DCIT, CHENNAI V. Shri Yuvanshankar Raja, CHENNAI

ITA 1391/CHNY/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81168 (ITAT-CHENNAI)
• Duration Of Justice: 6 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-08-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 23-06-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR S MOHARANA
• Assessee Lawyers: S SRIDHAR
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Document seized; Documents seized
• Section: 143(3); 153A; 27; 132

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH, CHE NNAI . , . ! ! ! ! , ' ' ' ' # # # # $ $$ $ BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NOS.1388, 1389, 1390 & 1391/MDS/2008 ' ! %! / ASSESSMENT YEARS :2003-04, 04-05, 05-06 & 2006-07 THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE II(5), 46, M.G. ROAD, CHENNAI 34. VS. SHRI YUVANSHANKAR RAJA, NO.2C/38, MURUGESAN STREET, T. NAGAR, CHENNAI - 17 [PAN : AAZPY7385B] ( &' &' &' &' /APPELLANT ) ( ()&' ()&' ()&' ()&' / RESPONDENT ) &' * + / APPELLANT BY : DR. S. MOHARANA, CIT ()&' * + / RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE * , / DATE OF HEARING : 20.08.2014 -% * , /DATE OF PRONOUNCEMENT : 26.09.2014 . . . . / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THESE FOUR APPEALS FILED BY THE REVENUE ARE DIRECTE D AGAINST DIFFERENT ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) II, CHENNAI, RELEVANT TO THE ASSESSMENT YEARS 2003-04, 2004-05, 2005-06 AND 2006-07. SINCE ALL THE APPEALS PERTAINING TO SAME ASSESSEE AND HEARD TOGET HER ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF BREVITY. I.T.A. NO. 1388/MDS/2008 [A.Y. 2003-04] 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A MUSIC DIRECTOR. A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE INCO ME TAX ACT, 1961 [ACT IN I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 2 SHORT] WAS CONDUCTED IN THE RESIDENCE OF THE ASSESS EE ON 26.10.2005. IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE AC T, THE ASSESSEE FILED THE RETURN OF INCOME SHOWING TOTAL INCOME AT .6,59,500/- FOR THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 143(3) R.W.S. 153A OF THE ACT AND ASSESSED INCOME O F .14,70,200/- BY MAKING FOLLOWING ADDITIONS. 3. FACTS RELATING TO DELETION OF ADDITION OF .8,10,700/- ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER OBSERVED FROM THE COPIES OF BANK STATEMENT THAT THE ASSESSEE HAS DEPO SITED AN AMOUNT OF .4,10,700/- FOR A PERIOD FROM 01.04.2002 TO 31.03.2 003 AND ALSO FOUND THAT THE ASSESSEE DEPOSITED .4.00 LAKHS DURING THE PREVIOUS YEAR ENDED 31.03.20 03. HE OBSERVED THAT THE ASSESSEE HAS RECEIVED REMUNERATIO N 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 T O HIS BOOKS OF ACCOUNTS, SUCH UNEXPLAINED CASH DEPOSITS REPRESENTS ONLY CASH RECE IPT 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 CHEQU E DEPOSIT OCCURS INDICATING THAT THE ASSESSEE HAD ISSUED A CHEQUE FOR A SUBSTAN TIAL AMOUNT TO ANOTHER PARTY, WHICH INDICATES THAT THE ASSESSEE MAKES CASH DEPOSI TS WHENEVER NECESSITY ARISES FOR HIM TO MAKE PAYMENTS IN CHEQUE. UNDER TH ESE CIRCUMSTANCES, IT HAS TO I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 3 BE TAKEN THAT THE CASH DEPOSITS FOUND IN THE BANK A CCOUNT OF THE ASSESSEE, IT COULD NOT BE RELATED TO A RECORDED TRANSACTION, IT IS NOTHING BUT THE UNACCOUNTED INCOME OF THE ASSESSEE. ACCORDINGLY, ADDITION OF .8,10,700/- WAS MADE. 4. ON APPEAL, BEFORE THE LD. CIT(APPEALS), A COPY OF THE BOOKS OF ACCOUNTS AND WRITTEN SUBMISSIONS WERE FILED AND SUBMITTED TH AT THE ASSESSEE HAS DEPOSITED TOTAL AMOUNT OF .4,60,200/-. THE PARTICULARS OF TRANSACTIONS RELATI NG TO COPY OF THE BOOKS OF ACCOUNT FILED BEFORE THE LD. C IT(APPEALS) IS EXTRACTED AS UNDER: DATE AMOUNT PAGE NO. IN THE CASH BOOK 29/04/2002 20,000/- 30 27/06/2002 1,09,000/- 31 01/07/2002 9,000/ - 31 31/07/2002 22,500/- 32 25/11/2002 49,500/- 34 26/11/2002 49,500/ - 34 28/11/2002 49,500/- 34 12/12/2002 32,500/- 35 16/12/2002 34,700/- 35 02/01/2003 20,400/ - 36 09/01/2003 43,600/ - 36 20/02/2003 20,000/- 37 TOTAL DEPOSITED 4,60,200/- IT WAS FURTHER EXPLAINED BEFORE THE LD. CIT(APPEALS ) THAT THE ASSESSEE WAS HAVING A OPENING BALANCE OF .4,29,380/- ON 01.04.2002 AND THE ASSESSEE HAS RECEIVED PAYMENT IN CASH TOWARDS PROFESSIONAL FEE F ROM TWO PARTIES AMOUNTING TO .6,39,562/-, WHICH WAS OFFERED AS INCOME IN THE TOT AL INCOME RETURNED. IT WAS FURTHER EXPLAINED THAT THE CASH WITHDRAWAL OF .7,38,000/- WAS MADE FROM THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 4 BANK. REGARDING THE CASH DEPOSIT OF .4,00,000/- DURING THE PREVIOUS YEAR ENDING ON 31.03.2003, THE ASSESSEE HAD SUBMITTED THAT THE ASSESSING OFFICER HAS NOT DESCRIBED THE DETAILS OF THIS CASH DEPOSIT AND THAT THERE IS NO CASH DEPOSIT OF .4,00,000/- DURING THE PREVIOUS YEAR ENDING 31.03.2 003. 