Penalty based on Loose Sheets/Ledger Without supporting proof not Valid

Sabari Diamonds & Jewels Vs DCIT (ITAT Chennai)

The appeals concerned the levy of penalty under section 270A of the Income Tax Act for assessment years 2018-19 to 2021-22. The assessee, engaged in jewellery manufacturing and diamond retail, challenged the penalties imposed on additions relating to gross profit on alleged unaccounted purchases. The additions were based on a ledger titled “SABARI” extracted from JPACK software found during a search conducted in the Mohanlal Jewellers group. The Assessing Officer treated entries in the “SABARI” ledger as pertaining to the

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