AI Drafter 
TaxTMI 
TaxTMI 
2026 (2) TMI 696
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....of the art exhibition business undertaken through M/s PHI Events Singapore after 1 examination of the documentary evidences furnished during the assessment proceedings was correct in deleting the addition made of Rs. 3,67,46,724 made under section 68 r.w.s. 115BBE of the I.T. Act, 1961. 2. That having regard to facts and circumstances of the case, learned CIT(A) NFAC considered and appreciated the realisation of the sale consideration in the bank account of the appellant with reference to information collated as per Annexure 6 to the submissions, providing detail of Artwork and price, Invoice of consignment sale and Transit insurance, Import GST paid in Singapore and Sale invoices issued at 2 Exhibition, Particulars of buyers with mode of payment realised by M/s PHI Events and amounts remitted to Artists (owners of paintings providing reference to the bank statement, gross sale consideration of painting in Exhibition, Commission earned by the appellant with copy of account of the artists and thereby accepted the identity, genuineness and the creditworthiness of the source of the deposits in the bank account of the appellant. 3. That having regard to facts and circ....
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....ration received through exhibition sale of paintings organized in Singapore after deduction of expenses. The paintings sold in Singapore belonged to various Artists which were showcased by the assessee's proprietary concern M/s Sanchit Art, and he earned commission at the rate of 50% on such sale of paintings done in Singapore. The assessee explained that out of the gross realization from sale of paintings at Singapore through M/s PHI Events (agency which organized exhibition sales in Singapore) amounting to Rs. 3,67,46,724 and deduction of expenses of Rs. 61,64,876, the net realization of Rs. 3,05,81,848 was remitted into his bank account in India by M/s PHI Events. 6. The Learned AO, however, ignored the aforesaid contentions of the assessee and concluded that the consideration of Rs. 3,67,46,724 is unreal and emanating out of a colourable device used by the assessee to bring back his unaccounted income and treated the same as unexplained cash credit under Section 68 read with section 115BBE of the Act without conducting any enquiries on his side. The following are the documentary evidences submitted by the assessee before the Learned AO to prove the nature and source of credi....
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....ank (Explaining the realisation in Bank from PHI Events Singapore) 70-73 11. Letter DGFT about statement of Bank Realisation 74-75 12. Copy of Invoice issued by The Art House 1, Old Parliament Lane, in favour of assessee regarding return of unsold paintings with copies of Packing list of Paintings with complete details of Art Work, Artists, Painting ID, Size Medium and Crate No. 1, 3, 4, 5 76-82 13. Copies of Airway Bills of unsold goods returned back (Total no. of Pieces 5 verifiable with reference to Page 259-263, Invoice details and Shipping Bill of Import Page 257-258 in the name of The Sanchit Arts, Agra, India) (Explaining import value USD 300966 in respect of return of unsold paintings) 83-106 15. List of customers with complete address to whom paintings at Sold in Singapore 107-108 16. Copies of Invoices of Sale of Paintings at Singapore Camp office at Singapore Exhibition Site 109-133 17. List with name and addresses of Artists (owners) of Paintings 134 18. Copies of Cargo Clearance permit which contains details of GST amount paid at Singapore by PHI Events on sale of paintings which was eventually borne by the....
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....s https://www.saffronart.com/. It is noted that a simple internet search throws up sufficient evidence of the identity of the entity PHI events and its CEO Ritika Khattar who is the signatory to the invite issued to the appellant. The appellant has also submitted evidence in the form of business profile of PHI Events Singapore (Regn, no. 530317678) before Accounting and Corporate Regulatory Authority (ACBA) Singapore vents In view of the above I find that the genuineness of the event i.e. art exhibition in which the appellant claimed to have participated is established. The appellant further submitted that not only was he presently continuing in the same line of business but also that the business relationship with M/s PHI Events was being continued and he was regularly engaging them for events at Singapore. 5.2.4 As regards whether the appellant actually participated in the event and sold paintings of various artists as claimed, the evidence furnished in this regard includes copy of invoices drawn by Sanchit Art in favour of consignee 'The Art House, 1, Old Parliament Lane, Singapore', Copy of letter of IDBI Bank addressed to the Dy. Commissioner....
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....e and date of receipt of payment from purchasers of paintings (b) Copy of bank statement in which the sale proceeds were received in Singapore (c) Details of account through which consideration was credited from Singapore to the IDBI account of assessee in India. (d) Proof of payment received in Singapore. (e) Bills and vouchers related to expenses made in Singapore since same have been debited into the P&L account of assessee. (f) Confirmation from PHI events, the event management company in Singapore regarding receipt of sale consideration in its account. The A.O noted that mere production of Airway bill and shipping bill is not sufficient to establish that the paintings had actually been sold and they have fetched the amounts as claimed by the assessee, He questioned why paintings were not insured while transporting. AO further noted that paintings have been billed on the basis of weight. No valuation of paintings is there on any of the documents presented by the assessee viz. airway bill, the custom shipping bill for export etc. It was concluded from the assessee's submissions, that the only fact which can be es....
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....8 dated 05.04.2013 and out of which 39 works of Art valued to USD 300966 had been returned back and the realization of USD 686812 has been made into his bank account no. 0080102000037882 in IDBI Bank and requested for the release of the GR and generation of the Bank Realisation Certificate (BRC) on DGFT Portal required under FEMA Rules. The fact that the unsold paintings were imported back into India by the assessee and the copy of the Invoice of M/s The Art House, 1 Old Parliament Lane, Singapore along with the packing details, Airway Bill and Custom Clearance placed on record further support the appellant's contentions. 5.2.8 To demonstrate that the amounts credited in his bank account were actually received from the impugned sales at Singapore, the appellant has submitted copies of letter of IDBI Bank Delhi mentioning the Bank A/c No. Deutsche Bank Singapore from where foreign remittance has come (Foreign Bills Transaction Advice explaining realisation of SGD 686812 equivalent Rs. 3,05,81,848 from PHI Events, Singapore which is verifiable from IDBI Bank Current A/c No.0080102000037882);Letter corresponding with IDBI Bank (Explaining the realisation in Bank from PHI ....
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....tion Certificate (BRC) on DGFT Portal under FEMA Rules by IDBI bank and the copy of IDBI bank statement from where the remittances were made to the artists which is verifiable from IDBI bank statement and copy of account of the artists in the books of the assessee. I find that these are clinching evidences and assessee had been able to explain the nature and source of credit within the meaning of section 68 of the Act beyond reasonable doubt. No part of such evidence or no part of such credit could be treated as unexplained by the assessee. 10. During the course of hearing, the learned DR vehemently argued that copy of ledger account of artists and copy of IDBI bank statements were placed as additional evidences by the assessee before the learned NFAC which was not put to test by the learned AO thereby violating principles of natural justice in terms of Rule 46A of the Income Tax Rules. Per Contra, the learned AR submitted that absolutely no additional evidences were furnished before the learned NFAC by the assessee and that the very same documents were indeed furnished before the learned AO also and sought time to produce those evidences in the next date of hearing. Accordingly....