MOHANLAL JEWELLERS PVT. LTD.,CHENNAI vs. DCIT, CENTRAL CIRCLE-3(3), CHENNAI

आयकर अपीलीय अिधकरण, ‘ए’
यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘A’ BENCH: CHENNAI

ी एबी टी. वक
, ाियक सद एवं
एवं
एवं
एवं

ी एस.आर. रघुनाथा, लेखा सद के सम

BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER

आयकरअपीलसं./ITA Nos.1178 to 1182/Chny/2025
िनधारणवष/Assessment Years: 2017-18 to 2021-22

M/s. Mohanlal Jewellers Pvt. Ltd.,
Old No.68-69, NSC Bose Road,
Sowcarpet,
Chennai-600 001. v.
The DCIT,
Central Circle-3(3),
Chennai.
[PAN: AAFCM 9906 M]

(अपीलाथ/Appellant)

(यथ/Respondent)

आयकरअपीलसं./ITA Nos.1393 to 1397/Chny/2025
िनधारणवष/Assessment Years: 2017-18 to 2021-22

The DCIT,
Central Circle-3(3),
Chennai.
v.
M/s. Mohanlal –
Jewellers Pvt. Ltd.,
Old No.68-69, NSC Bose
Road,
Sowcarpet,
Chennai-600 001. [PAN: AAFCM 9906 M]
(अपीलाथ/Appellant)

(यथ/Respondent)

Assessee by :
Mr. D. Anand, Advocate
Department by :
Ms. E. Pavuna Sundari, CIT
सुनवाई क तारीख/Date of Hearing
:
05.08.2025
घोषणा क तारीख /Date of Pronouncement
:
26.09.2025

PER ABY T. VARKEY These cross appe the orders of the Learn Chennai [in short 'ld. C passed by the Dy. CIT, the Assessment Years [ issues involved are com were heard together. B similar arguments on convenience and brevity order. 2. The facts in brief a which is engaged in the gold bullion & gold jewe services to its customer 1961 (hereinafter refe assessee, its director(s) several material & elect key person(s) were notice(s) u/s 153A of t ITA Nos.1178 to ITA Nos.1393 (AYs: 20 M/s. Mohan ::2 :: आदेश / O R D E R Y, JM: als by the Revenue and the assess ned Commissioner of Income Tax ( CIT(A)'] all dated 24.02.2025 aga Central Circle-3(3), Chennai [in sho [in short 'AYs'] 2017-18 to 2021-22 mmon, all the appeals for all the ass Both the parties also argued them t these issues. Accordingly, for y, we dispose all the appeals by th are that, the assessee is a private li e business of manufacture and whole ellery. The assessee also provides m rs. A search action u/s 132 of the In erred to as "the Act") was cond ) and others, on 10.11.2020 in the c tronic data was found & seized and s recorded. Subsequent thereto, t the Act on 30.08.2021 and the de

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd see arise out of (Appeals) - 20, inst the orders ort 'the AO'] for 2. Since several sessment years together raising the sake of his consolidated mited company esale trading of making/job-work ncome Tax Act, ducted on the course of which statement(s) of he AO issued etails of income returned by the assesse question, are noted to b
Asst Year
2017-18
2018-19
2019-20
2020-21
2021-22
3. The summary of t
AO in the assessments for AYs 2017-18 to 202
which are in dispute in t
Sl
No.
Issue
17
1. Addition on a/c of ‘Ghat’
219,02
2. Addition on account of ‘Making
Charges’
received from customers
20,44,8
3. Addition on a/c of ‘Byaj’
8,97,71
4. Addition on a/c of ‘Vatav’
2,12,06
5. Gross
Profit on Unaccounted Sales
159,44
6. Excess Stock
-
7. Unexplained receivables
-
8. Unexplained cash
-
9. Unexplained Silver
-
4. It is noted that th additions/disallowances
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::3 ::
ee in response to the said notice(s) be as under:-
Return
Amount (in Rs.)
153A
4,37,68,120
153A
32,99,63,510
153A
33,24,62,890
153A
32,43,15,690
139(1)
53,75,18,770
the additions/disallowances in Rupee which were completed u/s 153A/14
20-21 and u/s 143(3) of the Act fo the cross- appeals are as follows:-
-18
18-19
19-20
,81,206
286,13,06,072
251,80,24,276
270
84,681
41,26,91,635
30,45,93,750
31,
1,261
3,84,86,690
4,48,74,607
6,9
6,805
4,23,91,890
1,42,38,299
2,3
4,96,644
218,05,32,778
10,95,17,554
84,
--
--
--
--
--
--
--
--
--
--
--
-- e reasoning given by the AO for ma were verbatim same across all A 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

) for the AYs in es made by the 43(3) of the Act or AY 2021-22,

(in AYs)
20-21
21-22
0,98,30,340
129,31,69,663
,00,17,604
13,16,35,575
92,09,435
6,81,77,631
31,21,285
1,45,54,166
,41,38,569
50,16,94,831
--
152,34,33,364
--
51,62,29,629
--
14,29,460
--
42,67,664
aking the above
AYs. Hence, for the sake of convenience adjudicate each of the c
5. As noted above, t
AYs before us and there up and discuss the fact findings so rendered sha perused the assessme
Investigating authoritie maintained in ‘J-Pack’ S record of the unaccoun
Shri. Rajendra Kothari maintaining the data in the entries therein co transactions of the grou
Director of the assesse dated 11.11.2020. The involving movement o
Software on the basis o assessee and the othe accounted and unaccou were made in the J-
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::4 ::
e, and to avoid repetition of facts; w common issues across all AYs before the first five (5) issues are common efore with the consent of both the p s relating to AY 2017-18 as the lea all mutatis mutandis apply to all oth nt order for AY 2017-18, it is n es had found and seized elec
Software, which according to them ted transactions of the assessee. It i, accountant of the assessee gr the J-pack software had inter alia omprised of both accounted and up. This was also confirmed by Shri.
e-company, in his statement record ese persons had explained that, th of inventory etc. were recorded of daily reports prepared by the em er group concerns, which comprise unted transactions, and that conso
-pack software at the end of t

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd we deem it fit to e us together.
n across all the parties, we take ad case and our her AYs. Having noted that, the tronic a data comprised of a t is noted that, roup, who was admitted that, d unaccounted
Suresh Khatri, ded u/s 132(4) he transactions in the J-pack mployees of the ed of both the olidated entries he day. As a consequence, this softw stock movements acros contain any entity-spec noted to have required in several of the ledg explained by the asses entity specific and also group entities, custom implication. It is obser statement of Shri Kotha and group concerns we were being made in J-p been segregated and t identified. The Investiga course of search that, periodical manner and reports for the last thre of daily reports on the b
Pack Software, was no background therefore documentation, the A ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::5 ::
ware served as a central deposito ss group concerns and branches and cific ledgers. The AO in assessment the assessee to explain the nature o ers extracted from the J-Pack so ssee that, these were consolidated contained entries of inventory move mers, goldsmiths etc. which had rved from the assessment order a ari that, the daily reports prepared b ere the source documents basis wh pack software, from which the entr the unaccounted entries could hav ating authorities is noted to have g these daily reports were being d that they were able to find and ee months alone. As a consequence basis of which consolidated entries w ot available for the relevant block and due to non-availability of O was not able to segregate o

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ory for tracking d thus it did not proceedings is of entries found oftware. It was d entries, non- ements inter-se d no financial as well as the by the assessee hich the entries ries could have ve been easily gathered in the destroyed in a seize the daily e, the entire set were made in J- period. In this data / source or identify the unaccounted transactio was no ledger-wise or would have enabled su proceeded on the presu pack software was unac to explain or reconcile filed their explanations have aggregated the u and added it under diffe the assessee.
5.1
It is observed th ledgers titled ‘Byaj’ and them suggested that th income earned on de commission income f respectively. According considered and offered
Mohanlal Khatri in his i no addition on this acco were not agreeable to ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::6 ::
ns included in the consolidated en r entity-wise data in the J-pack s ch bifurcation. The AO is therefore mption that, all the transactions rec ccounted for and accordingly require the same. Though the assessee is and objections to the same, the nexplained entries which could no erent heads / nomenclatures to the hat, the Investigating authorities h d ‘Vatav’ which according to the enq ese ledgers were records of unacco layed payment by customers an for various services rendered to the assessee, these two items ha d to tax by the key person of th ndividual hands and therefore it wa ount was warranted. The lower auth this plea of the assessee and the 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ntries, as there software, which e found to have corded in the J- ed the assessee noted to have AO is noted to t be reconciled total income of had found two quiries made by ounted interest- d unaccounted to customers ad already been he group, Shri as claimed that orities however refore the sum total of the entries foun to 2021-22 was added t
5.2
The Investigating the J-Pack Software a issue entries. According job work for their custo bullion or old gold orna ornaments. The AO was this conversion process
‘Ghat’ Ledger which en such wastage gold was which was sold throug have disputed this versi entries in ‘Ghat’ Ledger gold ornaments manufa that, the gold bullion w from customers, was goldsmiths and that th ornaments was entered these entries did not re found to have later on ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::7 ::
nd in these two ledgers across all th to the total income of the assessee.
authorities further found a ledger llegedly comprising of metal rece g to the Revenue, the assessee w mers, in the course of which, it wou aments, which would be converted s of the view that, the wastage go s was recorded by way of receipt ntirely represented the assessee’s p s used outside the books to make n h unaccounted means. The assess ion of the Revenue and instead cont r comprised of the alloy addition ma actured by the company. The asse which was purchased by the assess converted into gold ornaments e quantity of alloy which was add d in ‘Ghat’ Ledger for record purp epresent any metal entry i.e. gold. T n furnished documentary evidences

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd he AYs 2017-18

titled ‘Ghat’ in ipts and metal was undertaking uld receive gold d into new gold ld generated in entries in this profit, and that new ornaments see is noted to tended that the ade to the new ssee submitted see or received s through the ded to the gold poses, and that The assessee is s to support its claim, which upon being to be tenable. The Ld.
order, is noted to have d
5.3
Similarly another
Software, which accord charges paid outside th hand, claimed that, the charges received from of the same. Though submission of the asse
Ledger to the total inco have deleted the same.
5.4
It is further obse found in the J-Pack S contained unaccounted have estimated the una profit element embedde sales. The assessee ho quantification of unacc partially agreed with t
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::8 ::
g examined in the remand proceedi
CIT(A) for the reasons set out i deleted the addition made on accou ledger titled ‘MC Khata’ was found ding to the Revenue contained ent he books of accounts. The assessee e entries in this ledger was relating customers and furnished reconcilia the AO is noted to have disag essee and added the entries found me in all the years, but the Ld. CIT erved that, another ledger titled ‘C
Software, which according to the cash sales of the assessee. The A accounted cash sales and thereafte ed therein at 8% of the value of suc owever pointed out several infirmit counted sales. The Ld. CIT(A) is the contention and accordingly m

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ngs, was found n his appellate nt of ‘Ghat’.
d in the J-Pack tries of making e, on the other to the making ation in support greed with the d in ‘MC Khata’
T(A) is noted to Cash’ was also AO inter alia
AO is noted to er assessed the ch unaccounted ies in the AO’s found to have ade downward revision to the quantum out in his appellate ord profit element from 8%
5.5
To sum up, perus
2017-18 to 2021-22,
Software was a secret record their unaccounte the unreconciled ledger under different heads.
making these five (5) qua the entries found accounts, the assessee the assessee is found t reconciliations and supp called for a remand re submissions of the ass reconcile the entries fou of accounts on certain reconciliation errors in same time, the AO a addition(s) were require
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::9 ::
m of unaccounted sales. Also, for t er, the Ld. CIT(A) brought down th to 2.5%.
sal of the orders of the lower author shows that, according to the A t software being maintained by th ed transactions and he is noted to rs therein and added the same to th
Aggrieved by the order(s) of the additions on account of unreconci in J-Pack Software and the reg preferred appeal before the Ld. CIT to have submitted detailed explana porting evidences. The Ld. CIT(A) is eport from the AO, who after goin sessee admitted that the assesse und in the J-Pack software with the n issues and also accepted certain the quantum of addition(s) made lso gave his remarks where acco ed to be upheld. Taking into account

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd the reasons set e estimation of rities for the AY
AO, the J-Pack he assessee to have identified he total income e AO inter alia iled differences gular books of (A). On appeal, tion along with s noted to have ng through the ee was able to e regular books n calculation &
by him. At the ording to him, t the comments of the AO, the rejoinde facts of the case, the made on certain items issues emanating from t in the ensuing paragra
CIT(A), now both the as 6. Before we advert impugning the above d background facts which nature & purpose of the of search, as the sam impugned before us. It the assessee (M/s Moh company, M/s Mohanla
Jewellers Kolkata (Prop
Mumbai (Prop: Shri S
Mohanlal Exports (Prop business operations inv gold jewellery and ma these entities of which Director of this Group. D
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::10 ::
er filed by the assessee and having
Ld. CIT(A) is noted to have dele in its entirety and allowed partial the ‘J-Pack’ Software, which we sha aphs. Being aggrieved by the ord ssessee and Revenue are in appeal b to the several grounds taken in the discussed addition(s), it is relevant h led to these addition(s), more p e ‘J-Pack’ Software which was foun me would be relevant to adjudicat is observed that, the assessee grou hanlal Jewellers Pvt Ltd) which wa l Jewellers Chennai Private Limited
: Shri Mohanlal Khatri HUF), M/s Sh
Suresh Khatri) & M/s Mohanlal Je p: Shri Mohanlal Khatri). It is n volving manufacture, trading & sa aking charges was being carried o h Shri Mohanlal Khatri was the k
During the course of search, it was f

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd g regard to the eted addition(s) relief on other all be discussing der of the Ld.
before us.
e cross appeals to cull out the particularly the d in the course te the issue(s) up comprises of as the flagship d, M/s Mohanlal hanthi Jewellers ewellers & M/s oted that, the le of bullion &
out through all ey person and found that, this assessee group was u recording their entire ga unaccounted, and it wa accountant of the asses using this software, Shr statement recorded u/
software is a useful soft and that the entries t transactions. It is see summoned the Develop that, it is a commonly jewellery business. The is used primarily for inv that the software is so d done by jewellers. Acc each of these concerns software, but for comp operating group entities pack software to contro including both his accou
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::11 ::
using a customized software nam amut of business transactions, both as being maintained by one Shri Ra ssee group. When enquired about t ri Suresh Khatri, son of Shri Mohanl
/s 132(4) of the Act, explained tware implemented to track orname therein included both accounted &
en that, the Investigating author per of this software, from whom it y used jewellery software package
Developer had also stated that, th ventory management and quotation designed to only record metal-base cordingly, though separate books o s/entities were maintained in the T prehensive inventory management s, Shri Mohanlal Khatri was using thi l and manage his gold jewellery bus unted and unaccounted transactions

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ed ‘J-Pack’ for accounted and ajendra Kothari, the purpose for al Khatri, in his that, ‘J-pack’
ent-based trade
& unaccounted rities had also t was gathered e for wholesale is software tool n purposes and d trading being of accounts for Tally accounting across all the is specialized J- siness inter alia
.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

Ld. Counsel/AR the modus of Software, when f all their group nand explained n to be involved facture of gold hat, as a matter hanlal Jewellers
Jewellers were e gold jewellery d products so le through the Pvt Ltd & M/s with the object localizing their tablished an in- herefore, out of manufacturing modus operandi curement of 24

carat gold bullion and through outsourced go facility. The assessee fu sales comprise of the sa outlets and that only 3
end consumer. It is operates in the B2B gol that, since the assesse known and common ind this case, assessee] w dealers [in this case showrooms and they w after examining the sa displays, demand patte that, the movement inv basis’ did not represent assessee and only whe acceptance that, it wou generated. It was expla the jewellery industry a high inventories withou
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::13 ::
its conversion into 22 carat gold j oldsmiths or through the in-house urther pointed out that, more than 9
ales made to retailers, who operate
3-5% of the total sales constitutes therefore observed that, the ass ld jewellery segment. It was brough ee operates in the B2B segment, dustry practice, wherein the wholes would send across their gold jew
, customers] on an “approval-b ould subsequently confirm their pu ame or based on the customer re erns and marketability. The assess volving supply of goods to retailers t sales as the title in the goods con en the goods were confirmed upon uld be regarded as a sale and inv ained that, this was a common mo as it was impractical for retail deale ut gauging demand or the tractio

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd jewellery either manufacturing
95% of the total retail jewellery direct sales to sessee majorly ht to our notice it was a well- sale dealers [in ellery to retail basis” to their rchase decision esponse to the ee emphasized s on ‘approval- tinued with the n their express voice would be odel followed in ers to maintain n for the gold jewellery designs. Furth gold, which had a direct and commercial strateg fixed and that the sam time of acceptance by th
6.2
The discussion re to understand the reaso the inherent differences the regular accounting the J-pack software, movement of their me factory or outsourced g then dispatch of the g model, (iv) any further return of goods, if no jewellery when the ord accurate and real time concerns and locations.
assessee to only record values or prices thereto goods were dispatched
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::14 ::
her, due to the constant volatility t bearing on assessee’s pricing, inve gy, the sale price when sent on ap me was negotiated and agreed upo he customers.
garding the above business model ons and purpose for using the J-pac s between the entries in the J-pac
Tally software. The assessee show the assessee was able to reco etal items viz., (i) from issue of goldsmiths, (ii) to receipt of finish goods to retailers under their ‘sal r movement from one retailer to a ot accepted and (vi) the final sa der is confirmed. This software the e tracking of the stock movement
Further, this specialized software a d the movement of goods without o. This particular feature was usefu on ‘approval-basis’ to customers,

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd in the price of entory valuation pproval was not on, only at the is necessitated ck software and k software and wed us that, in ord the entire gold bullion to hed goods, (iii) e on approval’
nother, (v) the le of the gold erefore enabled t across group lso enabled the t assigning any ul as when the the sale prices were not fixed as it wa of approval, dependin
Accordingly, the assess on ‘approval-basis’ in t would be passed in Tal involving transfer of ow customers. This softwa stock movement and t providing a consolidated movement of goods. T was not an accounting software, meant to pro the regular accounting for each entity as the accounting software, o bullion, payment of ma time of final sale whe entered into. Hence, wh outsourced goldsmiths customers or when the customer movement,
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::15 ::
s to be decided and agreed upon o ng upon the gold prices, as pr see would pass notional entries of the J-Pack Software but no corres ly Software, as there was no finan wnership in goods from the assesse are was thus used to integrate an the operational data across all en d view of the group’s inventory and The assessee explained that, the J g software but rather a custom- vide proper inventory control. On t software was used to maintain sep ey were separate juridical person only the transactions involving pu aking charges and sale of gold jew n the invoice is raised upon the hen such costly and high valued go s for manufacture, or on app goods are returned by the custome these movements are recorded

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd only at the time revailing then.
the goods sent sponding entry cial transaction ee group to the nd manage the ntities, thereby the inter-entity
-pack software built inventory the other hand, parate accounts ns and in this rchase of gold wellery (at the customer) was ods are sent to proval-basis to rs or any inter- in the J-pack software for inventory possibly be made in movements do not have 6.3
Apart from the a that, they were also ren metal settlements. In s the assessee undertak dispatched back to the which is recorded in th but the assessee only customers in the Tally receipt of gold and issu purchase or sale.
6.4
In view of the ab software was meant to Tally accounting softw transaction. Evidently, t and issue entries invo return of unapproved go issue of gold jewellery
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::16 ::
control purposes but no such entr the Tally accounting software a e any financial implications.
bove, the assessee further brough ndering job work services which inv such transactions, the customer sup kes the job to manufacture jewe e customer. Though there is movem e J-pack software for inventory co records the receipt of making cha accounting software, as the transa e of gold jewellery, and it does not bove, it is therefore understood th capture the stock movement entrie ware, only records the final pur the J-pack software would contain lving issue of goods to customer oods, receipt of gold from customer y manufactured on customers’ beh

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ries could have as these stock t to our notice volved metal to pplies gold and llery, which is ment of metal, ntrol purposes, arges from the action involving t constitute any hat, the J-pack es whereas the rchase or sale several receipt s on approval, rs on job-work, half, etc. which constitute only stock transactions in themsel essentially specialized assessee, apart from th
6.5
The above narra addition(s) impugned i common in all other AYs pack software, which t found recorded in Ta individual issue(s) ema before us.
7. Issue 1: Addition
Ground Nos. 2 to 4 of th
7.1
It is observed th authorities had come
Software, which conta
Revenue, the receipt e was being generated fr gold ornaments and th which was to be ignore
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::17 ::
movement notings and were lves. We thus find that, the J-Pack inventory control software being eir regular accounting software.
ated discussion is of relevance a in the lead case of AY 2017-18, s, principally emanates from the ent the AO was unable to reconcile w lly accounting software. We now nating from J-Pack Software, which ns made on a/c of ‘Ghat’
he Revenue's appeal for AYs 2017-1
hat, in the course of search, the across one ledger titled ‘Ghat’
ained receipt & issue entries. Acc ntry in this ledger was made when rom conversion of old gold / bullion at the issue entries were only squ d. The AO was of the view that, th

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd not financial k Software was g used by the s the five (5) which is also tries found in J- with the entries w take up the h are in dispute
8 to 2021-22
e Investigating in the J-Pack cording to the n wastage gold n bars into new are off entries, e wastage gold was retained by the as services rendered to its same with an exampl provided gold bar weig jewellery which would government rules and t the assessee and that w this job-work services. T be credited in the recei accumulated gold wou ornaments and the sam arriving at this inference given by Shri Rajendra
According to the AO, S make the Ghat entries f the daily reports given and ‘Ghatnamma’ mea ledger. The AO further statement recorded u/
receipt entries in the G ought to be also consi
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::18 ::
ssessee was in lieu of the fees fo customers. The AO is noted to hav e in his assessment order viz., ghing 995 grams, the assessee wo d contain minimum of 916 gram that the remaining 79 grams would would represent the income derived
The AO was of the view that, this 7
ipt side of the Ghat ledger in the J- ld further be used for manufactu me would be sold through unaccoun e, the AO is noted to have relied on a Kothari u/s 131 of the Act date hri Kothari had inter alia explained from seeing the ‘Ghatjama’ and ‘Gh to him and that ‘Ghatjama’ means ans adjustment entries to square r observed that, even Shri Suresh
/s 132(4) dated 05.01.2021 had Ghat ledger but had claimed that th dered and that only the gross pro

