DEPUTY COMMISSIONER OF INCOME TAX, CENTRE-CIRCLE-6(4), MUMBAI vs. SHRI RAJIV RATAN, NEW DELHI

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 1 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 1434/Mum/2022 (A.Y.2011-12) The DCIT, CC -6(4), Vs. Shri Rajiv Rattan Room No. 1925, 19 th Floor, 60, 2 nd Floor, Vasant Marg, Air India Building, Vasant Vihar, Nariman Point, New Delhi - 110057 Mumbai – 400021 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AESPR3957D Appellant .. Respondent C.O. No. 126/Mum/2022 (A.Y.2011-12) Shri Rajiv Rattan Vs. The DCIT, CC -6(4), 60, 2 nd Floor, Vasant Marg, Room No. 1925, 19 th Floor, Vasant Vihar, Air India Building, New Delhi - 110057 Nariman Point, Mumbai – 400021 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AESPR3957D Appellant .. Respondent Appellant by : Smt. Riddhi Mishra Respondent by : Meet Shah

Date of Hearing 15.11.2022 Date of Pronouncement 30.12.2022 आदेश / O R D E R Per Amarjit Singh (AM): The present appeal and cross objection filed by the revenue are directed against the order passed by the ld. CIT(A)-54, Mumbai, dated 09.12.2021 for A.Y. 2011-12. The revenue has raised the following grounds before us:

“1 On the facts and in the circumstances of the case, whether the learned CIT(A) erred in deleting the addition on account of Unaccounted Cash Receipts of Rs 20.63.00.000 the details of which were maintained in the Cash Transaction Record maintained in an excel sheet by Shri Ashok Sharma, which was found and seized during the search in the case of the Indiabulls Group.

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 2 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 3 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan

instances the reference of ‘RR P’ has been made where the transactions were personal in nature and pertained to Shri Rajiv Rattan’s personal account. The detail of such transaction has given in the assessment order at page no. 2 & 3 are reproduced as under:

Approver Date Particulars Received Paid RR P 04 Jan 11 Paid back to RR (virendra 100 dhngra (as inst by H Rana (Personal a/c RR (P) RR P 07 Jan 11 Paid for RR (P) (to virendra 100 dhngra) as inst by H Rana (by RR) (personal a/c) RR P 22 Jan 11 Paid for RR (P) (to laxmi 501 buildtech Ltd) (vinod saluja) + comm. RR P 24 Jan 11 Paid for RR personal a/c to 250 laxmi build tak ltd vinod saluja RR P 25 Jan 11 Paid to kavita for RR personal 4 a/c inst RR RR P 25 Jan 11 Paid for RR personal a/c to 350 laxmi buildtak ltd vinod saluja (vasant vihar) RR P 31 Jan 11 Paid to RR Personal a/c 10 RR P 18 Feb 11 Paid to ram kumar shokeen D- 199.5 9, pushpaanjli N Delhi as inst by RR RR P 05 Mar 11 Paid for ram Kumar shoin D( 100.5 pushpanjali /bijwasan as inst of RR – RR (P) RR P 10 Mar 11 Paid to shaukeen (Pushpanjali) 440 RR P as per inst RR RR 17 Mar 11 Paid to H Rana for ram kumar 6 shoukeen (bijwasan) as inst by RR, RR (P) RR 24 Mar 11 Paid to sanjay for gurbansh as 1.5 inst by RR – RR(P) Total 2,063

Therefore, the AO observed that there was unaccounted cash received by the assessee during the year under consideration to the amount of Rs.20.63 crores. On query the assessee explained that the said document were found from the premises of M/s Indiabulls Group and were admittedly not found from Shri Rajiv Rattan. It was also explained that M/s Indiabulls Group through its various entities has already

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 4 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan approached to the Income Tax Settlement Commission, Mumbai and has filed application u/s 245D(i) of Income Tax Act. It was also explained that M/s Indiabulls Group have admitted before the Income Tax Settlement Commission that the withdrawals appearing in the said notings were made towards incurring expenses of the various natures that were related to the pursuance of their business activities and were disbursed through various persons. It is also explained that the amount referred were conducted by and on behalf of Indiabulls Group and the source of application of the aforesaid funds has already been included by M/s Indiabulls Group in their settlement application filed before the Income Tax Settlement Commission. It was also explained that assessee Shri Rajiv Rattan had exited from M/s Indiabulls Group w.e.f 09.07.2014. The assessee also submitted that ld. CIT central in his report under Rule 9 has submitted that the said notings belong to M/s Indiabulls Group. However, the A.O has not agreed with the submission of the assessee and referred the statement of Shri Ashok Sharma stating that Shri Rajiv Sharma was a co-promoter of Indiabulls Group who had given the idea to Shri Ashok Sharma to create an email id to store data of unaccounted transaction of Indiabulls Group. The A.O was of the view that assessee received cash from Indiabulls Group which had not been accounted by the assessee. Regarding submission of the assessee that Indiabull Group has filed an application before the settlement commission and offered income in respect of the transaction recorded and found from the possession of Shri Ashish Mehta, the A.O stated that the settlement application filed by Indiabulls Group was still pending before the Income Tax Settlement Commission, therefore, it cannot be accepted that Indiabulls Group has accepted all these cash transaction

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as their own money. Therefore, the impugned transaction of Rs.20.63 crores were treated as unaccounted income in the hands of the assessee.

