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TMI Blog2023 (12) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... ttlement Commission of the said order argued taking reference to Question that the cash expenses out of which already claimed and allowed at the time of search action were claimed on estimation basis without any supporting evidence or documents. He submitted the claim of cash expenses is a pure imaginary figure without any basis and argued to reject the claim in the case of M/s. Wellbuild Merchants Pvt. Ltd.. Further, taking reference to seized document concerning the assessee before us as referred by the AO in his order, we note that the CIT DR argued that the applicant furnished a common reply regarding evidences of cash receipts in seized documents stating that entry pertain to cash loan/ repayment. Further, he vehemently argued that the claim of interest payment of Rs. 7,80,00,000/- out of Rs. 8,00,62,029/- is not verifiable in the absence of mention of its payment and also in absence of conformity of nature of funds which is evident from para 5A(ii) of Page No. 25 of Income Tax Settlement Commission order. However, the assessee therein got relief towards business expenditure. Therefore, in our opinion, that the information by way of a seized loose papers in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash. Further, the AO referred to joint verification report submitted by the respondent-revenue to Income Tax Settlement Commission stating that the said Shri Yuvraj Dhamale paid interest to investors of Rs. 7.80 crores and the AO was of the opinion that when the Income Tax Settlement Commission accepted the payment of interest to the investors in cash, the same should be treated as cash income in the hands of the assessee which is at page 9 of the assessment order. Accordingly, considering the order of Income Tax Settlement Commission, the AO determined the total investments for the assessee s group and determined interest to an extent of Rs. 48,05,000/- in the hands of the assessee as income from other sources. The CIT(A) confirmed the same. 6. Heard both the parties and perused the material available on record. On an examination of the alleged seized loose papers at pages 3, 4 and 5 of the assessment order discloses names of investors, investment amount, interest and total amount. According to the AO, the said loose papers were seized from the residential premises of Shri Pravin Gawali stated to be Director in M/s. Wellbuild Merchants Pvt. Ltd. and trusted person Shri Yuvraj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e alleged payment of interest in cash not based on the seized material, but taking into account the submission of Shri Yuvraj Dhamale third party proceedings before another authority. As discussed above, the Income Tax Settlement Commission did not give any credence to the statement of Shri Yuvraj Dhamale and ordered joint verification regarding the confusion created by the said Shri Yuvraj Dhamale about the alleged receipt of investments and payment of interest in cash which clearly establishes that the said Shri Yuvraj Dhamale shifted his stand in the statement made u/s. 132(4) of the Act during the course of search proceedings by stating that he received entire investment through cheque and cash as mentioned in the seized documents at pages 36 to 38. Therefore, there was no clarity in the statement recorded u/s. 132(4) of the Act and the submissions made before the Income Tax Settlement Commission which are contrary, therefore, in our opinion, the alleged cash expenditure allowed by the Income Tax Settlement Commission on which the AO determined the Income Tax in the hands of the assessee is not justified. 8. The ld. AR referred to para 5.8 of the assessment order and argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action on 12-08-2015. 11. Page No. 98 of Bundle No. 1 relating to cash given to Anand Jain to an extent of Rs. 25,00,000/- at page 14 of the assessment order, shows cash given to Raj Sir, cash withdrawn Cosmos Bank and Union Bank for Rs. 10,00,000/- and 15,00,000/-, respectively, totaling to Rs. 25,00,000/-. According to the AO, the cash withdrawn from the said two banks, were given to Anand Jain on 08-06-2016 which is reflected at Sr. No. 14 of scanned copy of breakup of cash expenditure at page 9 of the assessment order. Admittedly, except a finding by the AO that the cash withdrawn from the said two banks were given to Anand Jain on 08-06-2016, but nowhere, the nature and purpose of transaction is visible from the said alleged documents. Further, on an examination of the tabular chart at page 16 of the assessment order shows that the cash given to Anand Jain of Rs. 25,00,000/- as loan repayment, but however, the contention of the AO that the said payments were made towards interest as stated by Shri Yuvraj Dhamale before the Income Tax Settlement Commission is contrary to the entries made in the said chart. 12. Further, Page No. 149 of Bundle No. 1, shows many transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of conformity of nature of funds before the Income Tax Settlement Commission which finds support to the arguments of the ld. AR in contending why the assessee would accept cash under the head interest when investment are made through cheque. Therefore, the above referred seized loose papers are not credible material showing direct nexus leading to make addition in the hands of the assessee. 15. As discussed above, as it was also argued by the ld.AR, the assessments made in the hands of the assessee regarding alleged payment of interest in cash was based on the seized documents found during the course of search basing on which Shri Yuvraj Dhamale claimed interest expenditure in Income Tax Settlement Commission. We find the AO considering the proceedings before the Income Tax Settlement Commission made addition in the hands of the assessee on account of interest payment in cash. In view of the same, we directed the ld. DR to furnish a copy of order of the Income Tax Settlement Commission regarding M/s. Wellbuild Merchants Pvt. Ltd. of the Damale Group. Ld. DR furnished the same which is on record by way of covering letter dated 15/01/2021. On an examination of the same, we ..... X X X X Extracts X X X X X X X X Extracts X X X X
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