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd or the job-work e explained the if a customer ould make gold ms as per the be retained by from rendering
79 grams would
-Pack and such uring new gold ted means. For n the statement ed 26.11.2020. d that he would atnamma’ from s Ghat receipts e off the Ghat h Khatri in his agreed to the he issue entries ofit element be estimated. The AO ho because when Shri Ko entries in the Ghat ledg were to be ignored, as t
7.2
The AO therefore represented income o payments. The AO acc income on account of G the assessee in their su of Shri Kothari with fac from his admission. T comprised of the ‘alloy
‘gold’ entries and there
The AO however reject documentary evidences in the course of search.
entries, treating it to assessee, while conve customers, to the tota question before us.
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::19 ::
owever disbelieved the statement thari was later on required to ex er, he had explained that, all the iss they were made only to square off t e, was of the view that the entire f the assessee and that there cordingly show caused the assess
Ghat receipts was not offered to tax ubmission is noted to have rebutted cts and showed that Shri Khatri also The assessee claimed that, the y’ [colloquially known as ‘ghat’] e efore no addition on this account w ted the submissions of the assess which would rebut the sworn statem
The AO accordingly added the enti be wastage gold which was re erting gold into gold ornaments l income of the assessee across a 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd of Shri Khatri plain the issue sue side entries he ledgers.
e Ghat receipts were no Ghat see as to why, x. In response, d the statement o had retracted
Ghat receipts entries and not was warranted.
ee for want of ments recorded ire Ghat receipt etained by the on behalf of all the years in 7.3
Aggrieved by the in appeal. Before the L account in the J-Pack converting pure gold maintained to record accordingly sought to r for this they brought o disprove his statement remand report from the assessee is noted to transactions for AY 201
well] along with invoic making charges, ledger
The relevant portion o noted to be as under:
“1. The Ghat Acc an alloy account vice versa.
2. The GHAT Acc of gold occurrin ornaments and vi
3. The Ghat Issu
Banks / Custome were issued to th
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::20 ::
order of the AO, the assessee car
Ld. CIT(A), the assessee submitted
Software was used as an ‘alloy’
into gold ornaments and this the difference in purity of gold.
rebut the statement of Shri Rajend on record several details along wit t. The Ld. CIT(A) is noted to hav e AO on this issue. In the remand p have submitted details of fifteen
17-18 [and similar sample size for ce copies of purchase, alloy additi r extracts where the purchase & sal of the explanation furnished by th count used in the J Pack Software was ma while converting Pure Gold into Gold Or count was maintained to record the differe g during the time of conversion from ice versa.
ue entries were posted when metal was r ers and Ghat Receipt entries were posted e Gold Smiths.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ried the matter that, the Ghat account while account was The assessee dra Kothari and th evidences to ve called for a roceedings, the n (15) sample other years as ion calculation, e are reflected.
he assessee, is jorly used as naments and ence in purity gold bar to received from d when metal

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ment of Shri n one issue at gs.
nation of the ng that no s brought on uly submitted ord.
to state that ompany with ount of metal n the regular d submission satisfactory.
he same was g the logical t satisfactory is bad in law, ure.
nting on the ness assets if ntary evidences wledged that, it ed to the entry ved that, the into new gold of either MJPL

(assessee) or MJCPL (g value for the converted
‘Assorted gold Jewellery was being converted int assessee was actually transactions, which was ledger in Tally Accou
Software. Though havin time, he was unable to therefore according to recorded in this ledger c on the statements of S
Pack Software, in his re account of ‘Ghat’ may b
7.5
After considering report of the AO, the L the AO’s finding of fact of ‘alloy’ addition value also verified and ackno bullion for manufactu manufacturing and the ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::22 ::
roup entity). Likewise, the AO noted d gold ornaments was also found r y’ ledger. The AO also noted that, to new ornaments on behalf of the y earning making charges from s reflected in ‘Making Charges for nts and the ‘MC-Khata’ Ledger ng held so, the AO stated that, du verify each and every entry in the G him, possibility of unaccounted tran cannot be ruled out. The AO reiterat
Shri Kothari & Shri Khatri and the D emand report, urged that the additi be sustained.
the submissions of the assessee a Ld. CIT(A) is noted to have taken s that, the entries in the ‘Ghat’ ledge e and not that of ‘metal’ addition.
wledged that, the corresponding pu uring and receipt of gold orn sale of the gold ornaments, was ac

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd d that, the sale reflected in the where the gold customers, the such job-work
Jewellery mfg’
in the J-Pack e to paucity of Ghat ledger and nsactions being ting his reliance
Developer of J- ion(s) made on nd the remand specific note of er are only that The Ld. CIT(A) urchase of gold naments after ccounted in the regular books of accoun
Ld. CIT(A) further obs when the gold was be customers, was being which was also recorded and/or its related conce charges were being re alleged by the AO. Hav which directly contradic we note that, the Ld. C to decipher as to how t
Ld. CIT(A) is noted to verification and after u that, the entries in th addition but was only ‘
made by the AO. Aggrie now in appeal before us
7.6
Assailing the actio
Revenue Ms. E. Pavuna the time of search wher represented ‘metal’ entr
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::23 ::
nts of either the assessee or the grou served that, the corresponding ‘m eing converted into gold ornament paid by the customers through ba d in the regular books of accounts o erns. Hence, it was not the case th eceived in form of ‘wastage gold’
ving taken note of the foregoing f cted the statement given by Shri Ra
CIT(A) himself also embarked on a f hese entries were made in the ‘Gha have called for the relevant seize undertaking an elaborate analysis, is ‘Ghat’ ledger did not comprise
‘alloy’ addition and therefore delete eved by the order of the Ld. CIT(A), s.
on of Ld. CIT(A), the Ld. CIT, DR ap a Sundari, relied on the statement( rein it was admitted that the entries ries retained by the assessee during

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd up entities. The making charges’
ts on behalf of anking channel, of the assessee hat, the making as was being factual aspects, ajendra Kothari, factual exercise at’ Ledger. The ed material for , he concluded of any ‘metal’
ed the addition the Revenue is ppearing for the (s) recorded at in Ghat Ledger g the process of conversion of gold into Director of the assessee was used for recording therefore only because recorded in ‘Ghat’ Ledg basis cannot ipso facto thus urged that the Ld addition and wants us t
AR heavily relied on the the impugned addition.
7.7
We have heard b before us. It is observe titled ‘Ghat’ maintained receipt entries (‘Ghatja assessee outside the b customers. This analogy statements given by Sh and we note that, there referred to by the AO, statements, the AO is receiving old gold or b
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::24 ::
o gold ornaments. She further ar e company had admitted that the J both accounted and unaccounted tr e the assessee was able to reconc er with their regular books of accou mean that all the entries are acco
. CIT(A) was unjustified in deleting to restore the order of the AO. Per e findings recorded by the Ld. CIT( both the parties and perused the m ed that, the AO was of the view t d in the customized software ‘J-P ma’) for the excess ‘metal’ (gold) r books, while rendering job-work s y of the AO is found to primarily em ri Rajendra Kothari u/s 132(4) and e was no other corroborative mater to justify such an inference. Rely noted to have theorized that, the ullion bars from the customers for 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd gued that, the J-pack software ransactions and cile the entries unts on sample ounted for. She g the impugned contra, the Ld.
(A) for deleting material placed hat, the ledger
Pack’ contained retained by the services to the manate from the 131 of the Act, rial or evidence ying upon their e assessee was r remaking into ornaments, and in this customers remained as passed in ‘Ghat’ Ledge essentially squaring off the receipt entries in th the unaccounted incom
Before the AO, the asse in the ‘Ghat’ Ledger act during conversion of bu this submission for want
7.8
As noted earlier, that, the entries in ‘Gh the new gold ornamen
(gold) addition, as had assessee was that, as a upon its purity content, the addition of alloy w
The addition of ‘alloy’ b recorded in the ‘Ghat’
essentially serves the p conversion. To substan
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::25 ::
s process, a portion of the gold s excess, for which receipt entries (‘G r and that the issue entries (‘Ghat entries, which was to be ignored. T he Ghat Ledger across all the years me in the form of wastage gold by essee is noted to have explained th tually represented only ‘alloy’ adjus ullion into ornaments, but the AO t of evidence.
before the Ld. CIT(A), the assessee hat’ Ledger were relating to the ‘al nts manufactured by goldsmiths a been wrongly inferred by the AO. T and when the gold bullion is purcha specific instructions are issued to t hile converting such bullion into g by the goldsmiths in the new gold ledger maintained in the J-Pack s purpose of accounting for alloy adju ntiate the same, the assessee is 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd supplied by the Ghatjama’) was tnamma’) were The sum total of was treated as y the assessee.
hat, the entries stments arising disagreed with e had reiterated loy’ addition to and not ‘metal’
The case of the sed, depending the Karigars for old ornaments.
ornaments was software, which stments during found to have submitted the details of Ghat entries, and it was the books of accounts.
invoices, alloy addition and entries reflecting t same, it is noted that, that, the foundational p was based on incorrect addition was deleted by 7.9
The Ld. AR Shr illustration, took us thro
Ledger. It is observed t of 99.5% purity from T
Invoice No. L/XG1MD amounting to Rs.3,97,5
duly reflected in the bu of 99.5% purity, on co
Consequently, when all weight worked out to difference between 16,2
alloy addition, was ente
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::26 ::
f purchases of gold bullion correspo s shown that the purchases were d
The details furnished inter alia inc calculations, ledger extracts of m the purchase and sale etc. Having the assessee was able to make o premise of the impugned addition m t assumption of fact and therefore the Ld. CIT(A).
ri Anand, at the time of hearin ough one such instance of entry mad that, the assessee had purchased a The Bank of Nova Scotia on 31.03
15-16/170 at the rate of Rs.2,630
7,817/-. We note that, the said bull ullion purchase ledger. As the gold onversion it yielded 14,925 grams loy addition at 91.66% was factore
16,283 grams. The assessee sho
283 grams and 14,925 grams, i.e., ered in the ‘Ghat’ Ledger in the J-

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd onding to these uly recorded in luded purchase making charges, g examined the ut a valid case made by the AO e the impugned g, by way of de in the ‘Ghat’
15 kg gold bar
3.2016 bearing
0.52 per gram, lion purchase is purchased was s of pure gold.
ed in, the total owed that, the 1,358 grams of -Pack Software.

Having considered the that the entry in ‘Ghat’
ornaments being made any entry of wastage g that, similar such insta report dated 18.11.2024
BNS BA
INVOIC
PURCHA
(8000X
ALLOY 9
Gold +
GOLD W
BALAN
HDFC B
INVOIC
17/08
PURCH
(15000
ALLOY
Gold +
GOLD W
BALAN
HDFC B
INVOIC
17/182
PURCHA
(20000
ALLOY 9
Gold +
GOLD W
BALAN
52)

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::27 ::
foregoing, we find merit in the as ledger was that of ‘alloy’ addition va by karigars on their behalf and d gold retained from the customers.
ances were also noted by the AO
4, which is reproduced hereunder: -
ANK
CE NO-L/XG1MD 16-17/10
ASE BULLION
X99.5%)
8000.00
91.66%
684.27
Alloy
8684.27
WT (8000.00 X99.5)
7960.00
NCE WT GHAT (P NO-3)
724.27
BANK
CE NO-L/XG95 CHN 16-
HASE BULLION
0X99.5%)
15000.00
Y =91.66%
1283.00
+ Alloy
16283.00
WT (15000.00 X99.5)
14925.00
NCE WT GHAT (P NO-4)
1358.00
BANK
CE NO-L/XG95CHN16-

ASE BULLION
X99.5%)
20000.00
91.66%
1710.67
Alloy
21710.67
WT (20000.00 X99.5)
19900.00
NCE WT GHAT (P NO-
1810.67

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ssessee’s claim alue to the gold idn’t constitute
It is observed in his remand
-

HDFC B
INVOIC
17/127
PURCHA
(3000X
ALLOY 9
Gold +
GOLD W
BALAN
EPART

SURAB
INVOIC
PURCHA
(3000X
ALLOY 9
Gold +
GOLD W
BALAN
32)

SURAB
INVOIC
MOHAN
LTD
INVOIC
PURCHA
(4000.0
7091.4
ALLOY
Gold +
GOLD W
BALAN
34)
MOHAN
LTD
INVOIC
PURCHA
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::28 ::
BANK
CE NO-L/XG95CHN16-

ASE BULLION
X99.5%)
3000.00
91.66%
256.60
Alloy
3256.60
WT (3000.00 X99.5)
2985.00
NCE WT GHAT (PNO38)
TME
271.60
BI BULLION
CE NO-G 1040
ASE BULLION
X100%)
3000.00
91.70%
271.54
Alloy
3271.54
WT (3000.00 X 100)
3000.00
NCE WT GHAT ( P NO –
271.54
BI BULLION
CE NOG 1138
NLAL JEWELLERS PVT
CE NO-G-327
ASE BULLION
00+3091.45-
5X99.5%)
7091.45
= 91.70%
603.19
Alloy
7694.64
WT (7091.45 X99.5)
7056.00
NCE WT GHAT (P NO-
638.64
NLAL JEWELLERS PVT
CE NO G-1331
ASE BULLION
13750.00

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

(13750
ALLOY
Gold +
GOLD W
BALAN

MOHAN
LTD
INVOIC
PURCHA
(7228.0
ALLOY 9
Gold +
GOLD W
BALAN
87)

MMTC-
INVOIC
00005
PURCHA
(50000
ALLOY
Gold +
GOLD W
BALAN

MMTC-PA
INVOICE
RADHA M
JEWELS
INVOICE
SAYSO E
INVOICE
PURCHAS
(17000-1
ALLOY 91
Gold + Al
GOLD WT
BALANCE

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::29 ::
X99.5%)
=91.70%
1169.57
Alloy
14919.57
WT (13750.00 X99.5)
13681.25
NCE WT GHAT (PNO-53)
1238.32
NLAL JEWELLERS PVT
CE NO – G-1907
ASE BULLION
00×100%)
7228.00
91.70%
654.22
Alloy
7882.22
WT (7228.00 X100)
7228.00
NCE WT GHAT ( P NO -
654.22
-PAMP INDIA PVT LTD
CE NO-TN-2016-2017-
ASE BULLION
.00X99.5%)
50000.00
=91.70%
4253.00
Alloy
54253.00
WT (50000.00×99.5%)
49750.00
NCE WT GHAT (PNO-6)
4503.00
AMP INDIA PVT LTD
NO-TN-2016-2017-0075
MOHAN PURSHOTTAM DAS
PVT LTD
NO-CHN/T/16-17/0070
XIM PVT LTD
NO-113
E BULLION
5000+10000-42000×99.5%)
42000.00
.70%
3572.52
loy
45572.52
T (42000.00X99.5%)
41790.00
E WT GHAT (P NO-29)
3782.52

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

MMTC-PA
INVOICE
PURCHAS
ALLOY 91
Gold + Al
GOLD WT
BALANCE

MMTC-PA
INVOICE
PURCHAS
(15000.00
ALLOY 91
Gold + Al
GOLD WT
BALANCE

ZAVERI &
INVOICE
PURCHAS
(30700.00
ALLOY 91
Gold + Al
GOLD WT
BALNCE

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd had verified the oted that they and thereafter dger related to ‘alloy’ addition and not the remand report is rep
“Considering the verified on sam verification of the * The bullion pur reflected in the G
* In the GHAT le value is recorded
* It is seen that i shown in GHAT is * The Gold Bullio gold bullion for m the sample cases
* When the gold sample cases, th for the same qua
* The sale value reflected in Assor
* The making cha found to be reflec
* The total sale
Jewellery register and Loss Account
However, due to not possible to ve possibility of unac
7.11 The above comm originally acted under t
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::31 ::
t ‘metal’ (gold) addition. The relev produced hereunder: - volume of the transaction the above in mple basis. The following are observed e above sample entries selected randomly:
rchase referred to above in sample cases is Gold Bullion Purchase ledger of MJPL and MJ edger of JPACK it is seen that only the a in the sample cases.
in the Gold Bullion Purchase ledger the allo s also reflected for the sample cases.
on Purchase ledger also contains entries on manufacture (including instruction for Alloy
.
d bullion is manufactured and returned e same is reflected in Assorted Gold Jewe ntity.
e for selling this converted gold ornamen rted Gold Jewellery Ledger for the sample c arges for the above transaction for the sam cted in “Making Charges for Jewellery mfg”
value and closing stock shown in the A r is found to be reflected in the sales shown t.
paucity of time and large volume of transa erify each and every entry in the GHAT le ccounted transactions cannot be ruled out.”
(empha ents of the AO make it amply clea the wrong assumption of fact that 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd vant extracts of nvoices were during the s found to be JCPL.
alloy addition oy addition as n issue of this addition) for back for the llery Register nts are found cases.
mple cases is ledger.
Assorted Gold n in the Profit action, it was edger and the ”
asis supplied) ar that, he had t the entries in ‘Ghat’ ledger was that was that, it pertained manufactured. Though above findings of the A the AO pertained to demonstrate the same
According to us, once showed that, the entrie pertains to alloy addit corollary that, all receip same item i.e. alloy and of the Ld. CIT, DR that, cannot be countenanced it would be highly unu entries of ‘alloy’ and s supra & infra, we agree was demonstrated to be all entries in the same that of alloy additions, u
7.12 Coming to the Ld.
have been verified inste
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::32 ::
of ‘metal’ (gold) addition whereas to ‘alloy’ addition to the new g the Ld. CIT, DR was unable to AO but she contended that, the ab a sample set and that the a e across all entries found in the the contemporaneous facts brou es found in ‘Ghat’ Ledger (even on tion and not metal (gold), then pt entries in the same ledger would d it cannot relate to metal i.e. gold there may be ghat entries relating d, since it not only lacks basis but l usual that the same ledger would some of ‘metal’. Considering the f with the Ld. AR that, once the char e alloy additions, then it was safe to ledger would bear the same char unless it is disproved by relevant ma
. CIT, DR’s contention that, all the e ead of a sample set, it is seen from 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd the actual fact gold ornaments controvert the bove findings of assessee didn’t
‘Ghat’ Ledger.
ught on record n sample basis) it is a natural d pertain to the d. The assertion to metal (gold) ogic as well, as d contain some facts discussed racter of entries o presume that racter, which is aterials.
entries ought to m the remand- report that, the AO ha
Ledger citing paucity considered view, the AO own time constraints ca cannot be the basis to transactions in the ‘Gha demonstrated on samp and not metal addition a forming part of the reg found to be factually ve on record some contrar unaccounted transactio instance where any en
‘alloy’ addition, we are a certain portion of unaccounted wastage go
7.13 The Ld. CIT, DR identified by the asses verify some instances o assessee’s claim. To thi also of the same view
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::33 ::
ad refrained from examining all en of time and voluminous size of O’s inability to verify all the entries annot be held against the assessee o assume that there may be som at’ Ledger. According to us, once th le basis that, the entries related to and that the corresponding purchase gular books of accounts and, this erifiable, then the onus lay on the Re ry evidence that some other entries ons. Without having pointed out ntry was found to be of ‘metal’ ad unable to countenance the Ld. CIT the ‘Ghat’ entries may be est old.
had further contended that, the sa ssee himself and therefore it was on random basis to ascertain the is, the Ld. AR showed us that, the w, and therefore in exercise of h

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ntries in ‘Ghat’
f data. In our because of his e and the same me unaccounted e assessee had o alloy addition es & sales were contention was evenue to bring s may relate to even a single ddition and not DR’s plea that, timated to be ample size was s imperative to veracity of the Ld. CIT(A) was his co-terminus powers, he had called fo verified the ‘ghat’ entrie the gold was being re- customers and not out relevant findings of the “Further, a doubt w was not explained account the entries and tried to deciph process, I had also cumulative entry fo
Rajendra Kothari t date of search wit
Tulsiram on the ba also noted that th yellow and white sl these seized mater period, these daily the appellant and it seize the correspon to 2020-21. In this material for verifica material which con verification with th under:

Seiz
ANN/V
ANN/V
ANN/V
ANN/V
ANN/V
ANN/V
ANN/V
ANN/V
ANN/V
ANN/V
ANN/V
ANN/V
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::34 ::
or the entire seized material and the es randomly on test-check basis, pa
-made into new gold ornaments on t of assessee’s own gold bullion p
Ld. CIT(A), taken note of by us, is a was raised by the AO that the receipt side of th properly by the appellant. In this regard, I h s made in GHAT ledger of J-Pack both, receipt a er how these entries were made in the GHAT a o come to the conclusion that the entries in GH or each day and the entry for a particular day is till 27.10.2019 and thereafter by Shri Kishore h the help of daily reports prepared by Shri N asis of white and yellow slips for the respectiv e seized materials do not have the daily rep lips for the entire period of FY 2016-17 to 2020
rials are available for limited period only. For reports and slips were destroyed in a periodi t was the reason for which the search team cou nding reports and slips for the entire period fro regard, the AO was requested to produce the r ation. In response, the AO had furnished the fo ntains the daily reports along with yellow and e GHAT entry which is available for the period zed material
Period
VD/RK/LS/S-01
14.07.2020 to 21
VD/RK/LS/S-02
22.07.2020 to 31
VD/RK/LS/S-03
01.08.2020 to 06
VD/RK/LS/S-04
07.08.2020 to 12
VD/RK/LS/S-05
13.08.2020 to 19
VD/RK/LS/S-06
20.08.2020 to 24
VD/RK/LS/S-07
25.08.2020 to 31
VD/RK/LS/S-08
01.09.2020 to 05
VD/RK/LS/S-09
06.09.2020 to 14
VD/RK/LS/S-10
15.09.2020 to 19
VD/RK/LS/S-11
21.09.2020 to 25
VD/RK/LS/S-12
26.09.2020 to 30

