AI Structured Summary
Not yet generated for this judgment
Judgment
PER BRAJESH KUMAR SINGH, AM,
These two appeals by the Revenue are against two separate orders both dated 28.03.2025 of Ld. Commissioner of Income Tax (Appeals)-29, New Delhi-110055 [hereinafter referred to as the ‘Ld. CIT(A)] arising out of the two separate assessment orders both dated 29.03.2022 passed under section 143(3) r.w.s. 153C/153A of the Income Tax Act, 1961 (hereinafter referred to as the ‘the Act’) passed by the ACIT, Central Circle-26, New Delhi, (hereinafter referred to as the ‘AO’) pertaining to Assessment Years (AY) 2012-13 and 2020-21.
Both these two appeals have common issues and were heard together and are disposed by the common order for the sake of convenience and brevity. The ITA No.- 2955/Del/2025 for A.Y. 2012-13 is taken as the lead case.
The assessee company filed its original ITR declaring current year loss of (-) Rs. 1,37,82,630/- on 28.09.20l2 and the same was processed under section 143(1) of the Income Tax Act. Further, a search and seizure operation was conducted on Bakshi Group on 10.12.2012 and the premises of the assessee was also covered u/s 132. Thereafter, a revised ITR was filed by the assessee declaring income of Rs. NIL on 24.02.2015 and assessment u/s 143(3) r.w.s 153A of the Act was completed at NIL/-on 24.03.2015.
Further, a Search and Seizure action u/s 132 of the Income Tax Act 1961 was carried out at the residence premise of Sh. Lalit Taluja in the case of M/s Sweta Estates Pvt. Ltd & other entities and family members of Oriental Group on 27.11.2019. Search was also conducted at the premises of Sh. Neeraj Dhawan, President (Finance) of M/s Sweta Estates Pvt Ltd on same date. During the course of search at the residence of Sh. Lalit Taluja as well as Sh. Neeraj Dhawan, incriminating documents/ diaries/ loose papers related to the assessee were found and seized. The AO noted that there were transactions in lot of papers/diaries pertaining to the assessee or belong to the assessee. The AO further noted that while examining the seized documents by the AO of the searched person, he came across the certain documents which pertained to the assessee and after recording his satisfaction to this effect, he forwarded the satisfaction note and copy of relevant seized documents and information relating to the assessee to the AO of the person other than the searched person (in both these case in the AO’s are same). Therefore, after recording satisfaction, notice u/s 153C was issued for A.Y. 2012-13 on 30.01.2021by the AO having jurisdiction over the assessee
In response to the notice u/s 153C, Assessee Company filed its ITR for A.Y. 2012-13 declaring nil income on 21.05.2021. Accordingly, notice u/s 143(2) of the Act, dated 19.03.2022 was issued and served upon the assessee through ITBA portal.
During the assessment year under consideration, the AO noted that the assessee company was engaged in development and maintenance of information technology/ information technology enabled services sector specific "SEZ". The AO further noted that the assessee company had taken land on lease from New Okhla Industrial Development Authority (NOIDA Authority) SEZ for construction of an IT software project at plot no. C-1, Sector-67, Noida vide allotment letter no. Noida/INDii/2006/834 and 9086 dt. 22nd May 2006 and O8 September 2006.
Notice u/s 142(1) was issued on 01.09.2021 and assessee was asked to furnish the explanation/ evidence/ information as mentioned therein. Vide its letter dated 02.12.2021, assessee sought permission to file offline due to large volume of documents. Further, notice uls 142(1) dated 25.11.2021 was issued to the assessee requesting it to comply with the previous notices. In response the notices issued to the assessee, assessee filed part replies only and sought further adjournment to submit pending reply. Copy of Satisfaction note was provided to the assessee vide letter 18.02.2O22. The final opportunity was provided through notice u/s 142(1) dated 19.03.2022 alongwith questionnaire as under:
"A search and seizure action was carried out at the residence premise of Lalit Taluja in the case of Sweta Estates Put Ltd & others concerns and family members of Oriental Group on 27.11.2019. Search is also conducted at the premises of Sh. Neeraj Dhawan, President (Finance) of M/s Sweta Estates Pvt Ltd on same date. During the course of search incriminating documents/ diaries/ loose pares were found and seized at the residence of Sh. Lalit Taluja as well as Sh. Neeraj Dhawan related to you. The transactions in lot of papers/diaries pertain to you or belong to you. Therefore, notice u/s 153C was issued for A.Y. 2010-11 to 2019-20 and notice u/s 143(2) was issued for A.Y. 2020-21.