5. THE LD. CIT(APPEALS), AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE GAVE A FINDING THAT, ON EXAMINATION OF THE BOOKS OF ACCOUNTS, THE ASSESSEE WAS HAVING BALANCE OF .4,29,380/- ON THE FIRST DAY OF THE FINANCIAL YEAR. THE CASH BOOK SHOWS THAT THERE WAS ADEQUATE BALANCE AT THE T IME OF VARIOUS DEPOSITS MADE IN CASH IN THE BANK ACCOUNTS. SINCE ALL THE DE POSITS ARE REFLECTED IN THE BOOKS OF ACCOUNTS AND THE CASH BOOK SHOWS ADEQUATE CASH BALANCE FOR MAKING THESE DEPOSITS, THERE IS NO JUSTIFICATION FOR MAKIN G ANY ADDITION ON ACCOUNT OF DEPOSITS MADE IN CASH IN THE BANK ACCOUNT. THE LD. CIT(APPEALS) FURTHER OBSERVED THAT ON EXAMINATION, IT WAS FOUND THAT THE ASSESSING OFFICERS FINDING THAT THERE WAS ANOTHER CASH DEPOSIT OF .4,00,000/- DURING THE FINANCIAL YEAR 2003-04 WAS FACTUALLY WRONG. ACCORDINGLY, THE LD. C IT(APPEALS), DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OF .8,10,700/- 6. AGGRIEVED, REVENUE IS IN APPEAL BEFORE THE TRIB UNAL. 7. THE LD. DR HAS STRONGLY SUPPORTED THE ORDER PAS SED BY THE ASSESSING OFFICER AND SUBMITTED THAT NO BOOKS OF ACCOUNTS WER E SUBMITTED BEFORE THE ASSESSING OFFICER. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 5 8. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE HAS SUBMITTED THAT THE BOOKS OF ACCOUNTS WERE FILED BEFORE THE ASSESSING O FFICER AND ALL THE TRANSACTIONS WERE RECORDED AND HE STRONGLY SUPPORTE D THE ORDER PASSED BY THE LD. CIT(APPEALS). 9. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CASE O F THE ASSESSING OFFICER IS THAT THE ASSESSEE HAS RECEIVED REMUNERATION PARTLY IN CA SH AND PARTLY IN CHEQUES AND THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN EACH ITEM WHICH HE WAS DEPOSITED IN THE BANK ACCOUNT BEFORE THE ASSESSING OFFICER. T HE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAS DEPOSITED CASH AND T HEREAFTER CHEQUE WAS ISSUED TO A PARTY. THEREFORE, HE CAME TO A CONCLUSI ON THAT THE CASH DEPOSITS FOUND IN THE BANK ACCOUNT OF THE ASSESSEE AS UNACCO UNTED TRANSACTIONS AND ACCORDINGLY DISALLOWANCE OF .4,10,700/- WAS MADE. HE ALSO FOUND THAT THE ASSESSEE HAS DEPOSITED .4,00,000/- DURING THE PREVIOUS YEAR ENDING 31.03.2003. IT IS NOT CLEAR WHEN THE ASSESSEE HAS D EPOSITED THIS AMOUNT AND NO DETAILS WERE MADE AVAILABLE IN THE ASSESSMENT ORDER . THE LD. CIT(APPEALS), AFTER EXAMINING THE BOOKS OF ACCOUNTS AND ALSO ENTIRE TRA NSACTIONS MADE BY THE ASSESSEE, GAVE A SPECIFIC FINDING THAT THE ASSESSEE WAS HAVING A OPENING BALANCE OF .4,29,380/- AND GAVE A FINDING THAT WHEN THE BOOKS OF ACCOUNTS SHOWS THAT THE ASSESSEE WAS HAVING SUFFICIENT BALAN CE IN HIS CASH BOOK AND THERE IS NO JUSTIFICATION IN MAKING ADDITION ON ACC OUNT OF DEPOSITS MADE IN CASH IN I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 6 THE BANK ACCOUNT. THE ASSESSING OFFICER HIMSELF AGR EED THAT THE ASSESSEE WAS RECEIVING REMUNERATION IN CASH AS WELL AS IN CHEQUE . WHEN THE ASSESSEE HAS ALREADY RECORDED AS REMUNERATION IN THE BOOKS ACCOU NT AND SUBSEQUENTLY DEPOSITED IN THE BANK, IT CANNOT BE SAID THAT IT IS UNACCOUNTED MONEY. IN SO FAR AS DEPOSIT OF .4,00,000/- FOUND BY THE ASSESSING OFFICER, THE LD. CIT(APPEALS) GAVE A FINDING THAT IT IS FACTUALLY WRONG. FROM THE ASSE SSMENT ORDER ALSO IT IS NOT CLEAR WHEN THE ASSESSEE HAS DEPOSITED .4,00,000/-. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO INT ERFERE WITH THE ORDER PASSED BY THE LD. CIT(APPEALS) AND THE GROUNDS RAISED BY T HE REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. I.T.A. NO. 1389/MDS/2008 [A.Y. 2004-05] 11. THE FIRST GROUND OF APPEAL RELATING TO DELETIO N OF ADDITION OF .23,65,347/- ON TRAVELLING EXPENSES AND STUDIO HIRE CHARGES. A S EARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE AND NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED TO THE ASSESSEE. ACCORDINGLY, THE ASSESSEE FILED HIS RETUR N DECLARING INCOME OF .30,04,204/-. THE ASSESSMENT WAS COMPLETED UNDER SE CTION 143(3) OF THE ACT BY ASSESSING TOTAL INCOME OF THE ASSESSEE AT .58,69,571/-. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS DISPUTED AN AMOUNT OF . 9,15,467/- TOWARDS TRAVELLING EXPENSES AND .14,49,900/- TOWARDS STUDIO HIRE CHARGES. WITH REGA RD TO TRAVELLING EXPENSES, SINCE THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT SUPPORTED BY ANY REGULAR BOOKS OF ACCOUNTS OR VOUCH ERS, THE ASSESSING OFFICER I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 7 HAD APPROACHED THE CENTRAL BOARD FILM CERTIFICATION [CBFC IN SHORT] AUTHORITY FOR GETTING INFORMATION. THE CBFC, IN TURN ADVISED THE ASSESSING OFFICER CERTAIN SOURCES LIKE WEB SIDES MAINTAINED BY THE STARS, TRA DE BODIES AND RENOWNED JOURNALISTS FROM WHICH THE INFORMATION CAN BE OBTAI NED. BASED ON THE ABOVE ADVISE OF THE BOARD AND CONSIDERING THE NATURE OF E XPENSES, THE ASSESSING OFFICER MADE ENQUIRIES AND ACCORDINGLY, HE CAME TO A CONCLUSION THAT THE IN MOST OF THE CASES, THE EXPENSES LIKE CONVEYANCE, BOARDIN G AND LODGING, ETC. ARE BORNE BY THE PRODUCER OF THE FILM HIMSELF AND THE LIABILI TIES OF THE ASSESSEE ARE NEGLIGIBLE IN THIS RESPECT. THEREFORE, HE CAME TO A CONCLUSION THAT THE PRODUCER TAKES RESPONSIBILITY OF MEETING ALMOST EVERY NEED O F AN ARTIST INCLUDING THE FOOD, DRINKS, COSTUMES, TRAVELLING, BOARDING, ETC. OBVIOU SLY, ANY PRODUCER OR DIRECTOR OF THE MOVIE WOULD LIKE TO KEEP ANY ARTIST IN A COMFOR TABLE POSITION, SO AS TO TAP THE MAXIMUM POSSIBLE OUT OF SUCH ARTISTS. ACCORDINGLY, HE MADE DISALLOWANCE OF TRAVELLING & CONVEYANCE AND STUDIO HIRE CHARGES AMO UNTING TO .23,65,367/-. 12. BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED THAT REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED WHICH WERE DULY AUDITED AN D THE TAX AUDIT REPORT WAS ENCLOSED ALONG WITH THE RETURN OF INCOME. IT WAS AL SO SUBMITTED THAT IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT, AN ADD ITIONAL INCOME OF .14,15,000/- WAS OFFERED ON ACCOUNT OF PERSONAL EXPENSES ETC. AN D THERE IS NO JUSTIFICATION IN MAKING ADDITION ON TRAVEL EXPENSES. IT WAS ALSO SUB MITTED BEFORE THE LD. CIT(APPEALS) THAT THE STUDIO HIRE CHARGES ARE PAID TO VARIOUS STUDIES THROUGH I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 8 CHEQUES FOR THE PURPOSE OF RECORDING AND THERE IS N O PERSONAL ELEMENT IN THIS EXPENSES. THE LD. CIT(APPEALS), AFTER CONSIDERING T HE SUBMISSIONS OF THE ASSESSEE AND ALSO DETAILS FILED BY THE ASSESSEE, DE LETED THE ADDITION MADE IN RESPECT OF STUDIO CHARGES AMOUNTING TO .14,49,000/- AND IN RESPECT OF TRAVELLING EXPENSES CLAIMED AT .9,15,467/- WAS RESTRICTED TO .1,00,000/- 13. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 14. THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER AND STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER. 15. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASS ESSEE HAS SUBMITTED THAT REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED WHICH WER E DULY AUDITED, THE TAX AUDIT REPORT WAS ENCLOSED ALONG WITH THE RETURN OF INCOME AND HE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(APPEALS). 16. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CASE O F THE ASSESSING OFFICER IS THAT THE ASSESSEE IS BEING A MUSIC DIRECTOR, THE EXPENSE S INCURRED TOWARDS TRAVEL AND STUDIO HIRE CHARGES HAS TO BE INCURRED BY THE PRODU CER OF THE FIRM. TO COME TO THE ABOVE CONCLUSION, HE APPROACHED THE CBFC AUTHORITIE S, WHO ADVISED THE ASSESSING OFFICER CERTAIN SOURCES LIKE WEB SITES MA INTAINED BY THE STARS, TRADE BODIES AND RENOWNED JOURNALISTS AND THEREAFTER, HE DISALLOWED THE CLAIM MADE BY THE ASSESSEE. ON APPEAL, THE LD. CIT(APPEALS) GAVE A SPECIFIC FINDINGS THAT THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 9 ASSESSEE HAS RECEIVED REMUNERATION AS MUSIC DIRECTO R AMOUNTS TO .70,90,002/- AND CLAIMED STUDIO HIRE CHARGES OF .14,49,900/-. THIS STUDIO CHARGES EXPENSE WAS INCURRED FOR THE PURPOSE OF RECORDING MUSIC FOR THE FILM AGAINST WHICH THE FEE OF .70,90,002/- HAS BEEN RECEIVED. ALL THESE EXPENSES ARE DULY VOUCHED AND DULY RECORDED IN THE BOOKS OF ACCOUNTS. WITH THE AB OVE FINDINGS, THE LD. CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSES SING OFFICER. SO FAR AS TRAVELLING EXPENSES IS CONCERNED, THE LD. CIT(APPEA LS) RESTRICTED THE DISALLOWANCE TO THE EXTENT OF .1,00,000/-. AT THE TIME OF HEARING, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED WHICH WER E DULY AUDITED AND THE TAX AUDIT REPORT WAS ENCLOSED ALONG WITH THE RETURN OF INCOME. ON PERUSAL OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS STATED THAT THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT SUPPORTED BY ANY REGULAR BO OKS OF ACCOUNTS OR VOUCHERS, WHICH VIRTUALLY MEANS, THE ASSESSING OFF ICER HAS NOT COME ACROSS ANY BOOKS OF ACCOUNTS OR VOUCHERS AS STATED TO HAVE BEE N FILED BY THE ASSESSEE ALONG WITH THE RETURN. THE LD. CIT(APPEALS) IN HIS ORDER AT PARA 4.2 HAS STATED THAT HE HAS EXAMINED THE RECORDS AND BOOKS OF ACCOUNTS. IF IT IS SO, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(APPEALS) SHOULD HAVE OBTAINED REMAND REPORT FROM THE ASSESSING OFFICER ON THE BOOKS OF ACCOUNTS /RECORDS AS STATED TO HAVE BEEN EXAMINED BY THE LD. CIT(APPEALS) BEFORE ARRIVI NG ANY CONCLUSION. FURTHER, THE ASSESSING OFFICER HAS STATED THAT HE HAS APPROA CHED THE CBFC IN CONNECTION I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 10 WITH THE ABOVE ADDITIONS. FOR MAKING ANY ADDITION, THE ASSESSING OFFICER SHOULD HAVE SUPPORTIVE EVIDENCE AND THE ASSESSING OFFICER HAS NOT STATED IN THE ASSESSMENT ORDER THAT BASED ON WHICH EVIDENCE HE MA DE THE ABOVE ADDITIONS. SINCE THE LD. CIT(APPEALS) HAS NOT OBTAINED ANY REM AND REPORT FROM THE ASSESSING OFFICER, WE SET ASIDE THE ORDER OF THE LD . CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH BASED ON MATERIAL EVIDENCE IN ACCORDANCE WITH LAW, AFTER ALLOWING SUFFICIENT OPPO RTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY, THE GROUND RAISED BY THE REV ENUE IS ALLOWED FOR STATISTICAL PURPOSE. 17. IN SO FAR AS ADDITION OF .5,00,000/- ON ACCOUNT OF CASH DEPOSIT IN THE BANK ACCOUNT IS CONCERNED, ON EXAMINATION OF THE BANK ST ATEMENT, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD DEPOSITED . 5,00,000/- IN THE HSBC BANK DURING THE FINANCIAL YEAR 2003-04. THE ASSESSING OF FICER OBSERVED THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF DEPOSI T MADE IN HIS HSBC BANK ACCOUNT AND ACCORDINGLY, HE MADE ADDITION OF .5,00,000/- TOWARDS UNEXPLAINED CASH DEPOSIT. 