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ereafter himself rticularly where n behalf of the purchases. The as under: - he GHAT ledger had taken into and issue side, account. In this HAT ledger is a s made by Shri
Khatri till the Nikhil and Shri ve day. It was ort along with 0-21. However, the remaining cal manner by ld not find and om FY 2016-17
relevant seized ollowing seized white slips for mentioned as .07.2020
.07.2020
6.08.2020
.08.2020
.08.2020
4.08.2020
.08.2020
.09.2020
4.09.2020
.09.2020
.09.2020
.09.2020

ANN/V
ANN/V
ANN/V
5.8.6 I had person reports for the dat
Naamae’ are work quantity of alloy to ornament. The com ornament is cumu consolidating simila in the GHAT ledg material, GHAT led this purpose, I had vide page no. 333
and white slips for report dated 27.07
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::35 ::
VD/RK/LS/S-13
02.10.2020 to 08
VD/RK/LS/S-14
09.10.2020 to 15
VD/RK/LS/S-15
14.10.202
nally verified the above seized material which tes mentioned as above, wherein the ‘Ghat Ja ed out based on the actual receipt of gold b o be added for converting 24 carat gold into mponent of alloy to be added for manufacturing latively added in the GHAT ledger for a par ar nature of entries. To understand the nature o er, a verification was carried out on the b ger in J-Pack and Tally accounts seized during t d randomly selected a daily report dated 27.0
of ANN/VD/RK/LS/S-02 which has the daily rep period from 22.07.2020 to 31.07.2020. The co
.2020 is reproduced as under:

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

The above daily search in the cas
‘Metal Jama’ i.e.
states that the g
2920.730 grams report as received report, in the ‘G side. In both, ‘Me i.e., T NAGAR S represents the nu seized as sheet n as under:
From the above
NAGAR SMJ (GRF top of the said sl receipt from the mentioned in bot percentage. In th
1990.00 grams o purity of 935.41
gold, was receive recorded under ‘
gold of 3090.72
165.310 grams grams and 2925. but the alloy t
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::36 ::
report is one of such yellow slips seized a se of the appellant. In the said daily repo receipt of gold, from one ‘T NAGAR SMJ old of 3090.720 grams of gross weight w of pure gold is entered in the receipt side d from the said party on 27.07.2020. In th hat Naamae’, 165.310 grams is entered etal Jama’ and ‘Ghat Naamae’ with respect
SMJ (GRF), Sr. no. 8 is mentioned. Th umber mentioned in rough estimation slip no. 288 of the said annexure. The same i seized material, it is noted that the part
F), date 27.07.2020 and Sr. no. 8 is appe ip and it is also mentioned as ‘Rt’ which d said party and the quantity of metal rec th pure gold i.e. ‘Fine’ and gross weight w he above slip, two bars of 99.5% purity w of 100% pure gold along with a broken b grams, which contains 930.73 grams of ed. The weight of 100% pure gold of 2920
‘Fine’, and the gross weight is converted grams and recorded under ‘Wt’. The GH is arrived by taking the difference betw
.41 (1990 + 935.41) grams. This differen to be added for manufacturing gold o

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd at the time of rt, there is a (GRF)’ which hich contains e of the daily he same daily in the issued t to this party is Sr. no. 8
which is also s reproduced ty name – T earing on the denotes metal ceived is also ith the purity hich contains bar of 99.5%
f 100% pure
0.73 grams is d into 94.5%
HAT issued of een 3090.72
ce is nothing ornament by converting 24 ca the making char
‘Ghat Naamae’ in Ghat Naamae fo
165.310 grams o another party ‘M debited as ‘GHAT relevant page of t
If the daily repo closely, there is a of metal. In the name of ‘ARJUN slip enclosed alon the course of sea reproduced as un
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::37 ::
rat gold into 22 carat gold ornament and ges equal to that of gold. The same is m n the daily report for the said date. Furth or the said date was 224.060 grams wh of the transactions related to ‘T NAGAR SM
MALABAR MDS’ of 58.750 grams and th
T issue’ in the GHAT ledger for the date 27. the GHAT ledger is also reproduced as unde ort dated 27.07.2020 (reproduced above) a ‘Metal Naamae’ in the same report which ‘Metal Naamae’ i.e. metal issued, Sr. no.
FACTORY’. The Sr no. 21 is again a roug ng with the daily report for the said date, s arch in the same annexure as sheet no. 2
nder:

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd d also adding mentioned in her, the total hich includes
MJ (GRF)’ and he same was 07.2020. The er:
) is observed means issue
21 is in the gh estimation seized during
275, which is If the above sei mentioned as 27.07.2020 to A two bars of 99. pure gold along grams which co were received manufacturing rough estimatio not differentiat purity is also m gold is also m respectively for SMJ (GRF). The taking the differ
+ 935.41) gram grams was arri gold to manufa
91.8% of pure while melting a the level mentio this transaction mentioned in ‘G
Further, the to grams which inc
‘T NAGAR SMJ grams in the na
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::38 ::
ized material is observed closely, the it ‘N’ which denotes ‘Naamae’ or ‘
Arjun Factory for the same quantity o
.5 % purity which contains 1990 gram g with a broken bar of 99.5% purity ontains 930.73 grams of 100% pure from T NAGAR SMJ (GRF) for jo
22 carat ornaments by the appellant.
on slip, the total gross weight and net ted and mentioned as 3181.63 gram mentioned as 100%. However, the actu mentioned as 1990 grams and 935
r the actual receipt of bullion bars from e GHAT received of 256.22 grams is rence between 3181.63 grams and 292
ms. It is also noted that the working ved at to convert 2920.73 grams of cture 91.6% purity, the minimum req gold is needed taking into account so nd also the impurities in the 24 carat g oned in the bullion itself. Thus, the ‘Gh was worked out at 256.22 grams and Ghat Jama’ in the daily report for the otal ‘Ghat Jama’ for the said date w cludes 256.22 grams of the transaction
(GRF)’ in the name of ‘ARJUN FACTOR ame of ‘VIJAY FACTORY’ and 0.830 g

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd tem name is ‘Issued’ on of metal i.e.
ms of 100%
y of 935.41
gold, which ob work of In the said t weight are ms and the ual 24 carat
5.41 grams, m T NAGAR s arrived by 25.41 (1990
of 3181.63
100% pure quirement of me wastage gold beyond at Jama’ for the same is e said date.
was 426.790
ns related to RY, 169.740
rams in the name of anoth credited as ‘G
27.07.2020 as r
5.8.7. The abov is available with receipt entered received from th his statements
It is proved bey added for man bullion of 24 car
7.14 From the above, detail the movement of into gold ornaments alo entry in the ‘Ghat’ Led gold ornaments made f rendering this service banking channel, which accounts. It was also similarly called for the and the yellow & white
Kothari. In order to tes
Ld. CIT(A) is found t transactions mentioned the name of ‘T NAGAR S books of accounts ma
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::39 ::
er party ‘M S BACK CHAIN’ and the HAT receipt’ in the GHAT ledger fo reproduced above.
ve findings, arising out of the seized ma h the AO, clearly proves that the GHA in the GHAT ledger of J-Pack are not he customers as stated by Shri Rajendr or concluded by the AO in the assess yond doubt that GHAT is only the quan nufacturing 22 carat gold ornaments rat.”
it is seen that, the Ld. CIT(A) ha f gold received from customers to t ng with their dates, weight etc. and ger was attributable to the ‘alloy’
for the customers and that the mak was received not in form of ‘gol h was also duly recorded in the re brought to our notice that, the L seized material which included th slips seized from the possession o t the veracity of the statement of M to have required the assessee t in these daily reports and yellow &
SMJ (GRF)’ and reconcile the same w aintained in Tally and the ‘Ghat’

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd e same was or the date aterial which AT issue and that of gold ra Kothari in ment order.
ntity of alloy s from gold ad examined in heir conversion d found that the addition to the king charges for d’ but through egular books of Ld. CIT(A) had e daily reports f Shri Rajendra
Mr. Kothari, the to explain the & white slips in with the regular
Ledger. After considering the submis the entries in the daily with the regular books o show that the entries in new ornaments manufa
(‘SMJ’). The Ld. CIT(A)
SMJ through banking c accounts maintained in found in ‘MC Khata’
according to us, negate were being received contemporaneous facts channel. The relevant f and as noted by us, is a “The AR has su
148, Usman Ro
SMJ (GRF)’ in th challan for th reproduced as u
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::40 ::
sions of the assessee, the Ld. CIT reports along with yellow & white of the assessee and that, the assess n Ghat Ledger was the ‘alloy’ additio actured on behalf of Shri Mahalak also noted that, the making charge channel which was also credited in Tally Software and corresponding
Ledger of J-Pack Software. This ed the Revenue’s theory that the m in form of wastage gold; showed that it was being paid th indings rendered by the Ld. CIT(A) as under:- ubmitted that M/s Shree Mahalakshm oad, T.Nagar is the party mentioned a he seized material and also submitted he job-work dated 25.07.2020. Th under:

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

(A) found that, slips reconciled see was able to on made to the kshmi Jewellery es were paid by n the books of entry was also material fact, making charges whereas the hrough banking in this regard, mi Jewellery, as ‘T NAGAR the delivery e same is On perusal of Shree Mahalaks bullion of 99.5%
239.300 grams grams. The sam which has been mentioned in t above seized m
(reproduced abo is on account o seized material party ledger in (reproduced in found that the gold with the g given credit. Th
Shree Mahalaks in sheet no. 28
with entries ma the correspond seized material
J-Pack. It was ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::41 ::
the above delivery challan, it is note shmi Jewellery has delivered 2935.41
% purity and gave the instruction to a s to make 22 carat gold ornaments o me bullion was received on 27.07.20
n acknowledged by both the parties. T he delivery challan is exactly matchin material sheet number 288 of the sai ove), but the only difference is 14.68 g of conversion of 99.5% to 100% purity matches with the delivery challan. F the name of ‘T NAGAR SMJ’ maintaine para no. 5.8.8. below) is also examin metal receipt of 2920.730 grams of ross of 3090.720 grams of 94.50% p e quantity of 24 carat pure gold receive shmi Jewellery for job-work as per seiz
88 and the delivery challan are exact ade in the party ledger maintained in ing GHAT issued and received as per is also entered in the GHAT ledger m also noted that after manufacturing

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ed that M/s
10 grams of add alloy of of 3174.710
20 by MJPL
The quantity ng with the id annexure grams which y. Thus, the Further, the ed in J-Pack ned and it is 100% pure urity is also ed from M/s zed material tly matching
J-Pack and r the above maintained in g 3174.710

grams of 22 ca to M/s Shree M the appellant ha the appellant in dated 08.08.202

On perusal of the making charge in assorted gold jew the appellant ha
Jewellery – MC’ a 08.08.2020 and is also reproduced
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::42 ::
arat gold ornaments, the same was als
Mahalakshmi Jewellery on 08.08.2020. ad furnished the making charges invoic n the name of M/s Shree Mahalakshm
20, which is reproduced as under:

e above, it is observed that the appellant h nvoice of Rs.3,80,965/- (excluding GST) fo wellery of 3174.710 grams @ Rs.120 per gr ad also furnished the ledger of ‘Shree as per Tally, wherein the party’s account wa crediting the Making Charges account. Th d as under:

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd so delivered
In support, ce raised by mi Jewellery ad raised the or making an ram. Further,
Mahalakshmi as debited on e said ledger

On perusal of th charges is receiva
Jewellery as per t
5.8.8. Further, th examined to find
‘Making Charges
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::43 ::

he above ledger, it is clearly seen that able on account of job-work for M/s Shree the invoice raised by the appellant dated 08
he entries made in ‘MC KHATA’ ledger in J- out the corresponding entries made for th s’ received/receivable from M/s Shree

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd the making
Mahalakshmi
8.08.2020. Pack are also he respective
Mahalakshmi

Jewellery. It is a ledger in the na
Mahalakshmi Jew charges for manu appellant are fou accounts maintain
MC Khata
Party Ledger
On perusal of the that Rs.9785.87/
the amount colum as stated by Shri dated 11.11.202
11.09.2020 again
SMJ party’s ledg
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::44 ::
also found that the J-Pack data has ind ame of ‘T NAGAR SMJ’ which pertains t wellery. The entries made with respect to ufacturing of gold ornaments on job-work und in both ‘MC KHATA’ and ‘T NAGAR ned in J-Pack. Both ledgers are reproduced e ‘MC KHATA’ ledger (as reproduced above
- (the actual amount is Rs.9,78,587/- as th mn in the ledger extracted from J-Pack is t
. Suresh Khatri in his statement u/s. 132(
20) was entered in ‘issued’ side i.e de nst T NAGAR SMJ. However, it is seen fro ger (as reproduced above) that the sam

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd dividual party o M/s Shree o the making basis by the SMJ’ ledger d as under:

e), it is noted he decimal in o be ignored,
(4) of the Act ebit side on om T NAGAR e amount of Rs.9,78,587/- wa
Jewellery on 11.0
is also noted fro reproduced abov bank transfer on on 11.09.2020 is Mahalakshmi Jew were raised for m

Sr.No Date
1. 11-06-2
2. 08-08-2
3. 08-08-2
4. 08-08-2
5. 26-08-2
TOTAL
As seen from th received on 11.09
transfer of Rs.10, same is accounte in J-Pack. Thus, i ledger in J-Pack offered as an inco the amount is rec ledger in J-Pack noted that there the amount rece
12.09.2020 and t the said reversal ledger on the sam the said party’s a there is receipt o ornaments by the account, each and the entries in Ta party on a specif appellant as reco given for job-wor issued by the ap either outstandin ledger. Thus, the of customer is le noted that when
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::45 ::
as entered as receipt from M/s Shree
09.2020 in the credit side of the said ledge om the party’s ledger account maintained e) that an amount of Rs.10,12,837/- was 11.09.2020. The said payment received t s against the making charges payable b wellery to the appellant for which the follow making charges payable:
e
Making Charges
(in Rs.)
GST (in Rs.)
2020
52,655
2,632
2020
1,22,316
6,116
2020
3,80,965
19,048
2020
1,14,174
5,709
2020
3,08,477
15,424
9,78,587
48,929
he above table, the making charges of R
9.2020 is included in the amount received t
,12,837/- (after considering TDS of Rs.14, ed in the Tally and also in ‘MC KHATA’ and p t clearly shows that the entries recorded in is also accounted in the regular books of ome by the appellant. Further, it is also not ceived in the bank account of the appellan is also credited on the same day. Howev is a reversal entry to the equivalent amou ived by way of bank transfer in the party the same is recorded as ‘RATE PURCHASE entry, there is an entry in the debit side o me day for equivalent amount. It is also o account i.e T NAGAR SMJ, is a running ac of gold bar/ old gold from the party and e appellant on a continuous basis. Since it d every entry of debit and credit cannot be lly account w.r.t. gold received for job-w fic date with subsequent gold ornaments i orded in J-Pack. In other words, the gold b rk by the party is adjusted against the go ppellant on a continuous basis and same g debit or credit balance for any specific d ere is always an outstanding balance as ei eft with the appellant or vice-versa. Howev the gold ornaments are issued to the part

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

Mahalakshmi er. Further, it d in Tally (as s received by through bank by M/s Shree wing invoices
Total (in Rs.)
55288
128432
400013
119883
323901
10,27,517
Rs.9,78,587/- through bank
679) and the party’s ledger n ‘MC KHATA’
accounts and ted that after t, the party’s ver, it is also nt of gold for y’s ledger on ’ and against of the party’s observed that ccount where issue of gold t is a running e verified with ork from the ssued by the bars/ old gold ld ornaments is shown as date in J-Pack ther the gold ver, it is also ties, as in the case of T NAGAR minimum gold re
100% for the re which contain m always shown ab making charges late/delayed pay manufacturing de metal weight equ the party’s ledge are raised subseq payment by way amount received concluded that w debited at the tim get equivalent am entry when there were raised by th of metal on acco does not alter th making charges r escapement of in Pack vis-à-vis th books of accounts
7.15 At the time of he had referred to one de name of the above part course of search, and verified by the Ld. CIT( factually misplaced as “GHAT” entries recorde relates to the technical converting 24-carat bu
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::46 ::
SMJ, it is always a case of mentioning the equirement of 91.66 percent, which vary eason that even though 22 carat orname inimum pure gold of 91.66%, the minim ove 91.66% i.e. 91.80% and over and ab
(which is normally 2-2.5%), interest cha yment by the party or additional elicate and specific designs, etc. Meaning uivalent to that of making charges is alread er before-hand and when the making cha quent to delivery of the gold ornaments a y of cheque, the reversal of equivalent m is credited in the same party’s ledger. Hen hen the metal equivalent to that of making me of issue of gold ornaments in advance mount of metal back into their account by e is a payment of making charges after he appellant for the making charges. Thus, ount of receipt of making charges by way he transactions already recorded in Tally o received. This also proves beyond doubt tha ncome on account of MC KHATA ledger ma he making charges already accounted in s.”
earing, the Ld. CIT, DR on behalf o ebit entry of 95.10 grams of meta ty in the same daily report which wa contended that this entry also (A). We find that this assertion of the matter at hand pertains spe ed in the J-Pack software, which as accounting of ‘alloy’ added during llion or old gold into 22-carat orna

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd e touch above from 93% to ent is issued mum touch is ove including rged for any wastage for thereby, the dy debited to rges invoices and receipt of metal for the nce, it can be g charges are e, the parties way of credit the invoices this reversal y of payment on account of at there is no intained in J- n the regular of the Revenue al found in the as seized in the ought to have the Revenue is ecifically to the s noted above, the process of aments. It was brought to our notic correspondedto “Metal
Jama” transactions and having complete differ shown that the “Metal incorporated in “Ghat”
that, this entry pointed had no nexus with the disregard the same as case before us.
7.16 Having regard to undertaken an elaborat findings for arriving at h relating to ‘alloy’ additi the Ld. CIT(A) that the erroneous and based o impugned addition was 7.17 We are also not a the statements given by of the AO. Instead, we a ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::47 ::
e that, the debit of 95.10 gra
Jama” transactions and was not that these two are separate and di rent purpose and accounting trea
Jama” entries are separately acco ledger. We agree with the Ld. AR o out by the Revenue under the hea impugned issue of ‘Ghat’ entries an being irrelevant and out of context o the above, we find that, the L e factual exercise and has given his his conclusion that the entries in ‘G on and not ‘metal’ addition. We th e entire case made out by the AO on wrong assumption of facts and unsustainable.
able to countenance the Ld. CIT, DR y Shri Kothari and Shri Khatri to sup are in the agreement with the Ld. C

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ams of metal made in “Ghat istinct accounts atment. It was ounted and not of the assessee ad ‘Metal Jama’
nd therefore we to the present
Ld. CIT(A) had s well-reasoned hat’ ledger was hus concur with O was factually d therefore the R’s emphasis on pport the action
CIT(A) that their testimonies, have been assumption of facts, w discussed above, the a relevant documentary matrix that, the AO had the assessee solely ba persons on wrong ass
Revenue was also not dislodge the factual ma testimonies of these consideration. In the a nor safe to rely on t assessee. In this contex rendered by the Ld. CIT
“..Firstly, the sta
The AO had reli
26.11.2020 whic also noted from statement record after four days f also part of the seen closely, it initial statement recorded on 30.1
had explained th from the parties
1 kg of gold orna make 1 kg of orn
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::48 ::
n shown by the assessee, to be ba which makes it unsafe to be relied assessee has successfully rebutted evidences. Hence, we hold in af d erred to draw adverse inference ased on an incorrect admission m sumption of fact/mistake of fact.
able to bring any contrary materia trix submitted by the assessee and persons had substance which bsence of the same, it would be n their statements to draw adverse xt therefore, we concur with the fol
T(A), which is reproduced hereunder tements of the above persons are examin ed on the statement of Shri Rajendra K h is also part of the assessment order. H the assessment order that there is one ed from Shri Rajendra Kothari on 30.11.20
rom the initial statement recorded from h assessment order itself. If both these sta is noted that Shri Rajendra Kothari has t dated 26.11.2020 in the subsequen
11.2020. Shri Rajendra Kothari, in his init hat M/s MJPL receive gold bars for makin and it normally receives 975 grams of gol aments and they add alloy to make the or naments with only 935 grams of gold and t

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ased on wrong d upon, and as the same with foresaid factual in the hands of made by these
Moreover, the al on record to show that, the would merit neither prudent e view against llowing findings r:- ned in detail.
Kothari dated
However, it is more sworn
020, which is him, which is atements are changed his nt statement ial statement ng ornaments ld for making rnaments and the remaining

