TMI Blog2023 (10) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... lls Financial Services Ltd more so when assessee is not an applicant. AO 's finding with regard to bank withdrawals recorded in the books of the assessee has also been not discussed by the CIT(A). As from order of the settlement commission we notice that the percentage of expenditure claimed by the applicants has been reduced from 90.32% to 65% and accordingly the amount to be settled is arrived at by the settlement commission. From this settlement whether the additions made based on specific list of expenses submitted before the settlement commission in the hands of the assessee is covered or not is not coming out clearly. In view of these discussions we are of the considered view that the issue should go back to the AO for a fresh examination and accordingly remit the issue to the assessing officer to verify whether the source for the additions made in the hands of the assessee is explained through the settlement made before the settlement commission. Assessee is directed to submit the relevant details before the assessing officer and cooperate with the proceedings. This ground of the revenue is allowed for statistical purposes. - SHRI AMIT SHUKLA (JUDICIAL MEMBER) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance/additions made during original assessment proceedings. Aggrieved the revenue is an appeal before the Tribunal. 6. The revenue raised grounds of appeal with respect to the following issues which are common for all the assessment years (i) Deletion of addition made u/s. 69C by the CIT(A) (ii) Deletion of disallowance of additional depreciation by the CIT(A) (iii) Disallowance of ESOP expenses deleted by the CIT(A) 7. During the course of hearing the ld DR did not present any arguments with regard to the deletion of disallowance of additional depreciation and of ESOP expenses. Therefore the grounds raised in this regard in all the appeals are dismissed as not pressed. Addition under Section 69C 8. During the course of the assessment proceedings, the AO observed that a search at the premises of Indiabulls group was conducted on 13.07.2016. The entry found from the print out of MS Excel in the data seized from the Laptop of Shri Ashok Sharma reflected name 'ISL/IVL/IBSL/IVSL'. The AO asked the assessee to explain as to why the aforementioned transactions should not be treated as the unaccounted receipt/expenditure of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees who were handling those transactions have identified the same towards the group. The Assessee has been given to understand that considering the difficulty in identifying e-titles to whom the transactions entered in the CTR belong. 16 entities of the group who have been the primary entities which have entered into cash transactions, owned up the data and filed applications before the Settlement Commission. It is respectfully submitted that in case of unrecorded cash transactions, the first transaction will invariably be of receipt as there cannot be notional transactions in cash. Either cash is available to be spent or the spending cannot take place. The 16 entities took the said basic thread of source to identify entities to whom the transactions belong. Even after the said exercise of identifying entities, there still remained many receipts which could not be identified to any specific entity. With a view to ensure that no receipt of revenue nature goes untaxed, all unidentifiable revenue receipts were apportioned, on a best effort basis, amongst the 16 applicants who filed the settlement applications. The Assessee submits that the issue, of identification of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the source and application of unaccounted cash. However, unlike regular accounting where the account heads would be revenue or capital or other accounting terminology, the accounting and reporting to management was in the format of person who authorised the transaction. It will be appreciated that record keeping and reporting was for limited a purpose of reporting to management. It will be appreciated that the transactions were motivated out of business compulsion and therefore requirement of record keeping and reporting was to ensure that transactions are for stated purpose only. The records do not identify the entity which has incurred the expenditure or was the recipient of receipts. It is humbly submitted that the entries in the CTR reflecting the abbreviation ISL/IVL/IBSL/IBVL do not specifically pertain to the Assessee, Indiabulls Ventures Ltd. The notations for the legal entity in the CTR are merely indicative in nature and do not relate to IDSL as has been alleged. The Assessee had during the course of assessment proceedings, furnished to the Assessing Officer manner in which the alleged transactions have been dealt with before the Settlement Commission i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application made before the settlement commission. Accordingly the ld AR prayed that the addition be deleted. 12. The Ld. DR on the other hand supported the order of the assessing officer. The Ld. DR submitted that the assessing officer in para 7.3 of his order has given a clear finding that the assessee is not before the settlement commission and that the assessee has not offered a plausible explanation for the expenses incurred in cash. Therefore the Ld. DR submitted that the addition deleted by the CIT(A) is not correct since he has simply relied on the decision of the Hon ble tribunal in the case of India Bulls Financial Services Private Limited for AY 2011-12 and that the CIT(A) has not given any independent finding with regard to how the addition made by the assessing officer is part of the amount offered before the settlement commission. Accordingly the ld DR submitted that the AO's order should be upheld. 13. We heard the parties and perused the material on record. During the course of search in the India Bulls Group, a Cash Transaction Record (CTR) in the form of loosely maintained cash book in Excel format by an employee. It is submitted by the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 18.36 crores - totaling to Rs. 68.63 crores). Thus, the net profit percentage comes to almost 55% of cash so generated/received. 14. The main ground on which the assessing officer has made the addition under section 69C is that for the transactions mentioned in the CTR the explanation provided is towards expenses are incurred by/on behalf of M/s. ISL/IVL/IBSL/IBVL as mentioned in the narrations given against each of the entries. Therefore the assessing officer held that the same cannot be treated as source of expenses incurred by the assessee. The assessing officer also did not accept the submissions of the assessee for the reason that before ITSC what is explained only from the receipts side of the cash transactions and that the assessee who has incurred the expenses is not before the settlement commission. Further the assessing officer in his order has extracted the various cash withdrawals from the bank account of the assessee as has been recorded in the books of accounts and held that the said withdrawals cannot be the source for the cash expenses for the reason that the narration mentioned therein are not in sync and that the assessee has made contrary statement sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any further details from assessee to provide any additional details to substantiate the claim. Further we notice that the CIT(A) has allowed the appeal of the assessee by relying on the decision in the case of M/s. Indiabulls Financial Services Ltd., which is one of applicants before the settlement commission. However the CIT(A) has not given any finding with regard to the assessee as to how the addition made in assessee's hands gets explained with regard to source from the settlement made by M/s. Indiabulls Financial Services Ltd more so when assessee is not an applicant. Further the assessing officer's finding with regard to bank withdrawals recorded in the books of the assessee has also been not discussed by the CIT(A). In the above extracted order of the settlement commission we notice that the percentage of expenditure claimed by the applicants has been reduced from 90.32% to 65% and accordingly the amount to be settled is arrived at by the settlement commission. From this settlement whether the additions made based on specific list of expenses submitted before the settlement commission in the hands of the assessee is covered or not is not coming out clearly. In v ..... 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