GINNI GOLD PVT. LTD.,NEW DELHI V. ASSISTANT COMMISSIONER OF INCOME-TAX, NEW DELHI

ITA 1322/DEL/2024

AI Insights

The case involves Ginni Gold Pvt. Ltd, which appealed against the order of the Commissioner of Income Tax (Appeals) confirming the addition of Rs 3,00,000 to its income for the Assessment Year 2013-14. This amount was initially added by the Assessing Officer, treating it as bogus expenditure based on a seized document and the statement of Smt Reena Goel, who was allegedly paid this remuneration but denied any knowledge of her role or the payment during her statement under section 132(4) of the Income-tax Act, 1961. The Tribunal dismissed the appeal, agreeing with the lower authorities that the Assessee did not substantiate the authenticity of the expenditure.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314377 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MANEESH UPNEJA
• Keywords: Search and seizure; Bogus
• Section: 143(3); 142(1); 132; 153A; 2

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 1322/Del/2024 (Assessment Year: 2013-14) Ginni Gold Pvt. Ltd, Shop No. 403, Fourth Floor, 2633-2634, Bank Street, Karol Bagh, New Delhi Vs. ACIT, Central Circle-28, New Delhi (Appellant) (Respondent) PAN: AACCG9728Q Assessee by : Shri Maneesh Upneja, CA Ms. Sanju Kumari, Adv Revenue by: Date of Hearing 08/04/2025 Date of pronouncement 07/05/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.1322/Del/2024 for AY 2013-14, arises out of the order of the ld. Commissioner of Income Tax (Appeals)-29, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 10109/2019-20 dated 25.01.2024 against the order of assessment passed u/s 153A/ 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 31.07.2019 by the Assessing Officer, ACIT, Central Circle-28, New Delhi (hereinafter referred to as ‘ld. AO’). 2. The only effective issue argued by the Ld AR before us was challenging the action of the Learned CITA in confirming the addition of Rs 3,00,000/- made on account of director’s remuneration on the basis of se4ized document A-1, RS-1 Pages 62-63 treating the same as bogus expenditure. 3. We have heard the rival submissions and perused the materials available on record. The return of income for the assessment year 13-14 was filed under ITA No. 1322/Del/2024 Ginni Gold Pvt. Ltd Page | 2 section 139(1) of the Act by the assessee on 11-01-2014 declaring total income of Rs 3,51,11,952/-. The Assessee company is engaged in the business of manufacturing and trading in gold and diamond jewellery and also had made investments in real estate. A search and seizure operation was carried out under section 132 of the Act on the group cases of M/s SRM on 15-10-2013 by the Investigation Wing, New Delhi. The Assessee belongs to the said group. Accordingly, the case of the Assessee was centralized vide order of learned PCIT dated 8-12-2017 under section 127 of the Act. Notice under section 153A of the Act stood issued to the Assessee on 17-06-2014. In response to the notice under section 153A of the Act, the Assessee filed its return of income on 2-01- 2015 declaring the same income of Rs 3,51,11,952/- as was originally declared in the return filed under section 139(1) of the Act. During the pendency of assessment proceedings, the Assessee along with other group cases filed an application under section 245C(1) of the Act before the Hon’ble Income Tax Settlement Commission on 11-07-2016 for assessment years 2008-09 to 2014-15 which were admitted by the Settlement Commission vide combined order under section 245D(1) of the Act dated 21-07-2016. Consequently, the assessment proceedings were abated. The Settlement Commission vide combined order dated 29-01-2018 passed under section 245D(4) of the Act had rejected the application of the Assessee on the ground that Assessee did not make true and full disclosure of its income. Consequent upon rejection of the application of the Assessee by the Settlement Commission, the assessment proceedings commenced and notice under section 142(1) of the Act dated 26-09-2019 along with general and specific questionnaire stood issued to the Assessee. The Learned AO confronted the Assessee to the seized document of Annexure A-1 at pages 62 and 63 which revealed that Smt Reena Goel was deriving director's remuneration amounting to Rs. 3 lakhs from the Assessee company. During the course of search itself, statement under section 