40 grams of gold into the GHAT ac white slips of the from ‘Ghat Jam subsequent state had stated that th making 1 kg of o
%) to Karigars to grams is the ma ornament for the is sold for margin customers in the GHAT ledger are Shri Rajendra Ko
GHAT ledger. If that Shri Rajendr entries made in two different ma the first instance arrived at 40 gram and tried to exp
GHAT ledger. Fur side of GHAT ledg
5.8.5. If the find entries made in manufacturing of different from the verification carrie concluded that th carat bullion into gold purity betw component of allo proves without a the quantity of a Rajendra Kothari…
7.18 Overall therefore, remand report acknowle of alloy adjustments an exercise undertaken by ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::49 ::
is kind of profit for them and this 40 gram ccount and he makes this entry by seein daily reports prepared by Shri Nikhil and ma’ and ‘Ghat Naamae’ columns. Whe ement recorded on 30.11.2020, Shri Raje he gold ornaments are made with 91.6% p rnaments, M/s MJPL issues gold bar of 925
o make ornaments of 916 grams and the aking charge for Karigars. When M/s MJ rate equivalent to 940 grams (94%) and t n of 15 grams and these 15 grams is char e form of metal credit and the receipt si the income of M/s MJPL. In the said sta othari had asked to ignore the issue side e both the statements are seen closely, it ra Kothari is not clear about the nature of G
J-Pack and he had explained the same t nners. Further, if the said example is be , the profit of MJPL for making 1 kg of or ms and in the second instance it is reduced lain that the same is entered as GHAT r rther, he had totally disregarded the entrie ger for the reason that there are no GHAT p ings of the AO in the remand report on ac the GHAT ledger for the purchase of gold f gold ornaments is considered, the facts e statement of Shri Rajendra Kothari as a ed out by the AO in the remand proceed he alloy is calculated on the basis of conv o 22 carat gold ornaments, the exact diffe ween 24 carat and 22 carat is calcul oy and said alloy is added into the GHAT a any doubt that the GHAT account is enter alloy which is contrary to the statement g
…”
, the specific findings rendered by edging that, the entries in ‘Ghat’ le nd not wastage gold, coupled with the Ld. CIT(A) clearly disproved the 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ms is credited g yellow and Shri Tulsiram ereas in the endra Kothari purity and for 5 grams (92.5
e remaining 9
JPL sells this this ornament rged from the de entries in atement only, entries in the can be seen
GHAT receipts transaction in ing taken, at naments was d to 15 grams receipt in the s in the issue payments.
ccount of the d bullion and s are entirely above. In the ings, he had version of 24
erence of the ated as the account. This red with only given by Shri y the AO in his edger were that the verification e testimonies of Shri Kothari & Shri Khat by the Revenue on the Vs CIT (52 taxmann.co distinguishable, as that consistent, credible, an in the foregoing, is ab reliance placed by the L of the Hon’ble juri i
Jayalakshmi Ammal (39
was held that, unless th
Act is corroborated by cannot be the sole bas relevant findings of the “19. While advert for deciding any Income Tax Act, corroborative m documentary evid of the Income Ta at any adverse d the Income Tax A exercised, solely arbitrary exercise consequences. Th due care and cau arbitrary exercise
20. In the case son of the assess
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::50 ::
tri making it unreliable. Hence, the decision rendered in the case of B om 449) is found to be misplaced decision turned on facts where the d corroborated with evidence, whic bsent in the present case. Instead
Ld. AR of the assessee Shri Anand ctional High Court in the case
90 ITR 189)(Mad) to be of relevan he statement recorded under Sectio y documentary evidence, such st sis for making additions in the as Hon’ble High Court is as under:- ting to the above, we are of the considere issue, against the assessee, the Authoriti
1961 have to consider, as to whether material evidence.
If there is no c dence, then statement recorded under Se ax Act, 1961, alone should not be the basis decision against the assessee. If the auth
Act, 1961, have to be conferred with the on the basis of a statement, then it ma e of such power. An order of assessment herefore, under Judicial review, courts hav ution that no man is condemned, due to e of authority conferred.
on hand, statement recorded on 29.12.19
see under Section 132(4) of the Act is not 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd reliance placed
Kishore Kumar d and factually statement was ch as discussed d, we find the on the decision of CIT v. S.
nce, wherein it n 132(4) of the tatement alone ssessment. The ed view that, es under the there is any corroborating ection 132(4) s, for arriving horities under power, to be ay lead to an t entails civil ve to exercise erroneous or 999 from the corroborated by any material d the assessee, wit can be safely c evidence, to s
Mr.Natarajan, son under Section 13
documents found contra, if mere without any corr would lead to dis assessment, in th facts and circum statement withou be treated as con
21. In the light o
Revenue has not on the grounds questions of law, in favour of the re
7.19 In the present cas of Shri Kothari and Shri been brought on recor entries in ‘Ghat’ ledger
Rather, the contempo contrary viz., the en ornaments. Hence, hav record, we find that the of alloy added for con ornaments and does no ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::51 ::
document. Admittedly, Revenue has also no th the said statement of his son. If that be concluded that, there was no material substantiate and corroborate the st n of the assessee. If the assessee makes
32(4) of the Act, and if there are any d in his possession, then the case is diffe statement made under Section 132(4) roborative material, has to be given crede sastrous results. Considering the nature of he instant case characterised as undisclose mstances of the case, we are of the vie ut there being any corroborative evidence nclusive evidence against the maker of the f our discussion, we are of the considered made out a case for reversal of the orde raised, and thus we hold that all the are answered in the negative against the R espondent/assessee.”
se also, apart from the unsubstantia
Khatri, no independent corroborativ rd by the AO which would show t r comprised of ‘metal’ received by raneous facts as discussed abov ntries related to ‘alloy’ additions ving examined of the gamut of fa e ‘Ghat Jama’ entries only related to nversion of 24 carat bullion into ot involve any gold entries. We thus

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ot confronted e the case, it documentary tatement of a statement incriminating erent. On the of the Act, ence, than it f the order of ed and on the w that mere e, should not statement.
view that the rs impugned, e substantial
Revenue, and ated statements ve material has hat the receipt y the assessee.
ve, proves the s to the gold acts placed on o the quantities
22 carat gold s are entirely in concurrence with the fo is reproduced hereunde
“After examinatio material in ANN reproduced abov maintained in J-P
(i) The GHAT acco conversion of 24
involve any gold.
(ii) The issue and daily report along as brought out in found the GHAT e rough estimation it is also found t with yellow and entries are made reports and slips, and explain each found on verifica where the materi are in the nature these daily repor during the course of verification of Pack, it can be co have any gold va
(iii) The AO had r basis for arriving component, how above paragraphs can only be cons material to suppo and seized.
(iv) Further, th
Thavisanantham the said statemen
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::52 ::
llowing conclusive findings of the Ld r: - on and verification of the contents of ava
N/VD/RK/LS/S-1 to 15 for the period a ve in Para 5.8.5) with GHAT and MC K
Pack software, it can be concluded that:
ount is entered with only the quantity of al carat bullion into 22 carat gold ornaments d receipt side of GHAT account is also veri g with yellow and white slips available for l the above paragraphs. On the basis of ver entered in GHAT ledger is matching with th slips and daily report for the available pe hat the appellant is maintaining the daily white slips and on the basis of these sl e in GHAT account in J-Pack ledger. Withou
, it is impossible either for appellant or the h and every entry in GHAT ledger. Howev tion that the entries in the GHAT ledger f als are found and seized vide ANN/VD/RK/
e of alloy addition only. Further, it is als rts along with slips were either destroyed e of search for the remaining period. Thus, f available seized material and the GHAT oncluded beyond doubt that the GHAT acco lue in it.
relied on the statement of Shri Rajendra K g at the conclusion that GHAT account ever, the same was found otherwise as s. Hence, the statement given by Shri Raje sidered as mere statement without any ort and also it is contrary to the material ev e AO had also relied on the statem who had developed the J-Pack software. O nt, it is noted that J-Pack software is used

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd d. CIT(A) which ailable seized available (as KHATA ledger loy added for and does not fied from the imited period rification, it is he working in riod. Further, report along ips only, the ut these daily
AO to match ver, it is also or the period
/LS/S-1 to 15
so noted that or not found
, on the basis ledger in J- ount does not Kothari as the has the gold observed in endra Kothari corroborative vidence found ment of Shri
On perusal of for recording the metal-based he had also state cash and metal
Thavisanantham with regard to r unaccounted sal
However, the AO
Shri Thavisanant to be correct wit used for recording
(v) Furthermore,
Khatri dated04.12
kg of gold ornam process of adding grams will be the portion of weight that 3764.109 kg metal weight for are GHAT outgo.
report after verif and also the verif seized material a otherwise. Thus, correct as per th books of accounts of Shri Suresh Kh any corroborative material evidence
5.8.10. On the b addition made o cannot be sustain
7.20 For the reasons s the order of Ld. CIT(A)
2017-18 to 2021-22. H stands dismissed.
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::53 ::
transactions, which is not available in Ta ed that some of the clients are using it for l trading. This second part of statem is also found to be correct in the case of ecording unaccounted transactions w.r.t.
es, BYAJ and VATAV income recorded
O cannot take shelter under this part of ham in respect of GHAT, which is otherwis th the other part of his statement that it g metal-based trading which is not availabl the AO had also relied on the statement o
2.2020, wherein he had stated that for ma ments,960 grams of gold bar is used, wh g alloy only 930grams will be used and r e wastage for him. Further, he has also stat s will be credited in the GHAT ledger and a gs of gold received as per the GHAT ledge
FY 2016-17 to 2020-21. He had also claim
On the basis of the findings of the AO in fication carried out by him in the remand fication carried out by me independently on and ledgers of J-Pack and Tally, the fac this statement of Shri Suresh Khatri is fou e contents of seized material and entries s. Hence, it can be concluded that the abo hatrican only be considered as mere statem e material to support and also it is con e found and seized.
basis of above findings, I am of the opin on account of GHAT receipt for the resp ned.”
set out above, we see no reason to deleting the impugned addition acr ence, these grounds of the Revenu

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd lly. However, unaccounted ment of Shri the appellant the issue of d in J-Pack.
statement of se also found t is primarily le in Tally.
of Shri Suresh nufacturing 1
hereas in the remaining 30
ted that small also admitted er are of gold ed that there n the remand d proceedings n the basis of cts are found und to be not made in the ve statement ment without ntrary to the nion that the pective years o interfere with ross all the AYs e in all the AYs

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd charges (MC
2021-22
g a wholesale rders from his basis, for which ally, the making gold ornament ceiving making or which he has k software. The king charges in 16-17 to 2020- and the group es in all these at as per the f the Act dated ards the receipt s paid through banking channels but r
AO further observed tha statement recorded u/s explain this ledger. Rel found to have show cau making charges paid th same should not be dis cause was based on in entries in the J-Pack S incurred by the assess from various parties th found to have shown th of receipts (not payme
Profit & Loss Account concerns of the assesse the entry-wise details i that of the party-wise that the entries of am accounted in the regula
8.3
Though the AO is the entries in ‘MC Khat
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::55 ::
received back in cash by the assess at, Shri Khatri, the Director of the a s 132(4) of the Act had however lying on the statement of Shri Kot used the assessee to justify the gen hrough banking channel and explain sallowed. The assessee pointed out ncorrect premise and also demonst
Software were not pertaining to m see but related to the receipt of m hrough banking channel / RTGS. T hat all these entries in ‘MC Khata’ le ents) which were accounted and c of the respective years across ee group. The assessee is noted to h n the ‘MC KHATA’ ledger of J-Pack ledgers maintained in Tally softwa ount received in ‘MC KHATA’ ledge r books of accounts of the assessee found to have dropped his initial sh ta’ Ledger related to unaccounted m

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd see group. The assessee, in his sought time to thari, the AO is uineness of the n as to why the t that the show trated that the making charges making charges
The assessee is edger were that credited in the the respective have submitted k software with are to correlate er was entirely
.
how cause that, making charges payments which was ba still treated the entries book found in the cour companies, which was AO, this note book co
Saravana Stores from d
Charges which inter alia the statement given by Stores (Jewel) Super LL were received by the a customers and that Sh his customers. The AO a Ledger as unaccounted made addition(s) aggre to 2021-22. 8.4
On appeal, the L report from the AO to ledger ‘MC Khata’ maint of expenses paid by th noted to have verified t findings that the entries
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::56 ::
ased on the statement of Mr. Kotha s to be unaccounted for, by referrin rse of search at Super Saravana S marked as ANN/SR/SSSLLP/B&D/1
ontained details of cash received different persons on the account of a included the name of the assesse y Shri A Julian, Manager of M/s S
LP, the AO held that, though these m ssessee but they were paid back in ri Khatri was providing accommoda accordingly treated the entries foun d making charges received by the egating to Rs.136,34,23,245/- acros
Ld. CIT(A) is noted to have called ascertain the exact nature of the tained in J-Pack viz., whether it wa he assessee or income received by the claim of the assessee afresh an s found in the ‘MC Khata’ Ledger of J

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ari, but the AO ng to one note
Stores Group of 1. According to back by Super f bogus Making ee. Referring to Super Saravana making charges n cash to these ation entries to d in ‘MC Khata’
e assessee and ss AYs 2017-18
d for a remand e entries in the as in the nature y it. The AO is nd rendered his
J-Pack software related to making cha accounted for in the boo entities. The AO is note with the parties ledge
Jewellers (Prop Concern
Though having observe one notebook seized f
Super LLP, as discusse that the customer had making charges paid to AO wanted the Ld. CIT(A 8.5
After considering have held that, the ma in the nature of expen nature of income receiv work basis, which, as a books of accounts of t years. and therefore, ac account was warranted the statements of Shri
Saravana Stores (Jewe
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::57 ::
rges earned by the assessee, all oks of accounts of the assessee and ed to have examined and cross che er in the books of accounts of M n) and MJCPL and found the same d so, the AO asserted that, an entr from the premises of M/s New Sa d in the assessment order, wherei received back cash from the asse o the assessee. Hence, referring to A) to sustain the addition.
this remand report, the Ld. CIT( king charges entered in ‘MC Khata’
ses booked by the assessee, inste ved for manufacturing of gold orna admitted by the AO, was already ac he assessee and offered to tax in ccording to Ld. CIT(A), no further a . The Ld. CIT(A) is noted to have Rajendra Kothari and Shri A. Julia l) Super LLP and found the same

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd of which was d/or their group ecked the same
MJPL, Mohanlal to be in order.
ry was found in aravana Stores in it was found essee in lieu of the same, the (A) is found to ’ ledger are not ead, it is in the aments on job- ccounted in the the respective addition on this also examined n of M/s Super to be factually incorrect. With these deleted the impugned a 8.6
The Ld. CIT, DR a note book found in the Saravana Stores (Jewel the assessee was payin from the customers, to AR relied upon the ve remand report and also 8.7
Heard both the pa it is observed that the that the entries found making charges payme averred so in his state after considering the su of assessment, we find
Shri Kothari as it was agreed with the assess represented receipt of m same to be unaccounted
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::58 ::
observations, the Ld. CIT(A) is ddition. Now, the Revenue is in app appearing for the Revenue primaril e course of search at the premises
) Super LLP which according to her ng cash in lieu of making charges in justify the impugned addition. Per erification exercise undertaken by the findings rendered by the Ld. CI arties. From the facts as narrated in initial case sought to be made out in ‘MC Khata’ Ledger represente ents made by the assessee, as Sh ement recorded u/s 132(4) of the ubmissions put forth by the assesse that, the AO himself disregarded th found to be rebuttable on facts. T see that the entries found in ‘MC making charges from customers, but d income of the assessee.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd noted to have eal before us.
y relied on the s of M/s Super suggested that ncome received contra, the Ld.
the AO in his
T(A).
n the foregoing, by the AO was ed unaccounted hri Kothari had Act. However, ee in the course he statement of Though the AO
C Khata’ ledger t he treated the 8.8
Before the Ld. C charges (net) earned fr the books of account a gross and net figures fu by us, is as under:-
FY 2016-17
Entity
MJPL
Mohanlal Jewellers (Prop.
Concern)
Mohanlal
Jewellers
Chennai Pvt. Ltd.
Total

FY 2017-18
Entity
MJPL
MJPL HYD
Mohanlal Jewellers (Prop.
Concern)
Mohanlal Exports (Prop.
Concern)
Total

FY 2018-19
Entity
MJPL
MJPL HYD
Total

FY 2019-20
Entity
MJPL
Total

FY 2020-21
Entity
MJPL
MJCPL
Total
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::59 ::
IT(A), the assessee had shown th rom the customers had already be and offered to tax. The year-wise r urnished before the Ld. CIT(A), also Gross Receipts (₹)
Net Receip
16,53,21,918
13,91,37,035
2,59,15,185
33,03,74,138
Gross Receipts (₹)
Net Receip
34,61,69,838
1,01,83,791
9,44,19,580
45,59,908
45,53,33,117
Gross Receipts (₹)
Net Receip
33,42,52,831
29,07,312
33,71,60,143
Gross Receipts (₹)
Net Receip
31,32,87,048
31,32,87,048
Gross Receipts (₹)
Net Receip
15,75,66,963
95,92,855
16,70,89,818

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd hat the making een recorded in reconciliation of o taken note of pts (₹)
8,14,17,869
5,00,38,778
1,46,31,971
14,97,83,013
pts (₹)
10,03,77,671
64,94,332
2,94,09,348
17,88,029
13,80,69,380
pts (₹)
16,45,78,603
20,54,826
16,66,33,429
pts (₹)
17,55,49,384
17,55,49,384
pts (₹)
8,44,79,471
68,43,546
9,13,23,017

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd e ledgers, profit nd computation
It is seen that, poraneous facts s found in ‘MC of the entities d the same tax vant verification hich is found to , is noted to be was added as AY 2017-18. in the JPACK at they have accounts and t Receipts
,14,17,869
,00,38,778
,46,31,971
,97,83,013
es relating to ed for in their checked. The checked with the parties ledge
(Prop Concern) a On a detailed exa as extracted from reflected in the Concern) and MJC
The Profit and L
Concern) reflecti
Annexure VIII

Mohanlal Jewelle
Ltd
Mohanlal Jewelle
(Prop
Concern)
It is seen that th as extracted from parties ledger in (Prop Concern). T be reflected in th be reflected in the 8.10 We note that, the AO’s verification exercis entry recorded in the ‘M of accounts and offered to the same, deleted offered and assessed to note of by us, is as follo
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::61 ::
r in the books of accounts of MJPL, Mohan nd MJCPL.
amination of all entries found in the MC K m the JPACK software, it is seen that the parties ledger of MJPL, Mohanlal Jew
CPL. The same is enclosed as Annexure VII
Loss Account of MJPL, and Mohanlal Jew ing the receipt of Making Charges are Making
Charges
Receipt
Making
Charges paid ers P
16,53,21,918
8,39,04,049
ers
13,91,37,035
8,90,98,257
e Making charges as reflected in the MC K m the JPACK software is found to be ref the books of accounts of MJPL, and Mohan
The closing balance of these parties ledger he Making charges ledger, the total of whic e profit and loss account as receipt.”
(empha e Ld. CIT(A) had taken specific cog se wherein the AO had stated that,
MC KHATA’ ledger was duly reflecte d as an income of the assessee and the impugned addition, as it had o tax. The relevant findings of the Ld ows:-

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd nlal Jewellers
KHATA ledger ey are found wellers (Prop
I.
wellers (Prop enclosed in Net Making
Charges
8,14,17,869
5,00,38,778
KHATA ledger flected in the nlal Jewellers r are found to ch is found to asis supplied) gnizance of the each and every ed in the books d having regard d already been d. CIT(A) taken

“5.9.4. The ass submitted by t proceedings, the findings in Para entries found in t reflected in party
MJCPL. He had a party’s ledgers fr report. Further, h and MJCPL and f the MC KHATA le had also found reflected in the P had verified each the books of acco and found that appellant. In add the making char consideration, th charges paid a Rs.8,14,17,869/- was offered as n
Mohanlal Jewelle
However, after co
KHATA ledger are recorded in the statement of Shr
LLP dated 01.12
Assessing Officer charges paid to sustained.
…To verify the st said date, the M invoices raised fo the same, it is fo six making charg gold ornaments which is duly acc relevant party’s reproduced asund
Party Ledger as p
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::62 ::
sessment order, remand report and t the appellant are considered. During
AO had verified the claim of the appellant
6.4.3 of the remand report that he had the MC KHATA ledger in J-Pack and found y’s ledger in the books of accounts of the a lso enclosed the details of both MC KHATA rom Tally accounts in Annexure-VII along he had also verified the P & L account of found that the making charges recorded a edger are already offered in the return of that the closing balance of these part
& L account of the appellant as a receipt.
and every entry of the MC KHATA ledger i ount maintained and the P & L account of it is fully offered as an income in the h dition, the AO had also verified and found ges received of Rs.16,53,21,918/- for the e appellant had debited Rs.8,39,04,049/
nd offered net income from making in the hands of appellant. Similarly, Rs.5
net income from making charges in the h ers, Proprietary concern of Shri Moha oming to the conclusion that the entries ma e in fact making charges received by the a books of accounts, the AO had also r ri A Julian of M/s Super Saravana Stores (
2.2021 and stated that the addition m r is on account of receiving back cash for the customers and he has sought the ad tatement of Shri Rajendra Kothari with re
MC KHATA ledger and the party’s ledge or making charges were called for. On ex und that the amount of Rs.13,99,128/-was e invoices raised by the appellant for man on job-work basis for M/s Prince Jewell counted in the books of accounts of the a ledger from J-Pack, Tally and MC KHATA der:
per J-Pack

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd he rejoinder the remand and given his d verified the that they are appellant and A Ledger and with remand the appellant s received in f income. He ties are fully
Thus, the AO n J-Pack with the appellant hands of the that against e year under /- as making charges of 5,00,38,778/- hands of M/s anlal Khatri.
ade in the MC appellant and relied on the (Jewel) Super made by the r the making ddition to be espect to the r along with xamination of s received for nufacturing of ery, Chennai ppellant. The A ledger are MC Khata
Party Ledger as p
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::63 ::
per Tally

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::64 ::

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

On perusal of the M that on 21.03.20
Rs.13,99,128/- and in J-Pack vide ent party’s ledger in th of 18.01.2019 to 0
amount received th the Making Charges in Tally. Thus, it sh of gold ornaments
07.03.2019 and d maintained in Tally
Prince Jewellery.
21.03.2019, first t
Rs.13,99,128/- on debited by the sam ledger account in J contains both debit year. When the go entries in the part
91.66% ornament making charges pa other words, when to the party, M/s that of making cha ornaments to the way of payment equivalent to the a party’s ledger acco party towards mak case of M/s Prince equivalent to Rs.1
dated20.03.2019 w date. Thus, it can b the time of issue o the same is paid t the party’s ledger b there cannot be on verification of the J basis of examinat statement given by Jewellery with the material and the bo
5.9.6. Further, the M/s.Super Saravan of cash back by M making charges pa addition to be sust
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::65 ::
MC KHATA ledger in J-Pack (as reproduced abov
19, there are six entries in the name of d the same six entries were also entered in the try dated 21.03.2019 as the amount received he Tally account was also debited by six entries
7.03.2019 as six entries for each invoice raised hrough bank on21.03.2019 of Rs.14,41,103/-, s and GST, was also credited in the party’s ledg hows that the appellant has raised invoices for s on job-work for M/s Prince Jewellery from uly entered in the party ledger in the book y and considered it as making charges receiv
After actual receipt of invoice amount thro the party ledger in J-Pack is credited with s
21.03.2019 and then the MC KHATA ledge me amount on the same date. It is also noted tha
-Pack is a running account maintained by the a t and credit of metal on a continuous basis du old ornaments are issued to M/s Prince Jewel ty’s ledger are made by debiting with equiva and also adding additional metal weight equiva ayable by the party for job work done by the ever the 22-caratgold ornaments are issued by Prince Jewellery, the appellant debits the gold arges in the party’s ledger in J-Pack at the time party. However, when the making charges ar through banking channel from the said pa amount received in bank account is duly credite ount in J-Pack, otherwise, it will be a double pa king charges which no customer will allow to h
Jewellery, the appellant had given credit of 4
13,99,128/- in the same party’s ledger accou which is equivalent amount of prevailing gold r be stated that the making charges included as m f gold ornaments by the appellant is duly rever hrough banking channel with equivalent amou by way of crediting their account. Since, it is ru ne to one matching of metal receipt and issued
J-Pack ledgers and Tally account, both are ma ion and findings as above, I am of the op y Shri Rajendra Kothari explaining the transac appellant is contrary to the facts appearing fr ooks of accounts.
e AO had also relied on the statement of Sh na Stores (Jewel) Super LLP and stated that the M/s Super Saravana Stores (Jewel) Super LLP aid by them to the appellant and he has sou ained. In this regard, the MC KHATA ledger, pa

