DCIT Vs Dalmia Bharat and Industries Ltd. (ITAT Delhi)
Now the questions arising before us in this group of appeals were as Under:-
i. Whether assessment framed u/s 153C read with S; ection 143 (3) for assessment year 2006 – 07 and 2007 – 08 are barred by the limitation.
ii. Whether the assessment order passed for assessment year 2011–12 u/s 153C is without jurisdiction and void ab initio as no satisfaction has been recorded by the assessing officer of the
searched person
iii. whether the pen drive seized from the premises of one of the employees of the group concern can be said to be belonging to‘ the assessee when four different applicants have owned it before the settlement commission and settlement commission has accepted the above proposition after considering the objections of revenue before it and thereafter accepting the disclosure made by those four applicants passed an order settling the dispute and accepting additional income offered.
iv. As the satisfaction recorded by the AO of the searched person with respect to the impugned pen, drive does not mention that these pen drive belongs to‘ the assessee company. Thus requirement of the provisions of Section 153C is not fulfilled as learned assessing officer of the searched person has merely expressed and without any evidence. Thus additions in the hands of the assessee on protective basis have been made on defective satisfaction with respect to the pen drive belonging to the assessee and consequent assessment orders passed u/s 153C of the act are not valid
v. whether the orders passed by the learned assessing officer are bad in law as those orders are passed as an ad verbatim copy, of the order in case of another assessee, i.e. Dalmia cement Bharat Limited and therefore these orders are passed without any independent application of mind.
vi. Whether the assessee can take up a plea order of the settlement commission was conclusive u/s 245I of the act and where income covered in the pen drive has been accepted by the settlement commission as belonging to the four different applicants and accepting the disclosure, can now the assessing officer make the similar addition out of the same pen drive in the hands of the assessee on protective basis.
vii. Whether the assessment order passed in the case of the assessee on protective basis is sustainable, as identical substantive and protective additions were made on the basis of the same material i.e. pen drive in case of group companies, which have been deleted by the learned CIT – A, 29 on the ground that entries in the cash book and 125 pages found in the seized pen drive belongs to the promoters and not to these companies. The revenue has accepted such orders of the learned CIT – A, 29 in the case of the group companies and it has not been challenged, therefore, on the identical facts the orders passed by the learned assessing officer are not sustainable.
viii. When the additions made in the hands of the other entity on substantive basis is deleted by the learned CIT – A, can the protective addition in the hands of the assessee is still sustainable.
ix. Even otherwise, it is presumed that pen drive belongs to the assessee, manner of protective addition in the hands of assessee is correct, jurisdiction u/s 153C is correctly assumed in the case of assessee, despite deletion of substantive addition, still whether the disclosure made before ITSC covers the amount of data involved in the pen drive.
Held by ITAT
Thus, it is apparent that Assessment year which can be assessed u/s 153C of the act in this case is only from AY 2008- 09. Thus, the assessments made by the ld AO u/s 153C of the act for AY 2006-07 and 2007-08 are beyond time prescribed u/s 153C of the act and are quashed. Thus, First question is answered in favour of the assessee.
If the proposition canvassed by the learned authorised representative is accepted then the AO of the other person, will simply become a postman for issuance of notice u/s 153C of the act. That is not the mandate of the law. Therefore the argument of the learned authorised representative is rejected that when the AO of the searched person has specifically not included assessment year 2011 – 12, the authority of the assessing officer of the other person is curtailed in issuing notice for assessment year 2011 – 12 and hence the assessment order passed Under Section 153C of the act for assessment year 2011 –12 is liable to be quashed. Hence, we reject this argument of the learnedAR. In view of this, we are of the opinion that the assessment order passed for assessment year 2011 – 12 cannot be quashed at least on this count. Thus, second question is answered against the assesse.
Question no 3, 4 and 5 that arises are
a) whether the pen drive seized from the premises of one of the employees of the group concern can be said to be belonging to the assessee when four different applicants have owned it before the settlement commission and settlement commission has accepted the above proposition after considering the objections of revenue before it and thereafter accepting the disclosure made by those four applicants passed an order settling the dispute and additional income offered.
b) As the satisfaction recorded by the AO of the searched person with respect to the impugned pen drive does not mention that these pen drive belongs to the assessee company the requirement of the provisions of Section 153C is not fulfilled because the learned assessing officer of the searched person has merely expressed and without any evidence in the hands of the assessee protective additions have been made therefore the defective satisfaction with respect to the pen drive belonging to the assessee and consequent assessment orders passed u/s 153C of the act are not valid.
c) whether the orders passed by the learned assessing officer are bad in law as those orders are passed and back to copy of the order in case of another assessee i.e. Dalmia cement Bharat Limited and therefore these orders are passed without any independent application of mind.
In view of above facts, the question number [3] is answered in favour of assessee that the pen drive does not belong to the assessee company wherein for different applicants have owned it before the settlement commission and the settlement commission has accepted the content of the pen drive data contained therein and the income comprised in those documents chargeable to tax in the hence of those four applicants accepting the amount of disclosure made by them. Further question number [4] he also answered that the satisfaction recorded by the assessing officer of the person searched does not fulfill the requirement of provisions of Section 153C of the act as it is a defective satisfaction for the reasons given above. Issue number [5] that the assessment order framed u/s 153C read with Section 143 (3) for assessment year 2006 – 07 to 2011 – 12 in case of the assessee are ad verbatim copies of the orders of the learned Deputy Commissioner of income tax, central circle – 2 in the case of Dalmia cement Bharat Limited and therefore there is no application of independent mind by the learned assessing officer on the facts and the materials available before him while taxing the income in the hands of the assessee on protective basis. Therefore the consequent assessment order passed u/s 153C of the act for assessment year 2006 – 07 to 2011 – 12 are also not sustainable in law.
We have carefully analyzed the arguments of the learned authorised representative, which at first instance looks forceful and convincing. However when looked into the provisions of Section 245I, we are of the opinion that it gives the protection to the applicants before the settlement commission only that such matter cannot once again be taxed in the hands of only those four applicants in different proceedings for the same assessment year or in different assessment years. According to us, the provisions of Section 245I does not give protection to the whole world with respect to the ‘matter’ as decided by the settlement commission, it only protects those applicants who are before the settlement commission. Therefore, this proposition raised by the learned authorised representative stands rejected.
Issue number [7] that arises before us is Whether the assessment order passed in the case of the assessee on protective basis‘ is sustainable because identical substantive and protective additions‘ were made on the basis of the same material i.e. pen drive in case of group companies, which have been deleted by the learned CIT – A, 29 on the ground that entries in the cash book and 125 pages found in the seized pen drive belongs to the promoters and not to these companies. The revenue has accepted such orders of the learned CIT – A, 29 in the case of the group companies and those orders have not been challenged therefore on the identical facts the orders passed by the learned assessing officer are not sustainable. Issue number [8] is When the additions made in the hands of the other entity on substantive basis‘ is deleted by the learned CIT –A, can the protective addition in the hands of the assessee is sustainable
It is also a settled precedent that when the substantive additions are deleted, the protective additions also cannot survive. It can survive in one of the situation where there is a finding in the case of the person in whose hands substantive addition‘ is made that the income belongs to the person in whose hands protective additions‘ are made. We could not find such finding by any authority in the case of assessee in whose hands substantive additions‘ are deleted. Thus, we are of the view that when the substantive additions‘ is deleted in the hands of another assessee without holding that income does not belong to that assessee but to this assessee, protective additions‘ cannot be sustained in the hands of this assessee.
In view of this we find that ITSC has covered, the complete data of 125 pages found from the pen drive, deduced the income of Rs 95 crores, and held that such a disclosure is full and true. In absence of any infirmities pointed out by revenue about any leakage of income from the seized data, we find that revenue is not in a position to controvert findings of ITSC on adequacy of income offered for taxation. Thus, Issue no [9] is decided in favour of the assessee.
Thus, For AY 2006-07, Ground no 1 & 2 of the appeal of the ld AO are dismissed. Ground no 1 and additional ground raised by assessee in CO is allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. These are the six appeals filed by The Deputy Commissioner of Income Tax Circle -1 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 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 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,
a. its cement business was demerged to Avnija Properties Ltd.,
b. refractory business was demerged to Dalmia Bharat Enterprises Ltd.
c. 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 AADCA9414C) and it became a wholly owned subsidiary of Dalmia Bharat Enterprises Ltd. [now known as Dalmia Bharat Ltd. (DBL)]. Its name stands changed to Dalmia Cement (Bharat) Ltd. (PAN AADCA9414C) w.e.f 31.12.2010.
f. Assessee company herein is Dalmia Bharat sugar industries Ltd i.e. DBSIL (i.e. erstwhile Dalmia cement Bharat Limited-PAN AAACD2281K).
g. Search and seizure operations u/s 132 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act‘) was conducted in the ‘Dalmia Group of cases‘ including the cases of Dalmia Bharat Enterprises Ltd & the Dalmia cement Bharat the limited (new) and the premises of the directors/promoters namely Mr. Yadu Hari Dalmia & Mr. Puneet Dalmia of the Dalmia Group Companies on 20th January 2012, 27 & 28th January 2012.
h. Search proceedings in case of the group were concluded on 17th March 2012.
i. Assessee Company was not covered under the search action.
j. Searches were also conducted at the residences of employees of group companies on 27th and 28th January 2012. Bank lockers mostly held in the names of the following employees of group company i.e. Dalmia Bharat Enterprises Ltd were also subjected to search:
(i) Shri Sanjay Mitra
(ii) Shri N. K. Berry
(iii) Shri Joydeep Basu
k. There is no dispute that none of the aforesaid persons is employees of the Assessee Company.
l. However, one pen drive was seized from Mr. Joydeep Basu containing some data its taxability is the cause of disagreement between revenue and the assessee.
08. Brief facts of the case shows that
i. The Ld. A.O per order u/s 153C/143(3) dated 30.03.2015 for the A.Ys 2006-07 made an addition on ‘protective basis‘ of Rs 22,80,39,000/- on account of alleged total receipts (after extrapolation) purportedly recorded in a cash book contained in a pen drive. This pen drive was seized in course of search from the premises of Sri Joydeep Basu, an employee of group company, M/s Dalmia Bharat Enterprises Ltd of Rs 22,80,39,000/- .
ii. identical addition was made on substantive basis in the case of another group company m/s Dalmia Cement (Bharat) Ltd. (DCBL) by the Ld. DCIT, CC-2, New Delhi for A.Ys 2006-07 vide order passed u/s 153A/143(3) on 31.03.2014.
iii. Further identical additions on protective basis were also made by the Ld. DCIT, CC-2, New Delhi vide orders passed u/s 153A/143(3) for A.Ys 2006-07 to 2012-13 in the case of Sri Joy deep Basu.
iv. Further identical additions on protective basis were also made by the Ld. DCIT, CC-2, New Delhi vide orders passed u/s 153A/143(3) for A.Ys. 2011-12 & 2012-13 in the case of Dalmia Bharat Enterprises Ltd.
v. Thus, Revenue based on the above pen drive seized has made Substantive addition in the hands of one assessee i.e. Dalmia cement Bharat Limited. Protective addition is made in the hands of three different assessee namely [1] Mr. Joydeep Basu, from whom pen drive was seized, [2] Dalmia Bharat Enterprises Limited and [3] Dalmia Sugar & Industries Limited [Assessee before us].
vi. Mr. YaduHari Dalmia along with three other applicants filed a petition before Income tax Settlement commission owning the contents of pen drive and disclosing a sum of Rs 90 Crores.
Assessee claims that all impugned amounts involved in these appeals are included by Mr. Yadu Hari Dalmia and Mr. Gautam Dalmia in their application before Income tax Settlement Commission [ITSC]. ITSC passed an order u/s 245D (4) on 13/02/2015. It held that the contents of the impugned cashbook in the seized pen-drive belonged to Sri Yaduhari Dalmia & Sri Gautam Dalmia, (i.e. the promoters of the Dalmia group of companies) in their individual capacity. The ITSC vide its final order u/s 245D(4) had accepted the disclosure made by the said Mr. Yaduhari and Mr. Gautam Dalmia on the basis of the impugned pen-drive and the said order has attained finality by virtue of provision of section 245-I of the Act.
vii. Further Substantive addition in the hands of Dalmia Cement Bharat Limited and protective addition s made in the hands of [1] Shri Joydeep Basu & [2] Dalmia Bharat Enterprises Limited were deleted by the Ld. CIT (A)-29, New Delhi vide separate orders passed in April & May 2015.
viii. Reasons for deletion of addition is that Income-tax Settlement Commission had held that the contents of the impugned cash book in the seized pen-drive belonged to Shri Yaduhari Dalmia & Sri Gautam Dalmia, in their individual capacity.
