TaxTMI 
TaxTMI 
2013 (9) TMI 272
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....16MM rights. (v) The CIT(A) erred in sustaining addition of Rs. 6,17,678 as unexplained expenditure though it was already included in the amount of expenditure considered by the CIT(A). 3. The Revenue's grievances are as under: (i) Reduction in receipt of Rs. 5,27,19,500 as against the computation of the Assessing Officer at Rs. 5,42,46,500. (ii) The CIT(A) erred in re-computation of expenditure and thereby reducing the addition towards unexplained expenditure. (iii) The CIT(A) erred in deleting the addition towards unexplained investment made in the film "RAA" under the banner Sri Sai Movies as there is nexus of the regular business of the assessee by changing the nomenclature by cash credits u/s. 68 of the IT Act. (iv) The CIT(A) ought to have upheld the unexplained expenditure without allowing the deduction towards capitals and creditors on the basis of figures available on the trial balances. 4. The assessee also raised an additional ground which reads as follows: (i) The Commissioner of Income Tax (Appeals) erred in determining the receipts at Rs. 5,27,19,500/- and expenditure at Rs. 4,48,84,....
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.... 10. The Assessing Officer computed the expenditure relating to block period at Rs. 4,88,87,784/- as follows: Sl. No. Head of Expenditure Seized material No. And relevant page No. Amount (Rs.) 1. Artists Remuneration A/SRB/44 - page No. 78 1,83,84,972 2. Battas A/SRB/44 - page No. 88 7,87,100 3. Other expenditure A/SRB/44 - page No. 85 2,13,73,834 4. Technicians remuneration A/SRB/44 - page No. 80 78,87,438 5. Rent paid to Jayabheri Guest House AA/SRB/5 - page No.76 60,000 6. Expenditure incurred during the period 22.3.2000 to 24.5.2000 A/SRB/27 3,20,440 7. Expenditure incurred on direction department during the period 1.2.2000 to 29.5.2000 A/SRB/40 - page No.47 74,000 Total expenditure determined 4,88,87,784 11. The CIT(A) considered the expenditure at Rs. 4,48,84,521. This is for the period 4.7.2000 to 25.11.2000 as the corresponding oreceipt considered by the Assessing Officer is for the period 4.7.2000 to 25.11.2000. In other words, the CIT(A) was of the opinion that the Assessing Officer committed an error in comparing the receipts and expenditure of different period. He has considered the receipts and expenditure cov....
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....l at Rs. 1,03,25,000 and advances received from distributors as per the seized material at Rs. 1,43,13,000. Before the CIT(A) the assessee stated that the amount taken from Sri A. Mallikarjuna is at Rs. 1,22,00,000 and not Rs. 7 lakhs and due credit is to be given to Rs. 1,15,00,000. The CIT(A) not given credit towards this claim of the assessee. Against this the assessee is in appeal before us. 17. Further before the CIT(A) the assessee pleaded that Sunku Ramesh Babu has introduced capital of Rs. 37,00,770 as against Rs. 50,000 considered by the Assessing Officer. Accordingly, the CIT(A) given credit at Rs. 36,50,770 on this count. Against this the Department is having grievance. 18. Regarding B. Suresh, the assessee pleaded that the capital contribution was Rs. 12,28,508 as against Rs. 50,000 considered by the Assessing Officer. Herein also the CIT(A) considered it at Rs. 12,28,508 and directed the Assessing Officer to give further credit, as source is available, at Rs. 11,78,508 on this count. Further, the CIT(A) directed the Assessing Officer to give credit at Rs. 16 lakhs towards audio rights received from Aditya Music as source is available for the expenditure. Against thes....
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....ate the issue relating to admission of additional evidence. The learned AR filed a petition seeking admission of additional evidence and submitted that the Assessing Officer not carried on enquiry in proper perspective though various names appear in the seized material. He submitted that for the purpose of proper administration of justice additional evidences are to be admitted and the matter may be remitted back to the Assessing Officer for fresh consideration. He submitted that these evidences are not filed on earlier occasion as the assessee was not provided with a copy of the statement recorded from Sri A. Mallikarjuna. Further the assessee could not file the above details as the business of the assessee firm was closed in the year 2000 itself and the assessee could not contact the financier immediately. There were also differences between the partners and they got separated. According to him, the assessee was prevented by sufficient cause in not filing these evidences on earlier occasion. 24. The DR. strongly opposed the admission of additional evidence. 25. We have heard both the parties and perused the material on record. In this case there was a search and seizure action ....