Notice u/s 142(1) was issued on 01.09.2021 and you were asked to furnish the explanation/evidence/ information. Further, copy of satisfaction note was supplied to you on 18.02.2022 and you were asked to furnish the details as per query letter issued on 01.09.2021. Further, notices u/s 142(1) were issued on 25.11.2021, 18.02.2022
No details/explanation has been received till date. You have mentioned in reply dated 14.02.2022 that the annexure referred by this office is meaningless and has no relation with you (assessee company). It is already mentioned in earlier query letter/satisfaction note supplied to you that search and seizure operation was carried out at the residence of Sh. Neeraj Dhawan and Sh. Lalit Taluja in the cases of Sh.Amarjit Singh Bakshi, Sh. Kanwaljit Singh Bakshi, Sh.Sanjit Bakshi, Smt. Amrita Bakshi, M/s Oriental Structural Engineering Pvt Ltd, M/s Oriental Tollways Pvt Ltd and M/s Sweta Estates Pvt Ltd. The statement of Sh. Neeraj Dhawan and Sh. Lalit Taluja were recorded on oath at the time of search as well as during assessment proceedings. Both these persons categorically stated that the documents found and seized from their residence belongs to and pertains to Oriental Group and Sweta Group of companies/ persons. You (the assessee) also belongs to this group on the basis of documents found and seized from their residence, the notice u/s 153C was issued in your case. As mentioned supra, copy of satisfaction note is already supplied to you. The copies of documents found and seized are also supplied to you on preceding dates. However, if you desire to obtain further documents please collect the same from this office on 21/03/2022 at 11:00 AM onwards.
You have received the following payments from M/s Sweta Estates Pvt. Ltd. as under:
F.Y. 2008-09 Rs. 18,00,000/-
FY 2009-10 Rs. 22,000/-
FY 2010-11 Rs. 1,61,000/-
F.Y. 2011-12 Rs. 3,37,89,000/-
F.Y. 2012-13 Rs. 60,54,00O/-
F.Y. 2015-16 Rs. 35,000/-
F.Y. 2016-17 Rs. 60,00,00,000/-
F.Y. 2017-18 Rs. 1,56,50,000/-
F.Y 2018- 19 Rs. 26,01,000/-
F.Y. 2019-20 Rs. 2,24,62,000/-“
(emphasis supplied by us)
After considering the explanation of the assessee, which was not found tenable by the AO, an addition of Rs. 3,37,89,000/- was made in the assessment order. The relevant extract of the same is reproduced as under:
“In absence of sufficient evidences, the reply filed by the assessee is not correct and therefore, the amount received by the assessee during the year under consideration and mentioned in the annexure A2, A3 and documents found and seized from the residences of Sh. Lalit Taluja and MIS sheet found. 12.11.2019 at the residence of Sh. Neeraj Dhawan is treated as undisclosed receipt of the assessee. In view of the above, it is clear that amount of Rs 3,37,89,000/- received by the assessee from Sweta Group/ Oriental Group during the A.Y. 2012-13 remained unexplained and added to the total income of the assessee on account of unexplained receipts.”
(Addition: Rs. 3,37,89,000/-)
Aggrieved with the said order, the assessee filed an appeal before the Ld. CIT(A). The assessee filed a written submission dated 14.07.2023 before the Ld. CIT(A). The relevant extract of the same is reproduced as under:
“1.On 27.11.2019 a search conducted by the department on Sweta Group. During the search some documents found and seized from the car of Shri Saurabh Taluja perked outside the premises of Shri Lalit Taluja.
2.The addition of Rs. 3,37,89,000/- to the Income of the Assessee as per A.O. dated 29-03-2022 for A.Y. 2012-13 despite the facts that no Incriminating evidence was found during the course of search on the assessed or its directors/employees. The addition is made based on some payment entries shown in diary of Sweta Group.
3.It is submitted that the Assessee has not received any amount from M/s Sweta Estates P. P. Ltd, or any other concerns. This Amount is shown as withdrawn/spent by the Sweta Estates (P) Ltd. for the business purpose of the Assessee by Sweta Estates (P) Ltd out of the amount received as business receipts by Sweta Group and entered into the dairy (A-2 seized material).
4.M/s Sweta Estates P. Ltd. has filed an application before the settlement commission and has declared that all receipts entered into the diary (A-2 Seized material) are business receipts and all payments entered into the diary are for business purpose only and offered 15% of receipt as their income and paid income tax thereon with interest.
5.The amount spent by Sweta Estates P. Ltd. for the assessee is out the income declared by the M/s Sweta Estates P. Ltd. in the application filed before the settlement commission. In the above circumstances, how one income can be taxed two times in the group?
6.M/s Sweta Estates (P) Ltd in its submission to Settlement Commission stated as under in respect of payments recorded in the name of other entities of the group. As per entries found in the parallel cash books/diaries and other documents (MIS sheets), various payments have been made on behalf of other. entities of the Group towards their miscellaneous expenses and NOT for purchase of any assets. These expenses have not been accounted for in the books of the respective companies or in the books of any other entities of the group. The respective AOs made additions of such amounts in the assessments of the concerned entities. The additions made in various entities are tabulated below:
Under the circumstances, The Hon'ble IBS is requested to give a finding that these payments be considered as a part of undisclosed income i.e @ 15% of business receipts, declared by Sweta Estates Pvt Ltd in the application filed before the Hon'ble IBS and give an appropriate direction to the concerned authorities that any such additions made in the cases of the respective entities are not valid.
