TaxTMI 
TaxTMI 
2014 (9) TMI 954
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....r section 153A of the Act, the assessee filed the return of income showing total income at Rs. 6,59,500 for the year under consideration. The Assessing Officer completed the assessment under section 143(3) read with section 153A of the Act and assessed income of Rs. 14,70,200 by making following additions. 3. Facts relating to deletion of addition of Rs. 8,10,700 are that during the course of assessment proceedings, the Assessing Officer observed from the copies of bank statement that the assessee has deposited an amount of Rs. 4,10,700 for a period from April 1, 2002, to March 31, 2003 and also found that the assessee deposited Rs. 4 lakhs during the previous year ended March 31, 2003. He observed that the assessee has received remuneration and other payments partly in cash and partly in cheque. As long as the assessee was not able to explain each item of cash deposits with reference to his books of account, such unexplained cash deposits represents only cash receipt received by the assessee and same has not been recorded. Mere entry in the bank account cannot be taken as accounted income. Further it was noticed that after every cash deposit of a cluster of cash deposits, a che....
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....sh in the bank accounts. Since all the deposits are reflected in the books of account and the cash book shows adequate cash balance for making these deposits, there is no justification for making any addition on account of deposits made in cash in the bank account. The learned Commissioner of Income-tax (Appeals) further observed that on examination, it was found that the Assessing Officer's finding that there was another cash deposit of Rs. 4,00,000 during the financial year 2003-04 was factually wrong. Accordingly, the learned Commissioner of Income-tax (Appeals), deleted the addition made by the Assessing Officer of Rs. 8,10,700 6. Aggrieved, the Revenue is in appeal before the Tribunal. 7. The learned Departmental representative has strongly supported the order passed by the Assessing Officer and submitted that no books of account were submitted before the Assessing Officer. 8. On the other hand, learned counsel for the assessee has submitted that the books of account were filed before the Assessing Officer and all the transactions were recorded and he strongly supported the order passed by the learned Commissioner of Income-tax (Appeals). 9. We have heard both ....
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....ion 153A of the Act was issued to the assessee. Accordingly, the assessee filed his return declaring income of Rs. 30,04,204. The assessment was completed under section 143(3) of the Act by assessing total income of the assessee at Rs. 58,69,571. In the assessment order, the Assessing Officer has disputed an amount of Rs. 9,15,467 towards travelling expenses and Rs. 14,49,900 towards studio hire charges. With regard to travelling expenses, since the expenses claimed by the assessee are not supported by any regular books of account or vouchers, the Assessing Officer had approached the Central Board Film Certification (CBFC in short) authority for getting information. The Central Board Film Certification, in turn advised the Assessing Officer certain sources like websites maintained by the stars, trade bodies and renowned journalists from which the information can be obtained. Based on the above advise of the Board and considering the nature of expenses, the Assessing Officer made enquiries and accordingly, he came to a conclusion that in most of the cases, the expenses like conveyance, boarding and lodging, etc., are borne by the producer of the film himself and the liabilities of t....
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....o come to the above conclusion, he approached the CBFC authorities, who advised the Assessing Officer certain sources like websites maintained by the stars, trade bodies and renowned journalists and thereafter, he disallowed the claim made by the assessee. On appeal, the learned Commissioner of Income-tax (Appeals) gave a specific findings that the assessee has received remuneration as music director amounts to Rs. 70,90,002 and claimed studio hire charges of Rs. 14,49,900. This studio charges expense was incurred for the purpose of recording music for the film against which the fee of Rs. 70,90,002 has been received. All these expenses are duly vouched and duly recorded in the books of account. With the above findings, the learned Commissioner of Income-tax (Appeals) deleted the addition made by the Assessing Officer. So far as travelling expense is concerned, the learned Commissioner of Income-tax (Appeals) restricted the disallowance to the extent of Rs. 1,00,000. At the time of hearing, the learned Departmental representative has submitted that the assessee has not filed any books of account before the Assessing Officer. However, learned counsel for the assessee has submitted t....
