Surender Kumar Jain Vs ACIT (ITAT Delhi)
In a significant ruling for taxpayers, the Income Tax Appellate Tribunal (ITAT) Delhi has set aside additions made by the Assessing Officer (AO) and sustained by the Commissioner of Income Tax (Appeals) [CIT(A)] against Surender Kumar Jain, a gold and bullion trader. The case, involving assessment years (AY) 2016-17 and 2017-18, centered on alleged unexplained cash transactions totaling INR 11,45,348 and INR 10,88,000, respectively. The ITAT’s decision, pronounced on March 7, 2024, highlights the necessity of corroborative evidence and adherence to natural justice principles in assessment proceedings.
Background of the Case
Surender Kumar Jain, proprietor of M/s. S.K. Impex, a firm engaged in gold/bullion trading, had his returns for AY 2016-17 and 2017-18 initially accepted. However, a search operation under Section 132 of the Income Tax Act, 1961, was conducted on January 5, 2017, on M/s. Jindal Bullion Ltd. (JBL) Group. Incriminating documents and information seized during this search reportedly pertained to Jain. Consequently, notices under Section 153C of the Act were issued to Jain on June 10, 2021, for both assessment years.
The core of the dispute arose from data found in JBL’s digital software, “Hajir Johri.” This software, according to the revenue authorities, contained both ‘Pakka’ (official) and ‘Kaccha’ (unofficial) entries, including cash transactions not reflected in JBL’s regular Tally accounts. The AO specifically noted cash receipts by JBL from Jain aggregating to INR 11,45,348 in FY 2015-16 (relevant to AY 2016-17) and INR 10,88,000 in FY 2016-17 (relevant to AY 2017-18).
