Case Number: ITA 1623/DEL/2019
Appellant: Ratna Talwar, Delhi
Respondent: ACIT, Central Circle-4, New Delhi
Assessment Year: 2011-12
Case Filed On: 2019-02-27
Order Type: Final Tribunal Order
Date of Order: 2021-01-19
Pronounced On: 2021-01-19
The case involves Ratna Talwar and several others connected with the Jagatjit Industries Ltd. (JIL). A search and seizure operation was conducted on December 29, 2015, targeting key individuals including Rajnish Talwar, Sanjay Duggal, and their families. The operation aimed to investigate substantial deposits in bank accounts linked to M/s. Alfa India, a proprietary concern of Arun Duggal, and subsequent fund transfers to accounts of Talwar and Duggal family members.
The Income Tax Department discovered that significant amounts were deposited in the accounts of M/s. Alfa India and subsequently transferred to the personal accounts of Rajnish Talwar and his family members as well as Sanjay Duggal and his family members. The investigation revealed the funds were generated through unaccounted sales and promotional activities not properly documented in the financial records of Jagatjit Industries Ltd.
During the search, various bank accounts showed patterns of large value transactions without proper PAN details. The funds were traced back to liquor distributors including M/s. Sohan Lal Singla AOP and M/s. Om Prakash Singla AOP, linked to MAPSKO Group, which made payments to M/s. Alfa India. These funds were then used for incentives and other promotional activities in the liquor trade.
Both Rajnish Talwar and Sanjay Duggal admitted that M/s. Alfa India was used as a conduit for routing unaccounted money. They acknowledged the involvement of JIL in directing payments to M/s. Alfa India and the subsequent cash withdrawals from the accounts of their family members.
The Assessing Officer (AO) made several additions based on unexplained bank deposits, income from long-term capital gains, and other sources, concluding that the funds were unaccounted for. The CIT(A) confirmed these additions and further enhanced them, leading to the appeals by the assessees.
The Income Tax Appellate Tribunal (ITAT) reviewed the case, including the validity of the approval under Section 153D of the Income Tax Act. The ITAT noted that the approval granted by the JCIT appeared to be mechanical and lacked proper application of mind, as it did not reference specific seized materials or the incriminating evidence detailed in the AO’s report.
The Tribunal concluded that the assessments lacked a proper foundation and directed a thorough re-examination, ensuring that all procedural requirements and application of mind by the approving authority are strictly adhered to in accordance with the law.
In the Income Tax Appellate Tribunal, Delhi Benches “E”, Delhi, before Shri Bhavnesh Saini, Judicial Member, and Shri Prashant Maharishi, Accountant Member, the appeal was allowed in favor of Ratna Talwar, with directions for a fresh assessment to be conducted with due consideration of all material facts and legal provisions.
Order Date: 2021-01-19
Pronounced On: 2021-01-19
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