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....e-tax (Appeals) found that the assessee has deposited Rs. 5,00,000 in HSBC account on July 9, 2003. He also found that on July 8, 2003, the cash book showed cash balance of Rs. 8,68,927 and on the same day payment of Rs. 1,375 was also made. The learned Commissioner of Income-tax (Appeals) has stated in his order that the amount of Rs. 8,67,552 was available as per the cash book on the date of deposit and accordingly, he deleted the addition made by the Assessing Officer. 19. We have heard both sides, perused the materials on record and gone through the orders of the authorities below. The case of the Assessing Officer is that the assessee has not explained the source for the cash deposited in the assessee's HSBC bank account and therefore, the Assessing Officer made the addition. After examining the cash book filed by the assessee, the learned Commissioner of Income-tax (Appeals) found that the assessee has deposited Rs. 5,00,000 in HSBC account on July 9, 2003. He also found that on July 8, 2003, the cash book showed cash balance of Rs. 8,68,927 and on the same day payment of Rs. 1,375 was also made. The learned Commissioner of Income-tax (Appeals) has stated in his order ....
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....ar 2006-07. The learned Commissioner of Income-tax (Appeals) further observed that since the date of search falls within the financial year 2005-06 and relevant to the assessment year 2006-07, the source of cash found during the course of search can be examined only in the assessment proceedings for the assessment year 2006-07. Therefore, he held that the addition made by the Assessing Officer was invalid and accordingly, deleted the addition. 25. Before us, the learned Departmental representative has submitted that this amount of Rs. 3,08,000 found in the course of search was not offered for taxation even in assessment year 2006-07. 26. On the other hand, learned counsel for the assessee supported the order passed by the learned Commissioner of Income-tax (Appeals). 27. We have heard both sides, perused the materials on record and gone through the orders of the authorities below. During the course of search and seizure action under section 132(1) of the Act conducted on October 26, 2005, the source for the cash amount of Rs. 3,08,000 found was not explained. Therefore, the Assessing Officer made addition. However, the learned Commissioner of Income-tax (Appeals) deleted t....
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....the course of search on October 26, 2005, gold jewellery was found and seized from the assessee. The Assessing Officer, after allowing allowance of 500 grams for the lady members of the family, he valued the gold jewellery at Rs. 15,53,211 and addition was made. The learned Commissioner of Income-tax (Appeals) deleted the addition made by the Assessing Officer on the ground that it relates to the assessment year 2006-07. But the learned Departmental representative has submitted that even in the subsequent year, this amount was not offered for taxation. In view of the above facts and circumstances of the case, we are of the opinion that if the assessee has not offered for taxation the jewellery found and valued at the time of search, it is open to the Assessing Officer to take action in the assessment year 2006-07. as per law. In view of the above, we find no reason to interfere with the order passed by the learned Commissioner of Income-tax (Appeals) relevant to the assessment year 2005-06. 32. The third ground of appeal of the Revenue relates to deletion of addition of Rs. 6,50,000 made on the professional income for the film Perazhagan. In the assessment order, the Assessing O....
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....ncome-tax (Appeals), it was submitted that the amount of Rs. 6,50,000 was part of total amount of Rs. 20,67,209 received from AVM Production for the film Perazhagan and the payment was through cheque received and deposited in HSBC bank account on April 23, 2004. However, the learned Commissioner of Income-tax (Appeals) gave a different finding that AVM Production made payment to the assessee of Rs. 6,12,499 after deducting TDS of Rs. 37,500 by examining the bank book Rs. 6,12,499 was cleared on April 23, 2004. We find that the explanation given by the assessee and the findings of the learned Commissioner of Income-tax (Appeals) are contradictory. At page 4 of the learned Commissioner of Income-tax (Appeals) order, the seized document "receipt" is reproduced, wherein it is stated that the assessee entered into agreement on November 23, 2005, but advance of Rs. 1,00,001 was already paid and an amount of Rs. 6,12,499 was received on April 22, 2004 and TDS also deducted. We could not understand as to how full remuneration was made in advance on different dates before entering into agreement. The very basis for making the above addition "receipt" seized appears to be contradictory. The ....
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....me-tax (Appeals) gave a finding that the banking transactions recorded in the suspense account are regular transactions duly recorded in the books of account and there is no justification in making addition on account of seized document. For this, the learned Departmental representative relied on the order passed by the Assessing Officer and learned counsel for the assessee strongly supported the order passed by the learned Commissioner of Income-tax (Appeals). 36. We have heard both sides, perused the materials on record and gone through the orders of the authorities below. The learned Commissioner of Income-tax (Appeals), after examining suspense account and also the seized document on which addition was made, gave categorical finding that the banking transactions recorded in the suspense account are regular transaction duly recorded in the books of account. He accordingly directed the Assessing Officer to delete the addition made. Therefore, we find no reason to interfere with the order passed by the learned Commissioner of Income-tax (Appeals) and accordingly, the ground raised by the Revenue stands dismissed. 37. The fifth ground of appeal of the Revenue relates to delet....