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....of justice. This power is given to the Tribunal has to be exercised cautiously and sparingly in order to advance the interest of justice. Rule 29 of ITAT Rules, 1963 is not intended to allow the assessee who has been unsuccessful throughout appeal proceedings and to patch all the weak parts of his case or to fill up omissions. It is well settled that a party guilty of remissness and gross negligence, as in this case, is not entitled to indulgence being shown to adduce additional evidence. The assessee in this case had ample opportunities and year after year he was given opportunities by the authorities below to produce material so that assessment could be made on consideration of the material placed by him. To admit the additional evidence, we must be satisfied ourselves that it is necessary for the disposal of the case that the document sought to be admitted must be received in evidence or in the alternative there must be sufficient cause for not producing the same before the lower authorities. The assessee counsel tried to make a case that the assessee was prevented by sufficient cause in producing these evidences before the lower authorities. We also noticed that the assessee ma....
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....basis of this, due credit was given to that extent. Before us the assessee tried to make a case by filing additional evidences. As we have rejected the additional evidences itself, in our opinion, whatever the assessee stated before us cannot be considered. On the other hand, the plea of the assessee that due credit is to be given to the tune of Rs. 115 lakhs as investment by Sri A. Mallikarjuna could be considered only in the event of assessment of this amount in the hands of Sri A. Mallikarjuna and reaching its finality. In other words, if this amount is duly assessed in the hands of Sri A. Mallikarjuna as his income, then taxing the same in the hands of the assessee would amount to double addition of the same amount. It cannot be permitted. Accordingly we direct the Assessing Officer to verify whether this amount taxed in the hands of Sri A. Mallikarjuna and if he has not filed any appeal against this addition in his hand or it reaches the finality by the decision of a superior judicial forum, then it should not be assessed once again in the hands of the present assessee. This ground is allowed for statistical purposes. 28. The next ground is with regard to quantification of ex....
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....t the assessee has received only Rs. 25 lakhs as per the seized material and there is no other evidence towards this addition. He also drew our attention to the agreement between the assessee and Gemini Television. He showed the total consideration at Rs.31.5 lakhs and out of which the assessee received only Rs. 25 lakhs and the balance is to be paid on the date of signing the agreement. However, the balance amount was not paid as the picture was a failure. The DR submitted that the agreement amount of Rs. 31.5 lakhs is towards CD/DVD/satellite/overseas rights in relation to the film "Maa Annaiah". According to the DR the assessee wrongly shown it at Rs. 25 lakhs in his books of account as received from one Mr. G. Harinath, Chennai. On this issue there is no material showing receipt of Rs. 25 lakhs from G. Harinath. However, the agreement entered into by the assessee with Gemini Television Ltd., shows the agreement for Rs. 31.5 lakhs. The Assessing Officer made enquiries with Telugu Film Producers Council and found that there were two more agreements executed by the assessee with Sri K. Venkatakesava Murthy and D. Suresh. However, these parties denied any transaction having with th....
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....same lines as we have dismissed the ground relating to admission of additional evidence in earlier paras. 37. Coming to the grievances of the Department with regard to allowing deduction towards capital and creditors on the basis of figures available in the Trial Balance. The crux of this ground is with regard to giving credit towards the following as sources for expenditure: a) Capital of S. Ramesh, partner Rs. 36,50,770 b) B. Suresh Rs. 11,78,508 c) Aditya Movies Rs. 16,00,000 d) Chadana Ramesh Rs. 6,99,565 e) V. Srinivasa Rao Rs. 10,00,000 38. We have heard both the parties and perused the material on record. Regarding capital contribution of S. Ramesh the Trial Balance shows an amount of Rs. 20 lakhs in his name. The Assessing Officer computed the income as per the seized document. On the other hand, he has not followed the same while computing the source of expenditure. The seized document, his summary account for 4.7.2000 to 26.11.2000 shows credit of Rs. 17,00,770. If these amounts are duly reflected in his income-tax assessment due credit has to be given to the assessee. Accordingly, we direct the Assessing Officer to verify the income-tax assessment of ....
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...., the total income of any previous year of a person would, inter alia, include all income from whatever sources derived which is received or is deemed to be received by such person, subject to the provisions of the Act. It will be seen from section 69C of the IT Act that where in any financial year the assessee incurs any expenditure thereof and the assessee fails to offer satisfactory explanation to the Assessing Officer, the amount covered by such expenditure may be treated as deemed income of the assessee for such financial year. The scheme of section 69C would show that in cases where the nature and source of investment made by the assessee or the nature and sources of acquisition of any asset owned by the assessee or the source of expenditure incurred by the assessee are not explained at all or not satisfactorily explained, then, the value of such investment and money or the value of articles not recorded in the books of account or unexplained expenditure may be deemed to be the income of the assessee. It follows that the moment a satisfactory explanation is given about such nature and source by the assessee, then the source would stand disclosed and will, therefore, be known ....