Case Number: ITA 5404/DEL/2019
Appellant: DCIT Circle-I (LTU), New Delhi
Respondent: Dalmia Bharat Sugar and Industries Ltd., New Delhi
Assessment Year: 2009-10
Case Filed On: 2019-06-14
Order Type: Final Tribunal Order
Date of Order: 2021-09-13
Pronounced On: 2021-09-13
The present case involves an appeal filed by the Deputy Commissioner of Income Tax (DCIT), Circle-I, Large Taxpayer Unit (LTU), New Delhi against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] in favor of Dalmia Bharat Sugar and Industries Ltd., New Delhi. The appeal covers the assessment year 2009-10 and addresses issues related to unaccounted transactions recorded in a pen drive seized during a search operation.
The Dalmia Group of Companies underwent a search and seizure operation under Section 132 of the Income Tax Act, 1961 on January 20, 2012. During the search, a pen drive was seized from the premises of Mr. Joydeep Basu, an employee of Dalmia Bharat Enterprises Ltd. The pen drive contained detailed records of unaccounted cash transactions. Subsequent investigations led to the issuance of notices under Section 153C to various entities within the Dalmia Group, including Dalmia Bharat Sugar and Industries Ltd.
The CIT(A) reviewed the case and concluded that the transactions recorded in the seized pen drive did not belong to Dalmia Bharat Sugar and Industries Ltd. but to the individual members of the Dalmia family, specifically Mr. Yadu Hari Dalmia and Mr. Gautam Dalmia. This conclusion was based on the findings of the Income Tax Settlement Commission (ITSC), which had already accepted the disclosure of Rs. 90 crores made by the aforementioned individuals in their personal capacity.
The ITSC, in its final order dated February 13, 2015, held that the entries in the impugned cash book found in the seized pen drive belonged to Mr. Yadu Hari Dalmia and Mr. Gautam Dalmia. The ITSC accepted the disclosure of Rs. 90 crores made by these individuals, concluding that the disclosure was full and true. This order was not challenged by the Department, thereby making it conclusive and final as per Section 245-I of the Income Tax Act.
The Income Tax Appellate Tribunal (ITAT) considered the extensive submissions made by both parties. The ITAT noted that the substantive additions based on the same pen drive entries were made in the hands of Dalmia Cement (Bharat) Ltd. and were subsequently deleted by the CIT(A)-29, New Delhi. These deletions were not contested by the Department, indicating their acceptance of the CIT(A)’s findings.
The ITAT further observed that the protective additions made in the hands of Dalmia Bharat Sugar and Industries Ltd. were identical to those made in the hands of Dalmia Cement (Bharat) Ltd. Given the ITSC’s conclusive finding that the pen drive entries belonged to the individual Dalmia family members, the ITAT found no justification for making protective additions in the hands of Dalmia Bharat Sugar and Industries Ltd.
The ITAT upheld the CIT(A)’s decision to delete the additions made in the hands of Dalmia Bharat Sugar and Industries Ltd. on the basis that the seized pen drive entries did not belong to the company but to the individual Dalmia family members. The Tribunal emphasized the finality of the ITSC’s order and the Department’s acceptance of the CIT(A)-29’s decisions in related cases.
In conclusion, the ITAT dismissed the appeal filed by the DCIT and confirmed the deletion of the protective addition of Rs. 22,80,39,000 made in the hands of Dalmia Bharat Sugar and Industries Ltd. The Tribunal’s decision reinforced the principle that the same set of evidence cannot be used to make additions in multiple hands without clear justification.
The appeal filed by the DCIT, Circle-I (LTU), New Delhi is dismissed. The order of the CIT(A)-22, New Delhi dated March 29, 2019, for the assessment year 2009-10 is upheld.
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