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ve), it is noted f
‘PRINCE’ for e party’s ledger d. Further, the s for the period d and the total which includes ger maintained manufacturing
18.01.2019 to ks of accounts vable from M/s ough bank on six entries for er in J-Pack is at the ‘PRINCE’
appellant which ring the entire lery, the debit lent weight of alent to that of e appellant. In y the appellant d equivalent to e of delivery of re received by arty, the gold ed in the same ayment by the happen. In this 424.620 grams unt vide entry rate as on that metal weight at rted back once unt of metal in nning account, d. However, on tching. On the inion that the ctions of Prince rom the seized hri A Julian of ere is a receipt on account of ught the same arty’s ledger in J-Pack and party’s same, it is found t
Jewellery which ha the ledgers from J-
Party ledger as per
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::66 ::
ledger accounts in Tally are verified. On veri that the findings are exactly the same as that s been discussed in above paragraph. The rele
Pack and Tally are reproduced as under:
J-Pack;-

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ification of the t of M/s Prince evant copies of MC Khata
Party Ledger as p
On perusal of the Rs.5,55,037/-and notebook seized f in the case of appearing in the ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::67 ::
per Tally e above, it is noted that the amount of R d Rs.4,04,841/- which was recorded i from the search
M/s Super Saravana Stores (Jewel) Su e MC KHATA ledger, party’s ledger in J-P

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd s.5,48,573/-, n the small uper LLP are Pack and the ledger account i income of the app
5.9.7. On the ba concluded that th in the nature of e nature of income work basis, which appellant and off verified each and remand proceedi the books of acco
ITR filed. Howeve
Kothari and Shri
LLP, which was a in the above para
Rs.20,44,84,681/
MCKHATA ledger grounds raised by 8.11 The Ld. CIT, DR a any factual infirmity in able to controvert the wherein he himself had are duly reflected in corresponding amounts when it is not in disp credited and offered to out by the Revenue for us has no legs to stand same amount, which is ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::68 ::
n Tally. The same amounts are also o pellant, which is already subjected to tax.
asis of the above observations and finding he making charges entered in MC KHATA le expenses booked by the appellant, instead e received for manufacturing of gold ornam h is already accounted in the books of acc fered to tax in the respective years. The d every entry recorded in the MC KHATA ngs and found that all the entries are duly ounts and offered as an income of the app er, the AO had relied on the statement of S
A. Julian of M/s Super Saravana Stores ( also found to be incorrect as per the detaile agraphs. Hence, I am of the opinion that th
/- made by the AO on account of entr account in J-Pack is to be deleted. Accor y the appellant are allowed.”
appearing for the Revenue was una the above findings of the Ld. CIT(A remarks given by the AO in his accepted that the entries in the ‘MC the books of account of the ass have already been offered to tax. A pute that the impugned sum has tax by the assessee, the case soug sustaining the addition(s) being im d on, as it would amount to double impermissible in law.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ffered as an gs, it can be edger are not d, it is in the ments on job- counts of the AO had also ledger in the y reflected in pellant in the Shri Rajendra
Jewel) Super ed discussion he addition of ries made in rdingly, these ble to pin point
A) nor was she remand report
C Khata’ ledger essee and the According to us, s already been ght to be made mpugned before addition of the 8.12 In spite of the ab supported the order of Shri Julian of M/s Sup allegedly stated that, th in cash. We however statement is of any as addition which is in d already credited the m
Saravana Stores (Jewel to tax and therefore evidently tantamount to 8.13 There is also meri of Shri Julian had an payment back to M/s have been found in the contained record of bot assessee. It is seen th found that the am
Rs.4,04,841/- which ap was also reflected in th
J-Pack, and the Tally le
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::69 ::
bove admitted factual matrix, the L the AO by relying on the statement per Saravana Stores (Jewel) Super he making charges paid by them was are unable to comprehend as to ssistance to the Revenue to justify dispute before us. Admittedly, the making charge received inter alia fr
) Super LLP to their P&L A/c and of any further addition on this sam o double addition.
it in the Ld. AR’s submission that, if y substance, then corresponding
Super Saravana Stores (Jewel) Su
‘J-Pack Software’, as by Revenue’s th accounted and unaccounted tran hat, the Ld. CIT(A) had verified t mounts of Rs.5,48,573/-,
Rs.5, peared in the seized note-book of S e MC Khata ledger in J-Pack, the p edger account of Saravana Stores

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

Ld. CIT, DR still t recorded from r LLP who had s received back how does this y the impugned e assessee has rom M/s Super ffered the same e count would f the statement entry of cash uper LLP would own admission nsactions of the his aspect and ,55,037/- and Saravana Stores arty’s ledger in and that these amounts were already r income and were duly o note that, there was no that this amount was pa the Ld. CIT(A)’s findin unreliable.
8.14 We also agree wit a miniscule value of Rs
Saravana Stores (Jewel the entire making char
P&L A/c across all the assessee’s submission made by the Revenue o
M/s Sarvana Stores (0. se arbitrary and un-rea assessee is in the bu customers and therefo arbitrarily be disbeliev contrary material or evi
Rather, the verification support the assessee’s c
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::70 ::
recorded as part of the assessee’s m offered to tax in the relevant return o entry found in J-Pack software w aid back in cash. Hence, on these fa ngs treating the statement of S th the alternate plea of the Ld. AR th s.20.36 lacs found in the premises
) Super LLP cannot be the basis to rges of Rs.135.32 crores received a e years was not genuine. We find that the hypothetical extrapolation on the basis of this entry found at t
1% of the total value of making cha asonable. Further, it is an admitte usiness of rendering job work s ore the making charges earned ved as non-genuine, particularly dence was found or seized in the co exercise done by the AO & Ld. CIT case.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd making charges of income. We which suggested acts, we uphold hri Julian was hat the entry of s of M/s Super disbelieve that and credited in d merit in the n sought to be the premises of arges) was per- d fact that the ervices for its by it cannot when no such ourse of search.
T(A) is found to 8.15 Moreover, assumi the statement of Shri charges from M/s Super the P&L A/c is to be tre have been excluded fr which has not been d
Revenue itself is found which they seek to rely
Shri Julian is of no assis
8.16 For the above se order of Ld. CIT(A) del charges, as it was alrea assessed to tax as well.
9. Issue 3 &4 : Add
Ground Nos. 1 to 5 of th
9.1
It is noted that arguments raised by b they are being taken up issue are that, in the co in J-Pack software. It is ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::71 ::
ing for a moment that there is som
Julian, then by that logic, the rec r Saravana Stores (Jewel) Super LL eated as not genuine, then such in rom the computation of the asse done by the Revenue. Hence, the d to be contrary to the statement upon. According to us therefore, th stance to the Revenue.
t out reasons therefore, we theref eting the addition(s) made on acco dy accounted in the regular books o
We thus dismiss these grounds of t ditions made on a/c of ‘Byaj’ & ‘V he Assessee's appeal for AYs 2017-1
t, these two issues are inter-li oth the parties were also common p together. Briefly stated, the facts ourse of search, one ledger titled ‘B s understood that, the term ‘intere

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd me credence in ceipt of making
P as credited in ncome ought to ssable income, e action of the of Shri Julian, he statement of fore uphold the ount of making of accounts and the Revenue.
Vatav’
18 to 2021-22
nked and the n and therefore relating to this Byaj’ was found est’ in the Hindi language is pronounc authorities, the entries in the form of cash or m of their dues. The AO u/s 132(4) of the Act interest income to tax.
the receipt entries cou receipts and metal rece
AO is noted to have co by adopting per gram r
AO accordingly calcula
Ledger as follows:-
AY
Interest received in meta
(in grams
2017-18
603
2018-19
5784
2019-20
7951
2020-21
8397
2021-22
TOTAL
28163
9.2
In addition to the in the same J-Pack Soft rate differences etc. in ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::72 ::
ced as ‘Byaj’. According to the in this ledger denoted the interest metal (gold) from customers for de noted that, Shri Khatri in his state dated 05.01.2021 had agreed to After examining the ledgers, the uld be classified into two catego ipts. So far as the metal receipts is nverted the entries recorded in gra ate of Rs.4881/- prevailing as on 1
ated the interest income recorded t d l s)
Equivalent value of gold(@Rs.48
81 per gram as on 10.11.2020
Interest in Cash (in Rs.)
Tot
30
2,94,32,430
7,45,40,039
10
.8
2,835,609
1,39,07,037
4
.3
3,88,10,295
2,32,85,519
6
.4
4,09,87,709
6,02,51,200
10
0
0
7,80,72,778
7
.5
13,74,66,043
25,00,56,573
38
above, the AO also found one ledg tware, whose colloquial meaning wa the assessee’s line of business. Ac

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd e Investigating received either elayed payment ement recorded offer the said
AO noted that, ries viz., cash concerned, the ms into rupees
0.11.2020. The d in the ‘Byaj’
al Interest
(in Rs.)
,39,72,469
,21,42,646
,20,95,814
,12,38,910
,80,72,778
,75,22,617
er titled ‘Vatav’
as commission, ccording to the AO, both Shri Kothari a this ledger was also un
‘Vatav’ income from this 9.3
According to the been offered to tax and the assessee across all assessee preferred appe
9.4
Before the Ld. CI while calculating the ‘by squared off entries as Account and sought exc out that, there were s
Pondy, expressed in g entries, and no such in this person. The assess reflected in Shri Pondy’s called for a remand repo facts of the case and th
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::73 ::
and Shri Khatri had admitted that, accounted for and therefore the AO s ledger, which is as follows:-
AY
Vatav (in Rs.)
2017-18
7,68,38,850
2018-19
8,80,42,489
2019-20
7,04,04,429
2020-21
8,62,761
2021-22
1,45,54,166
TOTAL
25,07,02,695
AO, the above ‘byaj’ & ‘vatav’ re d therefore added the same to the the years. Aggrieved by the order eal before the Ld. CIT(A).
T(A), the assessee is noted to hav yaj’ income, the AO had erroneous interest receipts which were route clusion of the same. The assessee several debits to the account of o gold weight (grams), but they w nterest was actually received in gol see thus prayed for deletion of the s account as well. The Ld. CIT(A) is ort on this issue from the AO. After he remand report, the Ld. CIT(A) is 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

, the entries in O quantified the eceipts had not total income of of the AO, the e claimed that, sly included the ed through ‘PP’
further pointed one Shri Laxmi were only book d or cash from e ‘byaj’ amount s noted to have considering the s noted to have held that the assessee through ‘PP’ A/c were i debits appearing in the CIT(A) is noted to hav though there were deb interest in form of gol being 3,994.520 grams accordingly directed tha the assessee only to the party and the remaining directed to be deleted f held that, the AO was u prevailing as on 10.11
metal receipts in all th prevailing in the respec issued by the Ld. CIT(A follows:-
AY
2017-18
2018-19
2019-20
2020-21
2021-22
TOTAL
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::74 ::
was unable to substantiate that the n the nature of squared off entries e account of Laxmi Pondy is conc ve analyzed all the ledger entries a bit entries in her account in all the d was received only in FYs 2017- s and 958.750 grams respectively.
at, the interest is chargeable to tax e extent of value of the gold receive g balance amount debited in Pondy from the total interest income. The unjustified in adopting uniform rate o
.2020 for valuing the interest inco he years and directed that the m ctive years be adopted. In light of t
A), the revised quantum of ‘byaj’ in Interest computed by AO(inRs.)
Interest computed by Ld. CIT(A) (in Rs.)
10,39,72,469
8,97,71,261
4,21,42,646
3,84,86,690
6,20,95,814
4,48,74,607
10,12,38,910
6,92,09,435
7,80,72,778
6,81,77,631
38,75,22,617
31,05,19,624

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd e entries routed s. So far as the cerned, the Ld.
and found that e years but the -18 & 2018-19
The Ld. CIT(A) in the hands of ed from the said y’s account was Ld. CIT(A) also of Rs.4,881/gm ome in form of market rates as these directions ncome stood as 9.5
So far as the qu assessee is found to hav monthly basis by pass receipts side exceeded balancing entry on th according to the assess actual inflow or outflow while quantifying the ‘
considered and the debi wrongly ignored. In su detailed reconciliation
CIT(A) is noted to have issue of ‘Vatav’. The Ld infirmities in the calcul consequence the quant across
AYs
2017-18
Rs.11,55,12,445/-. It report, the Ld. CIT(A) a the end of each mont arising between the rec deleted. The Ld. CIT(A)
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::75 ::
uantification of ‘vatav’ income is ve claimed that, the ‘vatav’ ledger w sing squaring-off entries and there the issue side, the difference was he issue side, and vice versa.
see, were merely adjustment entri w of cash. The assessee further po vatav’ income, only the credit en it entries being in the nature of cash pport, the assessee is noted to ha with evidences before the Ld. CI e called for a remand report from d. AR showed us that, the AO had lation as pointed out by the asses tum of the aggregate ‘vatav’ incom
8
to 2021-22
from Rs.25,07
is observed that, after considerin also accepted that the squaring off e th in the ‘Vatav’ account towards ceipt side and issue side and vice-ve also held that, there are both cash

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd concerned, the was closed on a efore when the s recorded as a These entries, es without any ointed out that, tries had been h expenses was ave furnished a IT(A). The Ld.
the AO on this accepted these ssee, and as a me was reduced
7,02,695/- to ng the remand entries made at the difference ersa, was to be receipts (credit entries) and cash paym are arising out of the amount was to be con quantified by the Ld. C noted as under:-
AY
2017-18
2018-19
2019-20
2020-21
2021-22
TOTAL
9.6
After quantificatio assessee is found to h above revised figures
Khatri and that he had income filed u/s 153A therefore the assessee the hands of the asses amount twice. It is note by observing that the Khatri did not have an CIT(A), the assessee is ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::76 ::
ments (debit entries) on a continuo same ‘Vatav’ ledger and therefor nsidered. Hence, the corrected Va
CIT(A) on the basis of the AO’s rem
Vatav computed by AO(inRs.)
Vatav computed by Ld. CIT(A) (in Rs.)
7,68,38,850
2,12,06,805
8,80,42,489
4,23,91,890
7,04,04,429
1,42,38,299
8,62,761
2,31,21,285
1,45,54,166
1,45,54,166
25,07,02,695
11,55,12,445
on of the corrected ‘byaj’ and ‘vata have contended before the Ld. CI of ‘byaj’ and ‘vatav’ pertained to already offered the same to tax in A of the Act for AYs 2017-18 to prayed that these amounts should n ssee, as it would result in taxatio ed that, the Ld. CIT(A) rejected the disclosure given by the Director, ny break-up. Aggrieved by the or in appeal before us.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ous basis which e only the net atav income as mand report, is 6
av’ income, the IT(A) that, the Shri Mohanlal n his returns of o 2021-22 and not be added in on of the same assessee’s plea
Shri Mohanlal rder of the Ld.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

AR vehemently be taxed in the ditional income n his returns of 18 to 2021–22
t would amount
Ld. AR took us y Shri Mohanlal urns of income in Paper-book, amount(s) had same additions therefore ought e assessee and ting the benefit atri against the had originally
,75,22,617/- &

Rs.25,07,02,695/- resp assessee had pointed o of income, which the A CIT(A) is accordingly fo
‘byaj’ income & ‘vatav’
respectively. We find t items of income have therefore we find the q finality. The limited issu whether the impugned these very sum(s) had Shri Mohanlal Khatri.
9.10 In this context, th issued under u/s 153A computation of income
2021-22, details of whi of the Paper Book. It is income to tax in AYs 20
AY
Inc
2017-18
2018-19
2019-20
2020-21
2021-22
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::78 ::
pectively across all the AYs in ut infirmities in the calculations of t
AO acceded to in his remand report ound to have reduced the aggregate income to Rs.31,05,19,624/- & Rs.
that, the Ld. CIT(A)’s quantification not been disputed by either party quantification of ‘byaj’ & ‘vatav’ to ue raised by the assessee in their ap d addition(s) in their hands was j already been offered and taxed i he Ld. AR first invited our attention t
A of the Act on Shri Mohanlal K returned u/s 153A of the Act for A ch is found placed at Pages 16 to 4
s seen that, Shri Khatri had declare
17-18 to 2021-22. come declared u/s 139
Income declared u/s 12,25,27,950
22,08,8
10,51,56,860
42,21,1
10,47,49,160
26,47,4
11,58,63,680
27,58,6
NA
35,35,9

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd question. The these two items
(s) and the Ld.
e figures of the 11,55,12,445/- n of these two before us and o have attained ppeal(s) is that, justified, when n the hands of to the notice(s)
Khatri and the AYs 2017-18 to 48 of Volume V ed the following
153A
89,150
2,240
49,160
63,680
96,800

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd e filed by Shri e that, he had ditional income e(s) u/s 143(2) and in response
2022, which is ng perused the a explained the ncome filed u/s his submission
25,07,02,695/-
-Pack software.
his son’s offer rch and offered e observe that, of the ‘Byaj’ &

‘Vatav’ income, comput quantified same at Par follows :-
“8. Issues Found

Ass
2
2
2
2
2

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::80 ::
ted from the entries in the J-Pack ras 8 & 9 of his reply, which is n
During Search relating to "Byaj" :- course of search, the search team had fo software wherein the assessee used to acc usiness. Your kind authority in the above he amount in the byaj ledger as below :- sessment
Year
Cash
2017-18
10,39,72,469
2018-19
4,21,42,645
2019-20
6,20,95,814
2020-21
10,12,38,909
2021-22
7,80,72,778

38,75,22,617
stated that the above stated values collect and in cash.
y stated that while maintaining the said o close this ledger by putting a square of e., when the Receipt side is higher than th y on the issue side of the difference betw d vice versa. The amount specified in the come of your assessee for the relevant per stated that while arriving at the above st had also added the transfer entries which w month for squaring off the ledger. This is considered by the search team which was s.
he actual income of the assessee for the ng the transfer entries are as below: -

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd k Software and noted to be as und the Byaj count income stated notice ively consists ledger, your ff entry on a he issue side, ween the two ese entries is riod.
tated figures, were made at s because the s inflated due period under Ass
2
2
2
2
2

Ass
2
2
2
2
2

The relevant doc stated explanati authority in my authority on 17.0
consists of Byaj in 9. Issue Found D

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::81 ::
sessment
Year
Amount
2017-18
6,92,00,000
2018-19
2,52,00,000
2019-20
4,54,00,000
2020-21
9,14,00,000
2021-22
2,25,00,000

25,37,00,000
tries of one Shri Laxmi Pondywas added on year on year basis. This entry was tal from Laxmi Pondy was due from very lo est was added. However, it is hereby sta ely book entries but the same were never
CK. Hence the same also is to be reduced he correct figure after setting aside the tra sessment
Year
Amount
2017-18
5,51,84,434
2018-19
2,14,05,138
2019-20
2,80,62,373
2020-21
6,19,56,043
2021-22
2,25,45,278

18,91,53,266
umentary evidence for the same along wi on has already been submitted before submission which was submitted befor
03.2022. It may be noted that the above s n grams (Converted to Rupees) and in cash uring Search relating to “Vatav”:- course of search, the search team had foun software wherein the asseessee Used to acc
Business Your kind authority in the above he amount in the vatav ledger as below :-

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd d in the byaj because the ong time and ated that the r received as in arriving at ansfer entries th the above e your kind re your kind stated values h.
nd the VATAV count income stated notice

Ass
2
2
2
2
2

Ass
2
2
2
2
2

The relevant doc stated explanati authority in my authority on 17.0
9.13 We thus note tha that the ‘Byaj’ Ledger &
to him and accordingly
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::82 ::
sessment
Year
Amount
2017-18
5,51,84,434
2018-19
2,14,05,138
2019-20
2,80,62,373
2020-21
6,19,56,043
2021-22
2,25,45,278

18,91,53,266
y stated that while maintaining the said o close this ledger by putting a square of e., when the Receipt side is higher than th y on the issue side of the difference betw vice versa.
stated that while arriving at the above st had also added the transfer entries which w month for squaring off the ledger. This is considered by the search team which was s. Therefore, the correct figure can be arriv e transfer entries. Hence, the correct is as below:- sessment
Year
Amount
2017-18
2,21,06,805
2018-19
4,23,91,893
2019-20
1,42,32,299
2020-21
2,31,21,285
2021-22

10,09,52,282
umentary evidence for the same along wi on has already been submitted before submission which was submitted befor
03.2022.”
at, Shri Mohanlal Khatri had specifi
& ‘Vatav’ Ledger found in J-Pack soft he had offered the relevant entries

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ledger, your ff entry on a he issue side, ween the two tated figures, were made at because the s inflated due ved only after
Income with th the above e your kind re your kind ically explained tware pertained s therein to tax, on the basis of his own
13 of the same reply quantification of the a which is noted to be as “13. Additional
Proceedings (Sou

