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assessee group was using a customized software named 'J-Pack' 'J for recording their entire gamut of business transactions, both accounted and unaccounted, and nd it was being maintained by one Shri Rajendra Kothari, accountant of the assessee group. When enquired about the purpose for using this software, Shri Suresh Khatri, Khatri, son of Shri Mohanlal Khatri, in his statement recorded u/s 132(4) of the Act, explained that, 'J-pack' software is a useful software implemented to track ornament-based ornament trade and that the entries therein included both accounted & unaccounted transactions. It is seen that, the Investigating authorities had also summoned the Developer of this software, software, from whom it was gathered that, it is a commonly used jewellery software package for wholesale jewellery business. The Developer had also stated that, this software tool is used primarily for inventory management and quotation purposes and that the e software is so designed to only record metal-based based trading being done by jewellers. Accordingly, though separate books of accounts for each of these concerns/entities were maintained in the Tally accounting software, but for comprehensive inventory management management across all the operating group entities, Shri Mohanlal Khatri was using this specialized J-
were not fixed as it was to be decided and agreed upon only at the time of approval,, depending upon the gold prices, as prevailing then.
Accordingly, the assessee would pass notional entries of the goods sent on 'approval-basis' in the J-Pack J Pack Software but no corresponding entry would be passed in Tally Software, as there was no financial transaction involving transfer of ownership in goods from the assessee group to the customers. This software was thus used used to integrate and manage the stock movement and the operational data across all entities, thereby providing a consolidated view of the group's inventory and the inter-entity inter movement of goods. The assessee explained that, the J-pack J software was not an accounting software but rather a custom--built inventory software, meant to provide proper inventory control. On the other hand, the regular accounting software was used to maintain separate accounts for each entity as they were separate juridical persons and a in this accounting software, only the transactions involving purchase of gold bullion, payment of making charges and sale of gold jewellery (at the time of final sale when the invoice is raised upon the customer) was entered into. Hence, when such costly costly and high valued goods are sent to outsourced goldsmiths for manufacture, or on approval approval-basis to customers or when the goods are returned by the customers or any inter-
software for inventory control control purposes but no such entries could have possibly be made in the Tally accounting software as these stock movements do not have any financial implications.
6.3 Apart from the above, the assessee further brought to our notice that, they were also rendering rendering job work services which involved metal to metal settlements. In such transactions, the customer supplies gold and the assessee undertakes the job to manufacture jewellery, which is dispatched back to the customer. Though there is movement of metal, which is recorded in the J-pack J pack software for inventory control purposes, but the assessee only records the receipt of making charges from the customers in the Tally accounting software, as the transaction involving receipt of gold and issue of gold jewellery, jewellery, and it does not constitute any purchase or sale.
7.7 We have heard both the parties and perused the material placed before us. It is observed that, the AO was of the view that, that the ledger titled 'Ghat' maintained in the customized software 'J-Pack' Pack' contained receipt entries ('Ghatjama') for the excess 'metal' (gold) retained by the assessee outside the books, while rendering job-work work services to the customers. This analogy of the AO is found to primarily emanate from fro the statements given by Shri Rajendra Kothari u/s 132(4) and 131 of the Act, Act and we note that, there was no other corroborative material or evidence referred to by the AO,, to justify such an inference.