132(4) of the Act was recorded from Smt Reena Goel on 15-10-2013. In response to question numbers 12 and 17 in her statement, Smt Reena Goel expressed her unawareness in respect of having any role and responsibilities as Director in Assessee company as well as receipt of salary / ITA No. 1322/Del/2024 Ginni Gold Pvt. Ltd Page | 3 director's remuneration. The Learned AO reproduced the statement of Smt Reena Goel under section 132(4) of the Act recorded on 15-10-2013 in the assessment order. Accordingly, the Assessee was specifically asked to explain and showcaused as to why the said expenditure of Rs. 3 lakhs be not considered as bogus and added to the total income of the Assessee. The Assessee furnished its written submission dated 23-07-2019 explaining that Smt Reena Goel was director of Assessee company from where she was deriving salary for providing consultancy in jewellery designing. The Learned AO however disregarded the contentions and proceeded to disallow the sum of Rs. 3 lakhs treating it as bogus expenditure. 4. The Assessee company before the Learned CITA submitted that the seized document Annexure A-1 pages 62 and 63 is nothing but a declaration made by the Assessee company that an amount of Rs. 3 lakhs is paid to Smt Reena Goel during the financial year ended 31-03-2013 as director's remuneration. It was also submitted that the said payment of director's remuneration had been duly reflected in the books of accounts of the Assessee and the same were duly subjected to audit. It was stated that the said seized document cannot be considered as incriminating in nature as the transaction is already reflected in the books of accounts of the Assessee. It was pleaded that no addition could be made in the hands of the Assessee merely on the statement recorded under section 132(4) of the Act from Smt Reena Goel. 5. Admittedly, the year under consideration is an abated assessment as on the date of search. Hence, there is no need for existence of any incriminating material found during the course of search in order to determine the total income of the Assessee in the search assessment under section 153A of the Act. This argument has been rightly dismissed by the Learned CITA. It is a fact that a sum of Rs 3 lakhs has been shown to have been paid as director's remuneration to Smt Reena Goel and reflected in the books of accounts of the Assessee. But it is also a fact that during the course of search on 15-10-2013, Smt Reenu Goel was subjected to examination and a statement was recorded under section 132(4) of the Act from her. In response to a specific query raised to her on the aspect of director's ITA No. 1322/Del/2024 Ginni Gold Pvt. Ltd Page | 4 remuneration, she categorically replied that she is not aware of any such transaction in the form of, either being a director in the Assessee company or having been paid any director's remuneration to the tune of Rs 3 lakhs. Based on the statement of Smt Reenyu Goel, the Learned AO made an addition which stood confirmed by the Learned CITA. Merely because a particular expenditure has been reflected in the books of the Assessee company, it does not become an allowable deduction. The Learned AO in the instant case had doubted the genuinity of the expenditure per se by placing heavy reliance on the statement of Smt Reenu Goel under section 132(4) of the Act. Hence, the onus is on the Assessee to prove that Smt Reenu Goel was indeed a director of the Assessee company, and she was paid director's remuneration for the services rendered. The Assessee company is also duty bound to prove the nature of services rendered by Smt Reenu Goel and the business nexus thereon. None of these facts were proved in the instant case except stating that the said sum of Rs 3 lakhs being reflected in the books of accounts of the Assessee company. Accordingly, we do not deem it fit to interfere in the order of the Learned CITA confirming the treatment of the Learned AO by treating expenditure to be bogus. Accordingly, the grounds raised by the Assessee are dismissed. 6. In the result, the appeal of the Assessee is dismissed. Order pronounced in the open court on 07/05/2025. -Sd/- -Sd/- (SATBEER SINGH GODARA) (M BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 07/05/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) ITA No. 1322/Del/2024 Ginni Gold Pvt. Ltd Page | 5 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "