Case Law Details
DCM Shriram Industries Ltd Vs DCIT (ITAT Delhi)
ITAT Delhi held that addition under section 69C of the Income Tax Act towards unexplained expenditure based on dumb documents not sustainable in law.
Facts- A search and seizure u/s 132 of the Act took place on the office premises of Radico Khaitan and Survey u/s 133A on UPDA offices. A search was also carried out at the residence of one Shri R.K. Miglani, who was the Honorary Secretary of UPDA. The statement of Shri R.K. Miglani was recorded u/s 132(4) of the Act. These documents which were seized from the residential and office premises of UPDA u/s 133A or from Sh. R. K. Miglani, and according to the department, allegedly conveyed that all the distilleries situated in U.P. were contributing certain cash based on the production, which money was allegedly being used as bribe to pay certain public servants/bureaucrats/politicians. The department initiated proceedings u/s 153C by recording an identical satisfaction based on identical documents in respect of all the distilleries and completed assessments by making additions of large amounts in respect of each of the distilleries including the assessee u/s 69C of the Income Tax Act by holding that each distillery has incurred unexplained expenditure.
Conclusion- Held that these documents are only having hearsay value or these documents are dumb documents which cannot be relied upon.
Held that since the documents relied upon by the department or the statement of Sh. R. K. Miglani remains the same having no evidentiary value as per the factual findings recorded in the said order of ITAT and already relevant paras from the said order have already been extracted above in this order, which, in our considered opinion, are very much relevant to put the issue as rest. Therefore, respectfully following findings given by Tribunal in aforesaid batch of appeals, we hold that no addition of any alleged unexplained expenditure u/s 69C can be made in the hands of the assessee and the additions made u/s 69C of the Act for A. Y. 2004-05, A.Y. 2005-06 and A.Y. 2006-07 amounting to Rs. 4,53,93,300/-, 3,13,45,000/- and 4,14,44,000/- respectively are hereby directed to be deleted.
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