2017 (4) TMI 624 - AT - Income Tax

Appeal partly allowed with grounds dismissed, upheld decisions on evidence, sale, and artist fee.

ITO 18 (3) (4) Mumbai Versus Mr. Amit P Karekar

The appeal was partly allowed, with the first, second, and third grounds of appeal being dismissed, and the fourth ground of appeal being allowed for ... Addition on account of sale of tickets - Held that:- We find that the addition of ₹ 7,02,750/- confirmed by the learned CIT(A) out of total addition of ₹ 35,84,200/- made by the AO is based on evidence and proper evaluation as assessee could not provide evidence of free tickets amounting to ₹ 3,15,000/- related to ‘Lokmat News Paper’. Also in respect of two confirmations i.e. one in the name of Kalidas Natyagraha and another in the name of Parasuram Saikhed, the confirmations do not bear stamp and seal of the party and therefore, are not reliable. The amounts mentioned against these parties are ₹ 1,28,000/- and ₹ 1,23,000/- respectively. Therefore, the learned CIT(A) has not accepted the assessee’s explanation in respect of returned tickets amounting to ₹ 3,87,750/- (Rs. 2,51,000/- plus ₹ 1,36,750/-). Addition on account of discrepancies in TDS certificate - Held that:- As per the TDS certificate of Sapat International Pvt. Ltd. and Kotak Mahindra Mutual Fund, the payment made / credited are shown at ₹ 5,00,000/- and ₹ 9,21,157/-. However, in the P&L account the assessee has shown receipts of ₹ 3,00,000/- and ₹ 2,71,157/- respectively. It is the contention of the revenue that the learned CIT(A) should not have deleted the above addition made by the A.O. on the basis of additional evidence filed before him. We believe that the TDS certificate issued by Sapat International Pvt. Ltd. and Kotak Mahindra Mutual Fund need verification at the level of A.O. Therefore, we set aside the order of the learned CIT(A) only in respect of ground no 4 of the present appeal and restore the matter back to the file of the AO for verification and then passing an order as per the provisions of the Act Issues:1. Admission of additional evidences under Rule 46A by the CIT(A).2. Deletion of addition on account of sale of tickets.3. Deletion of addition on account of artist fee.4. Addition on account of discrepancies in TDS certificates.Issue 1: Admission of additional evidences under Rule 46A by the CIT(A)The first ground of appeal by the revenue challenged the admission of additional evidence by the CIT(A) without specifying the satisfaction of conditions under Rule 46A. The CIT(A) justified the admission citing compelling circumstances preventing the assessee from producing evidence before the AO during assessment proceedings. The CIT(A) held that the assessee's inability to collect evidence due to significant losses and change in business justified the admission under Rule 46A. Consequently, the first ground of appeal was dismissed.Issue 2: Deletion of addition on account of sale of ticketsThe second ground of appeal contested the deletion of an addition of Rs. 28,81,450 out of a total addition of Rs. 35,84,200 on the sale of tickets based on additional evidence. The CIT(A) reviewed the details submitted by the assessee during appellate proceedings and found discrepancies in the evidence related to free tickets given and tickets returned. The CIT(A) restricted the addition to Rs. 7,02,750 based on proper evaluation and evidence. The Tribunal upheld this decision, dismissing the second ground of appeal.Issue 3: Deletion of addition on account of artist feeRegarding the third ground of appeal, the AO disallowed Rs. 4,00,000 as unexplained expenditure under section 69C due to lack of documents for the total artist fee of Rs. 9,29,500. The CIT(A) deleted this addition as the AO did not provide reasons for disallowance. The Tribunal agreed with the CIT(A)'s decision, dismissing the third ground of appeal.Issue 4: Addition on account of discrepancies in TDS certificatesThe fourth ground of appeal challenged the deletion of additions of Rs. 2,00,000 and Rs. 6,50,000 by the AO due to discrepancies in TDS certificates. The Tribunal found that verification of the TDS certificates was necessary and directed the matter back to the AO for proper examination. The AO was instructed to provide a reasonable opportunity for the assessee to be heard and for the necessary details to be filed. Consequently, the fourth ground of appeal was allowed for statistical purposes.In conclusion, the appeal was partly allowed, with different grounds of appeal being dismissed or upheld based on the Tribunal's analysis of the evidence and legal provisions.