“7.3 The findings of the AO in the Assessment Order and the written submissions made by the appellant have been considered. The appellant has mainly submitted that the information used against the appellant was neither found at the premises of the appellant nor under his possession or control, not it bore the signature of the appellant nor was they linked to any receipts found at the premises of the appellant. This argument of the appellant has already been dealt with while deciding Ground Nos. 1 to 4 of this appellate order. The appellant has also submitted that Indiabulls group entities have filed an application before the Hon'ble Settlement Commission, Mumbai in which the group has admitted the notings, in respect of which the addition has been made, as belonging to the Indiabulls Group and the income accruing from such notings have been included in the Settlement Application. Thus, the source of receipt of Rs 2063 lakhs from Indiabulls Group is from funds included by the Indiabulls Group in the Settlement Application. The Hon'ble Settlement Commisison in the order uls 245(D)(4) of the Income-tax Act, 1961 accepted all the transactions and notings as admitted by the Indiabulls Group in the Settlement Application. Further, the order of the Hon'ble Settlement Commision is final and binding on the applicant and on the department. As per section 2451, every order of settlement passed u/s 245D(4) shall be conclusive as to the matters stated therein As the income from notings mentioned in the seized documents have been taxed in the hands of Indiabulls Group, therefore, taxing the same in the hands of the appellant is illegal and invalid 7.3.1 The Hon'ble Settlement Commission passed an order u's 245D(4) of the Income-tax Act on 30.04.2019 in the case of 16 entities of the Indiabulls Group. The 16 entities of the Indiabulls Group in their Settlement Application has included the unaccounted income arising from all the transactions found mentioned in the digital data seized from laptop in the possession of Ashok Sharma CFO of Indiabulls group in their Settlement Application All the 16 entities have admitted the transactions in the nature of giving and taking loan/amount as belonging to their own money/transactions. The Hon'ble Settlement Commission has passed final order u/s.245D(4) on 30.04.2019 in the case of 16 entities of the Indiabulls Group. The Settlement Commission has determined the additional income after the discussing and deciding all the issues, including the issues of On-money, Bogus Billing and Cash loans given and taken.

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In respect of unaccounted cash loan, the Hon'ble Settlement Commission has accepted the peak loan of Rs 236.05 Crore, which was arrived at after considering all unaccounted loans given to and taken from various persons by 'Indiabulls' Group 7.3.2 The appellant was a cofounder of the Indiabull group. He was a part of the Indiabulls group till 09.07.2014. All the entries of cash receipts & cash expenses and transaction in the nature of loan contained in the CTR, in respect of which the AO has made addition, have been offered as income by the Indiabull group in the case of 16 entities of the group. The Hon'ble Settlement Commission has also taken note of all the entries recorded in the CTR The Settlement Commission has determined the income of 16 Applicants after discussing all the issues, including cash receipts and cash expenditure and transaction in the nature of loan The AO has made addition only on the ground that the abbreviated name of the appellant was mentioned against some cash expenditure/loan entries in the CTR and these entries were not recorded in the regular books of account of the appellant company. It is also a fact that when the assessment order u/s 153A was passed by AO, the settlement proceedings were going on. Now, the Settlement Commission has passed final order u/s 245D(4) of the Act on 30.04.2019. The settlement commission has determined the income of the 16 entities considering seized material, including the CTR. The addition made by the AO in respect of the unaccounted cash receipts is based on the entries in CTR. Once all the cash entries, including loan entries in CTR have been considered while offering the additional income by the 16 entities of the Group and the Settlement Commission has also determined the income considering the entire CTR, further addition by AO in the case of the appellant will result into double addition of the same transaction and the same amount. In this context following decisions are relevant. In the case of Kesaria Marketing (P.) Ltd. v. Income tax Settlement Commission, Chennai [2019] 111 taxmann.com 311 (Madras), the Hon'ble High Court of Madras has held that where very same income as admitted by assessee in settlement application which was rejected by Settlement Commission, had been dealt with in settlement proceedings of another person and said order had become final, in view of possibility of double taxation for one income, issue in case of assessee was to be reconsidered by Settlement Commission. The Hon'ble High Court has held as under: “...The order of the Settlement Commission, in the case of PJ, was pursuant to the orders of the Settlement Commission in the case of the assesseo. It is not in dispute that the transactions pertaining to the undisclosed income of the assessee are also the subject matter of the settlement application in the case of PJ. If that being so, there is a possibility that such a subsequent consideration by the Settlement Commission could be deemed as double taxation, in case the order passed

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by the Settlement Commission in the case of the assessee is upheld. [Para 5] The order passed in the case of PJ by the settlement commission has become final. As such, the issue in the case of assessee should be reconsidered, in the light of the subsequent development through the orders passed by the Settlement Commission in the case of 'PJ [Para 6]...” The Income Tax Appellate Tribunal, Delhi- Bench 'B', in the case of ACIT, Central Circle-2, New Delhi v. M/S D.J. Infrastructure Dev. Pvt. Ltd. (ITA No 1019/DEL/2012), has held that the Settlement Commission has made an addition in the hands of the applicants on account of unexplained transactions in respect of the properties brought, hence any further addition in the hands of the assessee made by the Assessing Officer would result in a case of double addition. The relevant paras of the decision of the ITAT are reproduced as under “….7. We have heard both the parties and perused the records especially the impugned order dated 15.12.2011, we find that AO has made the addition of Rs.47,02,750/- to the income of the assessee on account of unexplained and unaccounted expenses in the Motia Khan property. During the course of search proceedings u/s. 153C, certain papers annexurized as Page No. 47 of Annexure A-1 was found. On this paper, details of expenses and payment of share premium is mentioned The AO contended that since the Directors of the assessee company has accepted the payment and receipt of Premium mentioned in Annexure A-1 of the seized documents therefore the amount of expenses mentioned on Page NO 47 of Annexure A-I is also correct. The AO further contended that during the period under consideration construction of two properties i.e. Hotel Motia Khan property of the Assessee Company and Hotel project in Mehrauli in the name of M/s Penguine Farms Pvt. Ltd. was in progress These lands were purchased in assessment year 2006-07 and assessment year 2008-09. The plea of the AO was that since these two project lands were acquired and hotel projects were launched by the owners of both the companies, therefore, these expenses were related to both these companies and thus made addition of Rs 47,02,750/- (50% of total expenditure of Rs.94,05,500/-) each in the hands of the assessee company and M/s Penguine Farms Pvt. Ltd. 8. We further find that the Ld CIT(A) has observed that the crux of the submission of the assessee dated 13.12.2011 were around the preposition that the additions made in case of the assessee with regard to unexplained and undisclosed expenses related to property at Motia Khan by the AO are covered by the order U/S 2450(4) passed by the Settlement Commission dated 31.12.2010 therefore in terms of the Section 245-1 of the IT Act the matters which are covered by the Order of Settlement Commission could neither be reopened nor eligible for any further addition under any proceedings under this Act.

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8.1 After perusing of the assessment order, the submissions made by the assessee as well as the findings given by the Settlement Commission in Order dated 31.12.2010 passed u/s 245D(4) of the IT Act is of the view that there is no case for addition made by the AO on account of unexplained and unaccounted expenses with respect to property at Motia Khan, as made in the assessment order. While it is true that the assessment order has been passed on 29.12.10 and therefore the AO was not having the benefit of having the Settlement Commission Order and finding given therein but then now as the Order of the Settlement Commission has already been passed upon consideration of the entire issues and having considered the addition to income with respect to the concerned properties in respect of the assessee group, therefore in terms of Section 245-1 of the Act the additions made in the assessment order are rightly been deleted by the Ld CIT(A) In this connection, Ld CIT(A) has referred the relevant portion of Settlement Commission's Order where a specific finding with reference to which the addition has been made. The relevant portion of the order of the Ld CIT(A) is as under: "The issue of unexplained and unaccounted expenses on account of Property at Motia Khan, as discussed by the Assessing Officer in his Assessment Order was already considered on Page No. 27 to 31 in the Order of the Income Tax Settlement Commission u/s 245D(4) of the Act dated 31st December, 2010. The relevant para 24 of the Order reiterating the judgment of Hon'ble Settlement Commission is presented hereunder for your kind perusal: "We have considered the nval submissions. The issues were discussed in detail during the hearing. There is one item which is figuring in the statement of Shri Gopal Gupta where he has surrendered Rs 6.5 crores. Even going by the calculation a/premium, the amount comes to Rs 133 crores (1/3rd of Rs 40 crores). The applicants have declared more So the amount of disclosure need not be disturbed Regarding the hand in which this amount should be taxed, Shri Dinesh Jain or Smt. Lata Jain it is immaterial since it would be revenue neutral. So we may allow taxing this amount in the hands of Smt. Lata Jain Regarding the year of taxability, the seized documents do not indicate any date of receipt of the premium. However from the cash flow statement given by Smt. Lata Jain and Roshan Agarwal, it is noticed that one part of Rs 55 crores was received from Shri Gopal Gupta on 08.11 2006 Rs 2,5 crore was received on 16 4.2007 When questioned why the premium would be faxed in AY 2008-09, it was replied that the first installment was given as advance Final appropriation was made when the shares were actually transferred in the light of explanation given by the applicant no interference is being made." 8.2 Keeping in view of the above, it is clear that the Settlement Commission has not made any further addition in respect to the Property

