Case Number: ITA 5401/DEL/2019
Appellant: DCIT Circle-I(LTU), New Delhi
Respondent: Dalmia Bharat Sugar and Industries Ltd., New Delhi
Assessment Year: 2006-07
Case Filed on: 2019-06-14
Order Type: Final Tribunal Order
Date of Order: 2021-09-13
Pronounced on: 2021-09-13
Case Conclusion:
Page | 1
INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ―B‖: NEW DELHI
BEFORE SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
(Through Video Conferencing)
ITA No. 5401 to 5406 /Del/2019
(Assessment Year: 2006-07 to 2011-12)
DCIT, Circle-I, LTU, New Delhi Vs. Dalmia Bharat and Industries Ltd, 11th & 12th Floor, Hansalaya, 15, Barakhamba Road, New Delhi
PAN: AAACD2281K
(Appellant) (Respondent)
CO No. 112 to 117 /Del/2019
ITA No. 5401 to 5406/Del/2019
(Assessment Year: 2006-07 to 2011-12)
Dalmia Bharat Sugar & Industries Ltd.
11th & 12th Floor, Hansalaya, 15, Barakhamba Road, New Delhi
PAN: AAACD2281K Vs. DCIT, Circle-I, LTU, New Delhi
(Appellant) (Respondent)
Revenue by: Ms. Nidhi Srivastava, CIT DR
Assessee by: Shri S. K. Tulsiyan, Adv Ms. Ananya Rath, Adv Ms. Abha Aggarwal, CA Shri Lakshya Budhiraja, CA
Date of Hearing: 18/06/2021
Date of Pronouncement: 13/09/2021
ORDER
PER PRASHANT MAHARISHI, A. M.
1. These are the six appeals filed by The Deputy Commissioner Of Income Tax Circle-I LTU, New Delhi [The ld AO] in the case of Dalmia Bharat Sugar & Industries Ltd. [the Assessee] against the orders dated 29.03.2019 passed by the Ld. Commissioner of Income Tax (Appeals)-22, New Delhi [The ld CIT(A)] for A.Ys 2006-07 to 2011-12. The ld CIT (A) allowed the appeals of the assessee made Page | 2 before him against orders passed u/s 153C r.w.s 143(3) of the Income-tax Act, 1961 [The ACT] dated 30.03.2015 by the Ld. Ld AO.
2. Assessee has filed 6 cross objections [CO] in these appeals filed by the learned AO.
3. Since the issues involved in the Appeals and Cross-Objections for all these Assessment Years (A.Ys) are based on common facts and are interconnected, parties also made common submission before us, therefore all these appeals and Cos are disposed of by this common order.
4. The learned AO has raised the following grounds of appeal in ITA No. 5401/Del/2019 for the Assessment Year 2006-07:
“1. Ld. CIT (A) erred both in law & on facts in deleting the addition on account of cash transaction of Rs. 22,80,39,000/- in assessee’s hands on protective basis, only on the basis that cash book found in Pen drive do not belong to assessee company, sole basis of such finding was order of Hon’ble Settlement Commission u/s 245 D(4) of the I.T.Act in case of Yadu Hari Dalmia, Gautam Dalmia, Puneet Dalmia & Jai Hari Dalmia, without realizing the facts that on the basis of same cash book found in pen drive, these 4 individuals accepted unaccounted income of Rs. 90 Crores & that employees of the company who maintained such cash book of unaccounted cash transaction namely Joy deep Basu, N. K. Berry, Sanjay Mitra & Director of company Sh. Puneet Dalmia accepted such unaccounted transactions in their statements and such order of settlement commission do not categorically state whether such 90 crores covers all entries in such unaccounted cash book whose total according to director’s of assessee company was Rs. 649.18 crore.
2. Whether Ld. CIT (A) erred both on facts & in law in deleting addition of Rs. 22,80,39,000/- merely on the basis of order of Hon’ble Settlement Commission, without appreciating that entire order of Settlement Commission is silent on the source of such unaccounted income as to how such huge income was earned by 4 individuals when there was clear proof in the cash book found in pen drive that such unaccounted income was generated in companies run by the group namely Dalmia Bharat Sugar & Industries Ltd. [erstwhile Dalmia Cement(Bharat) Limited] which was the holding company.”
5. The assessee has raised the following grounds of appeal in CO No. 112/Del/2019 for the Assessment Year 2006-07:
“1. That, the Ld. CIT(A) while correctly deleting the addition of Rs. 22,80,39,000/- made by the A.O on the basis of the alleged entries in the pen-drive seized from the premises of Sri Joydeep Basu by recording a categorical finding that the impugned entries in the seized pen-drive do not belong to the Assessee-Company but to the applicants before the Hon’ble Settlement Commission (i.e. Sri Yadu Hari Dalmia & Sri Gautam Dalmia), erred in not quashing the Assessment Order in the case of the Assessee-Company for lack of valid jurisdiction u/s 153C of the Act.”
