AI Drafter 
TaxTMI 
TaxTMI 
2017 (4) TMI 179
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....f the assessee on 21/01/2008. During the course of survey, certain incriminating documents were found in the nature of loose slips and agreements with the exhibitors for distribution of future film "Allaripidugu" for Krishna and Guntur districts, which states that assessee has purchased distribution rights of the future film for Krishna and Guntur districts for an amount of Rs. 1,85,00,000/-, which was paid in the form of cash, demand drafts and cheques. During the course of search, a statement under section 133A of the Act was recorded from the assessee, wherein assessee has stated that he had purchased distribution rights for an amount of Rs. 1,01,29,747/-, but not for Rs.1,85,00,000/-. The assessee further stated that producer of the film M/s. P.B. Arts, Hyderabad represented by Sri M.R.V. Prasad had sent two agreements, while talks of purchase of distribution rights of the film for Krishna and Guntur districts, are in progress, however, he had not accepted the price offered by the producer and it was finally agreed for Rs. 1,01,29,747/-. 3. Consequent to the survey, case has been selected for scrutiny. Notices under section 143(2) & 142(1) were issued. In response to notices....
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....stablish the payments of cash over and above the amount disclosed in the books of account for purchase of future film. The Assessing Officer further held that department has gathered evidence in the form of letter and also agreements, which clearly shows the purchase price of the film for Rs.Rs. 1,85,00,000/-. The assessee instead of rebutting the evidence put-forth by the department, furnished a letter from the producer, which cannot be considered as evidence in support of purchase price recorded in the books of account. The Assessing Officer referring to the impounded material at page No.16 of bundle No.20, two agreements entered by the producer-Sri M.R.V. Prasad, came to a conclusion that assessee has paid on money over and above the consideration recorded in the books of account and therefore, made additions of Rs. 83,70,253/- as unexplained expenditure under section 69C of the Act. 6. Aggrieved by the assessment order, assessee preferred an appeal before the Commissioner of Income Tax (Appeals). Before the Commissioner of Income Tax (Appeals), assessee reiterated the submissions made before the Assessing Officer. The assessee further submitted that he had purchased distribu....
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....es of the assessee written by the producer to Sri V.Rama Krishna, is also confirmed the payment of Rs. 1,85,00,000/-. The Commissioner of Income Tax (Appeals) ignoring all the evidences, deleted the additions made by the Assessing Officer which is incorrect. 9. The Authorized Representative of the assessee strongly supported the order of the Commissioner of Income Tax (Appeals) and submitted that the Assessing Officer has made additions towards on money, based on certain loose slips found during the course of survey, ignoring the fact that both the parties have denied received any money in cash for purchase of distribution rights of future film. The Authorized Representative of the assessee further submitted that the agreements stated to be entered with the assessee for distribution rights of Krishna & Guntur districts is only a draft agreement sent by the producer when talks are in progress. The assessee, in his statement made during the survey operation, categorically denied having paid any on money and, hence, the Assessing Officer was erred in making additions under section 69C solely based on the statement recorded during the course of survey. In support of his arguments, r....
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....ccount for purchase of future film. The Assessing Officer, referring to the impounded document at page 16 of bundle No.20 and page 6 of bundle No.20, stated that assessee has paid cash as well as demand drafts, which amounts to Rs. 1,85,00,000/-, whereas the assessee has recorded purchase price at Rs. 1,01,29,747/-. We find that though, the Assessing Officer stated assessee has paid on money over and above the consideration recorded in the books of account, fails to establish any financial connections/transactions between Shri V.Ramakrishna and the assessee and the producer and also failed to prove the payment of Rs. 1,85,00,000/- for purchase of distribution rights with any evidence, other than loose slips during the course of survey. The agreements relied upon by the Assessing Officer stated to be entered with the assessee for Krishna & Guntur districts are not signed by the assessee. The assessee, in his statement, categorically stated that the agreements, which were found during the course of survey are only draft agreements sent by the producer while talks are in progress for distribution rights. We further observed that merely based on the statement, which was recorded during....