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at Motia Khan, Karol Bagh The Settlement Commission has however made an addition of Rs.5 crores in the hands of both Pradeep Aggarwal Group and Dinesh Jain group on account of unexplained transactions (recorded on loose papers which includes page 47 of Annexure A-1) in respect of the properties brought before the Settlement Commission and hence any further addition made by the Assessing Officer would result in a case of double addition 8.3 In this connection, Ld CIT(A) has reproduced the relevant para 68 on Page 72 of the Order passed by Hon Settlement Commission at Page no. 12 of this impugned order which is as under- "While going through the seized material, there have been indications of several investments of a small amount which could not be deciphered. The applicant could not explain these notings. It appears that there were heavy cash transactions and applicants had sufficient rolling fund in cash. Taking an overall view, we take unexplained cash of Rs. 5 crores in the hand of the main applicant of the two groups" 8.4 Keeping in view of the facts and circumstances explained above, we are of the considered view that the Settlement Commission has made total addition of Rs. 2.5 crores each in the hands of Dinesh Jain Group and Pardeep Aggarwal Group based on the aforesaid seized paper at pages 47 of A-1 and consequently the addition of Rs.47,02,750/- made by the Assessing Officer has rightly been deleted by the Ld. CIT(A). Therefore, we do not see any reason to interfere with the well reasoned order of the Ld. CIT(A), accordingly. we uphold the same and decide the issue against the Revenue by dismissing this ground of appeal 9. In the result, the Appeal filed by the Revenue stands dismissed..." The Income Tax Appellate Tribunal, Delhi- Bench "B", in the case of M/s Surya Processed Food Pvt. Ltd. v. ACIT, Central Circle-8, New Delhi (IT.A. No. 1156/Del/2019), has also taken similar view. The relevant paras of the decision of ITAT are reproduced as under: 20. Learned DR has contended that the conclusion drawn by the ITAT in the order of stay is a wrong conclusion and should not be relied upon while deciding the appeals on merits. However, after considering the submissions of both the sides and the facts of the case and going through the orders of the lower authorities as well as Settlement Commission, we entirely agree with the above finding of the ITAT given in the stay petitions. From the assessment order, the relevant portion of which has already been reproduced above in this order, it is clear that the stand of the Assessing Officer throughout was that there was undisclosed income of the Surya Group which is routed in the form of share capital in the group companies by obtaining the accommodation entries from Kolkata based entry provider companies. Such share capital/share premium is liable to be added in the

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hands of the group companies. The flagship company of the group viz., M/s Surya Food and Agro Limited has already offered the additional income to the tune of Rs.49.12 crores before the Settlement Commission, which the Settlement Commission has enhanced to Rs.55.77 crores. The order of the Settlement Commission is accepted by both the parties and thus has become final. Before the Settlement Commission, the assessee has repeatedly stated, which we have already mentioned above while reproducing the relevant portion of the application before the Settlement Commission, that the undisclosed income which is being offered before the Settlement Commission has been applied by way of ntroduction in the shape of share capital to group entities viz, Ms Surya Processed Food Pvt Ltd and M/s Surya Agrotech Infrastructure Limited in paragraph 15 of the application before the Settlement Commission, Ms Surya Food & Agro Limited has made it clear that there is no other undisclosed asset found or application of funds by the group" This statement made before the Settlement Commission has neither been found to be incorrect nor before us a has been shown that M/s Surya Food and Agro Limited has applied the undisclosed income offered before the Settlement Commission for acquisition of any other asset In view of the above, we entirely agree with order of the ITAT passed in stay petition wherein the ITAT held that "the disclosure has been made by the company who has eamed the undisclosed income and routed in books through the petitioner companies as unaccounted share capital. The application of the income is taxed in the hands of the petitioner companies apparently it seems and sources of income is taxed in the hands of Surya Food and Agro Ltd. Therefore prima facie the case of the assessee shows that there is double taxation, once the source of income and secondly the application of income We entirely agree with the above finding of the ITAT in the order passed in the stay petition filed by M/s Surya Processed Food Pvt. Ltd and Ms Surya Agrotech Infrastructure Ltd. In view of the above. since the income has already been taxed in the hands of M/s Surya Food and Agro Limited, the application of the said income in the form of share capital in M's Surya Processed Food Pvt. Ltd and M's Surya Agrotech Infrastructure Ltd. ie. the appellants before us, cannot be taxed again. Accordingly, we delete the addition for unexplained share capital and allow ground No 1 in all the appeals In the case of the appellant, the source of the cash receipts has been explained to be a part of income offered in the case of 16 entities of the Indiabull group Hence, the addition of Rs 2063 lakhs made in the hands of the appellant would be a case of double addition. In view of the above discussion, addition of Rs.2063 lakhs made is deleted. In view of the above facts, the addition made by the AO in respect of unaccounted cash receipt amounting to Rs 2063 lakhs is deleted.”