18. BEFORE THE LD. CIT(APPEALS) IT WAS SUBMITTED T HAT ADEQUATE BALANCE IN THE CASH BOOK WAS AVAILABLE. AFTER EXAMINING THE CASH B OOK FILED BY THE ASSESSEE, THE LD. CIT(APPEALS) FOUND THAT THE ASSESSEE HAS DE POSITED .5,00,000/- IN HSBC ACCOUNT ON 09.07.2003. HE ALSO FOUND THAT ON 0 8.07.2003, THE CASH BOOK SHOWED CASH BALANCE OF .8,68,927/- AND ON THE SAME DAY PAYMENT OF . 1,375/- I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 11 WAS ALSO MADE. THE LD. CIT(APPEALS) HAS STATED IN H IS ORDER THAT THE AMOUNT OF .8,67,552/- WAS AVAILABLE AS PER THE CASH BOOK ON T HE DATE OF DEPOSIT AND ACCORDINGLY, HE DELETED THE ADDITION MADE BY THE AS SESSING OFFICER. 19. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CASE O F THE ASSESSING OFFICER IS THAT THE ASSESSEE HAS NOT EXPLAINED THE SOURCE FOR THE C ASH DEPOSITED IN ASSESSEES HSBC BANK ACCOUNT AND THEREFORE, THE ASSESSING OFFI CER MADE THE ADDITION. AFTER EXAMINING THE CASH BOOK FILED BY THE ASSESSEE , THE LD. CIT(APPEALS) FOUND THAT THE ASSESSEE HAS DEPOSITED .5,00,000/- IN HSBC ACCOUNT ON 09.07.2003. HE ALSO FOUND THAT ON 08.07.2003, THE CASH BOOK SHO WED CASH BALANCE OF .8,68,927/- AND ON THE SAME DAY PAYMENT OF . 1,375/- WAS ALSO MADE. THE LD. CIT(APPEALS) HAS STATED IN HIS ORDER THAT THE AMOUN T OF .8,67,552/- WAS AVAILABLE AS PER THE CASH BOOK ON THE DATE OF DEPOS IT AND DELETED THE ADDITION MADE BY THE ASSESSING OFFICER. THE ORDER OF THE LD. CIT(APPEALS) IS VERY CRYPTIC. WE COULD NOT FIND ANYTHING FROM THE ORDER OF THE LD . CIT(APPEALS) THAT THE ASSESSEE HAS EXPLAINED THE SOURCE OF CASH OF .5,00,000/- DEPOSITED IN HIS HSBC BANK ACCOUNT. IT IS ALSO NOT CLEAR WHETHER THE ASSESSEE HAS EXPLAINED THE SOURCE OF CASH DEPOSITED IN HIS ACCOUNT OR NOT. TH EREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE. TO MEET THE ENDS OF JUSTICE, WE REMIT THE MATTER BACK TO THE ASSESSING OFFICER WITH A DIRECTI ON TO GIVE ONE MORE OPPORTUNITY OF HEARING TO THE ASSESSEE FOR FURNISHING THE DETAI LS OF SOURCES FOR THE CASH I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 12 DEPOSITS AND DECIDE THE ISSUE DE NOVO IN ACCORDANCE WITH LAW. ACCORDINGLY, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATIST ICAL PURPOSE. 20. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 1390/MDS/2008 [A.Y. 2005-06] 21. A SEARCH WAS CONDUCTED IN ASSESSEES CASE ON 2 6.10.2005 AND IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE AC T, THE ASSESSEE FILED HIS RETURN OF INCOME SHOWING TOTAL INCOME OF .52,29,240/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 153A OF THE A CT ON 31.12.2007 BY ASSESSING TOTAL INCOME OF THE ASSESSEE AT .1,99,69,149/-. 22. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE M ATTER IN APPEAL BEFORE THE LD. CIT(APPEALS). THE FIRST GROUND OF APPEAL RELATI NG TO DELETION OF ADDITION IN RESPECT OF .3,08,000/- ON ACCOUNT OF CASH FOUND DURING THE COU RSE OF SEARCH. 23. DURING THE COURSE OF SEARCH ON 26.10.2005, CAS H OF .3,08,000/- WAS FOUND IN THE PREMISES OF THE ASSESSEE. WHEN THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN THE SOURCE OF THE ABOVE CASH, T HE ASSESSEE WAS NOT ABLE TO EXPLAIN. THEREFORE, THE ASSESSING OFFICER CAME TO A CONCLUSION THAT IT IS PROFESSIONAL INCOME AND ACCORDINGLY ADDITION WAS MA DE. 24. ON APPEAL, THE LD. CIT(APPEALS) OBSERVED THAT THE SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE ACT WAS CONDUCTE D ON 26.10.2005, WHICH FALLS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 13 WITHIN THE FINANCIAL YEAR 2005-06 AND RELEVANT TO T HE ASSESSMENT YEAR 2006-07. THE LD. CIT(APPEALS) FURTHER OBSERVED THAT SINCE TH E DATE OF SEARCH FALLS WITHIN THE FINANCIAL YEAR 2005-06 AND RELEVANT TO THE ASSE SSMENT YEAR 2006-07, THE SOURCE OF CASH FOUND DURING THE COURSE OF SEARCH CA N 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 LD. DR HAS SUBMITTED THAT THIS AMOUNT OF .3,08,000/- FOUND IN THE COURSE OF SEARCH WAS NOT OFFERED FOR TAXATIO N EVEN IN THE ASSESSMENT YEAR 2006-07. 26. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASS ESSEE SUPPORTED THE ORDER PASSED BY THE LD. CIT(APPEALS). 27. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. DURING THE COURSE OF SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE ACT CONDUCTED ON 26.10.2005, THE SOURCE FOR THE CASH AMOUNT OF .3,08,000/- FOUND WAS NOT EXPLAINED. THEREFORE, THE ASSESSING OFFICER MADE ADDITION. HOWEVER, THE LD. C IT(APPEALS) DELETED THE ADDITION ON THE GROUND THAT THE SEARCH WAS CONDUCTE D ON 26.10.2005 AND SINCE THE DATE OF SEARCH FALLS WITHIN THE FINANCIAL YEAR 2005-06 RELEVANT TO THE ASSESSMENT YEAR 2006-07, THE SOURCE OF CASH FOUND D URING THE COURSE OF SEARCH I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 14 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. ACCORDING TO THE LD. DR, THIS AMOUNT WAS N OT OFFERED FOR TAXATION IN THE ASSESSMENT YEAR 2006-07. IN SO FAR AS THIS ASSESSME NT YEAR IS CONCERNED, THE ABOVE SEIZED AMOUNT IS NOT RELEVANT. HOWEVER, IT IS OPEN TO THE ASSESSING OFFICER TO PROCEED AS PER LAW, IF THE ASSESSEE HAS NOT OFFE RED FOR TAXATION, WHICH HE OUGHT TO HAVE BEEN OFFERED AS PER LAW. HOWEVER, WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(APPEALS) ON THIS ISSUE. ACCOR DINGLY, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 28. THE SECOND GROUND RAISED BY THE REVENUE IS REL ATING TO DELETION OF ADDITION IN RESPECT OF .15,35,211/- ON ACCOUNT OF GOLD JEWELLERY FOUND DUR ING THE COURSE OF SEARCH. IN THE ASSESSMENT ORDER, THE ASSE SSING OFFICER HAS OBSERVED THAT DURING THE COURSE OF SEARCH, GOLD JEWELLERY OF WEIGHING 3088.6 GRAMS WAS FOUND. WHEN THE ASSESSEE WAS ASKED TO EXPLAIN THE S OURCE OF THE SAME, HE WAS NOT ABLE TO EXPLAIN AND ALSO IT WAS FOUND THAT IT W AS NOT ACCOUNTED FOR. ACCORDINGLY, THE ASSESSING OFFICER CALCULATED MARKE T VALUE OF THE GOLD JEWELLERY AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE AFTER ALLOWING 500 GRAMS FOR THE LADY MEMBERS OF THE FAMILY. 