ix. Further in all these cases, against orders of the ld CIT (A) for all these assessee for All these assessment years [i.e. AY 2006-07 to 2011-12], revenue has not filed any second appeal before the Income tax Appellate Tribunal.
x. The ITSC vide its final order u/s 245D(4) had accepted the disclosure made by the said Mr. Yaduhari Dalmia and Mr. Gautam Dalmia on the basis of the impugned pen-drive and the said order has attained finality by virtue of provision of section 245-I of the Act.
xi. Revenue has also not challenged the order of the Income tax Settlement commission before Honourable High court. Further, there is no allegation that such order is obtained by applicants by frauds or misrepresentation of facts.
xii. Thus, the
a. Appellate orders passed by the Ld. CIT (A)-29 in the cases of Dalmia cement Bharat Limited, Dalmia Bharat Enterprises Limited, and Mr. Joydeep Basu deleting identical substantive & protective additions made based on the impugned pen-drive, and
b. order of settlement commission passed in the case of four applicants Shri Yaduhari Dalmia and Others where contents of pen drive was held to be belonging to them and disclosure made therein by the applicants of Rs 90 Crores was held to be full and true has been accepted by the Department as final and conclusive.
9. Despite, Ld AO having accepted the order of the Ld. CIT(A)-29 deleting identical substantive additions in the case of Dalmia Cement Bharat Limited and the protective additions in the cases of Dalmia Bharat Enterprises Limited and Mr. Sri Joydeep Basu on the ground that the contents of the impugned cash book in the seized pen-drive belong to the promoters of the Dalmia Group in their individual capacity and not to any of the companies of the Dalmia Group, deletion of identical protective additions in the case of the Assessee on identical grounds by the Ld. CIT(A)-22 is challenged by the Department in the present appeals before us.
10. As in the case of the Assessee, the Ld. CIT (A) while deleting the quantum additions made by the Ld. A.O. did not adjudicate on the legal ground raised by the Assessee challenging the jurisdiction assumed by the Ld. A.O. u/s 153C of the Act, but deleting the quantum additions made on protective basis by the Ld. A.O., the Assessee has agitated the jurisdiction assumed by the Ld. A.O. u/s 153C vide its Cross-Objections.
11. As stated, a pen drive was found from the premises of Mr. Joydeep Basu. On the content of pen drive, statements of the employees of the group companies were recorded. Based on data contained in the pen drive as well as statements of employees of the group, LD AO in case of Dalmia cement Bharat limited held that the pen drive contains the data belonging to Shri Puneet Dalmia, which shows details of unaccounted cash received, and cash payment. Statement of suppliers of bags was also recorded. The AO of that company was also of the view that cement is the only business of the group earning money and therefore the cash is generated from cement business. Therefore, the learned AO of Dalmia cement Bharat Limited extrapolated the data of the pen drive and made an addition to the total income of Dalmia cement Bharat limited on substantive basis.
12. Similar additions were made on protective basis in the hands of two different assesses [1] Dalmia Bharat Enterprises Ltd [2] Mr. Joydeep Basu.
13. However, before the additions on substantive basis or on protective basis are made in the hands of Dalmia cement Bharat Limited, Dalmia Bharat Enterprises Ltd, Mr. Joydeep Basu, four applicants assesses namely Mr. Yaduhari Dalmia, and Mr. Gautam Dalmia filed an application before the income tax settlement commission on 28/10/2013. They offered an unaccounted income of ₹ 90 crores based on the pen drive found from Mr. Joydeep Basu, cash found etc.
14. Income tax Settlement commission admitted the application of the applicant on 1/11/2013 u/s 245D (1). Revenue submitted report u/s 245D (2B) of the act on 2/12/2013. In this report revenue challenged the application itself being invalid, gave its report on data contained in pen drive and cash seized. Settlement commission passed an order u/s 245D (2C) of the act on 18/12/2013. Settlement commission passed the final order u/s 245D (4) on 13/2/2015 accepting the disclosure of income made by Mr. Dalmias. Thus, the matter before the settlement commission reached finality.
15. However, the learned assessing officer in case of Dalmia cement Bharat the limited passed order u/s 153A read with Section 143 (3) on 30 March 2014 making similar addition on substantive basis. He also passed similar orders in case of Dalmia Bharat Enterprises Ltd and Mr. Joydeep Basu making same additions on protective basis on 31/3/2014.