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 11 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan 4. During the course of appellate proceedings before us the ld. D.R referred para no. 3.1 of the assessment order wherein A.O has mentioned that Shri Ashok Sharma has confirmed that unaccounted cash transaction were recorded in the email found in the above referred laptop at the time of search action. The ld. D.R also referred para 3.8 of the order of A.O and submitted that there is clearly mentioned that the RR/RRP pertained to Rajiv Rattan’s personal account. The ld. D.R has also referred para 3.9 of the assessment order stating that the impugned email was created by Shr Ashok Sharma on the instruction of assessee Shri Rajiv Rattan and the assessee was the co-promoter of the Indiabulls Group. The ld. D.R also contended that ld. CIT(A) has not considered the evidence in totality and assessee was not one of those 16 applicant who had filed application before the Income Tax Settlement Commission. The ld. D.R also submitted that the CIT(A) has not discussed how the Income Tax Settlement Commission has quantified the transaction entries belonging to the assessee were offered by the 16 applicant before Income Tax Settlement Commission. The ld. D.R has also submitted that revenue is in appeal against the order of Income Tax Settlement Commission before the Hon’ble Bombay High Court contending that 16 entities of Indiabulls Group has not made true and full disclosure before Income Tax Settlement Commission. The ld. D.R also mentioned that there is no evidences that the entries of Rs.20.63 crores belong to corporate entity not to the personal a/c of the assessee and submitted that these expenses are of the nature of personal nature and pertained to the assessee. The ld. D.R also mentioned that there was no clear quantification of expenses made by the Income Tax Settlement Commission in his order and contended that therefore the order of AO may kindly be upheld.

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 12 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan On the other hand, the ld. Counsel submitted that search was conducted on the Indiabulls Group of companies and during the course of search a laptop was found and seized in the chamber of Shri Ashok Sharma CEO Indiabulls Group of companies wherein an email id chinta.chat@yahoo.co.in was logged in. In this respect Shri Ashok Sharma in his statement u/s 132(4) has explained that he used the aforesaid email Id for storing unaccounted cash receipt and expenditure incurred by Indiabulls Group companies. He further submitted that the entries in the record seized from Shri Ashok Sharma and other seized material were in the nature of unaccounted cash receipts in relation to on money received from sale of units, amount received back in cash from accommodation entry providers and cash loans, advances received/repaid etc. The ld. Counsel further submitted that the 16 companies of Indiabulls Group of companies had filed an application u/s 245D(I) of the Act on 03.10.2017 covering assessment year 2010- 11/2011-12 to 2017-18 before Income Tax Settlement Commission and offered total additional income of Rs.495.6 crores. He also stated that the applicants have offered additional income in the form of bogus billing, on money of capital gain, loan peak and miscellaneous income etc, and disclosure of additional income has been made from the data of unaccounted cash transaction of the Indiabulls Group of companies found in the form of excel files in the email id chinta.chat@yahoo.co.in maintained by Shri Ashok Sharma CEO of the Group. The ld. Counsel contended that on the basis of the information obtained from the above referred email from the laptop found from the office of Shri Ashok Sharma the applicants have offered income of Rs.494.53 crores which has been increased by the settlement commission to the extent of Rs.899.53 crores which have covered all the transaction recorded in the

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 13 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan said email. The ld. Counsel has also pointed out that when the A.O has passed the order of assessment u/s 153A the settlement proceeding were going on and the settlement commission has passed the order u/s 245D(4) of the Act on 30.04.2019. The ld. Counsel also referred various judicial pronouncements and submitted that settlement commission vide order u/s 245D(4) dated 30.04.2019 has accepted all the transaction and notings as admitted by the Indiabulls Group in the settlement application filed u/s 245D(1) of the Act and order of the settlement commission under section 245D(4) of the Act is final and binding as per the provisions of Sec. 245I of the Act. 5. Heard both the sides and perused the material on record. Without reiterating the facts as elaborated supra in this order assessment u/s 143(3) r.w.s 153C of the Act was made in the case of the assessee on 27.12.2018. The addition of Rs.20.63 crores was made in the case of the assessee on the basis of data with reference of ‘RR P’ found to be stored in the email id chinta.chat@yahoo.co.in obtained from the laptop (Lenovo think pad) found in the office chamber of Shri Ashok Sharma CEO of Indiabulls Group. Before the A.O the assessee submitted that the said documents were found from the premises of M/s Indiabulls Group and not found from the premises of Shri Rajiv Rattan. The assessee has also submitted that impugned transaction being part of the notings/documents purportedly found from the premises of Indiabull Group were in the nature of application of unaccounted funds and the same have already been included by M/s Indiabulls Group in their settlement application filed before the Income Tax Settlement Commission. The A.O has rejected this submission of the assessee stating that on the date of passing the order u/s 143(3) r.w.s 153C the settlement application filed by the assessee before the Income Tax

