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.
Conclusion- Held that the assessee submitted only the statement which is part of the application before the settlement commission by adding the narration mentioning the nature of expense and the year. The assessing officer on the other hand has made the addition basis the application before the settlement commission, but has not given any contrary finding with regard to why the source as explained is not satisfactory. It is also noticed that the assessing officer did not call for any further details from assessee to provide any additional details to substantiate the claim.
Held that the issue should go back to the assessing officer 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. The 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.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These appeals of the revenue are against the common order of CIT(A)-54 Mumbai dated 20/10/2021 for the assessment years 2013-14, 2014-15, 2015-16 & 2017-18.
2. All the appeals are filed before the Tribunal with a delay of 130 days. However the period of delay is covered by the extension of time as granted by the Hon’ble Supreme Court vide order dated 10.01.2022. Accordingly the appeal is considered to be filed on time and taken up for adjudication.
3. 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 under section 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. The assessing officer made an addition under section 69C of the Income Tax Act (in short, ‘the Act’) on account of unexplained expenditure and unaccounted receipts for the years under consideration as given below:-