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....sue and the facts are not clear. Therefore, we are of the opinion that this issue has to be decided de novo. Accordingly, we set aside the order passed by the learned Commissioner of Income-tax (Appeals) and remit the matter back to the Assessing Officer to decide the issue afresh in accordance with law. 39. The sixth ground of appeal of the Revenue relates to deletion of addition of Rs. 50 lakhs made on account of cash deposits in bank account. In the assessment order, the Assessing Officer has observed that during the course of search, it was found that the assessee has deposited a sum of Rs. 50 lakhs in cash during the period from March 16, 2005 to September 15, 2005, in HSBC account No. 041104951006. Since the assessee is found to be receiving cash and making deposits, such cash deposits have to be explained item-wise. But the assessee has not explained same. In the absence of any explanation of item-wise cash deposits, the same was treated as undisclosed income deposited directly in the bank in cash. Accordingly, the addition was made. 40. Before the learned Commissioner of Income-tax (Appeals), it was submitted that this is an unfortunate addition of Rs. 50 lakhs for th....
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....ures. Under the above circumstances, we are of the opinion that this issue has to be examined in detail and the assessee may be given one more opportunity to explain the source of cash deposited in his bank account. Therefore, we set aside the order of the learned Commissioner of Income-tax (Appeals) on this issue and remit the matter to the Assessing Officer to decide the issue de novo in accordance with law after allowing opportunity of hearing to the assessee. Accordingly, the ground raised by the Revenue is allowed for statistical purpose. 43. The seventh ground of appeal of the Revenue relates to restricting professional expenditure of Rs. 15,54,750 as travelling and conveyance expenses to Rs. 1.5 lakhs. The assessee has claimed various expenses like conveyance, boarding, lodging, etc., and no details were produced. According to the Assessing Officer most of the expenses claimed by the assessee such as conveyance, travelling, etc., are only for personal purpose and not directly attributed to the purpose of profession. Accordingly, addition of Rs. 15,54,750 was made. 44. On appeal, the learned Commissioner of Income-tax (Appeals) gave a finding that on examining the facts....
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....was conducted under section 132 of the Income-tax Act on October 26, 2005, in the premises of Shri Yuvan Sankar Raja at 2C/38, Murugesan Street, T. Nagar, Chennai-17. During the course of search certain documents suspected to be incriminating were seized. Subsequently notice under section 153A of the Act was issued to the assessee and in response to that, the assessee filed the return of income on September 22, 2006, declaring total income of Rs. 53,49,899. The assessment was completed under section 143(3) read with section 153A of the Act by assessing total income of the assessee at Rs. 79,46,632. In the assessment order, the Assessing Officer has disputed an amount of Rs. 5,69,754 towards travelling expenses and conveyance and Rs. 25,96,733 towards studio hire charges. With regard to the claim of expenditure out of professional receipts, since the expenses claimed by the assessee are not supported by any regular books of account or vouchers, the Assessing Officer had approached the Central Board Film Certification (CBFC in short) authority for getting some information. The CBFC, in turn advised the Assessing Officer certain sources like websites maintained by the stars, trade bod....
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.... learned Commissioner of Income-tax (Appeals). 52. We have heard both sides, perused the materials on record and gone through the orders of the authorities below. The case of the Assessing Officer is that the assessee is being a music director, the expenses incurred towards travel and studio hire charges has to be incurred by the producer of the firm. Since the expenses claimed by the assessee are not supported by any regular books of account or vouchers and to come to the above conclusion, the Assessing Officer approached the CBFC authorities, who advised the Assessing Officer certain sources like websites maintained by the stars, trade bodies and renowned journalists and thereafter, he disallowed the claim made by the assessee. On appeal, the learned Commissioner of Income-tax (Appeals) gave a specific findings that the total fee receipt by the assessee as music director amounts to Rs. 1,44,84,648 and the profit and loss account and the books of account show total expenses of Rs. 20,26,979 for studio hire charges. This studio charges expense was incurred for the purpose of recording music for the film against which the fee of Rs. 1,44,84,648 has been received. All these expens....