A.Y
B
2015-16
2016-17
2017-18
7
2018-19
6
2019-20
4
2020-21
8
2021-22
2

TOTAL

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::83 ::
n quantification. We note that, Shri dated 24.03.2022, had furnished dditional income declared u/s 153
under:-
Business Income Offered with respect urce):- stated above, the precise unaccounted in r assessee cannot be derived with prec accounts maintained by the business of yo income which is identifiable out of all the rch are "Byaj Income" and "Vatav Income"
s hereby stated that the unaccounted bus is again utilized in the business of the a n be reflected as either excess stock or r are. Further, as stated in point 12.11 abov f the unaccounted income as appearing
Pack Account are brought to tax as additio e, it is hereby stated that as elucidated naccounted income generated throug entered in different names to have secrec ees. Therefore, the peak credit theory is a additional business income. Hence, the ock period is as below:-
Byaj and Vatav
Other Business
Income
Incom to Inc
-
4,21,54,799.00
4,21,
-
11,24,12,798.00
11,24,
,63,00,000.00
2,20,61,198.00
9,83,
,35,00,000.00
25,34,55,379.00
31,69,
,22,00,000.00
11,78,00,000.00
16,00,
,50,00,000.00
7,50,00,000.00
16,00,
,28,00,000.00
20,60,85,490.00
22,88,

82,89,69,644.00

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd i Khatri at Para the manner of 3A of the Act, t to Search ncome of the cision due to our assessee.
issues during
.
siness income assessee only receivables in ve, the assets in the Trial onal business d in point 6
gh business y of business lso utilized in total income e Offered come Tax
54,799.00
12,798.00
61,198.00
55,379.00
00,000.00
00,000.00
85,490.00

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ng the above of the assessee
143(3) for AYs made on these essment orders
-82, 87-90, 95-
According to the ditional income
Khatri but also s therefore the vatav’ receipts n offered to tax ain be added in eturns filed u/s t orders passed ri, we find that, e to tax in the -18 to 2021-22
‘vatav’ receipts software found in the course of search these two counts are no AY
By 2017-18
5,5
2018-19
2,1
2019-20
2,8
2020-21
6,1
2021-22
2,2
Total
18,9
9.16 In view of the a observations that, the lacked break-up, for h offered had emanated f we note that, Shri Mo submissions that, out o offered by him in AYs
Rs.29.01 crores had be earned by him, for whic that, the AO in the ass disputed the foregoing furnished by Shri Moha his hands. In light of th as the income on accou by Shri Mohanlal Khatr hands, then the impugn
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::85 ::
h. The details of the additional inco oted to be as under:- yaj
Vatav
To 51,84,434
2,12,06,805
7
14,05,138
4,23,91,890
6
80,62,373
1,42,38,299
4
19,56,043
2,31,21,285
8
25,45,278
-
2
91,53,266
10,09,58,279
29
above, we do not countenance th additional income offered by Shri M him to verify whether such additio from the entries found in J-Pack Sof ohanlal Khatri had made it explici of the total additional income of R s 2017-18 to 2021-22, the sum een disclosed towards ‘byaj’ and ‘
ch entries were made in J-Pack Softw sessment orders passed u/s 153A/1
g offer and the manner of break nlal Khatri and rather assessed the e foregoing, we have no hesitation unt of ‘byaj’ and ‘vatav’ had alread i and also assessed to tax by the s ned addition to that extent made a 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ome offered on otal
7,63,91,239
6,37,97,028
4,23,00,672
8,50,77,328
2,25,45,278
9,01,11,545
he Ld. CIT(A)’s
Mohanlal Khatri onal income so ftware. Instead, ty clear in his
Rs.96.42 crores aggregating to ‘vatav’ receipts ware. It is seen
143(3) had not k-up of income same to tax in in holding that, dy been offered same AO in his gain by the AO in the hands of the asse sum twice, which is imp
9.17 The Ld. CIT, DR h had offered the additio before the Income-tax previous search and t attributed to ‘byaj’ & ‘v course of the impugned
Khatri, in his individua income before the ITSC this offer on estimate b
‘unaccounted asset’ and such unaccounted incom the income offered was not specifically attribute in the Ld. AR’s submiss was not attributable to legally within his right t alia towards the ‘byaj’
present search dated 10
before the ITSC was he
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::86 ::
essee company amounted to taxati permissible in law.
had brought to our notice that, Shri onal income to tax for AYs 2014-
Settlement Commission (‘ITSC’), p therefore such additional income vatav’ receipts of the J-Pack Softwa d search action. It is observed that l capacity, had admitted substantia
C. As noted by the lower authorities basis without any reference to ‘seiz d therefore no specific break-up of me was placed before the ITSC. We in the nature of an ‘intangible addi ed to any particular seized material ion that, if the aforesaid offer of ad any particular item, then Shri Moha to attribute such additional income
& ‘vatav’ receipts found later on in 0.11.2020. It is not in dispute that, eld to be true and fair. Even the Ld

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd on of the same
Mohanlal Khatri
15 to 2017-18
pursuant to the could not be re found in the , Shri Mohanlal al unaccounted s, he had made zed material’ or f the details of thus note that, tion’ which was . There is force ditional income anlal Khatri was so offered inter n the course of , the disclosure d. CIT, DR was unable to show us that, attributable to some ot which the same could receipts impugned befo assessments being fram consequent to the pres
Shri Mohanlal Khatri h before ITSC. It is seen
‘byaj’ & ‘vatav’ receip assessment orders pas disputed the aforesaid these facts, we reject t offered to tax for AYs 2
sums.
9.18 It is further obser income offered by Shri mistaken understandin related to the assessee paragraphs, it is amply the assessee group as group entities including
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::87 ::
, the additional income so offered b ther seized material or unaccounte not have been attributed to the ‘
ore us. Moreover, it is noted that, in med u/s 153A/143(3) of the Act fo sent search which was conducted o ad furnished the break-up of inco that the said break-up was stated pts from the J-Pack Software. T ssed u/s 153A/143(3) for AYs 201
submission of Shri Mohanlal Kha the Ld. CIT, DR’s plea that the ad
2017-18 cannot be said to include rved that, for denying the benefit o
Mohanlal Khatri, the Ld. CIT(A) ha g of fact that, the entries in J- e alone. From the discussions made clear that, the J-Pack Software was a whole and that the entries rel g proprietorship concerns and othe

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd efore ITSC was ed asset due to ‘byaj’ & ‘vatav’
n the course of or AYs 2017-18
on 10.11.2020, ome as offered d to include the The AO in the 17-18 has not atri. In light of ditional income e the impugned f the additional ad acted on the -Pack Software e in the earlier s being used by ated to all the r companies of the assessee group. It contain any explicit re unaccounted transactio entity in these entries whom they pertain to.T was also no other cor search, which would lin ledger to the assessee c
J-Pack software does no entire group is inter a rendered in the context accepted the fact that, the assessee but also Chennai Private Limited
Khatri). It is also note
Khatri, while offering th named or identified the simply averred that th considered cumulatively the J-Pack software pe impossible to specificall
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::88 ::
is observed that, the seized J-Pack eference to the assessee as the ons in as much as there is no ref and therefore it is not clearly dis
The Ld. AR has also rightly pointed rroborative evidence was found in nk the impugned entries found in ‘
company alone. The fact that the en ot relate to the assessee alone but p alia evident from the Ld. CIT(A)’s t of making charges or ‘MC Khata’ w this ledger not only contained ent other group entities viz., M/s Moh d & M/s Mohanlal Jewellers (Prop :
d that, Shri Suresh Khatri, son of he income on account of ‘byaj’ and e person to whom it pertained to.
hese receipts will be offered to ta y supports the assessee’s case that rtained to the entire group and it ly identify the unaccounted entries

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd k data does not owner of the ference to any scernible as to out that, there the course of ‘byaj’ & ‘vatav’
ntries passed in pertained to the s own findings wherein he had tries relating to hanlal Jewellers
: Shri Mohanlal f Shri Mohanlal
‘vatav’ had not Rather, he had ax. These facts t, the entries in was practically to any specific entity or individual. In that, the Ld. CIT(A) was software related to the of the additional income reference to the same e
9.19 Further, there is ordinarily the unaccoun controlling the group a juridical person. The Ld from customers for d services rendered, and likely that this unacco individual viz., the pro assessee group and it company. According to found in J-Pack software income ordinarily should holds the capital and m
Mohanlal Khatri. There entries in ‘byaj’ & ‘vata and given the fact that ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::89 ::
light of the foregoing therefore, we s unjustified in assuming that, all e assessee alone, only to deny the be e to the extent offered by Shri Moha entries in J-pack software.
s also merit in the Ld. AR’s su nted transactions are attributable to nd not the flagship company which d. AR pointed out that, ‘byaj’ was elayed payments and ‘vatav’ for thus going by the nature of these ounted income would have been omoter-director i.e. Shri Mohanlal would not have been received by us, in the absence of clear nexus e to any specific person or entity, th d be attributedto the person who e manages the operations, all of which efore, when clear identification as av’ ledger pertained to was evident t, the key person of the assessee

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd are of the view ntries in J-pack enefit of set-off anlal Khatri with ubmission, that o the individual h is an artificial being received miscellaneous e receipts, it is n pocketed by Khatri of the y the assessee s of the entries he unaccounted xercise control, h points to Shri to whom the ly not possible, group i.e. Shri

Mohanlal Khatri had ow entries to tax in his in same issue could have assessee company.
9.20 The Ld. AR also hands of Shri Mohanlal tax rate in the hands individual in some year there was any Revenue assessee group, by offe key individual instead of 9.21 So far as the reli the Hon’ble Supreme C
239) is concerned, we judgment, the legal pr taxed in the hands of same income is to be t discernible. In light of had already accepted account of the ‘byaj’
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::90 ::
wned up these entries and offere ndividual hands, then no further a e been legally made again in the pointed out that the applicable ta
Khatri and the assessee was the sam of company was comparatively l s. Hence, we find that, it was also e leakage or any tax benefit being ering the impugned income to tax i f the assessee company.
ance placed by the Ld. CIT(A) on Court in the case of ITO v. Ch. Atc find it to be factually distinguishab rinciple laid down was that, the in the ‘right person’. Nowhere was it taxed in multiple hands, if the righ the facts as discussed above, whe the offer of income by Shri Moha
& ‘vatav’ receipts based on the 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ed the relevant addition on the e hands of the ax rates in the me. Rather, the ower than the not a case that availed by the in the hands of the decision of haiah (218 ITR ble. In the said ncome is to be t held that the t person is not en the Revenue anlal Khatri on e same source documents i.e., the J impermissible to bring assessee again.
9.22 Having held so a the ‘byaj’ income &
Rs.31,05,19,624/- & Rs
2021-22. Correspondin offered by Shri
Mo
Rs.18,91,53,266/- & Rs as noted by us is as follo
AY
By As quantified by CIT(A)
Am offer tax b
2017-18
8,97,71,261
5,51,8
2018-19
3,84,86,690
2,14,0
2019-20
4,48,74,607
2,80,6
2020-21
6,92,09,435
6,19,5
2021-22
6,81,77,631
2,25,4
Total
31,05,19,624
18,91,
9.23 From the above, had offered ‘byaj’ & ‘va quantified by him and a than the amounts qua assessee company. The ledger has been attribu
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::91 ::
J-Pack entries, in our considere the same amount to tax in the bove, we find that the Ld. CIT(A)
‘vatav’ income from the J-Pac s.11,55,12,445/- respectively for A ng thereto, the ‘byaj’ income &
ohanlal
Khatri in these year s.10,09,58,279/- respectively. The ows:- yaj
Vat ount red to y MLK
Remaining
Difference
As quantified by CIT(A)
Am offer tax b
84,434
3,45,86,827
2,12,06,805
2,12,
05,138
1,70,81,552
4,23,91,890
4,23,
62,373
1,68,12,234
1,42,38,299
1,42,
56,043
72,53,392
2,31,21,285
2,31,
45,278
4,56,32,353
1,45,54,166
,53,266
12,13,66,358
11,55,12,445
10,09
it is observed that, though Shri M atav’ income to tax in his hands b assessed to tax by the AO was comp ntified by the Ld. CIT(A) in the Ld. AR had claimed that, once the e uted to Shri Mohanlal Khatri and his

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ed view, it is e hands of the had quantified ck ledgers at AYs 2017-18 to ‘vatav’ income s totaled to details thereof tav mount red to by MLK
Remaining
Difference
06,805
NIL
91,890
NIL
38,299
NIL
21,285
NIL
-
1,45,54,166
,58,279
1,45,54,166
Mohanlal Khatri but the amount paratively lower matters of the entries in ‘Byaj’
s quantification of the ‘byaj’ & ‘vatav’ in income-tax assessment assessee company qua unable to countenance
Shri Mohanlal Khatri ha the J-Pack Software an noted above, the valu amounts quantified by us, the Ld. AR was una
‘byaj’ & ‘vatav’ receipts view that, this quantif entries in the J-Pack sof no specific identification entries to any specific considered view that,
‘byaj’ & ‘vatav’ rece
Rs.10,09,58,279/- resp extent, the same amou the assessee and the remaining ‘byaj’ & ‘
18,91,53,266] and Rs.
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::92 ::
ncome has been accepted by the AO ts, then no further sum could be at the remaining unlinked entries. W this plea of the assessee. It is ind d admitted to the ‘byaj’ & ‘vatav’ re nd offered the same to tax in his ues quantified by him does not m the Ld. CIT(A) in the impugned o able to show any infirmity in the ca s by the Ld. CIT(A) and therefore fication is indeed correct. As not ftware pertained to the entire group n or demarcation to attribute specif c entity or individual. We therefo when Shri Mohanlal Khatri had a eipts to the extent of Rs.18,9
pectively in his individual hands, nt cannot be brought to tax again same is directed to be deleted.
‘vatav’ of Rs.12,13,66,358/- [3
.1,45,54,166/- [11,55,12,445 - 10

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd in his personal ttributed to the We however are deed true that, eceipts found in hands, but as match with the order(s). Before lculation of the we are of the ted above, the p and there was fic unaccounted ore are of the dmitted to the 91,53,266/- &
then to that in the hands of So far as the 1,05,19,624 -
0,09,58,279] is concerned, as it is not pertains to and even S these remaining entries
9.24 Hence, for the ab in all fairness to the Rev well, we accordingly con the extent of Rs.12,13,6
assessee across AYs 20
for the sake of clarity,
‘vatav’ being deleted an AY
Addition confirmed by CIT(A)
Am be 2017-18
8,97,71,261
5,51
2018-19
3,84,86,690
2,14
2019-20
4,48,74,607
2,80
2020-21
6,92,09,435
6,19
2021-22
6,81,77,631
2,25
Total
31,05,19,624
18,9
9.25 In view of the a allowed.
10. Issue 3: Additio sales
Ground Nos. 5 & 6 of th
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::93 ::
clearly discernible from the entries hri Mohanlal Khatri had not admitt to tax as his personal income.
ove reasons, and to meet the ends venue and with a view to protect th nfirm the addition on account of ‘by 66,358/- and Rs.1,45,54,166/- in th
017-18 to 2021-22. In light of the the details of the amounts on acco nd confirmed by us, is as follows:-
Byaj
V mount to deleted
Remaining amount confirmed
Addition confirmed by CIT(A)
Am be ,84,434
3,45,86,827
2,12,06,805
2,12
4,05,138
1,70,81,552
4,23,91,890
4,23
,62,373
1,68,12,234
1,42,38,299
1,42
,56,043
72,53,392
2,31,21,285
2,3
,45,278
4,56,32,353
1,45,54,166
1,53,266
12,13,66,358
11,55,12,445
10,0
above, these grounds of the asses n made on a/c of gross profit of he Revenue's appeal for AYs 2017-18

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd s as to whom it ted and offered s of justice and, heir interests as yaj’ & ‘vatav’ to he hands of the foregoing, and ount of ‘byaj’ &
Vatav mount to deleted
Remaining amount confirmed
2,06,805
NIL
3,91,890
NIL
2,38,299
NIL
1,21,285
NIL
-
1,45,54,166
09,58,279
1,45,54,166
ssee are partly f unaccounted
8 to 2021-22

Ground No. 6 of the Ass
10.1 The facts relating
Ledger in the J-Pack So of all their unaccounted explain the same. The had mistook the natur colloquial sense. The a used in the J-Pack specifications. The asse name ‘Bank’ in the soft through banking chann represented the funds a showed that the paym channels was also re demonstrated the same
‘Cash’ ledger. The asse also inter alia included approval basis to their bills and since the J-Pa goods, the amounts me basis, was correspondin
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::94 ::
sessee’s appeal for AYs 2017-18 to 2
to this issue are that, the AO had oftware, which according to him, co d cash transactions and required t assessee is found to have explaine re of ‘Cash’ ledger by assuming assessee submitted that, the terms account was customized to t essee showed that, there was no tware and that all the payments rec nels were also entered in the ‘Cas available with the assessee. Similarly ments made to several parties th ecorded in this ‘Cash’ Ledger.
e with sample instances of sub-ledge essee further pointed out that, the d entries relating to goods which customers, which were accompanie ck software was used to record the entioned in proforma bills, when se ngly routed through ‘Cash’ Ledger. L

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

2021-22
found a ‘Cash’
ontained entries he assessee to ed that, the AO its meaning in s and language the assessee’s ledger by the ceived and paid h Ledger’ as it y, the assessee hrough banking
The assessee ers found in the e ‘Cash’ Ledger were sent on ed by proforma e movement of ent on approval
Later on, if and when the goods are ret would be reversed, or i be automatically accoun to be made by the asse assume that all the en cash transactions. Rat transactions, and notio basis, or when it was unaccounted transactio consolidated entries we which included cash sa goods were sent on app value of cash sales du entries made in the J submissions of the ass sworn statement recor stated that the ‘Cash’
done by the assessee a Khatri in his original submitted that the ‘Ca unaccounted transactio
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::95 ::
urned without approval, the entry i f there was sale of approved goods nted for in the books of accounts. T ssee before the AO was that, it was ntries in this ‘Cash Ledger’ denote ther, it was a complete record o nal entries in relation to goods se s returned back unapproved, and ons. The assessee further contend ere passed at the end of day in the les, banking sales and the notiona proval, it was not possible to deter e to the complexities involved in J-Pack software. The AO howeve sessee, because Shri. Rajendra Ko rded u/s. 131 of the Act dated 2
ledger pertains to unaccounted ca alone. The AO observed that, thou statement u/s 132(4) dated 05
ash’ Ledger which included both ons, but he had not submitted a 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd n ‘Cash’ Ledger s, then it would
The case sought a misnomer to ed unaccounted of the banking ent on approval also the cash ded that, since e ‘Cash Ledger’
l entries where rmine the exact the manner of er rejected the othari, vide his
24.11.2020 had ash transaction gh Shri Suresh
5.01.2021 had accounted and any bifurcation working with documen submissions put forth b
AO is found to have ex
Ledger’ across AYs 2017
sales, which is reproduc
AY
Balance
Cash le
2017-18
3222
2018-19
5054
2019-20*
252. 2020-21
1727
2021-22
1005
*There was a one de rectified by Ld. CIT(A)
10.2 Taking the above the profit element emb addition(s) to the total the AO, the assessee pr
10.3 On appeal before furnished a detailed rec at most the unidentifia work out as follows:-

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::96 ::
ntary evidences. However, after c by the assessee in the course of a xcluded almost twenty sub-ledgers
7-18 to 2021-22 and thereafter qua ced hereunder:-
As per edger
Less : Sub-Ledgers excluded by AO
Unaccoun estimate
2.80
(1229.68)
199
4.30
(2328.64)
272
.55
(115.66)
136
7.50
(672.32)
105
5.94
(378.82)
627
ecimal mistake in the AO’s calculation, w
) and the assessee has not disputed the sa e figures of unaccounted sales, the bedded therein at 8% and accordi income of the assessee. Aggrieved referred appeal before the Ld. CIT(A e the Ld. CIT(A), the assessee is conciliation statement with working ble sales for the AYs 2017-18 to 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd considering the ssessment, the from the ‘Cash ntified the cash
Rs.(in Crs.) nted Sales ed by AO
3.12
5.66
6.89
5.17
7.11
which was later on ame.
e AO estimated ngly made the by the order of A).
found to have gs to show that 2021-22 would

AY
2017-18
2018-19
2019-20
2020-21
2021-22
10.4 For arriving at th have pointed out calcu which had already been ‘Vatav’ etc. The asses certain sub-ledgers and also identified contra en according to them, wa considering the remand of the assessee is not sales across all AYs as f
AY
2017-18
2018-19
2019-20
2020-21
2021-22
*The figures a with the corrig
10.5 It is seen that th considered] made by t
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::97 ::
Unaccounted Sales estimated by AO
Unaccounted sales per assessee
1993.12
699.22
2725.66
497.84
136.89
767.52
1055.17
540.76
627.11
146.91
he above quantification, the assess ulation errors in quantification of c n added or considered separately su ssee also furnished additional evid d entries with the books of accounts ntries, group transfers and sales con as to be excluded as well. The Ld d report furnished by the AO and t ed to have quantified the figure o follows:-
Unaccounted Sales estimated by AO
Unaccounted sale estimated by CIT(A 1993.12
1527.03
2725.66
1940.55
136.89
767.52
1055.17
540.76
627.11
265.77
are noted from the Ld. CIT(A)’s order dated gendum dated 05.03.2025
ere was a calculation mistake [one the AO in the assessment order f

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd as see is noted to certain ledgers, uch as ‘Byaj’ or dences tagging s. The assessee ntra etc., which d. CIT(A) after he submissions of unaccounted s
A)*
d 24.02.2025 read e short decimal or AY 2019-20

which was taken note o enhancement of the qu quantified the figure of set out in his appellate rate at 2.5% instead of the AO to re-compute unaccounted sales. Agg is in appeal before us sales and the estimatio
Revenue in the grounds estimation of gross prof that, the Revenue ha unaccounted sales made
10.6 Assailing the actio first objected to the qua
The Ld. AR pointed out entries relating to good materialize as sales and be excluded. He furthe consolidated entries wh made across several c
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::98 ::
of and rectified by the Ld. CIT(A), w uantum of unaccounted sales in tha unaccounted sales, the Ld. CIT(A), e order, is noted to have adopted t
8% estimated by the AO and, accor e the profit on the above quan rieved by the order of the Ld. CIT(A assailing both the quantification o on of gross profit rate. On the o s raised in their appeal(s) have on fit rate at 2.5% instead of 8%. It is as not disputed the revised qu e by the Ld. CIT(A).
on of the Ld. CIT(A), the Ld. AR fo antification & estimation of the unac t that, the entries in the ‘Cash Led ds sent on approval to customers, d therefore according to him, such er submitted that, there were sev ich could not be individually identifi concerns due to complexities in t