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 14 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan Settlement Commission was pending for filing disposal and thus, it cannot be accepted that Indiabull has accepted all these transaction. Subsequently, at the time of appellate proceedings before the ld. CIT(A), the CIT(A) has deleted the impugned addition on the basis of the order passed by the Income Tax Settlement Commission u/s 245D(4) of the Act on 30.04.2019 in the case of 16 entities of the Indiabulls Group. The ld. CIT(A) held that settlement commission in the order u/s 245D(4) of the Act accepted all the transactions and notings as admitted by the Indiabulls Group in the settlement application. He also held that income from notings mentioned in the seized documents have already been taxed in the hands of the Indiabull Group, therefore, taxing the same in the hands of the assessee is illegally invalid. The ld. CIT(A) in his finding stated that settlement commission had passed the final order u/s 245D(4) on 30.05.2019 in the case of 16 entities of the Indiabull Group after discussing and deciding all the issue including the issue of on- money, bogus bills and the cash loan given and taken. All the entries of cash receipt and cash expenses and transactions in the nature of loan contained in the CTR in respect of which the A.O has made additions have been offered as income by Indiabull Group in the case of 16 entities of the group. The settlement commission has considered all the entries mentioned in CTR. The ld. CIT(A) concluded that once all the cash entries including loan entries in CTR have been considered for determining the income in the hands of 16 entities then further additions made by the A.O resulted into double addition in the hands of the assessee. 6. We have also perused the judicial pronouncements referred by the ld. Counsel of the ITAT, Mumbai, in the case of DCIT CC-6(4) Vs. Indiabulls Financial Service ltd. vide ITA No. 99/Mum/2022 for A.Y.

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2012-13 wherein the relevant part of the decision is reproduced as under:

“4. We have heard the rival contentions. We have also perused the orders of the lower authorities. Ground no.1 to 3 relates to the addition of ₹95,000/- as unexplained expenditure. We find that identical issue arose in the case of the assessee for A.Y. 2011-12, the learned CIT (A) has deleted the identical addition, the facts in the assessment order shows that the above entries on which the addition has been made were duly recorded in the regular books of account of the assessee and assessee also produced the copies of the relevant books of account showing the withdrawals and deposits. The learned Assessing Officer did not believe the same because of the difference in narration in the bank account. We find that there is identical expenditure which is held to be unexplained expenditure for seven years which has been deleted by the learned CIT (A). Further, it was also the claim of the assessee that the transactions have already been offered as income before the settlement commission. The learned CIT (A) deleted this addition for the reason that the amount has already been considered in income of the assessee and other entities before the settlement commission. In view of this, we do not find any infirmity in the order of the learned CIT (A) in deleting the addition. Merely because the order of the settlement commission has been challenged before the Hon'ble High Court, unless that order is reversed, we do not find any infirmity in the order of the learned CIT (A). Accordingly, ground no. 1 to 3 of the appeal is dismissed.” The ITAT Mumbai in the case of ACIT, CC-6(4) Vs. Juventus Estate Ltd. vide ITA No. 2377 & 2379/Mum/2021 dated 27.10.2022 held as under:

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 16 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan

“04. We have heard the rival contentions. We have also perused the orders of the lower authorities. Ground no.1 to 3 relates to the addition of ₹70,000/- as unexplained expenditure. We find that identical issue arose in the case of the assessee for A.Y. 2011-12, the learned CIT (A) has deleted the identical addition, the facts in paragraph no. 7.5 of the assessment order shows that the above entries on which the addition has been made were duly recorded in the regular books of account of the assessee and assessee also produced the copies of the relevant books of account showing the withdrawals and deposits. The learned Assessing Officer did not believe the same because of the difference in narration in the bank account. We find that there are identical expenditure which are held to be unexplained expenditure for seven years which has been deleted by the learned CIT (A). Further, it was also the claim of the assessee that the transactions have already been offered as income before the settlement commission. The learned CIT (A) deleted this addition for the reason that the amount has already been considered in income of the assessee and other entities before the settlement commission. In view of this, we do not find any infirmity in the order of the learned CIT (A) in deleting the addition. Merely because the order of the settlement commission has been challenged before the Hon'ble High Court, unless that order is reversed, we do not find any infirmity in the order of the learned CIT (A). Accordingly, ground no. 1 to 3 of the appeal is dismissed.” In the case of DCIT, CC-6(4) Vs. Indiabulls Housing Finance Ltd. vide ITA No.1414/Mum/2022.

