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Facts
A search and seizure action was conducted on the appellant's husband, Sh. Pradeep Kumar Jindal, revealing incriminating material and his admission to providing accommodation entries through shell companies. Subsequently, the Assessing Officer (AO) made additions to the appellant's income for unexplained jewellery, accommodation entries received, and unexplained cash payment under the Income Tax Act. The assessee challenged the jurisdictional validity of the assessment orders passed under Section 153A read with 143(3) and the transfer orders under Section 127, along with the merits of the additions.
Held
The Tribunal dismissed all appeals, upholding the jurisdictional validity of the assessment orders as incriminating materials were found during the search. The additions for unexplained jewellery (Rs. 46,45,491/-), accommodation entries (Rs. 56,64,131/-), and unexplained cash (Rs. 1 lac) were confirmed due to the assessee's failure to provide satisfactory explanations or evidence. The Tribunal noted the assessee's non-appearance and lack of assistance during the proceedings.
Key Issues
1. Whether the assessment orders passed under Section 153A read with 143(3) and transfer orders under Section 127 were jurisdictionally valid. 2. Whether additions for unexplained jewellery under Section 69, accommodation entries, and unexplained cash payments under Section 69/69A were justified.
Sections Cited
153A, 143(3), 127, 132, 133A(1), 132(4), 69, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH, DELHI
Before: MS. MADHUMITA ROY & MS. RENU JAUHRI
The instant appeals filed by the assessee are directed against the orders of the CIT(A)-29, New Delhi arising out of the orders passed by the ACIT/DCIT, Central Circle-25, New Delhi dated all 29.12.2017 for A.Y.2011-12, 2012-13, 2014-15 and 2016-17 respectively.
None appeared on behalf of the assessee at the time of hearing. Neither any adjournment has been sought for. Further, it appears from the records that previously on number of occasions matters stood adjourned at the behest of the assessee. Hence, having no other alternative we have proceeded to decide the appeals ex-parte.
Heard the Ld. DR.
4. The common issues involved in these appeals are as follows :-
1. 1. The order impugned passed under Section 153A r.w.s 143 (3) of the Act is without complying mandatory jurisdictional statutory conditions.
2. The impugned order passed is wrong since the transfer orders under Section 127 of the Act dated 19.07.2016 is not in accordance with law.
3. On merit addition treating the unexplained jewellery under Section 69 of the Act is challenge before us.
Addition under Section 69A of the Act on the payment made by the assessee by cash is under challenge addition under Section 69 of the Act in relation to purchase of property is under challenge.
Addition on accommodation entry is under challenge before us. Ground Nos.1 and 2.
5. The assessee has challenged the technical issue of passing order under Section 153A r.w.s. 143(3) of the Act as without jurisdiction since the transfer of appeals under Section 127 of the Act was not passed in accordance with law. The Ld. CIT(A) in the appeal for A.Y. 2011-12 while dealing with the issue observed as follows :-
“4.1 I have considered the facts and circumstances of the case, submission of the appellant and perused the order of the AO. The fact of the case is that a search and seizure action as well as survey action was carried out under section 132/133A(1) of the IT Act respectively, on Sh. Sajan Kumar Jain and Sh. Pradeep Kumar Jindal group of cases. Thereafter, in pursuance of the order passed by the Pr. CIT-24, New Delhi dated 19.04.2016 under section 127 of the IT Act, the cases were Centralized. Accordingly, notice under section 153A was Issued by the present AO on 12.06.2017 asking the appellant to file her return of income and accordingly the appellant filed her return of Income on 27.11.2017. During the assessment proceedings, Sh. Vivek Aggarwal, CA attended on behalf of the appellant and filed written submissions. After taking into account all the relevant facts and after following due procedure, the AO passed order under section 153A/143(3) of the IT Act. It was found that Sh. Pradeep Kumar Jindal husband of the appellant was engaged in giving accommodation entries through the various concerns/companies controlled/managed by him. Statement was recorded