Matter set back to AO to verify source of addition u/s 69C as explained before settlement commission

DCIT Vs Dhani Services Limited (ITAT Mumbai)

ITAT Mumbai held that with regard to addition under section 69C of the Income Tax Act it is directed to set the matter back to AO 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.

Facts- The assessee company is engaged in the business of stock and share broker on the national stock exchange of India Ltd. There was a search operation carried out in the case of India Bulls group on 13/07/2016. Consequent to the search, the assessee was issued a notice u/s. 153A calling the assessee to file the return of income. The assessee declared the same income as in the original return of income in response to the above notice. However, AO made an addition u/s. 69C on account of unexplained expenditure and unaccounted receipts for the years under consideration.

CIT (A) deleted the addition made under section 69C and also the disallowance/additions made during original assessment proceedings. Aggrieved the revenue is an appeal before the Tribunal.

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.

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