ACIT, CIRCLE-1, JAMMU V. JHELUM INDUSTRIES, JAMMU

ITA 372/ASR/2024

AI Insights

The case involves the Deputy Commissioner of Income Tax, Circle-1, Jammu (Appellant) vs. M/s Jhelum Industries (Respondent), concerning the assessment year 2014-2015. The primary issue was the addition of Rs. 91,24,94,884 made by the Assessing Officer (AO) to the assessee's income, which was considered as unexplained money under section 69A of the Income Tax Act, 1961. The CIT(A) reduced this amount by applying a GP rate of 4% to the total credits in the assessee's bank accounts, based on the GP rate applied in the subsequent assessment year 2015-16. The revenue appealed against this decision, arguing that the CIT(A) erred in law and on facts by not fully appreciating the factual matrix and not verifying the genuineness and correctness of the deposits/credits in the bank accounts.

• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Amritsar
• Assessment Year: 2014-2015
• Appeal Filed On: 26-06-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business expenditure; Assessment record
• Section: 148; 144; 143(3)

Judgement Text

"D IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (PHYSICAL HEARING) BEFORE SH. UDAYAN DASGUPTA, JUDICIAL MEMBER AND SH. KRINWANT SAHAY, ACCOUNTANT MEMBER I.T.A. No. 372/Asr/2024 Assessment Year: 2014-2015 Deputy Commissioner of Income Tax, Circle-1, Jammu (Appellant) Vs. M/s Jhelum Industries, SIDCO Complex, Samba (J & K)-184121 [PAN: AAEFJ 9788L] (Respondent) Appellant by Respondent by : : None Sh. Sunil Kumar Yadav CIT-D.R. Date of Hearing Date of Pronouncement : : 17.02.2026 23.03.2026 ORDER Per Udayan Dasgupta, J.M.: This appeal is filed by the revenue against the order of the ld. CIT (A) NFAC, Delhi dated 03.05.2024 passed u/s 250 of the Income Tax Act, 1961(henceforth the Act) which has emanated from the order of the NFAC Delhi dated 22.03.2022 passed u/s 144 r.w.s.147 of the Act. Printed from counselvise.com 2 I.T.A. No. 372/Asr/2024 Assessment Year: 2014-15 2. Grounds of appeal taken by the revenue in Form No. 36 are as follows: “1. The Ld. CIT(A), NFAC, Delli has erred in law and on the facts in partly allowing the appeal of the assessee without truly appreciating the factual matrix of the case. 2. The Ld. Commissioner of Income-tax (Appeals), National Faceless Assessment Centre, Delhi has erred in law and on the facts in deleting the addition of Rs.91,24,94,884/- made of the Assessing Officer on accounts of credits/deposits in the two bank accounts of the assessee. 3. The Ld. Commissioner of Income Tax (Appeals), National Faceless Assessment Centre, Delhi charged/applied of Income Tax @4% of total credits appearing in the two-bank account during aggregating of Rs. 95,05,15,5504/- by applying GP rate @ 3.49% offered for the assessment year 2015-16 without verifying the genuineness and correctness of the deposits/credits in bank account. 5. The Ld. Commissioner of Income Tax (Appeals), National Faceless Assessment Centre, Delhi did not provide an opportunity to Assessing Officer to file response by calling the remand report to the submissions made by assessee during appellate stage. The assessee did not file any submission during the assessment proceedings as well, therefore the Assessing Officer did not get any chance to counter the submission of assessee. 6. (a) The order of the Ld. CIT(A), National Faceless Assessment Centre, Delhi is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before the before or during the course of the hearing of the appeal.” 3. Brief facts emerging from records are that the assessee is a steel re-rolling mill and has filed regular return declaring loss of Rs. (-) 3.24 crores. Proceedings were Printed from counselvise.com 3 I.T.A. No. 372/Asr/2024 Assessment Year: 2014-15 initiated vide notice u/s 148 dated 30/03/2021 (after necessary approval from higher authorities) and in absence of any representation from the assessee in course of assessment proceedings, the total of credits amounting to Rs. 95.05 crores, in two bank accounts (i) J & K Bank (A/c No. xxxxx001284) and with (ii) Bank of India (A/c No. xxxx 00012), during the year under appeal, has been assessed as unexplained money u/s 69A of the Act. 4. The matter carried in first appeal (though not represented by the assessee in spite of various opportunities) has been adjudicated on merits considering past history of the assessee, the nature of business and materials on record, and part relief has been allowed by the Ld. CIT (A) by observing as follows: “4. Before this appeal, the Appellant merely made statement that compliance was made on 17.03.2022 before AO. But appellant failed to provide the supporting document in support of its claim of compliance. The compliance to notices u/s 250 issued by this appeal is also not made by the appellant. Despite numerous opportunities, no reply has been filed in appeal proceedings. 5. However, to be fair and judicious, the appellant's history before the appeal proceeding is considered. It is pertinent to discuss the assessment framed u/s 143(3) in appellant's case for AY 2018-19 which is also disputed before me. It has been discussed in the assessment order supra (vide para 5) that in absence of quantitative details of principal items of goods traded, the GP Ratio @3.94% belonging to AY 2015-16 (year subsequent to the year under consideration here) was similarly charged for the AY 2018-19 and consequently the gross sales/credits for that year (Rs. 96.33 crore) has been subjected to profit element @ 3.94%. Printed from counselvise.com 4 I.T.A. No. 372/Asr/2024 Assessment Year: 2014-15 6. Since AO has applied the GP ratio @3.94% in AY 2018-19 by maintaining consonance with the GP offered for AY 2015-16. In my considered view and keeping a consistent approach, it would be reasonable and just to attract a similar 4% for the year under consideration. Therefore, the credits appearing in the two bank accounts during the year aggregating Rs. 95,05,15,504/- are required to be charged @4%. The profit thus arrived of Rs. 3,80,20,620/-only is needed to be taxed here instead of whole credits in the bank account. The ground of appeal is partly allowed.” 5. Now the revenue is in appeal on the grounds contained in the memo of appeal , and in course of hearing the Ld. DR , relied on the order of the AO and submitted that since the genuineness and correctness of the credits in the bank accounts has not been examined , and the assessee has not filed any submissions or documentary evidences in course of assessment or appellate proceedings , explaining the above credits in bank accounts , the entire amount of credits as rightly added by the AO should be upheld . 6. We have considered the submission of the Ld. DR and the materials on record and we note that the credits in the banks has not remained in the banks and the same has also been withdrawn ( presumably for meeting business expenses ) and considering the nature of the business of the assessee and after considering past records and subsequent assessment records and the profit percentage applied by the AO in various years as available on record , we are in full agreement with the view taken by the Ld. CIT(A) and we considered the same to be a logical and acceptable view , and for all practical purpose we uphold the same . Printed from counselvise.com 5 I.T.A. No. 372/Asr/2024 Assessment Year: 2014-15 7. In the result, the order of the Ld. CIT(A) is upheld. 8. In the result, the appeal of the revenue is dismissed being devoid of merits. Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 23.03.2026 Sd/- Sd/- (Krinwant Sahay) (Udayan Dasgupta) Accountant Member Judicial Member *GP/Sr.PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T True Copy By Order Printed from counselvise.com "