TaxTMI 
TaxTMI 
2013 (11) TMI 125
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..... No. 6457/M/08 Ground No. 1 relates to the grievance of the assessee that the learned Commissioner of Income-tax (Appeals) erred in confirming the addition of Rs. 56,58,062 out of the addition of Rs. 1,34,40,137 made by the Income-tax Officer. Briefly stated the facts of the case are that the assessee is a film actor following cash system of accounting. During the course of the assessment proceedings for the year under consideration, the Assessing Officer found that the assessee has shown professional fees of Rs. 82,00,000 in his profit and loss account whereas in the balance-sheet, the assessee is showing advances received from various producers at Rs. 1,34,40,137. The assessee was asked to explain why the entire advances rec....
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....f the learned Commissioner of Income-tax (Appeals). Before us, learned counsel for the assessee reiterated that since the assessee has been offering the income in the year of the release of the film and since the same practice has been followed since last so many years which have been accepted by the Department, therefore, the same should be accepted for the year under consideration also. In alternative, learned counsel argued that out of the advances received during the year under consideration, the assessee has already offered Rs. 53,52,000 as his income therefore only the balance should be added. Learned counsel further drew our attention at page 1 of the paper book which is the summary of advances received and offered for tax and explai....
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....ction 145 of the Act. We cannot follow the decisions of the Revenue authorities which are inconsistent with the provisions of section 145 of the Act. In our considered view, the method of computing the income by the assessee, is faulty. It is the case of the assessee that the advances are taken as income in the year of the release of the films which in itself is a faulty practice as the release of the films are not in the hands of the assessee as it is the sole prerogative of the producers of the films, whereas the assessee is enjoying the fruits of the advances from the day he gets them. In the film line, producers sign actors and pay for their services as per their box office reputation, therefore any payment received by the actor is acco....
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....nd that as per the information received from CIB, the assessee has paid Rs. 16,44,426 to American School of Bombay as annual fees for his two sons, Jai Shroff and Krishna Shroff. The assessee was confronted with this information and asked to explain the sources of payments of the school fees of the children. In response to which, the assessee replied that the payment of school fees of his children was made by his mother-in-law Mrs. Claude M. Grout. A copy of her confirmation and passport was submitted along with the reply. The Assessing Officer further asked the assessee to substantiate his claim by producing statement of bank account of his mother-in-law from which the payment is claimed to be made to the school. The assessee filed no deta....
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....pages 42 and 43 of the paper book. The confirmation received is as under : To whom it may concern I, Mrs. Claude M. Grout, a Belgium national holding passport number EE788193 and residing at 163 Baron de Gieylaan, de Pinte, Belgium, hereby do confirm that I have arrange to pay the school fees of my grand children, Jai Shroff and Krishna Shroff for the year 2004-05. Yours truly, Mrs. Claude M. Grout On a careful consideration of the above confirmation, we find that it does not even mention the amount which has been paid by Mrs. Claude M. Grout nor she has given any details of her bank account, further, the mode of payments has also not been mentioned. Even the assessee has not filed any other corroborative evidence to substantiate h....
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....ssessing Officer was of the opinion that the loan has been taken for repaying personal liabilities and purchase of assets. The Assessing Officer further observed that the assessee has given a loan of Rs. 9,97,47,562 to various parties from whom no interest is offered as income. The Assessing Officer disallowed Rs. 25,99,311 and added back to the income of the assessee. Before the learned Commissioner of Income-tax (Appeals), the assessee reiterated his submission that these amounts were borrowed for purchase of assets and also for discharging personal liabilities. After considering the submissions and the materials on record, the learned Commissioner of Income-tax (Appeals) concluded that similar issue had arisen in the past wherein his ....