16. The learned AO DCIT, Circle – 1, LTU, New Delhi issued notices u/s 153C on the basis of satisfaction note dated 25/3/2014 contending that the impugned pen drive and the content thereof belonging to Dalmia Bharat sugar industries Ltd.
17. The same officer has also held in case of three different assesses that the pen drive as well as data contained therein is belonging to Dalmia Bharat Enterprises Ltd, Dalmia Bharat cement Ltd and Mr. Joydeep Basu.
18. On appeal, in all these three cases before the learned CIT – A – 29, New Delhi, the additions were deleted. The learned CIT – A in those cases noted that
a. the impugned addition is forming part of the settlement commission order,
b. ITSC is a higher forum,
c. ITSC has recorded a categorical finding that the entries in the cash book and that of the pen drive belonged to Shri Y H Dalmia and Sri Gautama Dalmia
d. Income contained in the pen drive was owned by Sri Yaduhari Dalmia and other applicants
e. Pen drive does not belong to those assesses in whose hand substantive addition as well as protective additions are made.
19. Admittedly, the revenue has not challenged these orders of the learned CIT (A). These facts were also confirmed by the learned Asst Commissioner of income tax circle – 1, Trichy to the learned CIT (A) 22 in confirming that no second appeal has been preferred by revenue against the order of CIT (A), 29 in case of Dalmia cement Bharat Limited as well as Dalmia Bharat Enterprises Ltd and Mr. Joydeep Basu.
20. However, ld AO of assessee was of the view that the pen drive as well as the data contained therein belongs to the assessee. Therefore, he issued notices u/s 153C on 31/3/2014 for assessment year 2006 – 07 to assessment year 2011 – 12 based on the satisfaction note dated 25/3/2014 received from The Deputy Commissioner Of Income Tax, central circle – 2 contending that the impugned pen drive and the content thereof belong to the assessee company. The assessee questioned the notices and requested the learned AO to provide the basis for arriving at the satisfaction that these materials belong to the assessee. The AO on 4/2/2015 gave the statement of Mr. Joydeep Basu and the data/transactions recorded in the pen drive stating that these transactions belong to the assessee. The AO was also relying on an email communication from another employee of Dalmia Bharat Enterprises Ltd , Mr. Sanjay Mitra, contained in the above pen drive where there was a proposal to buy back the shares of assessee company as well as of another company i.e. OCL being bought back from GFL. Thus, it was stated by the AO that the pen drive and the contention of the pen drive belong to the assessee company.
21. The assessee objected to the above notice on 16/2/2015 stating that pen drive was also simultaneously alleged to be belonging to [1] Messer‘s Dalmia cement Bharat Limited and [2] Dalmia Bharat Enterprises Ltd and [3] Mr. Joydeep Basu and substantive and protective additions have been made in the hands of various assesses on the basis of the very same pen drive. Therefore it cannot be said that such pen drive also belong to the assessee. Assessee also submitted that The settlement commission has already held that the pen drive in the data contained in the pen drive belonged to Mr. Y H Dalmia and Mr. Gautam Dalmia as per order dated 13/2/2015. Assessee also drew attention of the learned AO about the order of the settlement commission, the orders of the assessment in case of Dalmia cement Bharat Limited, orders in the case of Dalmia Bharat Enterprises Ltd and Mr. Joy the Basu. It was also submitted that according to the provisions of Section 245I of that the order of the settlement commission shall be conclusive and final as to the matter stated therein. It was submitted that the matter is similar in all those cases of all these assessee is which are also considered by the AO in the case of the assessee.
22. The learned assessing officer rejected objections of the assessee. He made an identical addition in the hands of the assessee on protective basis for assessment year 2006 – 07 to 2011 – 12 by passing an order u/s 153C read with Section 143 (3) on 30th of March 2015. Identical sum was added in the hands of assessee, which were added in the hands of [1] Dalmia Bharat Enterprises Ltd and [2] Mr. Joydeep Basu on protective basis and [3] Dalmia cement Bharat Ltd on substantive basis. Learned assessing officer passed an order u/s 153C of the income tax act wherein the addition of ₹ 228,039,000/– was made in the hands of the assessee whereas the assessee originally filed its return of income at ₹ 613,939,731 /– which was assessed u/s 143 (3) or u/s 250 of the act at ₹ 71,17,88,899/– assessing income of the assessee at ₹ 939,827,900/–. Identical additions were also made in the hands of the assessee for assessment year 2007 – 08 to 2011 – 12.