“7. We have heard both sides and have examined orders of the authorities below. In ground No. 1 to 3 of appeal, the Revenue has assailed the findings of CIT(A) in deleting the addition on account of unexplained expenditure of Rs.35,28,000/-. We find that similar grounds were raised by the Department in appeal ITA No. 496/MUM/2022 (Supra). The facts germane to the issue are identical except the amount. The Tribunal upheld the findings of the CIT(A), and dismissed the grounds raised in appeal by the Revenue. The relevant extract of the observations by the Co-ordinate Bench are as under: “4.We have heard the rival contentions. We have also perused the orders of the lower authorities. Ground no.1 to 3 relates to the addition of ₹70,000/- as unexplained expenditure. We find that identical issue arose in the case of the assessee for A.Y. 2011-12, the learned CIT (A) has deleted the identical addition, the facts in paragraph no. 7.5 of the assessment order shows that the above entries on which the addition has been made were duly recorded in the regular books of account of the assessee and assessee also produced the copies of the relevant books of account showing the withdrawals and deposits. The learned Assessing Officer did not believe the same because of the difference in narration in the bank account. We find that there are identical expenditure which are held to be unexplained expenditure for seven years which has been deleted by the learned CIT (A). Further, it was also the claim of the assessee that the transactions have already been offered as income before the settlement commission. The learned CIT (A) deleted this addition for the

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 17 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan reason that the amount has already been considered in income of the assessee and other entities before the settlement commission. In view of this, we do not find any infirmity in the order of the learned CIT (A) in deleting the addition. Merely because the order of the settlement commission has been challenged before the Hon'ble High Court, unless that order is reversed, we do not find any infirmity in the order of the learned CIT (A). Accordingly, ground no. 1 to 3 of the appeal is dismissed.” (Emphasized by us) 7. We have perused the order u/s 245D(4) of the I.T. Act passed by the Income Tax Settlement Commission Mumbai. After search actoin, 16 companies of Indiabull Group had filed the application u/s 245C(1) of the Act on 03.10.2017 covering assessment years 2010-11/2011-12 to 2017-18 and offered additional income of Rs.495.06 crores. The disclosure of additional income has been made from the data of unaccounted transaction of the Indiabulls Group of companies found in the form of excel files in the email id chinta.chat@yahoo.co.in maintained by Shri Ashok Sharma CEO of the group. The assessee was co-founder of the Indiabulls Group. At page 17 of the settlement commission order the disclosure and manner of earning additional income was given. It was explained that from search action it revealed that unaccounted cash transaction of the group was found and stored in the form of excel file in the email id chinta.chat@yahoo.co.in maintained by Shri Ashok Sharma. He used to compile data of unaccounted cash receipts and cash expenditure (not recorded in regular books of account of Indiabull Group) as received from Om Singh and Ashish Mehta (both are employees of the group). The email dated 15.06.2016 and 11.10.2010 contained detail of unaccounted cash transaction of the group from 06.01.2019 to 31.03.2016. Shri Ashok Sharma used to regularly update the database of unaccounted transaction on receipt of further details from Shri Ashish Mehta & Om Singh so as to report the same to Shri Sameer Gahlot. The excel sheets were stored in the main folder named “CDA” Shri Ashok

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 18 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan Sharma used to prepare data/accounts generally for 3 months. He would prepare 5 sheets for a particular period. It is noticed that the A.O has given the references of the aforesaid same material while making addition in the case of the assessee. However, it is demonstrated from the disclosure made before the settlement commission that entire record of transaction has been considered on the basis of data recorded in the above referred email in the case of group companies wherein assessee was one of the director. The settlement commission has also referred the report of the PCIT dated 10.10.2018 and nowhere any separate reference of any particular transaction pertaining to the assessee which was not included in the combined disclosure made in respect of 16 companies were given. At page no. 319 of the order of settlement commission it is stated that the case of the applicant is that in their lines of business the business expenditure is required to be made in cash also. The cash transaction record of Shri Ashok Sharma not only show the receipt of the cash but also gives the details of the payment and expenses made out of it. At page no. 370 of the order of the settlement commission, it has referred the statement of Shri Ashok Sharma showing that the unaccounted cash receipts and unaccounted cash expenditure are recorded in the CTR. "Q.30 Please explain as to how unaccounted business transactions of Indiabulls Group done through Shri Om Singh and Shri Ashish Mehta are maintained in the excel files. A.30 All the unaccounted business! cash transactions of Indiabulls Group done through Shri Om Singh are updated in the excel file named "Book" as available in the email attachment folder named CDA dated 15-06-2016 in the email ID chinta chat@yahoo.co.in. The said file has multiple sheets and the sheet named "del" provides all details of receipts and expenditure done by Indiabulls Group through Shri Om Singh. The narration as to the source/nature/purpose of unaccounted cash receipt or unaccounted cash expenditure along with the details of the persons who handled the same and the person who authorised the same are also stated.