We request your good-self to take cognizance of the aforesaid and keep the proceeding in abeyance till the time of order passed by the Settlement Commission in the case of M/s Sweta Estates P. Ltd.”
(emphasis supplied by us)
Thereafter, the Ld. CIT(A) after considering the order of the IBS dated 21.12.2023 u/s 245D(4) of the Act in the assessee’s group held that since the entire income as per seized papers have been offered by M/s Sweta Estates Pvt. Ltd. and other entities before Hon'ble IBS, the above request of the applicant was reasonable and it was further directed that in no case income should be taxed twice and deleted the said addition. The relevant extract of the order of the Ld. CIT(A) is reproduced as under:
“8.6Accordingly, in view of the directions of Hon'ble IBS that no income should be taxed twice, a remand report/comments were sought from the AO. Vide letter dated 22.10.2024 a remand report was furnished by the AO which is reproduced in para-5 above. The copy of remand report was forwarded to the appellant for rejoinder/comments. Vide rejoinder dated 20.12.2024 the appellant furnished comments an ITBA which are reproduced in para-6 above.
8.7It is seen that the addition has been made in the case of the appellant on the basis of a diary found during the course of search with a ledger account in the name of the appellant. In the assessment order, AO has reproduced the statements of Sh. Lalit Taluja & Sh. Amarjit Singh Bakshi wherein it was categorically accepted that the amount shown in the name of the appellant pertains to the receipts and payments related to M/s Sweta Estates Pvt. Ltd. and its group associates for their business operations. Further, in the petition before Hon'ble IBS, M/s Sweta Estates Pvt. Ltd. and other group entities had also owned up the transactions recorded in the diary under reference, It was requested by the applicants before Hon'ble IBS that the payments/expenses incurred on behalf of other group entities should not be taxed again in the hands of such group entities which are not before the Hon'ble IBS. In this regard, Hon'ble IBS has also made an explicit observation in the order u/s 245D(4) of the Act that since the entire income as per seized papers have been offered by M/s Sweta Estates Pvt. Ltd. and other entities before Hon'ble IBS, the above request of the applicant was reasonable and it was further directed that in no case income should be taxed twice. The name of appellant also figures in the list of other group entities in whose case addition has been made on the basis of such seized documents and diary as detailed out at Page 17 of the order of Hon'ble IBS (reproduced in para 8.4 above). Under these circumstances, since the expenses and receipts in the diary/seized documents have been owned up by M/s Sweta Estates Pvt. Ltd. and other entities before Hon'ble IBS and they have agreed to pay taxes thereon at the rate determined by Hon'ble IBS, the addition of same amount in the hands of other third parties such as accountant, CFO or other group entities is not justified, more specifically in view of the directions of Hon'ble IBS that no income should be taxed twice. The addition made in the case of the appellant is therefore not sustainable on merits and directed to be deleted. Accordingly, this ground of appeal is allowed.”
(emphasis supplied by us)
During the hearing before us, the Ld. Sr. DR could not controvert the above findings of the Ld. CIT(A).
On the other hand, the Ld. Counsel for the assessee relied upon the order of the Ld. CIT(A).
We have heard both the parties and perused the material available on record. After considering the facts of the case, we agree with the findings of the Ld. CIT(A) and her reasoning that the same income cannot be taxed twice. The submission of the department in ground no. 2 that the Ld. CIT(A) has erred in placing undue reliance on the order passed by the Hon'ble Interim Board of Settlement (IBS), despite the fact that the assessee was not a party to the settlement proceedings and had not filed any application before the IBS has been carefully perused but not found to be acceptable. Here the issue is not whether the the assessee was not a party to the settlement proceedings and had not filed any application before the IBS, as the Ld. CIT(A) deleted the addition based upon the findings of the Ld. IBS that income of Rs. 3,37,89,000/- added in the case of the assessee has already been offered and taxed in the hand of the assessee and the IBS had stated that the same income cannot be taxed twice could not be controverted by the Revenue. As noted by the Ld. CIT(A) that amount of Rs. 3,37,89,000/- had already been considered by the IBS in its order dated 21.12.2023 u/s 245D(4) of the Act in the case of M/s Sweta Estates (P) Ltd. and therefore, the said income was no longer taxable in the hands of the assessee. Therefore, no interreference is called for in the order of the Ld. CIT(A) and we uphold the order of the Ld. CIT(A). Ground nos. 1 and 2 of the appeal are dismissed.
In the result, appeal of the Revenue in ITA No.- 2955/Del/2025 is dismissed.
As the facts and circumstances in ITA No. 2956/Del/2025 are identical to those in the lead case, our decision rendered in ITA No. 2955/Del/2025 shall apply mutatis mutandis to this appeal as well. Accordingly, ITA No. 2955/Del/2025 is also dismissed.
To sum up, both the appeals of the Revenue in ITA No.- 2955/Del/2025 and 2956/Del/2025 are dismissed.