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd hich resulted in at year. Having for the reasons the gross profit rdingly directed tified value of A), the assessee of unaccounted ther hand, the ly disputed the observed by us uantification of or the assessee ccounted sales.
dger’ contained which did not entries was to veral untagged ied to the sales the manner of recording in the softwa passed on consolidate contained details of all t not possible for the ass transactions of each gr
AR argued that, the R assessee was making co the J-Pack Software a weeded out at regular in not possible to bifurcate accounts. The Ld. AR t facts of the case, the estimated on a reasona
10.7 The next argumen
2.5% estimated by the through the gross profi showed us that, the ave years did not go beyon years, had the Revenu therefore, the Ld. CIT(A 2.5%, and that it ough
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::99 ::
are. According to the Ld. AR, thes d basis by relying on the daily the group concerns and therefore it sessee to bifurcate and tag the ind roup entity to these consolidated e
Revenue had also tacitly acknowle onsolidated entries on the basis of nd that these daily reports were ntervals and therefore in absence of e and tag the remaining entries wit thus urged us that, having regard quantum of alleged unaccounted ble basis.
nt of the assessee was that the gros e Ld. CIT(A) was on the higher s it rates reported across several yea erage gross profit rate of the assess d 1.5%. He further submitted that, ue rejected the book results. Acc
A) was unjustified in estimating the ht to further reduced to 1.5%. In t

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd se entries were reports which t was humanely ividual sales or entries. The Ld.
edged that the daily reports in systematically f the same, it is th the books of to the overall sales may be ss profit rate of side. Taking us ars, the Ld. AR see for multiple
, in none of the cording to him e gross profit at this regard, the Ld. AR relied on the jud
Court in the case of P
Tribunal in the case of (ITA No. 1611/Chny/20
10.8 The third and las person of the assessee
Mohanlal Khatri had alre the ‘Cash’ Ledger of J-P offered the gross profit
Ld. AR showed us that, profit aggregating to Rs returns of income filed and that such income h
AO in the hands of Shr that the gross profit val
Mohanlal Khatri ought profit on unaccounted s
10.9 Per contra, the Ld estimated the unaccoun not want us to interfer
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::100 ::
dgments of the Hon’ble juri iction
PCIT vs Marg Ltd [2017] 396 ITR
M/s New Saravana Stores Braman
23).
st argument of the assessee was group and Director of the assessee eady identified the entries of unacc
Pack Software which pertained to h on such entries to tax in his perso
, Shri Mohanlal Khatri had already s.65,37,97,54,716/- as his additiona u/s 153A of the Act, for AYs 2017- had also been accepted and assesse ri Mohanlal Khatri. The Ld. AR acco ue to the extent already taxed in th to be excluded from the quantific ales assessable in the hands of the d. CIT, DR submitted that, the Ld. C nted sales turnover across all the y re with the same. On the issue o

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd al Madras High
R 580 and this ndamai vs DCIT that, the key company, Shri counted sales in him and he had onal hands. The disclosed gross al income in the -18 to 2021-22
ed by the same rdingly claimed e hands of Shri cation of gross assessee.
IT(A) had fairly years and does f estimation of gross profit, the Ld. CIT justify the adoption of 8
assessee’s plea seekin offered to tax by Shri M income offered by Shri made in the hands of th
10.10
We have h before us. We first unaccounted sales acro the AO in his remand re heads contained in th unidentifiable sales whi the assessee. We find elaborate exercise had to 2021-22. It is noted sub-heads which were additions in the hands been considered by the and, also those sub-hea books of accounts of t
CIT(A) is also noted to ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::101 ::
T, DR referred to the provisions of S
8% by the AO. The Ld. CIT, DR also ng benefit of telescoping the add
Mohanlal Khatri, as according to her
Khatri had no nexus with the imp he assessee.
heard both the parties and the m take up the issue involving qu oss AYs 2017-18 to 2021-22. It is eport had objectively analyzed all th he ‘Cash’ ledger and thereafter ch was not found to be accounted that, the Ld. CIT(A) also after u quantified the unaccounted sales fo d that, the Ld. CIT(A) had already already considered separately while of the assessee and, those sub-he e AO separately in the hands of Shr ads which comprised of actual sales he entities belonging to assessee have excluded the contra entries,

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

Section 44AD to objected to the ditional income r, the additional pugned addition material placed uantification of observed that, e different sub- quantified the in the books of undertaking an or AYs 2017-18
excluded those e making other eads which had ri Suresh Khatri recorded in the group. The Ld.
sales contra &

group transfers which with supportings. Hav findings rendered by th the view that the Ld.
reasonable.
10.11
We find tha in their line of business customers, it cannot be Software was meant t could be entries in ‘Cas on approval basis. Furth appeal, the J-Pack S movement of the goods consolidated entries wo reports were regularly
Investigating authoritie past three months, it co in the ‘Cash’ Ledger wh specific entities. Though are found persuasive assertions, the assessee
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::102 ::
were identified and pointed out by ing gone through the remand r he Ld. CIT(A) in his appellate orde
CIT(A)’s quantification of unaccoun at there is force in the assessee’s c s, where goods are sent on approv e regarded as sales. As noted ear to provide inventory control and t sh Ledger’ which pertain to goods w her, as noted while adjudicating othe
Software was being used to rec s of the entire assessee group and uld also be passed in this software.
y destroyed by the assessee a s were able to recover daily repo ould be possible that there are conso ich cannot be bifurcated and individ h at first blush, these arguments o but we find that, apart from e has not been able to bring on rec

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd y the assessee eport and the r(s), we are of nted sales was contention that, val basis to the lier, the J-Pack therefore there which were sent er issues in this cord inventory therefore daily
Since the daily and even the rts of only the olidated entries dually tagged to of the assessee making these ord any further documentary evidences of the considered view
Revenue’s case by brin remaining unidentifiabl quantified as unaccoun consolidated entries or approval. The assesse undertake this volumin reports, which have sin thus reject the asse quantification of unacco
10.12
We now co unaccounted sales. It is of 8% to the unaccou embedded therein. We basis for arriving at th averred that, profit ma generally 8%. We are estimation exercise was AR, on the other hand earned by the assessee
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::103 ::
s or supportings to corroborate the w that, the onus is on the assesse nging on record some material to e entries in the Cash ledger, wh nted sales by the Ld. CIT(A) inte r entries relating to goods which ee cannot get away by citing th nous exercise or due to non-avail nce been destroyed. For the aforesa ssee’s plea seeking further red ounted sales.
ome to the issue of estimation of s observed that, the AO had applied unted sales for working out the note that, the AO had not mention his rate. Rather, the AO is noted t argin on such type of unaccounted in agreement with the Ld. CIT(A) s unjustified as it lacked cogent rat
, took us through the details of t across AYs 2017-18 to 2021-22 at 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd same. We are ee to rebut the show that, the hich have been er alia included were sent on eir inability to ability of daily aid reasons, we duction in the f profit on the a uniform rate profit element ned any cogent to have simply transactions is that, the AO’s tionale. The Ld.
he gross profit of Volume - IV of the Paperbook. Havin of the assessee, we h
2017-18 to 2021-22, as Particulars
201
Gross Profit Rate
0. 10.13
It is observe above book results of th
145(3) of the Act. In ou profits earned by the reasonable barometer assessee from the una assessee is identical.
juri ictional Tribunal in vs DCIT (supra), wherei by the assessee on th realistic and reasonable the GP rate offered on a no defect pointed out i above, it is observed th works out to 1.5% and in AY 2021-22. We f
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::104 ::
ng regard to the audited financials ave tabulated the gross profit rat s disclosed by the assessee, which is 17-18
2018-19
2019-20
2020-2
74%
0.80%
1.39%
1.43%
ed that, the lower authorities had n he assessee nor had invoked provis ur thoughtful consideration therefor assessee itself in the comparab to estimate the gross profit d accounted sales, as the business a Our view is supported by the d n the case of New Saravana Stores in it was held that adopting the GP r he accounted sales during the yea e approach. In this decision, it was accounted sales can be adopted bec in the regular books of accounts.
hat the average GP rate across the it ranges between 0.74% in AY 201
further observe that, the Ld. CI

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd and Form 3CD es for the AYs s as under:-
1
2021-22
%
1.85%
not rejected the sions of Section re, the average ble years is a erived by the activities of the decision of the s Bramandamai rate as adopted ar, would be a s also held that cause there was From the table e five (5) years
17-18 to 1.85%
T(A) had also examined the entries in Profit recorded in the J of the transactions in foregoing, we are unab gross profit at 8%, wh reveal such high rate accounted GP rate, the into account the factor than the accounted sa action of estimating t relevant findings of the under:-
“5.11.8. The abov uniform GP rate observed that in was found that transactions in J customers, which time of issue of average as exces over a period of y in addition to 2-3
more than the a designs and mod
8%. Thus, it can
J-Pack that the a majority of transa
2016-17 to 2020- the basis of the from the course o
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::105 ::
n the J-Pack Software and noted t
-Pack Software ranged between 2- volving sale of gold jewellery. I ble to countenance the Revenue’s p hen the entries in J-Pack software of gross profit. Rather, having
GP rate found in the J-Pack Softw that, profit in unaccounted sales is ales, we are in agreement with th he profit from unaccounted sales e Ld. CIT(A) in this regard, are n ve submissions of the appellant with regard for all the AYs 2017-18 to 2021-22 is con the case of the appellant during the course t the appellant is systematically mai
-Pack software on the basis of metal tra h includes making charges or wastage rec f gold ornaments ranging from average ss metal either in the form of Making Ch years for FY 2016-17 to 2020-21. It was al
3%, the appellant is also charging making c average percentage of 2-3% for the delic els for making the ornaments which goes u also be verified from the parties ledgers m ppellant is able to receive an average of 2
actions recorded in the J-Pack for all the y
-21 where the data is available in the seize above, I am of the opinion that the evid of search are to be relied to find out the m

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd that, the Gross
3% in majority n light of the lea to estimate itself does not regard to the ware and taking s usually higher he Ld. CIT(A)’s s at 2.5%.The noted to be as d to adopting nsidered. It is e of search, it ntaining the aded with its corded at the of 2-3% on harges or GP so noted that charges or GP cate, antique up to even 4- maintained in 2-3% of GP in years from FY ed J-Pack. On dences seized more realistic

GP than adopting
AO either in the a also noted that re of appellant for t be made only on of accounts. It is that the unacco outside the book books of the ap reason that the G altered without a Hence, I am of t case of the appe the search and e sale transactions disclosed in the arrive at the tota consideration. I appellant for the these 5 years is appellant in the I
2.58% for the AY
5 years i.e. 1.5%
pack ledger i.e.
Pack. Further, transactions are are saving/evadin to certain level of to the accounted gold sales is alw evasion of taxes element of addit accounted sales c basis of the facts adopting the GP appellant on the recorded in J-Pac all the AYs 2017- that the appellan noted from the tr directed to estim transaction…”
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::106 ::
g of 8% of GP as general, which is not jus assessment order or in the remand report.
ejection of books of accounts is not require the reason that the addition/estimation of account of the transactions recorded outsi also verified beyond doubt during remand ounted sale transactions of Rs.1527,03
ks of accounts maintained in Tally and the ppellant may be detrimental to the appe
GP arrived in the regular books of accounts any findings of defects in the said books the opinion that on the facts and circumst llant, adopting the GP% on the basis of th estimating the income at such GP rate on and making an addition to the total inc books of accounts will be more realistic al business income of the appellant for th had also considered the average GP% of AY 2017-18 to 2021-22. The average ra worked out at 1.5% as per the GP% dec
ITRs filed and it ranges from 0.74% for AY
Y 2020-21. Meaning thereby, the average G
% is almost closer to the average GP recor
2-3% for the majority of transactions re it is also observed that when unacc made in gold ornaments, both the buyer ng the VAT/GST and duties payable on acc f percentage of the total value of transacti transactions. In other words, the GP on ways higher than the accounted sales on s and duties payable to the Government ional gross profit over and above the av cannot be ruled out in the case of the appe s and circumstances as above, I am of the of 2.5% for estimating the unaccounted in e unaccounted sale transactions of gold ck may be reasonable and the same can be -18 to 2021-22 which are under appeal fo t had followed the same approach for all th ransactions in the J-Pack software. Therefo mate the income of 2.5% on the unac

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd stified by the Further, it is ed in the case income is to ide the books d proceedings
3,32,138/- is e rejection of ellant for the s may also be of accounts.
tances of the he findings of unaccounted come already approach to e year under ffered by the ate of GP for clared by the Y 2017-18 to GP for all the rded in the J- ecorded in J- counted sale rs and sellers count of gold on compared unaccounted n account of . Hence, the verage GP on ellant. On the e opinion that ncome of the d ornaments e adopted for or the reason hese years as ore, the AO is counted sale

1,26,04,12
ntention of the assessee which is to profit as quantified is to be brought her the quantum of profit(s) already hri Mohanlal Khatri is to be exclu tware is not an accounting softwar software, which was meant to p he assessee group as a whole. It for the reasons already discussed entries in the J-Pack software rela ssee group. It is seen that consolida software for all the entities be bserve that, this factual aspect also ssue of making charges (already dis

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd element on the ack Software is 5%
.]
,303
,518
,408
,246
676
2,151
be adjudicated t to tax in their y offered to tax uded. As noted re but rather a provide proper is an admitted d in preceding ates to all the ated entries are longing to the o came to light scussed earlier) wherein it was gathere included making charg
Mohanlal Jewellers Che
(Prop : Shri Mohanlal K that the entries in J-Pa but it comprised of al group. It is also observ narration and therefore to any specific entity of was able to identify an software which correspo entities of the assess appropriately considere untagged entries, which inferred them to be pe such action of the considering the assesse the given facts, it cann person (in this case, S group has already ac attributable to these un
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::108 ::
ed that the ‘MC Khata’ Ledger of J ges credited to the accounts of ennai private Limited & M/s Moh hatri). These admitted facts thus cle ack Software did not relate to the l the entries/transactions of the e ved that, several entries in J-pack s there was no specific demarcation o f the assessee group. We note tha nd correlate certain ledgers and en onded to the regular books of acco see group and therefore the sa ed in their respective hands. It is h we find that, the Revenue has su ertaining to the assessee alone. Ac
Revenue could have been ordi ee was the flagship company of the not be countenanced, for the reaso
Shri Mohanlal Khatri) belonging to ccepted and admitted portion o ntagged or unidentifiable entries in 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

-Pack Software the assessee, anlal Jewellers early evidences assessee alone entire assessee software lacked or identification t, the assessee ntries in J-pack ounts of several ame has been the remaining ummed up and ccording to us, narily justified e group, but in on that another o the assessee of the income n ‘Cash’ Ledger and the Revenue has hands.
10.16
It was brou return(s) of income fi additional income on a this same ‘Cash’ Ledger earlier in Para 9.11 ab additional income of Rs that, Shri Mohanlal Kha
153A of the Act, had maintained in J-pack so their notice u/s 142(1) his reply dated 24.03.2
the unaccounted incom including TTT accounts that, it was not possibl entry and therefore by a following additional inco tax, :-

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::109 ::
also assessed the same to tax in ght to our notice that, Shri Mohanl led u/s 153A of the Act had int ccount of profit from unaccounted r of J-Pack Software to tax in his h bove, Shri Mohanlal Khatri had int
.96,42,02,070/- to tax in his hands atri, in the course of assessment p d explained the contents of this oftware, which was confronted to t of the Act. We note that, Shri Moh
2022 had inter alia submitted that, me emanating from this ‘Cash’
on peak-credit basis. He is noted t e for him to trace and determine e applying the peak credit theory, he ome on account of profit from unacc

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd such person’s al Khatri in the er alia offered sales found in ands. As noted ter alia offered
. It is observed proceedings u/s ‘Cash’ Ledger the assessee in hanlal Khatri in he had offered ledger to tax o have averred each and every had offered the counted sales to A 20
20
20
202
202
TO 10.17
It is seen th furnished by Shri Mo
153A/143(3) for AYs computations of income before the AO and the a Act in the matters of Sh
Shri Mohanlal Khatri had income filed u/s 153A such additional incom business aggregating to been tabulated above.
10.18
It is further quantified by the Ld.
estimated thereon is n
Mohanlal Khatri. It is se order that, the Ld. CIT
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::110 ::
A.Y.
Additional Business Income
(on a/c of profit from unaccounted sales) [in Rs.]
17-18
2,20,61,198
18-19
25,34,55,379
19-20
11,78,00,000
20-21
7,50,00,000
21-22
20,60,85,490
OTAL
67,44,02,067
hat, the AO had not disputed the abo ohanlal Khatri, while passing the 2017-18 to 2021-22. Having gon e, returns filed u/s 153A, reply fur assessment orders passed u/s 153A hri Mohanlal Khatri, we agree with t d offered additional income to tax in of the Act for AYs 2017-18 to 202
e inter alia included unaccounte o Rs.67,44,02,067/-, details of whic r observed that, the aggregate una
CIT(A) in the impugned order(s) not exclusive of the profit offered een from the remand report(s) and t
T(A) had first considered the aggre

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ove explanation e order(s) u/s ne through the rnished by him
A/143(3) of the the Ld. AR that, n the returns of 21-22 and that ed profit from ch have already accounted sales and the profit to tax by Shri the Ld. CIT(A)’s egate entries in the ‘Cash’ Ledger and ‘Byaj, ‘Vatav’, ‘MC Kha hands of the assess unaccounted transaction individual hands, (c) ba and (d) reversal/ grou unaccounted sales. Hav with the Ld. AR of the already offered to tax b the Ld. CIT(A) but is quantified by the Ld.
estimated thereon.
10.19
In view of unaccounted sales foun in the hands of Shri Mo unaccounted sales estim of addition which is to b
We concur with the Ld profit from unaccounted has already been taxed then it would result in im
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::111 ::
thereafter excluded (a) the ledg ata’ etc. which had been separatel see, (b) those sub-ledgers whic ns of Shri Suresh Khatri and had be ank entries found in the regular boo p / contra entries; to arrive at th ving regard to the foregoing, we are e assessee that, the profit on una by Shri Mohanlal Khatri had not bee subsumed in the aggregate una
CIT(A) in the impugned order(s) the above therefore, we hold that d in the ‘Cash’ ledger to the extent ohanlal Khatri, is to be excluded fro mated by Ld. CIT(A), to arrive at th be added and taxed in the hands o
. AR that, if the additional income d business [‘Cash’ ledger of J-Pack S d in hands of Shri Mohanlal Khatri is mpermissible double taxation of the 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ers relating to y taxed in the ch related to een taxed in his oks of accounts he quantum of e in agreement accounted sales en excluded by ccounted sales and the profit t, the profit on t already taxed m the profit on he correct value of the assessee.
e on account of Software] which s not excluded, same amount.