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 19 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan

All the unaccounted business/cash transactions of Indiabulls Group done through Shri Ashish Meta have been compiled / consolidated and updated in the excel file named "Book Status 3103012" as available in the email attachment folder named CDA dated 15-06-2016 in the email ID chinta.chat@yahoo.co.in. The said file has around 120 to 125 tabs/sheets within it and are named after various periods and names of places mainly Mumbai and Delhi. The figures written in each sheet are rupees in lakhs and each row has the narration to the source/nature/purpose of unaccounted cash receipt or unaccounted cash expenditure along with the details of the persons who handled the same and the person who authorised the same." Q.32 Please explain as to how unaccounted business transactions of Indiabulls Group are compiled in the excel files. A.32 All the unaccounted business/ cash transactions of Indiabulls Group have been compiled consolidated and updated in the excel file named "Book Status 3103012" as available in the email attachment folder named CDA dated 15-06- 2016 in the email ID chinta_chat@yahoo.co.in. The said file has around 120 to 125 tabs! sheets within it and are named after various periods and names of places mainly Mumbai and Delhi. At page no. 398 of the order of the settlement commission in the submission of the assessee it is mentioned that all these expenses are business expenditure and have to be taken into account for determining the real income and evidence is required by the department to prove otherwise. The relevant part of the submission of the assesse is reproduced from the page no. 398 of the order of the settlement commission as under:

“So far as relating these expenses to the business of the Applicant Companies are concerned, it is submitted that applicant entities are in the business of real estate development, the starting point of which is land acquisition. In the process of land acquisition, the following kinds of expenses necessarily have to be incurred in cash and the developer does not have any choice in the matter: 1. A significant portion of land purchase consideration is paid in cash; 2. Brokerage is paid in cash;

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 20 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan 3. Liaison consultants have to be appointed for taking peaceful possession of land, running the registration process and other activities in various forums smoothly. Such consultants also demand their payments in cash; 4. Cash expenses are incurred for settling intra-family disputes of land owners so as to avoid title related litigation later on. 5. Security expenses of the land have to be paid in cash on an ongoing basis so that nobody starts occupying the lands or start farming on the land if the land is cultivable. In the view of the fact that cash expenditure have not been explained very graphically in the CTR as the motive of the person recording the same would always be to try and hide the existence of cash receipts as well as expenditures. While it would be impossible to establish a one to one co-relation between each and every line item of expense to its corresponding line item on the Income side, considering the nature of the business and prevalent practices, this estimation is definitely indicative of ground realities. It is further submitted that the entire inflow of funds recorded in the CTR which are in the form of loose papers, pen drive and excel sheet, even where no description has given, has been considered as income in some head or the other. As per CTR, all such expenses were undertaken after approval which proves that the expenses have been incurred for official work of the company. The other vital point is that no unaccounted assets have been found at any premises during search which further proves that expenses were indeed made only for the business purpose.” The Income Tax Settlement Commission at para 12 of the order at page no. 442 held that after taking into account all the facts and material on record as discussed at page no. 1 to 442 of the order it has increased the additional income from Rs.405 crores to Rs.899.53 crores. The revenue has not demonstrated from the order of the settlement commission that how the part of the income of Rs.20.63 crores is not included in the total income of Rs.899.53 crores determined by the settlement commission in respect of all the transaction recorded in the said email.

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 21 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan various coordinate benches, we don’t find any infirmity in the decision of ld. CIT(A). Therefore, the appeal of the Revenue stand dismissed. C.O. No.126/Mum/2022 9. During the course of appellate proceedings before us the cross objection filed by the assessee were not deliberated. Since we have dismissed the appeal of the revenue, therefore, the cross objection filed by the assessee stand dismissed. 10. In the result, the appeal of the revenue is dismissed and cross objection filed by the assessee is also dismissed. Order pronounced in the open court on 30.12.2022 Sd/- Sd/- (Aby T Varkey) (Amarjit Singh) Judicial Member Accountant Member Place: Mumbai Date 30.12.2022 Rohit: PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai गार्ड फाईल / Guard file. 6.

ITA No. 1434/Mum/2022 and C.O. No.126/Mum/2022 22 The DCIT, Central Circle-6(4) Vs. Shri Rajiv Rattan

सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER,

उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीिीय अतिकरण/ ITAT, Bench, Mumbai.