23. The assessee preferred an appeal before the learned CIT – A challenging the order of the learned AO. Assessee contended that the
i. satisfaction recorded by the assessing officer in the case of searched person was not brought on record by the AO of the assessee and only a summary was provided to the assessee.
ii. impugned pen drive did not belong to the assessee since the same was neither seized from the possession of the assessee nor any of its promoters but from the residence of Mr. Joydeep Basu
iii. Mr. Basu is not at all related to the assessee or an employee of the assessee
iv. Provisions of Section 153C are not satisfied.
v. Same addition and been made in the case of numerous assesses holding that the pen drive and data contained therein belonging to those assesses also.
vi. additions are made in the hands of various assesses on protective basis and on substantive basis which are deleted by the learned CIT – A in those cases
vii. Such orders of ld CIT (A) in those cases have not been
challenged before the higher forum and therefore they have become final.
viii. There is no independent application of mind by the learned assessing officer as the part of the order reproduces the orders passed in another assessee and ld AO merely concurs with that view without giving any reasons.
ix. Issue is squarely covered by the decision of the settlement commission which has already become final and therefore same addition cannot be made in the hands of the assessee which has already been included in the settlement petition of other assesses.
x. On quantum, extrapolation of the figures recorded in the pen drive is beyond the jurisdiction of the AO.
xi. Commenting on the data in pen drive, inflows have been taxed however, that the outflow has not been granted as deduction.
xii. addition has been made with respect to the over invoicing of taking material on the basis of the statement of the two different persons behind the back of the assessee neither the copy of such statements were provided nor the opportunity of cross-examination was also given and therefore there is a clear-cut violation of the principles of natural justice.
24. The learned CIT – A passed an order on 29 March 2019 for assessment year 2006 – 07 to 2011 – 12 deleting the addition holding that the settlement commission vide order dated 13/2/2015 has already categorically found that the entries in the cash book and 125 pages of seized pen drive on the basis of which the impugned addition has been made in the hands of the assessee belonged to Mr. YH Dalmia and Mr. Gautam Dalmia. Hence, addition made in the hands of the assessee was liable to be deleted as the matter has become final. He also noted that the CIT – A – 29 has passed the orders in the case of [1] Dalmia cement Bharat Ltd [2] Dalmia Bharat Enterprises Ltd and [3] Mr. Joydeep Basu and deleted all the substantive and protective additions. These orders of ld CIT (A) -29 have not been challenged before the higher forum. Therefore, these orders of the learned CIT – A in those cases have become final. Further, the order of the settlement commission has not been also challenged by the revenue and therefore the addition in the hands of the assessee cannot be made.
25. However , learned CIT appeal did not adjudicate the other grounds of the assessee is arguments regarding satisfaction note raised as per ground number 1, the issue that the material do not belong to the assessee as per ground number 2 and non application of mind as per ground number 3. Therefore, the assessee is also aggrieved as the learned CIT – A did not adjudicate on the legal arguments with respect to the validity of the assessment challenged before him.
26. On the merits and legal grounds ld Cit (A) held as under :-
“6. The relevant portion of the AO is as under:
The AO has framed-assessment. by placing reliance on the statement of the various officials recorded during search and survey operations, findings, observations of the DCIT, Central Circle – 26, New Delhi in the assessment order of Dalmia Cement Bharat ltd for the AY 2006-07 in connection with the proceedings u/s 153A of the Act in the case of the assessee company for AY 2006-07.
AO observed that a pen drive was found from residence of Joydeep Basu, an employee of Dalmia Group. The said pen drive contained details of various unaccounted cash transactions. AO observations regarding it are as under:
Cash Transactions:-A perusal of data contained in the pen drive reveals that it contains complete data of cash transactions, which was being maintained out of the books. It is observed that substantial amount of cash was received and paid to different parties on day-to-day basis. Different sheets of pen drive contain data for the period 03.11.2005 to 31.03.2006, 01.04.2006 to 29.05.2006, 10.08.2006 to 10.10.2006 and 01.04.2007 to 01.07.2011. i.e. the complete details of inflow and outflow are available for the F.Y. 2007-08, 2008-09, 200910, & 2010-11. However, for F.Y. 2005-06, 2006-07 and F.Y. 2011-12 part details are available. In the absence of the complete data for these financial years, extrapolation has to be done on the basis of the available information..
