9911796707
TMI Blog2022 (4) TMI 1181X X X X Extracts X X X X X X X X Extracts X X X X ..... ed u/s. 143(3) r.w.s. 153A of Income-tax Act, 1961 (in short "Act") on 29.12.2010. Subsequently, there was a search at the premises of Dalmia Group on 20.01.2012. During the course of the search, certain incriminating documents were found. It is the case of the Department that the incriminating document found from the premises of Dalmia Group reveals unaccounted cash transactions between Dalmia Group and Jain Group of which assessee is a main person. The necessary information was passed on from the DDIT (Inv), New Delhi to the Assessing Officer at Mumbai. Consequently, a notice u/s.148 of the Act was issued by the Assessing Officer on 22.11.2013. During the course of the assessment proceedings, it was pointed out to the assessee that various documents found from the premises of the Dalmia Group reveal the cash transactions between Dalmia Group and the assessee. The assessee was asked to show cause as to why the addition should not be made in respect of such cash transactions. In response, the assessee flatly denied having entered into any cash transactions with Dalmia Group. The Assessing Officer rejected the explanation of the assessee and proceeded to determine the undisclosed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.4 The search and seizure operations and investigations conducted in the cases of Shri Joydeep Basu, Manger (Treasury) in M/s. Dalmia Bharat Enterprises Ltd, Shri Neel Kamal Berry, Senior Manager (Finance) of Dalmia Bharat Enterprises Ltd and Shri Sanjay Mitra, acting as the head of the team for handling cash transactions, revealed that the instructions start from the Dalmias and flow through Shri Sanjay Mitra, Shri Neel Kamal Berry and Shri Joydeep Basu, in that order, for executing discreet unaccounted cash transactions/receipts and payments. Relevant evidences have been supplied to the assessee. 13.5 It is to be noted that Shri Joydeep Basu, regularly and systematically, maintained the details of unaccounted cash transactions on a pen drive. Some of the details, as contained in the pen drive, match with the contents of the documents, seized from the residence of the Dalmias. In the pen drive, one folder named "SJ Files" is stored The folder "Si Files" contain three folders namely "Meeting on 9.78.2011", "reciprocal" and strd files". 13.6 The details in "structured Accounts" and "reciprocal", stored on the pend drive of Shri Joydeep Basu, have been discussed at length in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to either buy these shares themselves or enable selling to a person/investor of their comfort. They did not know when these shares would be sold therefore, informally documented it. The condition for giving them this option to buy or to enable selling to a person of their comfort was that Dalmias will ensure that there is no loss on these shares including reimbursement of an interest of 12% per annum. Therefore, they provided an lCD of Rs. 40 crores, Rs. 10 crores as debenture application money and Rs. 34 crores as cash to ShriAnand lain. 13.10 In paras 11.15 to 11.17, of the questionnaire issued, the details of transactions and issues relating to funds provided, debenture application money and payments made, are discussed. The details of interest accrued and reimbursement of capital are discussed in paras 11.20 and 11.21 of the questionnaire. 13.11 The issues relating to transactions in shares appearing in the file 'reciprocal' of "SI files" are discussed at length in para 12 of the questionnaire. 13.12 The seized documents and data contain unaccounted cash transactions, which are not part of the books maintained by the Dalmias and their related business entities. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... belonged to the other party. The profits earned by one party actually belonged to the other party. Therefore, the party earning more profits on such shares transferred such profit to the other party in the form of cash or profits. In his settlement, total amount Rs. 84.16 crores has been received by Shri Anand Jain. Out of this Rs. 84.16 crores, Rs. 54.50 crores have been paid in the form of profits and Rs. 29.66 crores have been paid in the form of cash. Out of the profits of Rs. 54.50, Rs. 47 crores (Rs. 27 crores + Rs. 20 crores) are received in the A" 2007-08 and Rs. 75 crores appear to be received by Shri Jain in FY 2008-09. (Refer Path: H./SJ Files/Reciprocal/SJ reciprocal MIS July 5 2011/Sheet 3). Cash of Rs. 29.66 crores is received by Shri Jain in the FY 2009-10. Accordingly, the amounts of Rs. 47 crores in the A Y 2008-09, Rs. 75 crores in the A V 2009-10 and Rs. 29.66 crores in the A Y.2010-11, in the hands of Shri Anand jain, become relevant. The assessee was required to furnish explanation." 6. The above referred cash payment has been alleged to be made by Dalmia Group to the assessee during the year under consideration. The case of the A.O., based on his interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds for the A.Y. 2008-09 are: - "1. "Whether on the facts and circumstances of the case and in law, the Ld. C.I.T.(A) has erred in deleting the addition in respect to the addition made by the A.O. for Rs. 47.00 Crores holding that documents seized from the premises of Dalmias of Delhi is not conclusive evidence." 2. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of AO be restored." 3. "The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 10. At the time of hearing, Ld. DR submitted that the seized documents are meticulously maintained and the transactions with the assessee have been clearly reflected in the said seized documents. The attention was invited to various seized pages which are at page No. 1 to 16 of the assessee's paper book. The Ld. DR has drawn attention to various seized documents and pointed out that the amount of Rs..47 crores have been mentioned on seized page No. 21 (PBP 14) wherein it has been clearly mentioned that the profit of Rs..20 crores have been paid up to 31.12.2007 and Rs..27 crores has been paid during January to March 31, 2008. It was also pointed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are: - a. CIT v. S.V. Sreenivasan [2018] 404 ITR 433 (Madras) b. Smt Dayawanti v. CIT [2017] 390 ITR 496 (Del.) c. Smt. Vasantibai N. Shah v. CIT [1995] 213 ITR 805 (Bombay). d. Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC) e. S. P. Jaiswal v. CIT [1973] 224 ITR 619 (SC) 14. On the other hand, Ld. AR submitted that the real issue to be decided in the present case is not as to whether the seized documents are meticulous or complete. The real issue to be decided is as to whether the documents found from the premises of third party can be relied upon for making the addition in the hands of the assessee. Thus, the principal argument of the assessee is that the addition on the basis of seized material found during the course of search from third party cannot be sustained. This is more particularly so when the assessee has consistently and categorically denied any cash transactions. Further, not only there is no corroboration of the seized documents but the details of the shareholding, allegedly held by the assessee, has not been shown to be existing at all. Thus, the seized documents are uncorroborated. He submitted that this proposition is supported by the serie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the above making of payment by the assessee was found during the course of the search. Merely recording made by a third party or statement of a third party could not be treated as so sacrosanct so as to read as a positive material against the assessee. Therefore, addition in the hands of the assessee on account of 'on-money' was notjustified" iv) ACIT v. Prabhat Oil Mills [52 TTJ 533 (Ahd)] - Pg. nos. 38-43 In this case, the department relied upon certain notings in the seized diary found from the premises of third party and contended that the assessee had made sales outside the books of accounts. However, the assessee denied of having made any sales outside the books of accounts. The Hon'ble Tribunal held that once the assessee denies the transaction, the onus was on the Assessing Officer to prove with corroborative evidence that the entries in the seized diary represented sales outside books of accounts. The Hon'ble Tribunal further held that mere entries in the accounts of third party was not sufficient to prove that assessee had indulged in transaction outside books of accounts. Further, in para 9 of the order, the Hon'ble Tribunal also rejected the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al submissions and material placed on record. We observe from the record submitted before us that there was a search at the premises of Dalmia Group and certain incriminating documents were found, it revealed alleged unaccounted cash transactions between Dalmia Group and Jain Group. The revenue considered the fact that the assessee is the main person in Jain Group, the DDIT (Inv), New Delhi referred the issues to the assessing officer, accordingly reassessment proceedings were initiated in the case of the assessee. When the above findings were confronted with the assessee during the assessment proceedings, we observe from the record that the assessee has consistently denied having any transactions with the Dalmias. From the record submitted before us, such stand of the assessee was communicated to the Assessing Officer vide letter dated 04.03.2014 (Para no. 3.1 of assessment order). Further communication to this effect was made vide letter dated 20.03.2014 addressed to the Assessing Officer (Para no. 3.2 of assessment order). Further, we observe that the Assessee's statement was recorded u/s.131(1) of the Act on 11.05.2012 by ADIT (Inv), New Delhi, who had carried out a search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ...... " 19. Further we observe that in reply to Rule 9 report reproduced on Page no 18 of the order, Dalmias have stated that 'the employees who were recording/executing the transactions were not actually aware of the whole/correct import of the transaction. They have further observed at page 21 of the order that none of the Dalmia family member was present at the time when the pen drive was seized or cloned. It is their claim that 'hence, the ownership and authenticity of the contents of the pen drive per se is not clear'. We observe that the amount of addition admitted before the Settlement Commission by the Dalmias is way too small than the addition made in the case of the assessee. Although the Department has strongly objected this before the Settlement Commission (Pg no 13 of ITSC order), the application has been accepted and nothing has been brought on record to show that the order of the Settlement Commission has been reversed or even challenged. In any case, even if the person from whom the documents have been found out have accepted the Correctness of transaction before the Settlement Commission, in our considered view, the same is not binding on the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement on the first day itself. 22. In our view, the AO has not conducted any independent enquiry or made any efforts to corroborate the seized pages or link it to assessee. The entire assessment has been made without bringing on record any evidence but merely relying on statements made by persons from Dalmia Group and AO's perceptions/presumptions. 23. Further, as regards the argument of the Ld. DR that the cheque transactions with two companies are corroboration of seized material it is observed that the cheque transactions are not of the assessee. Transactions other than cheque transactions do not get established automatically. Ld DR argued by relying on the Hon'ble Jurisdictional High Court decision in the case of Smt. Vasantibai N Shah (supra) that there was nothing improper on the part of the AO in relying on circumstantial evidence in such a case for the purpose of arriving at the above finding in as much as no direct evidence in a transaction like the one in question was even possible. Circumstantial evidence in such cases was not impermissible because in such cases it was only the circumstantial evidence which would be available and no direct evidence could be expected. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oup have disputed the contents of the pen-drive. Further reliance is placed upon the decision of Mumbai Bench of the Tribunal in the case of Simtools P. Ltd. v. DOT in ITA No. 1574/Mum/2020 dated 09.02.2022 wherein following the above referred decision of the Supreme Court, it was held that the electronic data cannot be relied upon in the absence of requisite certificate. 25. After considering the above discussion, in our considered view, the findings of Ld CIT(A) is proper and he has addressed the issue in right perspective. We do not see any reason to interfere with the findings of the Ld CIT(A). Accordingly, the grounds raised by the revenue is dismissed. 26. The identical issue has been involved in A.Y. 2009-10, 2010-11 and 2011-12 findings given in the para no 26 is applicable mutatis mutandis, accordingly the appeal filed by the revenue is AY 2009-10, 2010-11 and 2011-12 are also dismissed. 27. Additionally, in A.Y. 2011-12 the Department has raised a ground in respect of annual letting value of certain flats owned by the assessee. The said ground of appeal is reproduced as under: - "2. Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) is rig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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