Tax Tribunal Upholds Disallowance/ Addition of Liabilities to Celebrities; Prevents Double Taxation

The Tribunal dismissed the assessee's appeal, confirming the disallowance/addition of liabilities claimed to Abhishek Bachchan, Amitabh Bachchan, and Rani Mukherjee, with provisions to prevent double taxation of the same amounts. The order was pronounced on July 16, 2014.

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Issues Involved:
1. Liability to Abhishek Bachchan (Ab) - Rs. 17.50 lacs.
2. Liability to Amitabh Bachchan (AB) - Rs. 4.50 lacs.
3. Liability to Rani Mukherjee (RM) - Rs. 6 lacs.

Detailed Analysis:

Liability to Abhishek Bachchan (Ab) - Rs. 17.50 lacs:
The assessee claimed a liability of Rs. 17.50 lacs to Abhishek Bachchan based on agreements with M/s. Pepsi Foods Ltd. (PFL) and Ab. The Assessing Officer (A.O.) found this liability non-existent and camouflaged to reduce tax. The CIT(A) confirmed this finding. The assessee argued that the liability arose due to the extension of the performance period, but no supporting material was provided. The payee, Ab, confirmed receiving Rs. 31.25 lacs and Rs. 4.725 lacs in the relevant years, with no further amount due. The Tribunal observed that the liability did not accrue as claimed by the assessee and confirmed the disallowance of Rs. 17.50 lacs. The Tribunal also noted that the same amount should not be taxed twice, allowing for consequential relief for A.Y. 2004-05 if the assessee accepts the current year's assessment.

Liability to Amitabh Bachchan (AB) - Rs. 4.50 lacs:
The assessee claimed a liability of Rs. 4.50 lacs to Amitabh Bachchan for releasing stock pictures to M/s. Glaxo India, retaining Rs. 50,000 as commission. The A.O. and CIT(A) found no evidence of an agreement or confirmation from AB, and thus, no liability was established. The Tribunal agreed, noting the lack of evidence and confirming the disallowance. The Tribunal also reiterated that the same amount should not be taxed twice, similar to the case with Abhishek Bachchan.

Liability to Rani Mukherjee (RM) - Rs. 6 lacs:
The assessee claimed a liability of Rs. 6 lacs to Rani Mukherjee, which was paid in cash on 31.03.2002 and disallowed 20% u/s.40A(3) for A.Y. 2002-03. However, during a search on 08.10.2000, Rs. 7.50 lacs was found in RM's locker, with Rs. 6 lacs claimed to be from the assessee. The A.O. and CIT(A) disallowed the liability, finding the explanation unsatisfactory and the source of cash unexplained. The Tribunal noted the intertwined nature of the payments and found that the liability did not subsist as on 31.03.2001. The Tribunal confirmed the addition of Rs. 6 lacs for A.Y. 2001-02, noting that the source of payment in September 2000 remained unexplained.

Conclusion:
The Tribunal dismissed the assessee's appeal, confirming the disallowance/addition of the liabilities claimed to Abhishek Bachchan, Amitabh Bachchan, and Rani Mukherjee, with provisions to avoid double taxation of the same amounts. The order was pronounced in the open court on July 16, 2014.

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