ITAT deletes addition made based on entries found in Hazir Johri software, as they were accounted in Tally

Vaibhav Jain Vs DCIT (ITAT Delhi)

The Income Tax Appellate Tribunal (ITAT) Delhi’s decision in the case of Vaibhav Jain vs. Deputy Commissioner of Income Tax (DCIT) reflects a detailed examination of the appeals filed by the assessee against the orders of the lower authorities. The case, identified under ITA No. 9854/Del/2019 and related appeals, was pronounced on January 3, 2024, showcasing intricate legal and factual arguments surrounding jurisdictional aspects under section 153A of the Income Tax Act, 1961, the addition of unexplained investments, and procedural aspects concerning the principles of natural justice and the opportunity for cross-examination.

The case centered on the aftermath of a search and seizure operation conducted on Jindal Bullion Ltd. (JBL) and its group entities, including the appellant Vaibhav Jain, who was one of the directors of JBL. The crux of the dispute revolved around the additions made by the Assessing Officer (AO) based on entries found in the Hazir Johri software, which the AO contended were unaccounted transactions not reflected in the company’s official accounts in Tally software. The AO made substantial additions to the assessee’s income, alleging unexplained investments in gold and other discrepancies.

Vaibhav Jain’s primary contention was the lack of incriminating documents directly linking him to the alleged unaccounted transactions, arguing against the jurisdiction assumed under section 153A and the subsequent additions made under sections 69 and 115BBE of the Income Tax Act. Jain also challenged the denial of the opportunity to cross-examine witnesses and the procedural fairness of the assessment proceedings.

Upon appeal, the ITAT meticulously reviewed the submissions, evidences, and legal arguments presented by both parties. The Tribunal’s decision to allow the assessee’s appeals was rooted in a detailed analysis of the transactions in question, with particular attention to the explanations and evidence provided by Jain regarding the sources and accounting of the amounts in dispute.

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