A.Y.
Unacc
[As ord

2017-18
38
2018-19
48
2019-20
19
2020-21
13
2021-22
6,
TOTAL
1,2

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

CIT, DR to this ating the issue av’ and for the we reject the of unaccounted cordingly being of calculation is Net addition to be made in hands of the assessee
(A) – (B)
35,96,97,105
23,16,83,139
7,40,80,408
6,01,91,246
NIL
(since negative)
72,56,51,898
26,04,12,151/- dger of J-pack come offered to ual hands, and accordingly confirm add
2017-18 to 2020-21 in shall be seen from the CIT(A) in AY 2021-22 s grounds raised by the R assessee is partly allowe
11. Issue Nos. 6 to physical stock, une receivables
Ground Nos. 6 to 11 of 11.1 These grounds ra by the AO on account unexplained cash
&
Rs.204,53,60,116/-. It found a ‘Party Balance
814253.03 gms was fo party names. Upon bein noted to have submitt accounts and some are a letter before the DD
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::113 ::
dition(s) totaling to Rs.72,56,51,89
the hands of the assessee, as tabul e above table, the addition confirm stands deleted in full. Hence, overal
Revenue stands dismissed and the ed.
10 : Additions made on a/c of explained cash & silver and the Assessee's appeal for AY 2021-2
aised by the assessee relate to the t of unexplained stock, unaccounte silver etc.
all of which a is observed that, the Investigat
Sheet’ as on 10.11.2020 wherein und recorded in the receipt side a ng confronted with the same, Shri S ted that some entries are reflecte unaccounted for. Later on, the ass
DIT(Inv) wherein it was submitte

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

98/- across AYs lated above. As med by the Ld.
l therefore, the grounds of the f unaccounted unaccounted
22
addition made ed receivables, aggregated to ting authorities n gold stock of gainst different
Suresh Khatri is ed in books of sessee had filed d that, out of 814235.03 gms, 44544
accounts and 56709.99
customers for job-work
502120.02 gms was ac was unexplained. Later pointed out further infi were certain entries for contra entries, which a stock as per J-Pack so however was not agree relying on the stateme stated that, out of 8142
the books of accounts
368825 gms to be unac the AO is noted to ha
Rs.180,02,34,825/-.
11.2 In addition to the Balance Sheet’, there w to Rs.51,62,29,969/-, w and therefore he added cash of Rs.14,29,460
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::114 ::
410.03 gms are duly reflected in 9 gms comprised of gold received
. The assessee had therefore claim ccounted for and the balance of 3
r on, in the course of assessment irmities in the calculation and show r goods sent from one entity to an also to be removed, and accordin oftware would only be 143659.38
eable to the submission of the as ent given by Shri Suresh Khatri w
235.03 gms, only 4454410.03 gms w s, the AO considered the remain ccounted stock. Applying gold rate o ve estimated the value of unacco above, the AO also found that, in t were receivables from various parti which according to him was also un d the same u/s 69 of the Act. Furt
0/- and unexplained silver of 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd n the books of d from various ed that total of 312115.01 gms t, the assessee wed that there nother entity or gly the excess gms. The AO ssessee and by wherein he had was reflected in ing balance of of Rs.4881/gm, unted stock at the same ‘Party ies aggregating naccounted for, ther, there was Rs.42,67,644/- physically found in the added by way of unex observed that, the total of the assessee in AY 20
Pa
Excess Stock
Unaccounted cash
Unaccounted cash
Unexplained silver
Total
11.3 Aggrieved by the in appeal before the Ld submissions objecting t valuation. The assessee treated to be unexplain as taxed in AYs 2017-1
same. The assessee is f on account of ‘byaj’, ‘va and in the hands of Shr unexplained assets. Th
CIT(A) that, after allow would be warranted in t
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::115 ::
premises at the time of search, w plained asset to the total income.
unaccounted assets added by the A 021-22 comprised of the following:- articulars
Amount (in 152,34
receivables
51,62
14
r
42
204,53
above addition(s), the assessee car d. CIT(A). It is noted that, the asse the above addition(s) and also its e alternatively claimed that, if the a ed, then correspondingly the unacc
18 to 2021-22 ought to be telescop found to have contended that, the atav’ & ‘profit on unaccounted sales ri Mohanlal Khatri, ought to be teles e assessee accordingly submitted wing the benefit of telescoping, no f this regard.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd which was also It is therefore
AO in the hands n Rs.)
4,33,363
2,29,629
4,29,460
2,67,664
3,60,116
rried the matter essee furnished quantification&
above items are counted income ped against the additions made
’ in their hands scoped to these before the Ld.
further addition

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ppeals of the dered as the earch. The AO e basis of the d also for the the value of available for cess stock, if consideration.
l filed by the counted sales appeal orders e appellant is he AO has to ving effect to be taxed as the form of …”
e assessee is in sessee, without ddition(s), had the excess gold in the course of on 10.11.2020. g in the J-Pack e excess stock e appropriately with reference has furnished a calculation sheet, in ter silver, as per the as Rs.25,07,183/- respecti this corrected stock val confirmed by the Ld.
unaccounted income off the unaccounted incom allowed, then the ent contra, the Ld. CIT, DR
11.7 We have heard b before us. Before adver the principle of telesco the Hon'ble Supreme C assessee offers any in commonly described as assessee's real income same concrete existenc or undisclosed income assessment year may c from which the assesse
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::118 ::
rms of which, the value of excess sessee, works out to Rs.1,01,84
vely. The Ld. AR contended that, ha ues and the value of other unexpla
CIT(A), if the benefit of telesc fered to tax by Shri Mohanlal Khatr me assessed in the hands of the as tire impugned addition shall stand vehemently supported the order of both the parties and perused the m rting to the facts of the case, we fir ping which has since been judicial
Court in the case of Anantharam Ve
7). In the decided case, it was held ncome on ad hoc basis, then s s intangible addition; but it is very e as disclosed in his account book ce. The Hon'ble Court held that, th of an assessee earned in the sam constitute a secret fund, even tho e may draw subsequently for meeti

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd gold stock and 4,40,250/- and aving regard to ained assets, as coping for the i, in addition to ssessee, is also d deleted. Per the Ld. CIT(A).
material placed rst take note of ly approved by eerasinghaiah &
that where the uch income is much a part of ks and has the e secret profits me or an earlier ugh concealed, ing expenditure or introducing amounts were held to be availabl be. The Apex Court thu cash credits can be r concealed profits or by year then no addition cash credits.
11.8 Gainful reference juri ictional Hon'ble Ma
CIT (51 ITR 757). In addition by way of infl across AYs 1947-48 to 1
information that the ass name of his brother an daughter in an entity 'S
1949-50 & 1950-51. On was no justification in m out of the addition mad
1950-51. On further a appeal by the assess elaborately discussed
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::119 ::
s in his account books. The intan le to the assessee as the regular bo s held when the unexplained cash d reasonably attributed to a pre-ex reference to concealed income earn is warranted on account of such c in this regard may be made to the adras High Court in the case of S K the decided case the AO had ini ation of purchases in the hands o
1950-51. Thereafter, the AO came i sessee had lent certain amounts in m nd also made investment in name
S', for which separate additions wer n appeal, the AAC is noted to have making the subsequent addition as it e on account inflated purchases in A ppeal, the Tribunal upheld the act ee, the Hon'ble High Court is n the theory of telescoping of in 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ngible additions ok profits could deficits and the xisting fund of ned in that very cash deficits or decision of the K. Muralidhar Vs tially made an of the assessee n possession of mortgage in the of his wife and re made in AYs held that there t stood justified
AYs 1947-48 to tion of AO. On noted to have ncome against investment / expenditu under:-
"The question in itself and went w and 1948-49 a to in computing the real income of the notional or fiction the addition as "i
Tribunal, the fact and was not mer addition is made assessee earned relaxation from th cannot deviate fr standards of just to that addition which he is called as exceedingly li treating the addi that the source w this would be on department sayin
The decision of t
Commissioner of that case the ass styled the Nellore company its prof the years of acco
1947, 31st Dece
34,352. The reve estimated its inc
62,000 was asse dividend warrant
1,16,280. The as and Rs. 4,800 fo and 31st Decem declared by the c claimed a refund
9, 1949, for Rs. 6
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::120 ::
re and allowed the assessee's claim issue is quite simple and yet the Tribuna wrong. It is a hard fact that for the two ye otal addition of Rs. 52,230 was made by the assessable income. This was, therefore, t e assessee for the years in question. There nal about it. However convenient it might b ntangible" as has been done by the departm t is that it was found to have accrued to rely supposed to have been earned by hi e the department is fixed to the posit the amount in the relevant year. There hat position and we have no doubt that the om or wriggle out of it without departing f tice and fair play. If in such a case the ass as the source from which he got a partic d upon to explain, the department is bound kely and probable, consistent with its pre ition as income, unless it be that it is po was not available to the assessee. The onu n the department. Otherwise, it would am ng, "heads I win, tails you lose".
he Andhra High Court in Lagadapati Subba
Income-tax [1956] 30 ITR 593 is a case sessee was a shareholder of a private limi e Bus Transport Co. Ltd. According to the fits for its entire period of existence, that ount ending with 31st December, 1946, 31s ember, 1948, nth May, 1949, amounted enue declined to accept the books of the c ome at a higher sum on which tax to the essed and paid. The company purported ts to its shareholders aggregating to a ssessee stated that he got the dividends r the account years ending with 31st Dece mber, 1947, respectively, the dividends company on 2nd March, 1949. The assess on the basis of only one dividend warran
6,800. The department as well as the Trib

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd m by holding as al mi irected ears 1947-48
e department reated as the e was nothing be to describe ment and the the assessee im. Once the tion that the e can be no e department from ordinary sessee points cular amount d to accept it evious act in ossible to say us of proving mount to the a Ramaiah v.
e in point. In ted company books of the is to say, for st December, in all to Rs.
company and e tune of Rs.
to issue the sum of Rs.
of Rs. 6,800
ember, 1946, having been see, however, nt dated June unal rejected the claim of the a income- tax of R available with it paid. The questio not entitled to a dealing with the 599:
"In the present c profits of the com
When the revenu it proceeded on th total income of o were unreliable a outside its books therefore, would dividends. Once have been open and distribute t dividends.... Hav undisclosed incom did not in fact e books and could dividends. Among blowing hot and c
The order of the decision. The only the assessee cou prior years which The Tribunal doe to say, that the s the mortgage loa advances. If ther devoted that am mortgage loan an undisclosed sourc conception of "in our inability to "Intangible additi estimate which m of proper evidenc other defects m possession of the ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::121 ::
assessee. The view taken was that after th
Rs. 62,000 levied on the company there w out of which, dividends could have been on before the High Court was whether the a refund of tax in respect of the dividends in matter, Viswanatha Sastri J. observes t case, it is somewhat difficult to say that th mpany out of which a dividend could hav e authority levied a tax of Rs. 62,000 on t he basis that the books of the company wh only Rs. 34,532 for all the four years of nd that the bulk of the company's profits h s. Now those secret profits less the inco be available with the company for di the secret profits had been assessed to to the company to bring those profits in them, or what remained after payment ving assessed the company on a large me, it cannot, at the same breath, say that xist because they did not appear from th not, therefore, have been available for the g common men, such an attitude would be cold or playing fast and loose."
e Tribunal shows that it has missed the r y question that the Tribunal had to decide uld have derived the amount of Rs. 52,2
h according to the department the assess s not say, nor would the materials on rec sum was not available to the assessee eithe an in the name of Murugesa Mudaliar or re had been any evidence to show that mount for other purposes it may well nd other advances were made from an un ce. But that is not so in the present case. T tangible additions" is somewhat queer and appreciate it. The Tribunal observes in ons, as the name itself suggests, are pure may err on the wrong side for the departme ce, additions on account of deficiency of g may be made but this would not mea e assessee their equivalent in hard cash

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd e payment of were no funds declared and assessee was n question. In thus at page here were no ve been paid.
the company, hich showed a its existence had been kept me-tax paid, stribution as tax, it would to the books t of tax, as sum as its t these profits he company's e payment of e regarded as real point for was whether
230 from the see did earn.
cord enable it er to advance for the other the assessee be that the nexplained or The Tribunal's d we confess n its order :
ely matters of ent. For want ross profit or n putting in available for expenditure or in assessment in considered sympa of the nature we doubt made very any rate the de addition is not th not have earned.
the addition was be taken as true
Tribunal is wron assessment" whe assessment is pe reason to suppos also unable to un the assessee in t liable to tax or no by pleading equ authority. The f conducive to a co no materials for t the two assessm the order of the T
11.9 The above view juri ictional Madras Hig
Nadar and Sons, [1984
held that when there a suppression of profit a open to the assessee t brought in as cash credi
11.10
Gainful refe
Hon'ble Bombay High C
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::122 ::
nvestment. It may be said that having suff a particular year, the assessee's case athetically in the subsequent year when a e are discussing is brought to light." Add often on estimate basis. But it can never epartment cannot contend, that the am he real income but something which the a It is wholly illogical for the department to only for purposes of taxation and that it e income of the assessee. We must point ng in thinking that an assessee suffe en his income is computed by making additi rfectly within the four corners of the Act an se that it is in any way inequitable or un nderstand the real scope of a sympathetic he matter of assessment to tax. The asses ot, and if he is really liable to tax he canno uity or by invoking the sympathy of th faulty reasoning of the Tribunal was c orrect conclusion in the matter. In our opini the addition of Rs. 40,000 and Rs. 12,230
ent years 1949-50 and 1950-51 respectiv
Tribunal cannot be sustained."
is noted to have been reiterat gh Court in the case of CIT v. K. S.
4] 149 ITR 127. In the decided ca re two separate additions viz., one nd another on account of cash cr to explain that, the suppressed pr its and has to be telescoped into the erence may also be made to the d
1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd fered a harsh e should be n investment itions are no be said, or at mount of the assessee may contend that should never out that the ers a "harsh ions. Such an nd there is no njust. We are treatment of ssee is either ot get rid of it he assessing certainly not ion, there are in respect of vely, and that ed by Hon'ble
. M Guruswamy se also, it was e on account of redit, then it is rofits had been e other.
decision of the Gandhi (39 CTR

127). In this judgment theory of telescoping a additions in relation of made in the hands of th addition towards undisc make certain addition i be treated by the asse out of the undisclosed in 11.11
The principle income should not be ta thereafter at the time undisclosed asset. Hav come back to the facts we find that, the add unaccounted sales’ as follows:-(in Rs.)
AY
Byaj
2017-18
3,45,86,827
2018-19
1,70,81,552
2019-20
1,68,12,234
2020-21
72,53,392
2021-22
4,56,32,353
Total
12,13,66,358

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::123 ::
t also, the Hon'ble High Court had and held that it could be applied i unexplained money/investment ar he assessee. The Hon'ble Court expl closed income was made and the AO n relation to unexplained investme essee that the unexplained investm ncome already taxed.
e which emerges from the above is axed twice i.e. once at the time of e of application for making inves ing regard to this settled legal po of the case. From the discussions itions on account of ‘byaj’, ‘vatav confirmed in the hands of the a Vatav
Profit on unaccounted sales
--
35,96,97,105
--
23,16,83,139
--
7,40,80,408
--
6,01,91,246
1,45,54,166
--
1,45,54,166
72,56,51,898

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd d approved the in cases where e sought to be ained that if an O also seeks to ent then, it can ment is sourced that, the same generation and stment or any osition, we now set out above, v’ & ‘profit on assessee is as Total
39,42,83,932
24,87,64,691
9,08,92,642
6,74,44,638
6,01,86,519
86,15,72,422

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd not specifically ather, the facts nsolidated and entities of the plained asset(s) tifiable to any epresented the le. In that view income offered es found in this the unexplained ed earlier, the y Shri Mohanlal eference to the rved that, there to tax by Shri
(s) identified in e Revenue has shows that, the i had been set- s found in the course of search and further. Instead, the L
Khatri in his reply date claimed that, the addit income filed u/s 153A impugned unexplained that, the AO did not d completed u/s 143(3) in 22. According to us ther
Mohanlal Khatri, Direc telescoped against the u
11.14
For the reas the additional income
Mohanlal Khatri represe available with the asses principle of telescoping, impugned unexplained action.
11.15
In this rega coordinate bench of thi
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::126 ::
was therefore unavailable for be Ld. AR brought to our notice that, ed 24.03.2022 filed before the AO tional income offered by him in h
A of the Act may be telescoped asset(s) found in the course of sea dispute this claim in the income-t n the matters of Shri Mohanlal Khat refore, the additional income offered ctor of the assessee was availa unexplained assets found in the cou sons discussed in the foregoing, we of Rs.96,42,02,070/- taxed in the ented an intangible addition or to s ssee group, which applying the judi
, was legally available for being set asset(s) found by the Revenue ard, we may gainfully refer to the s Tribunal at Pune in the case of D

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd eing telescoped
Shri Mohanlal
O had inter alia his return(s) of against these arch. It is seen tax assessment tri for AY 2021- d to tax by Shri able for being rse of search.
e thus hold that hands of Shri ay secret profit icially approved off against the in this search decision of the DCIT v. Dhariya

Construction Pvt Ltd (IT on somewhat similar fa the benefit of telescopin of the assessee compa name of the Director of noted to be as follows:-
“7.5. If we look by the Hon’ble H assessee had a the earlier ye
Rs.1,67,29,248/
has sought for t our view, telesc as the flat was p
11.16
We also gai the case of ACIT
3024/Mum/2023) dated offered to tax by the i telescoping against the assessee-JV in the sam found to be relevant in t
“57. The princi same income s generation and back into the b where the cas
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::127 ::
TA No.1440/Pun/2015) dated 11.02
acts and circumstances, the Tribun ng the unaccounted income assesse any against the unexplained asse f the assessee company. The releva k into the above said proposition of law
High Courts, it is clear that in the prese agreed for the addition of undisclosed ears of Rs.64,20,637/-, Rs.1,03,91
/- ( for the assessment year under a telescoping for the amount of Rs.2,53,5
coping is permissible to be granted to t purchased in the name of the Director.”
1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd settled legal
. It is not in income of 13-14. It is 28.10.2014
ed that this oing work of of utilization
072/- and resented by evident that the assessee income of on / secret principle of unexplained that the AO gregating to only because had rightly red that the ctions were s as well as ter pipeline been made ongoing and ed.
was made in he assessee
2013-14 and available for line project.
onal income to 2016-17, unexplained he AO in AY
T(A)'s action of allowing the undisclosed in 9,50,56,072 +
Rs.8,00,00,000/
Hence, having telescoping, acc to tax in ear investment alle separate protec hands of assess dismissed.”
11.17
Having reg unaccounted income tax
Khatri available for Rs.182,57,74,492/- (R eligible to be set off ag the course of search.
11.18
Having held quantification of the un the course of search. It assessee was against th
Balance Sheet’, as ex pointed out that, the ex the FY 2020-21 alone b generated over the yea the assessee group. We
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::129 ::
telescoping benefit and set-off of the come aggregating to Rs.12,87,11,
Rs.3,36,55,357), towards the cash inv
/- found mentioned on seized pages regard to the judicially approved cording to us, since the additional inco rlier years was sufficient to cover eged to have been made by JV p ctive addition was required to be m see JV. Accordingly, the appeal of the gard to our above findings, t xed in the hands of the assessee and the benefit of telescoping is Rs.86,15,72,422 + Rs.96,42,02,0
ainst the impugned unexplained as d so above, we now turn our at nexplained asset(s) unearthed by t is noted that, one of the argument he valuation of the excess stock fou xtracted from the J-Pack Software xcess stock mentioned therein was n but represents the cumulative sum ars from the unaccounted business e agree with the Ld. AR that, the im

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd e amount of ,429/- (Rs.
vestment of s 20 & 21. principle of ome offered such cash partners, no made in the Revenue is the aggregate d Shri Mohanlal found to be 070) which is sset(s) found in ttention to the the Revenue in ts raised by the nd in the ‘Party e. The Ld. AR not the result of of excess stock s conducted by mpugned excess stock cannot be the pr represents the accumu
We thus find force in th ought to then be att unaccounted income as prevailing in the respec of notional appreciation notice that, similar ‘gol
J-Pack software, which being the rate prevailin
Ld. CIT(A) had held tha across the years and respective years. It is rendered in the contex
Revenue and the same the same analogy shou
‘Party Balance Sheet’ of 11.19
It is well-se consequent to search undisclosed income and based on estimates. I
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::130 ::
roduct of a single year’s undisclose lation of unaccounted income earn he Ld. AR’s plea that, the impugne tributed across the years in pro ssessed in those years and be value tive years, as otherwise it would re n of the stock. The Ld. AR also b d’ metal entries was found in the ‘
was originally valued by the AO g as on 10.11.2020 and thereafter at, the same ought to be appropria be valued at the market rates pr s observed that, this finding of t xt of ‘byaj’ income has not been d e has attained finality. According to uld be applied to the excess stoc f the J-Pack Ledger.
ettled that, in cases where mater action, the AO is required to d that, in such cases the additions
It has been judicially held that,

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd ed income, but ned over years.
ed excess stock portion to the ed at the prices esult in taxation brought to our
Byaj’ Ledger of at Rs.4881/gm
, on appeal the ately quantified revailing in the the Ld. CIT(A) disputed by the o us therefore, k found in the rial is detected determine the s are generally in matters of estimation some amoun when the relevant seiz same time, it does not by adopting an arbitrar the assessee has be transactions, ‘byaj’ & ‘v is safe to presume that would have been gradua out of the unaccounted
21. Applying the theory we find merit in the Ld.
Pack software should ought to be valued with years. We thus do not assuming that the impu
FY 2020-21 so as to be i.e. 10.11.2020. 11.20
In light of th the excess stock found income taxed in the ha reference to the entr
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::131 ::
nt of latitude is required to be sho zed material is not forthcoming. H mean that the AO can arrive at any ry basis. In the present case, it is en generating income from una vatav’ receipts etc. over the years a t, the excess stock found in the co ally acquired over the years and it c income derived in the year of searc y of human conduct and circumstan
AR’s contention that, the excess st be appropriately apportioned acr h reference to the market rates pre countenance the action of the lowe ugned excess stock was purchased valued at the rate prevailing on the he above, we find it fit and reasonab in J-Pack software in the ratio of th nds of the assessee and Shri Moha ries found in the same J-Pack

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd own to the AO, owever, at the y notional figure observed that, accounted sale and therefore it ourse of search cannot be solely ch i.e. FY 2020- ntial evidences, tock found in J- ross years and vailing in those er authorities in entirely during e date of search ble to apportion he unaccounted nlal Khatri with Software and, accordingly revise the prevailing in those yea works out as follows:-

Asst
Year
Income taxed in hands of MLK
Income t in hand assess
2017-
18
9,83,61,198
39,42,83
2018-
19
31,69,55,379
24,87,64
2019-
20
16,00,00,000
9,08,92,
2020-
21
16,00,00,000
6,74,44,
2021-
22
22,88,85,490
6,01,86,
TOTAL
96,42,02,067
86,15,72

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd market rates of the same,
Rate aken for luing byaj’
Value
930
24,67,56,909
978
28,80,00,861
181
13,64,32,897
723
14,47,55,891
4881
24,12,02,805

105,71,49,363
excess stock of m for application works out to n Rs.)
1,49,363
2,29,629
4,29,460
2,67,664
0,76,296
ted income of n taxed in the ufficient to be telescoped / set-off ag assets of Rs.157,90,76, therefore, the separate stock, unaccounted cas directed to be deleted.
11.23
In view of o the assessee on the me unexplained asset(s) a assets (apart from exce and is therefore not be open. Overall therefore,
12. In the result, all t and the appeals filed by Order pronounced (एस.आर. रघुनाथा)
(S.R.RAGHUNATH
लेखासद य/ACCOUNTANT
चेई/Chennai,
दनांक/Dated: 26th Septemb
TLN
ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::133 ::
gainst the above aggregate value
296/-. Hence, applying the principle addition(s) made by the AO on acc h receivables, unexplained cash & s our above findings, all other objec erits of the addition made on accou and also the quantification & valu ess stock) have become academic a eing separately adjudicated upon an , these grounds of the assessee stan the appeals filed by the assessee is y the Revenue are dismissed.
d on the 26th day of September, 202
)
HA)
MEMBER (एबी टी.
(ABY T. VA
याियकसद य/JUDI ber, 2025. 1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd of unexplained e of telescoping count of excess silver is hereby ctions raised by nt of impugned uation of other and infructuous nd is being left nds allowed.
s partly allowed
25, in Chennai.
/-
वक
)
ARKEY)
CIAL MEMBER

आदेश क ितिलिप अेिषत/Cop

ITA Nos.1178 to ITA Nos.1393
(AYs: 20
M/s. Mohan
::134 ::
py to:
nai / Madurai / Salem / Coimbatore.

1182/Chny/2025 &
to 1397/Chny/2025
017-18 to 2021-22) lal Jewellers Pvt. Ltd