under section 132(4) of the IT Act of Sh. Pradeep Kumar Jindal in which he admitted that through the companies controlled/managed by him, he was engaged in giving accommodation entries to the beneficiaries against which commission @2.5% was received. Further, on enquiries carried out it was transpired that the accommodation entries given by Sh. Pradeep Kumar Jindal through the companies controlled/managed by him towards long term capital gain/short term capital gain, commission was charged @6%, this fact was also confirmed by S Pawan Arya that he and his family members also received accommodation entries in the nature of capital gain through Sh. Pradeep Kumar Jindal on which commission @6% was given to the entry operator. In view of above discussion, the AO made addition on account of commission accordingly. In Sh. Sajan kumar Jain group cases, it was found that an excel sheet was maintained by Sh Pradeep Kumar Jindal which has been seized under the head" SUDHIR CHAUDHARY" in respect of large number of beneficiaries for different years and a tally account in the name of "APEX" maintained by Sh Pradeep Kumar Jindal for maintaining cash transactions record related to accommodation entries. Sh. Pawan Arya in his statement dated 02/06/2016 had also admitted to have received accommodation entries through front companies of Sh. Sh Pradeep Kumar Jindal through Sh Sudhir Chaudhary. E-mail sent by Sh. Sudhir Chaudhary to Sh. Pradeep Kumar Jindal in respect of beneficiaries and blank but signed share transfer form/delivery note/power of attorney in respect of companies of Sh Pradeep Kumar Jindal were found and impounded during the survey proceedings.
4.2 Sh. Pradeep kumar Jindal in his statement recorded u/s 132(4) of the Act had vehemently admitted that he was engaged in the business of providing accommodation entries and for this purpose he had been managing and controlling a web of 33 paper companies through which accommodation entries were provided in the form of Long Term Capital Gain/Short Term Capital Gain, share capital etc,
4.3 From the facts discussed in earller paras, it is clear that incriminating materials were found during the course of search action carried out under section 132 of the IT Act in the case of Sh. Pradeep Kumar Jindal as well as Sh. Sajan Kumar Jain group of cases, The incriminating material was also found and Impounded during the course of survey action carried out which is discussed in detail in the assessment order passed in the case of Sh. Pradeep Kumar Jindal. Therefore, the statement given by Sh. Pradeep Kumar Jindal under section 132(4) of the IT Act was corroborated with the incriminating material found and seized/impounded during the course of search/survey action carried out in these cases, Further, certain incriminating documents were also found in the case of the appellant which was annexurized as annexure A-1 to A-13. Unaccounted cash and jewellery was also found and seized.
4.4 In view of the above discussion, I hold that the assessment made u/s 153 of the Act is not in conflict with the judgments of the Hon'ble Courts relied upon by the appellant including that of Kabul Chawla and others.
4.5 In view of above discussion and under these circumstances, it is clear that there is no defect in the order passed by the AO under section 153A/143(3) of IT Act. The AO followed due procedure while passing the assessment order. order was passed on the basis of jurisdiction lies with him and the additions v made on the basis of incriminating material. Under these circumstances, t legal/technical grounds raised by the appellant are dismissed.”
As incriminating materials were found during the course of search carried out under Section 132 of the Act in the case of Pradeep Kumar Jindal and further that the statement of Sh. Pradeep Kumar Jindal in relation to such incriminating materials found during the course of search/ survey action carried out in the matters, the judgment relied upon by the Ld. AR in the case of Kabul Chawla has rightly being taken into consideration not in favour of the assessee by the authorities below. In that view of the matter the observations made by the Ld. CIT(A) particularly in the absence of any assistance rendered by the appellant is found to be just and proper so as not to warrant interference. Ground Nos.1 and 2 as above are, therefore dismissed.
This ground will also apply mutatis mutandis to the other appeals wherever raised.
