ITO, CHENNAI V. C.Balasundaram, CHENNAI

ITA 1156/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7099 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: P RANGA RAMANUJAM
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , D B ENCH, CHENNAI . , ' $ % , & ' BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.1156/MDS/2014 ( / ASSESSMENT YEAR: 2009-10) INCOME TAX OFFICER, WARD-I(1) CHENNAI-600 034. VS MR. C.BALASUNDARAM 14, III CROSS STREET, TEYNAMPET, CHENNAI-600 018. PAN: AFDPB5670B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.DAS GUPTA, JCIT /RESPONDENT BY : MR. P.RANGA RAMANUJAM, C.A / DATE OF HEARING : 22 ND JULY, 2014 /DATE OF PRONOUNCEMENT : 8 TH AUGUST, 2014 / O R D E R PER CHALLA NAGENDRA PRASAD , JM: THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) (C)-II, CH ENNAI DATED 28.1.2014 FOR THE ASSESSMENT YEAR 2009-10. T HE ONLY GRIEVANCE OF THE REVENUE IS THAT COMMISSIONER OF I NCOME TAX (APPEALS) ERRED IN DIRECTING THE ASSESSING OFFI CER TO DELETE ADDITION OF ` 29.93 LAKHS AFTER VERIFYING THAT RECEIPTS ARE INCLUDED IN THE RECEIPTS AS PER BOOKS OF ACCOUN TS OF THE ASSESSEE. 2 ITA NO.1156/MDS/2014 2. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THERE WERE CASH TRAN SACTIONS EXCEEDING ` 20,000/- ON VARIOUS DATES. THE ASSESSEE WAS ASKED TO EXPLAIN CASH TRANSACTIONS. THE ASSESSEE GA VE DETAILS FOR ALL THE CASH TRANSACTIONS. THE ASSESSEE STATED THAT MANY OF THE CASH TRANSACTIONS ARE NOTHING BUT SALE PROCEEDS FROM PICTURE REALIZATION AS THE ASSESSEE IS DISTRIB UTOR OF THE FILM MUMMY 3 FOR NORTH ARCOT AND SOUTH ARCOT DISTRI CTS AND THESE CASH TRANSACTIONS ARE FROM THEATRE COLLECTION S. THE THEATRE AGREEMENTS WERE ALSO FILED BEFORE THE ASSES SING OFFICER .THE ASSESSING OFFICER OBSERVED THAT ON THE PERUSAL OF THEATRE EXHIBITION AGREEMENT IT REVEALS THAT ASS ESSEE IS IN RECEIPT OF FIXED HIRE CHARGES IRRESPECTIVE OF THE COLLECTIONS MADE THROUGH THEATRES. FIXED HIRE CHARGES CAN BE DO NE ONLY WITH THE WRITTEN APPROVAL OF THE COPY RIGHT OWNERS. HENCE, THE COPY RIGHT OWNER OF THE FILM MUMMY 3IS M/S. H ANSA PICTURES. HE HAS CALLED FOR AGREEMENT ENTERED INTO WITH HANSA PICTURES BY THE ASSESSEE. ASSESSING OFFICER O BSERVED THAT ASSESSEE VIDE LETTER DATED 21.11.2011 SUBMITT ED THAT THERE IS NO AGREEMENT WITH HANSA PICTURES FOR THE F ILM MUMMY 3. SINCE THE ASSESSEE RECEIVED CASH EXCEEDING 3 ITA NO.1156/MDS/2014 ` 20,000/- FROM THEATRE OWNERS, ASSESSEE WAS ASKED TO EXPLAIN WHY PAYMENTS HAVE BEEN RECEIVED BY WAY OF C ASH INSTEAD OF CHEQUE, THE ASSESSEE REPLIED THAT IT IS A COMMON PRACTICE IN THE CINEMA INDUSTRY TO RECEIVE CASH FRO M THEATRES AND CHEQUE TRANSACTIONS ARE NOT ACCEPTED IN THE IND USTRY. THEREFORE, THE ASSESSING OFFICER TREATED THESE TRAN SACTIONS AS NOT GENUINE AND BROUGHT TO TAX ` 29.93 LAKHS AS UNEXPLAINED CASH CREDITS. ON APPEAL, COMMISSIONER O F INCOME TAX (APPEALS) DELETED THE ADDITION AGAINST W HICH REVENUE IS IN APPEAL BEFORE US. 3. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF THE ASSESSING OFFICER IN TREATING CASH DE POSITS EXCEEDING ` 20,000/- AMOUNTING TO ` 29.93 LAKHS AS UNEXPLAINED CASH DEPOSITS UNDER SECTION 68 OF THE A CT. 4. COUNSEL FOR THE ASSESSEE SUBMITS THAT AGREEMENT ENTERED INTO BY THE ASSESSEE WITH HANSA PICTURES WA S ALREADY PRODUCED BEFORE THE ASSESSING OFFICER AS IS EVIDENT FROM ASSESSEES LETTER DATED 21.11.2011 SUBMITTED B EFORE THE 4 ITA NO.1156/MDS/2014 ASSESSING OFFICER. THEREFORE THE OBSERVATION OF TH E ASSESSING OFFICER THAT ASSESSEE VIDE LETTER DATED 2 1.11.2011 STATED THAT THERE IS NO SUCH AGREEMENT WITH HANSA P ICTURES FOR THE FILM MUMMY -3 IS AVAILABLE WITH ASSESSEE IS NOT CORRECT. COUNSEL SUBMITS THAT THIS AGREEMENT HAS N O BEARING TO THE AGREEMENT AS IT HAS NO RELATION TO CASH DEPO SITS SINCE IT ONLY REFLECTS PURCHASES BY THE ASSESSEE OF THE DISTRIBUTION AND EXHIBITION RIGHTS OF THE FILM MUMMY -3. COUNSEL FOR THE ASSESSEE SUBMITS THAT COLLECTIONS FROM THEATRES ON EXHIBITION OF THE FILM WERE ALL FORMING PART OF BOOKS AND THEY ARE ALL ACCOUNTED FOR AND SINCE THEY ARE ALL PART OF COLLEC TIONS FROM THEATRE NO ADDITION CAN BE MADE AS UNEXPLAINED CASH DEPOSITS. HE VEHEMENTLY SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN DELETING TH E ADDITION. 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES. THE COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERIN G THE SUBMISSIONS OF THE ASSESSEE ELABORATELY AND THE FIN DINGS OF THE ASSESSING OFFICER DELETED THE ADDITION HOLDING THAT AMOUNTS CREDITED TO THE BANK ACCOUNTS OF THE ASSESS EE ARE 5 ITA NO.1156/MDS/2014 ALREADY INCLUDED IN THE ACCOUNTS OF THE ASSESSEE A ND THIS FACT IS NOT DISPUTED BY THE ASSESSING OFFICER. THER EFORE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT BY B RINGING TO TAX SAME AMOUNTS UNDER SECTION 68 OF THE ACT WOU LD AMOUNT TO TAX THE SAME AMOUNT TWICE. HOWEVER, THE COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO DELETE THE ADDITION AFTER VERI FYING WHETHER THE SAID RECEIPTS ARE INCLUDED IN THE RECEI PTS AS PER THE BOOKS OF ACCOUNT OF THE ASSESSEE. IN THE CIRCUM STANCES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS THESE THEAT RE COLLECTIONS WERE ALREADY FORMING PART OF BOOKS OF A CCOUNT REFLECTED AS INCOME OF THE ASSESSEE. THE REVENUE C OULD NOT REBUT ANY OF THE FINDINGS OF THE COMMISSIONER OF IN COME TAX (APPEALS) WITH EVIDENCE. IN THE CIRCUMSTANCES, WE U PHOLD THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) A ND REJECT THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 6 ITA NO.1156/MDS/2014 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 8 TH DAY OF AUGUST, 2014 AT CHENNAI. SD/- SD/- ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDRA PRASAD ) . ( ' )* ) ACCOUNTANT MEMBER / , JUDICIAL MEMBER/ ) , ) /CHENNAI, - /DATED, 8 TH AUGUST, 2014 SOMU /0 10 /COPY TO: 1. APPELLANT 2. /RESPONDENT 3. 2 () /CIT(A) 4. 2 /CIT 5. 0 6 /DR 6. /GF .