DCIT Vs Dalmia Family Office Trust (ITAT Delhi)
The appeals filed by the Revenue before the Income Tax Appellate Tribunal (ITAT), Delhi were directed against separate orders of the Commissioner of Income Tax (Appeals) [CIT(A)-23], New Delhi concerning assessment years (AYs) 2017–18, 2018–19, and 2019–20. Since the issues raised in all the appeals were similar except for differences in the figures of additions, the Tribunal considered the facts of AY 2017–18 as the lead case.
The Revenue challenged the order of the CIT(A) which had deleted additions amounting to ₹58,73,04,576 made by the Assessing Officer (AO) on account of alleged non-genuine losses adjusted by the assessee. The Revenue also contested the deletion of an addition of ₹9,69,92,110 relating to actual profit received. According to the Revenue, the transactions entered into by the assessee with JM Mutual Fund were sham transactions and constituted a colourable device, which it argued was impermissible in law as per the principles laid down by the Supreme Court in the McDowell decision.
The case arose following a search and seizure operation conducted under Section 132 of the Income-tax Act in the case of the assessee, where the warrant of authorization was executed on 17 March 2021 and the assessee’s premises were covered under the search. The assessee had originally filed its return of income under Section 139(1) on 31 October 2017 declaring an income of ₹24,84,99,070. A revised return was filed on 21 September 2018 declaring an income of ₹25,25,10,450.