Ground No.3 8. The ground in respect of addition on unexplained jewellery under Section 69 of the Act to the tune of Rs.46,45,491/-as raised by the assessee for A.Y. 2016-17 has duly been considered by us.
During the course of search action from the lockers of the assessee jewellery worth of Rs.1,74,52,889/- was seized, source whereof were directed to be explained but the source of remaining jewellery of Rs.92,90,983/- of the assessee and her son, since not explained, additions to the tune of Rs.46,45,491/- was made, which in our considered opinion, is just and proper so as not to warrant interference, particularly in the absence any assistance rendered by the assessee before us.
Thus, this ground of appeal is found to be devoid of any merit and hence, dismissed.
11. This ground will also apply mutatis mutandis to the other appeals wherever raised.
12. Addition on accommodation entry to the tune of Rs.56,64,131/- as made by the Ld. Assessing Officer and further confirmed by the Ld. CIT(A) with the following observations is under challenge before us :-
“4.3 From the facts discussed in earlier paras, it is clear that incriminating materials were found during the course of search action carried out under section 132 of the IT Act in the case of Sh. Pradeep Kumar Jindal as well as Sh. Sajan Kumar Jain group of cases. The incriminating material was also found and impounded during the course of survey action carried out which is discussed in detail in the assessment order passed in the case of Sh. Pradeep Kumar Jindal. Therefore, the statement given by Sh. Pradeep Kumar Jindal under section 132(4) of the IT Act was corroborated with the incriminating material found and seized/impounded during the course of search/survey action carried out in these cases. Further, certain incriminating documents were also found in the case of the appellant which was annexurized as annexure A-1 to A-13. Unaccounted cash jewellery was also found and seized.
4.4 In view of the above discussion, I hold that the assessment made u/s of the Act is not in conflict with the judgments of the Hon'ble Courts relied upon by the appellant including that of Kabul Chawla and others.
4.5 In view of above discussion and under these circumstances, it is clear that there is no defect in the order passed by the AO under section 153A/143(3) of the IT Act. The AO followed due procedure while passing the assessment order. The order was passed on the basis of jurisdiction lies with him and the additions were made on the basis of incriminating material. Under these circumstances, these legal/technical grounds raised by the appellant are dismissed.
5. Ground no.6 relates to contention of the appellant against addition of Rs.56,64,131/- made by the AO. The fact of the case is that Sh. Pradeep Kumar Jindal husband of the appellant had stated that he was engaged in giving accommodation entries to the various beneficiaries. In the details of such beneficiaries, name of the appellant was also appearing. From the company owned/controlled/managed by Sh. Pradeep Kumar Jindal namely M/s Nanon Distributors P. Ltd., the appellant has also received accommodation entries of Rs.21,14,131/- on 27.06.2013, Rs.22,50,000/- on 12.03.2014 and Rs.13,00,000/ on 13.03.2014 respectively. Total of the same comes to Rs.56,64,131/-. С careful perusal of the facts, I find that since, the amount of Rs.56,64,13/- pertains to unaccounted income of the appellant which was routed through the shell company as discussed above, therefore, the AO justified to make addition of the same as undisclosed income of the appellant.”
The reason mentioned hereinabove by the Ld. CIT(A) is found to be acceptable in the absence of any further submission made by the assessee. Hence, the addition is confirmed. This ground of appeal is, thus, dismissed.
14. The addition of Rs.1 lac under Section 69 of the Act for A.Y.2011-12 is under challenge before us, in regard to payment made by the assessee in cash, the nature and source whereof since remained unexplained. Even before the Ld. CIT(A) no document has been filed to raise objections to such addition made by the Ld. AO. Thus, we find no reason to interfere with the order passed by the authorities below, particularly in the absence of any assistance rendered by the assessee. Hence, this ground is found to be devoid of any merit and thus, dismissed.
In the result, all the appeals are filed by the assessee are dismissed.
Order pronounced in the open court on 11.12.2024.