6. Identical grounds are raised by the parties for other Assessment years also.
7. It is important to note down the history of the case and corporate restructuring/reorganization has been carried out in the group concern.
a. The Assessee, M/s. Dalmia Bharat Sugar & Industries Ltd, is a part of the Dalmia Group of Companies. Originally, M/s. Dalmia Cement (Bharat) Ltd. (PAN AAACD2281K) was incorporated in the year 1951.
b. W.e.f 07.09.2010, its name was changed to M/s. Dalmia Bharat Sugar & Industries Ltd.
c. Prior to 01.04.2010, Dalmia Bharat sugar industries (earlier known as Dalmia Cement (Bharat) Ltd.) was interalia engaged in the business of manufacturing of cement and sugar, power generation, refractory trading, magnesite, travelling agency business etc.
d. Under a scheme of arrangement and demerger approved by the Hon‘ble High Court of Madras vide its order dated 29.07.2010,
i. its cement business was demerged to Avnija Properties Ltd.,
ii. refractory business was demerged to Dalmia Bharat Enterprises Ltd.
iii. Thermal power business was transferred to DCB Power Ventures Ltd. (a sub-subsidiary of Dalmia Bharat Enterprises Ltd) effective from 01.04.2010.
e. On 31.12.2010, the name of M/s. Avnija Properties Ltd. was changed to M/s. Dalmia Cement (Bharat) Ltd. (PAN AAFCA9414C).
8. Consequent to a search conducted in this case u/s 132 of the Act on 19.01.2009 at various premises of the assessee as well as its group companies and persons related to Dalmia group, certain pen drives were seized from the premises of Mr. Joydeep Basu, Assistant Vice President (Commercial) of Dalmia Cement (Bharat) Ltd.
9. On the basis of the seized material found from such pen drives, notice u/s 153C of the Act was issued to the assessee for Assessment Year 2006-07 on 05.09.2011.
10. Assessee preferred writ petition against the said notice before the Hon’ble Delhi High Court in WP (C) No. 2199/2011. The Hon‘ble High Court vide order dated 21.10.2011 held that the notices for six assessment years prior to the year in which search was conducted could be issued.
11. Consequently, the notices u/s 153C were issued to the assessee and the assessments were completed for assessment year 2006-07 to 2011-12 on 30.03.2015.
12. The whole case of the learned assessing officer hinges upon the pen drive found from Mr. Joydeep Basu, who is a employee of the assessee. According to the learned AO the pen drive contains the entries of the unaccounted cash of the assessee.
13. Based on the above addition was made by the learned assessing officer on protective basis in the hands of the assessee company.
14. Aggrieved by the order of the learned assessing officer assessee preferred the appeal before the learned CIT – A who allowed the appeal of the assessee and therefore revenue is in appeal before us.
15. The learned departmental representative vehemently supported the order of the learned AO and submitted that the learned CIT – A has deleted the addition without any proper basis. She further submitted that the order of the honourable settlement commission does not have a full bearing on the facts of the case. According to her the learned CIT – A has deleted the addition solely on the basis of the order of the honourable settlement commission in the hands of 4 persons where they have accepted undisclosed income of ₹ 90 crores.
16. The learned authorised representative vehemently supported the order of the learned CIT – A.
17. We have carefully considered the rival contention and perused the orders of the lower authorities. The addition has been made by the learned AO in the hands of the assessee company on protective basis.
18. The addition has been made solely on the basis of the pen drive found from the employee of the assessee company. The whole reliance has been placed by the revenue on the order of the settlement commission where for the above pen drive some other persons of the same group has accepted the additional income. As such pen drive was found from a employee of the assessee. Naturally, therefore the addition has been made in the hands of the assessee company. It is also not disputed that the same group of the persons has already accepted the undisclosed income based on this pen drive. The above pen drive was examined by the honourable settlement commission and thereafter the order was passed by the honourable settlement commission for those persons. The order of the settlement commission clearly records that the 4 individuals accepted the unaccounted income of ₹ 90 crores based on that pen drive.
19. The learned assessing officer could not point out before us any discrepancy in the order of the honourable settlement commission.
20. In view of this we find that the learned CIT – A has deleted the addition in the hands of the assessee company as the same amount has already been taxed in the hands of those four persons of the group based on the same pen drive. In view of this we find no infirmity in the order of the learned CIT – A in deleting the addition in the hands of the assessee.
21. In the result ITA number 5401/Del/2019 filed by the revenue for assessment year 2006 – 07 is dismissed.
Conclusion:
The case involving Dalmia Bharat Sugar and Industries Ltd. vs DCIT Circle-I(LTU), New Delhi for the assessment year 2006-07 revolves around issues of unaccounted cash transactions. The key point of contention was the addition of Rs. 22,80,39,000/- made by the Assessing Officer based on a pen drive found with an employee of the assessee company, which was claimed to contain unaccounted cash transactions. The Tribunal upheld the CIT(A)’s decision to delete this addition, as the unaccounted income had already been taxed in the hands of four individuals of the same group, who had accepted the additional income during a settlement commission proceeding. The Tribunal found no discrepancies in the CIT(A)’s order and dismissed the appeal filed by the revenue.
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