29. ON APPEAL, THE LD. CIT(APPEALS) HAS OBSERVED T HAT THE SEARCH AND SEIZURE ACTION WAS CONDUCTED ON 26.10.2005, WHICH FALLS WIT HIN THE FINANCIAL YEA 2005-06 I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 15 AND RELEVANT TO THE ASSESSMENT YEAR 2006-07. ACCORD INGLY, THE ADDITION WAS DELETED. 30. BEFORE US, THE LD. DR HAS SUBMITTED THAT EVEN IN SUBSEQUENT YEAR ALSO, THE ASSESSEE HAS NOT OFFERED ANYTHING FOR TAXATION AND STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER, WHEREAS, THE LD. C OUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER PASSED BY THE LD. CIT(APPEALS). 31. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND FR OM THE ASSESSMENT ORDER THAT DURING THE COURSE OF SEARCH ON 26.10.2005, GOLD JEW ELLERY WAS FOUND AND SEIZED FROM THE ASSESSEE. THE ASSESSING OFFICER, AFTER ALL OWING ALLOWANCE OF 500 GRAMS FOR THE LADY MEMBERS OF THE FAMILY, HE VALUED THE G OLD JEWELLERY AT .15,53,211/- AND ADDITION WAS MADE. THE LD. CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND THAT IT RELATES TO ASSESSMENT YEAR 2006-07. BUT THE LD. DR HAS SUBMITTED THAT EVEN IN THE SUBSEQUEN T YEAR, THIS AMOUNT WAS NOT OFFERED FOR TAXATION. IN VIEW OF THE ABOVE FACTS AN D CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT IF THE ASSESSEE HAS NOT OFF ERED FOR TAXATION THE JEWELLERY FOUND AND VALUED AT THE TIME OF SEARCH, IT IS OPEN TO THE ASSESSING OFFICER TO TAKE ACTION IN ASSESSMENT YEAR 2006-07. AS PER LAW. IN V IEW OF THE ABOVE, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD . CIT(APPEALS) RELEVANT TO THE ASSESSMENT YEAR 2005-06. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 16 32. THE THIRD GROUND OF APPEAL OF THE REVENUE RELA TES TO DELETION OF ADDITION OF .6,50,000/- MADE ON THE PROFESSIONAL INCOME FOR THE FILM PERAZHAGAN. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVE D THAT AS PER PAGE NO 16 OF SEIZED MATERIAL ANN/VP/B&D/S20 [ANNEXURE 15], THE A SSESSEE HAS TO RECEIVE .7,50,000/- FOR THE MOVIE PERAZHAGAN. THE ASSESSEE HAS SHOWN RECEIPT OF .1,00,001/- ONLY ON 10.01.2005. HENCE, THERE IS DIF FERENCE OF .6,50,000/-. FURTHER, SIMILAR DISCREPANCIES WERE FOUND FOR THE R EMUNERATION RECEIVED FROM INDIRA INNOVATIONS FOR THE FILM KURUMBU. AS PER PAG E NO. 17 OF THE SEIZED MATERIALS, THE TOTAL REMUNERATION RECEIVED BY THE A SSESSEE FROM INDIRA INNOVASTIONS DURING THE FINANCIAL YEAR ENDING 31.03 .2003 WAS .4,00,000/-. HOWEVER, THE ASSESSEE HAS SUBMITTED ONLY .3,00,000/- RECEIVED FROM INDIRA INNOVATION. SINCE THE DIFFERENCE OF .1,00,000/- WAS NOT EXPLAINED BY THE ASSESSEE, THE SAME WAS ADDED TO THE INCOME OF THE A SSESSEE AND ADDITION MADE WAS AGGREGATED TO .7,50,000/- [ .6,50,000 + .1,00,000/-]. 33. BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED THAT THE ASSESSEE HAS RECEIVED TOTAL AMOUNT OF .20,67,209/- FROM AVM PRODUCTION FOR THE FILM PERALAGAN. THAT THE PAYMENT WAS RECEIVED THROUGH CH EQUE ISSUED ON INDIAN OVERSEAS BANK WHICH WAS DEPOSITED IN ASSESSEES BAN K ACCOUNT WITH HSBC AND THE SAME WAS CLEARED ON 23.04.2004 AN AMOUNT OF .6,50,000/- WAS PART OF THE ABOVE TOTAL AMOUNT RECEIVED BY THE ASSESSEE. THE LD . CIT(APPEALS), AFTER CONSIDERATION THE EXPLANATION OF THE ASSESSEE, GAVE A FINDING THAT ON I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 17 EXAMINATION OF THE SEIZED DOCUMENTS AND THE BOOKS O F ACCOUNTS, THE AVM PRODUCTION HAD MADE PAYMENT OF .6,12,499/- AFTER DEDUCTING TDS OF .37,500/- AS SHOWN IN THE RECEIPT DESCRIBED ABOVE. AFTER EXAM INING THE BANK BOOK, THE LD. CIT(APPEALS) FOUND THAT CHEQUE OF .6,12,499/- WAS CLEARED ON 23.04.2004, WHICH SHOWS THAT NO PART OF PAYMENT SHOWN IN THE SE IZED COPY OF THE RECEIPT IS UNACCOUNTED AND ACCORDINGLY DELETED THE ADDITION OF .6,50,000/- MADE BY THE ASSESSING OFFICER. 34. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. ACCORDING TO THE ASSESSING OFFICER, AS PER THE SEIZED DOCUMENT AT SL.NO. 16 [ANNEXURE 15], THE ASSESSEE HAS TO RECEIVE .7,50,000/- FOR THE FILM PERALAGAN. THE ASSESSEE HA S SHOWN A RECEIPT OF 1,00,001/- ON 10.01.2005. THE DIFFERENCE WAS NOT EX PLAINED BEFORE THE ASSESSING OFFICER. BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED THAT THE AMOUNT OF .6,50,000/- WAS PART OF TOTAL AMOUNT OF .20,67,209/- RECEIVED FROM AVM PRODUCTION FOR THE FILM PERALAGAN AND THE PAYMENT W AS THROUGH CHEQUE RECEIVED AND DEPOSITED IN HSBC BANK ACCOUNT ON 23.04.2004. H OWEVER, THE LD. CIT(APPEALS) GAVE A DIFFERENT FINDING THAT AVM PROD UCTION MADE PAYMENT TO THE ASSESSEE OF .6,12,499/- AFTER DEDUCTING TDS OF .37,500/- BY EXAMINING THE BANK BOOK .6,12,499/- WAS CLEARED ON 23.04.2004. WE FIND THAT THE EXPLANATION GIVEN BY THE ASSESSEE AND THE FINDINGS OF THE LD. C IT(APPEALS) ARE CONTRADICTORY. AT PAGE NO.4 OF THE LD. CIT(APPEALS) ORDER, THE SEI ZED DOCUMENT RECEIPT IS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 18 REPRODUCED, WHEREIN IT IS STATED THAT THE ASSESSEE ENTERED INTO AGREEMENT ON 23.11.2005, BUT ADVANCE OF .1,00,001/- WAS ALREADY PAID AND AN AMOUNT OF .6,12,499/- WAS RECEIVED ON 22.04.2004 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 A SSESSING OFFICER HAS STATED IN THE ASSESSMENT ORDER THAT THE ASSESSEE HAS SHOWN RE CEIPT OF .1,00,001/- ONLY ON 10.01.2005. WE ARE OF THE OPINION THAT THE EACH AND EVERY FACT REQUIRES DETAILED VERIFICATION. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AFTER MAKING DETAILED VERIFICATION. AC CORDINGLY, THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 35. THE FOURTH GROUND OF APPEAL OF THE REVENUE REL ATES TO DELETION OF ADDITION OF .14,19,000/- MADE ON ACCOUNT OF SUSPENSE ACCOUNT. I N THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT DURING THE COURSE OF SEARCH, SEIZED DOCUMENT NO.ANN/VP/B&D/S-4 REVEALS THAT AN AMOUNT O F .14,90,000/- WAS SHOWN AS SUSPENSE ACCOUNT AT PAGE NO. 109. SINCE TH E ASSESSEE HAS NOT EXPLAINED THE SOURCE IN DETAIL, THE SAID AMOUNT WAS ADDED AS UNEXPLAINED INCOME OF THE ASSESSEE. THE SEIZED DOCUMENT ON WHIC H THE ADDITION WAS MADE PRODUCED BEFORE THE LD. CIT(APPEALS) IS EXTRACTED A S UNDER: I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 19 YUVAN SHANKAR RAJA SUSPENSE LEDGER ACCOUNT 1-APR-2004 TO 31-MAR-2005 DATE PARTICULARS VCH TYP DEBIT CREDIT 13.07.2004 AMERICAN EXPRESS BANK CH.NO.47 PYMT 1,38,000.00 21.08.2004 HSBC BANK CH. FROM YUVANS UNCLE RCPT 1,00,000 30.12.2004 AMERICAN EXPRESS BANK CH.NO.95 TRF TO HSBC PYMT 2,00,000.00 19.01.2005 HSBC BANK CH. NO.12905 PYMT 1,00,000.00 27.01.2005 HSBC BANK CH. NO. 12907 PYMT 26,220.00 HSBC BANK CH. NO. 12908 PYMT 10,000.00 04.03.2005 HSBC BANK CH. NO. 12913 PYMT 71,000.00 11.03.2005 HSBC BANK CH. NO. 12914 PYMT 5,00,000.00 HSBC BANK CH. NO. 12915 PYMT 44,240.00 23.03.2005 HSBC BANK CH. NO. 12918 PYMT 2,92,800.00 HSBC BANK CH. NO. 12917 PYMT 16,000.00 30. 03.2005 HSBC BANK CH. NO. 12920 PYMT 11,110.00 CLOSING BALANCE 14,09,370.00 1,00,000.00 13,09,370.00 14,09,370.00 14,09,370.00 AFTER EXAMINING, THE LD. CIT(APPEALS) GAVE A FINDIN G THAT THE BANKING TRANSACTIONS RECORDED IN THE SUSPENSE ACCOUNT ARE REGULAR TRANSA CTIONS DULY RECORDED IN THE BOOKS OF ACCOUNTS AND THERE IS NO JUSTIFICATION IN MAKING ADDITION ON ACCOUNT OF SEIZED DOCUMENT. FOR THIS, THE LD. DR RELIED ON THE ORDER PASSED BY THE ASSESSING OFFICER AND THE LD. COUNSEL FOR THE ASSES SEE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(APPEALS). 36. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE LD. CI T(APPEALS), AFTER EXAMINING SUSPENSE ACCOUNT AND ALSO THE SEIZED DOCUMENT ON WH ICH ADDITION WAS MADE, I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 20 GAVE CATEGORICAL FINDING THAT THE BANKING TRANSACTI ONS RECORDED IN THE SUSPENSE ACCOUNT ARE REGULAR TRANSACTION DULY RECORDED IN TH E BOOKS OF ACCOUNTS. HE ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO DELET E THE ADDITION MADE. THEREFORE, WE FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(APPEALS) AND ACCORDINGLY, THE GROUND RAISED BY THE REVENUE STANDS DISMISSED. 37. THE FIFTH GROUND OF APPEAL OF THE REVENUE RELA TES TO DELETION OF ADDITION OF .13,82,948/- ON ACCOUNT OF THE INVESTMENT IN IMMOVA BLE PROPERTY. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVE D THAT THE ASSESSEE OWNS IMMOVABLE PROPERTY AT G-1, MRC GARDEN STERLING ROAD , CHENNAI. AS PER SEIZED MATERIAL IN ANN/VP/B&D/S-4, SALE CONSIDERATION WAS SHOWN AT .13,36,440. HOWEVER, THE MARKET VALUE OF THE PROPERTY WAS FOUND TO BE .43,82,948/-. IT WAS FURTHER SEEN THAT THE ASSESSEE HAS OBTAINED BANK LO AN OF .30 LAKHS, WHICH CONFIRMS THAT THE VALUE OF THE PROPERTY IF MORE THA N .13,36,440/-. OUT OF THE TOTAL AMOUNT OF .43,82,948/-, THE SOURCE TO THE EXTENT OF .30 LAKHS IS FOUND TO BE EXPLAINED AS BANK LOAN AND THE BALANCE AMOUNT OF .13,82,948/- [ .43,82,948 .30,00,000] WAS TREATED AS UNEXPLAINED INVESTMENT I N IMMOVABLE PROPERTY. THE LD. CIT(APPEALS), AFTER CONSIDERING THE ENTIRE FACT S OF THE CASE AND THE SUBMISSIONS MADE BEFORE HIM DURING THE COURSE OF AP PELLATE PROCEEDINGS, CAME TO A CONCLUSION THAT THE PROPERTY AT STERLING ROAD WAS PURCHASED ON 21.05.2005. IT WAS FURTHER OBSERVED THAT THE TOTAL PAYMENT OF .42 LAKHS WAS MADE IN THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 21 FINANCIAL YEAR 2005-06, WHICH WAS DULY RECORDED IN THE BOOKS OF ACCOUNT. THE LD. CIT(APPEALS) FOUND THAT THE ASSESSING OFFICER HAS N OT GIVEN ANY BASIS FOR DETERMINING THE TOTAL INVESTMENT IN THE PROPERTY AT .43,82,948/- AND ACCORDINGLY DELETED THE ADDITION OF .13,82,948/- MADE BY THE ASSESSING OFFICER. 38. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CASE O F THE ASSESSEE IS THAT THE ASSESSEE HAS PURCHASED THE PROPERTY FOR A CONSIDERA TION OF .13,36,440/- AS PER DOCUMENT SEIZED. ACCORDING TO THE ASSESSING OFFICER , THE MARKET VALUE OF THE PROPERTY WAS .43,82,948/-. HOWEVER, HE HAS NOT GIVEN ANY REASON OR BASIS AS TO HOW HE ARRIVED AT THIS FIGURE. BEFORE THE LD. CIT(A PPEALS), THE ASSESSEE HAS SUBMITTED THAT HE HAS PURCHASED THE PROPERTY AT .36.0 LAKHS. AFTER EXAMINING THE FACTS OF THE CASE, THE LD. CIT(APPEALS) GAVE A FINDING THAT THE ASSESSEE HAS PAID .42 LAKHS IN THE FINANCIAL YEAR 2005-06, WHICH WAS DULY RECORDED IN THE BOOKS OF ACCOUNTS. WE DO NOT FIND ANY BASIS FOR THE ABOVE FINDINGS OF THE LD. CIT(APPEALS). THERE IS LOT OF INCONSISTENCY IN THIS ISSUE AND THE FACTS ARE NOT CLEAR. THEREFORE, WE ARE OF THE OPINION THAT THIS I SSUE HAS TO BE DECIDED DE NOVO. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE L D. CIT(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 RELA TES TO DELETION OF ADDITION OF .50 LAKHS MADE ON ACCOUNT OF CASH DEPOSITS IN BANK ACCOUNT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT DURI NG THE COURSE OF SEARCH, IT I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 22 WAS FOUND THAT THE ASSESSEE HAS DEPOSITED A SUM OF .50 LAKHS IN CASH DURING THE PERIOD FROM 16.03.2005 TO 15.09.2005 IN HSBC AC COUNT NO. 041104951006. SINCE THE ASSESSEE IS FOUND TO BE RECEIVING CASH AN D MAKING DEPOSITS, SUCH CASH DEPOSITS HAVE TO BE EXPLAINED ITEM WISE. BUT T HE ASSESSEE HAS NOT EXPLAINED SAME. IN THE ABSENCE OF ANY EXPLANATION O F ITEM WISE CASH DEPOSITS, THE SAME WAS TREATED AS UNDISCLOSED INCOME DEPOSITE D DIRECTLY IN THE BANK IN CASH. ACCORDINGLY, ADDITION WAS MADE. 40. BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED THAT THIS IS AN UNFORTUNATE ADDITION OF .50 LAKHS FOR THE REASON THAT DURING THE COURSE OF SEARCH, IT WAS FOUND THAT THE ASSESSEE HAS DEPOSITED A SUM OF .50 LAKHS DURING THE PERIOD FROM 16.03.2005 TO 15.09.2005 IN HSBC ACCOUNT NO. 0 41104951006. THE ASSESSING OFFICER DOES NOT GAVE DETAILS AS TO ON WH AT DATES HE FOUND SUCH CASH DEPOSITS. OUT OF THE PERIOD AS MENTIONED BY THE ASS ESSING OFFICER, THE RELEVANT PERIOD RELATING TO THE ASSESSMENT YEAR 2005-06 IS O NLY THE PERIOD 16.03.2005 TO 31.03.2005. AS PER BOOKS OF ACCOUNT AND AS PER SEAR CH MATERIAL, THERE WAS NO CASH DEPOSIT. THEREFORE, THE ADDITION MADE WAS MERE UNJUST AND OUGHT NOT TO HAVE BEEN MADE. AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE, THE LD. CIT(APPEALS), AFTER EXAMINING THE FACTS, FOUND THAT THE ASSESSEE HAS MADE A DEPOSIT OF .3,62,000/- ONLY DURING THE FINANCIAL YEAR 2005-06. HE FURTHER OBSERVED THAT THE CASH BOOK OF THE ASSESSEE SHOWS A DEQUATE CASH BALANCE FOR MAKING THIS DEPOSIT IN THE BANK. THEREFORE, HE DELE TED THE ADDITION MADE BY THE ASSESSING OFFICER. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 23 41. THE LD. DR SUPPORTED THE ORDER PASSED BY THE A SSESSING OFFICER, WHEREAS THE LD. COUNSEL FOR THE SUPPORTED THE ORDER PASSED BY THE LD. CIT(APPEALS). 42. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CASE O F THE ASSESSING OFFICER IS THAT THE ASSESSEE HAS DEPOSITED A SUM OF RS. 50 LAKHS IN CASH DURING THE PERIOD FROM 16.03.2005 TO 15.09.2005 IN HSBC ACCOUNT NO.0411049 51006. SINCE THE ASSESSEE IS FOUND TO BE RECEIVING CASH AND MAKING D EPOSITS, SUCH CASH DEPOSITS HAVE TO BE EXPLAINED ITEM WISE. BUT THE ASSESSEE HA S NOT EXPLAINED SAME. THEREFORE, THE ASSESSING MADE ADDITION OF .50 LAKHS. ON APPEAL, THE LD. CIT(APPEALS) OBSERVED THAT ON EXAMINATION, IT WAS F OUND THAT THE ASSESSEE MADE DEPOSIT OF ONLY .3,62,000/- DURING THE ASSESSMENT YEAR 2005-06. THE ISSUE INVOLVED IN THIS APPEAL RELATING TO SOURCE OF INCOME OF THE ASSESSEE DEPOSITED IN THE BANK. NEITHER THE ASSESSING OFFICE R NOR THE LD. CIT(APPEALS) PROPERLY EXAMINED THIS ISSUE. THE ASSESSEE HAS NOT EXPLAINED THE SOURCE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE LD. CIT( APPEALS) OR EVEN BEFORE US. WE FIND LOT OF INCONSISTENCY IN THE FACTS AND FIGUR ES. UNDER THE ABOVE CIRCUMSTANCES, WE ARE OF THE OPINION THAT THIS ISSU E 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 S ET ASIDE THE ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND REMIT THE MATTER TO THE ASSESSING OFFICER TO DECIDE THE ISSUE DE NOVO IN ACCORDANCE WITH LAW AFT ER ALLOWING OPPORTUNITY OF I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 24 HEARING TO THE ASSESSEE. ACCORDINGLY, THE GROUND RA ISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 43. THE SEVENTH GROUND OF APPEAL OF THE REVENUE RE LATES TO RESTRICTING PROFESSIONAL EXPENDITURE OF .15,54,750/- AS TRAVELLING AND CONVEYANCE EXPENSES TO .1.5 LAKHS. THE ASSESSEE HAS CLAIMED VARIOUS EXPENS ES LIKE CONVEYANCE, BOARDING, LODGING, ETC. AND NO DETAILS WERE PRODUCE D. ACCORDING TO THE ASSESSING OFFICER MOST OF THE EXPENSES CLAIMED BY THE ASSESSE E SUCH AS CONVEYANCE, TRAVELLING, ETC. ARE ONLY FOR PERSONAL PURPOSE AND NOT DIRECTLY ATTRIBUTED TO THE PURPOSE OF PROFESSION. ACCORDINGLY, ADDITION OF .15,54,750/- WAS MADE. 44. ON APPEAL, THE LD. CIT(APPEALS) GAVE A FINDING THAT ON EXAMINING THE FACTS OF THE CASE, THERE IS ELEMENT OF PERSONAL EXPENSES IN THE CONVEYANCE AND TRAVELLING EXPENSES TO SOME EXTENT. IN THE RETURN F ILED BY THE ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT, T HE ASSESSEE HAS DECLARED UNDECLARED INCOME ON ACCOUNT OF PERSONAL EXPENSES E TC. SINCE THE ASSESSEE IS A BUSY PROFESSIONAL AND EXTRA INCOME ON ACCOUNT OF PERSONAL EXPENSES ETC. HAVE BEEN OFFERED IN THE RETURN, THE LD. CIT(APPEALS) RE STRICTED THE DISALLOWANCE OF TRAVELLING AND CONVEYANCE EXPENSES TO .1.50 LAKHS. 45. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE DISALL OWANCE WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE EXPENDITUR E IS NOT RELATING TO EARNING PROFESSIONAL INCOME AND IT IS ONLY PERSONAL EXPENDI TURE. THE ASSESSING OFFICER HAS POINTED OUT THAT THE EXPENSES CLAIMED BY THE AS SESSEE ARE NOT SUPPORTED BY I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 25 ANY REGULAR BOOKS OF ACCOUNTS OR VOUCHERS. THE LD. CIT(APPEALS) SIMPLY HELD THAT THERE IS ELEMENT OF PERSONAL EXPENSES AND OFFERED E XTRA INCOME IN THE RETURN. IT APPEARS THAT THE LD. CIT(APPEALS), WITHOUT EXAMININ G THE ISSUE, RESTRICTED THE DISALLOWANCE TO THE EXTENT OF .1.50 LAKHS. EVEN THE ASSESSING OFFICER HAS OBSERVED THAT THE PRODUCERS TAKE THE RESPONSIBILITY OF MEETING ALMOST EVERY NEED OF THE AN ARTIST INCLUDING THE FOOD, DRINKS COSTUME S, TRAVELLING, BOARDING, ETC. WITHOUT ANY MATERIAL EVIDENCE. IN VIEW OF THE ABOVE , WE ARE OF THE OPINION THAT THE ONUS CAST UPON BOTH SIDES, I.E., THE ASSESSING OFFICER SHOULD HAVE ASCERTAINED THE EXPENDITURE ACTUALLY INCURRED BY TH E ASSESSEE AND THE ASSESSEE SHOULD FURNISH RELEVANT VOUCHERS AND BOOKS OF ACCOU NT FOR MAKING SUCH CLAIM OF EXPENDITURE. IN THE INTEREST OF JUSTICE, WE SET ASI DE THE ORDER OF THE LD. CIT(APPEALS) ON THIS ISSUE AND REMIT THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE AFRESH BY EXAMINING T HE ISSUE IN DETAIL IN ACCORDANCE WITH LAW AFTER ALLOWING OPPORTUNITY OF H EARING TO THE ASSESSEE. ACCORDINGLY, THIS GROUND OF APPEAL OF THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSE. 46. IN THE RESULT, THE APPEAL OF THE REVENUE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. I.T.A. NO. 1391/MDS/2008 [A.Y. 2006-07] 47. THE ASSESSEE IS A LEADING MUSIC DIRECTOR. A SE ARCH WAS CONDUCTED UNDER SECTION 132 OF THE INCOME TAX ACT ON 26.10.2005 IN THE PREMISES OF SHRI YUVVAN SANKAR RAJA AT 2C/38, MURUGESAN STREET, T. NAGAR, C HENNAI 17. DURING THE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 26 COURSE OF SEARCH CERTAIN DOCUMENTS SUSPECTED TO BE INCRIMINATING WERE SEIZED. SUBSEQUENTLY NOTICE UNDER SECTION 153A OF THE ACT W AS ISSUED TO THE ASSESSEE AND IN RESPONSE TO THAT, THE ASSESSEE FILED THE RET URN OF INCOME ON 22.09.2006 DECLARING TOTAL INCOME OF .53,49,899/-. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 153A OF THE ACT BY ASSESSING TOTAL INCOME OF THE ASSESSEE AT .79,46,632/-. IN THE ASSESSMENT ORDER, THE ASSESSIN G OFFICER HAS DISPUTED AN AMOUNT OF .5,69,754/- TOWARDS TRAVELLING EXPENSES AND CONVEYA NCE AND .25,96,733/- TOWARDS STUDIO HIRE CHARGES. WITH REGA RD TO THE CLAIM OF EXPENDITURE OUT OF PROFESSIONAL RECEIPTS, SINCE THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT SUPPORTED BY ANY REGULAR BOOKS OF ACCOUNTS 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 WEB SIDES MA INTAINED BY THE STARS, TRADE BODIES AND RENOWNED JOURNALISTS FROM WHICH THE INFO RMATION CAN BE OBTAINED. BASED ON THE ABOVE ADVISE OF THE BOARD AND CONSIDER ING THE NATURE OF EXPENSES, THE ASSESSING OFFICER MADE ENQUIRIES AND ACCORDINGL Y, HE CAME TO A CONCLUSION THAT THE IN MOST OF THE CASES, THE EXPENSES LIKE CO NVEYANCE, BOARDING AND LODGING, ETC. ARE BORNE BY THE PRODUCER OF THE FILM HIMSELF AND THE LIABILITIES OF THE ASSESSEE ARE NEGLIGIBLE IN THIS RESPECT. THEREFORE, HE CAME TO A CONCLUSION THAT THE PRODUCER TAKES RESPONSIBILITY OF MEETING ALMOST EVERY NEED OF AN ARTIST INCLUDING THE FOOD, DRINKS, COSTUMES, TRAVELLING, B OARDING, ETC. OBVIOUSLY, ANY PRODUCER OR DIRECTOR OF THE MOVIE WOULD LIKE TO KEE P ANY ARTIST IN A COMFORTABLE I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 27 POSITION, SO AS TO TAP THE MAXIMUM POSSIBLE OUT OF SUCH ARTISTS. ACCORDINGLY, HE MADE DISALLOWANCE OF TRAVELLING & CONVEYANCE EXPENS ES AND STUDIO HIRE CHARGES AMOUNTING TO .25,96,733/-. 48. BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED THAT REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED WHICH WERE DULY AUDITED AN D THE TAX AUDIT REPORT WAS ENCLOSED ALONG WITH THE RETURN OF INCOME. IT WAS AL SO SUBMITTED THAT IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT, AN ADD ITIONAL INCOME OF .13,85,000/- WAS OFFERED ON ACCOUNT OF PERSONAL EXPENSES ETC. AN D THERE IS NO JUSTIFICATION IN MAKING ADDITION ON TRAVEL EXPENSES ACCOUNT. IT WAS ALSO SUBMITTED BEFORE THE LD. CIT(APPEALS) THAT THE STUDIO HIRE CHARGES ARE PAID TO VARIOUS STUDIES THROUGH CHEQUES FOR THE PURPOSE OF RECORDING AND THERE IS N O PERSONAL ELEMENT IN THIS EXPENSES. THE LD. CIT(APPEALS), AFTER CONSIDERING T HE SUBMISSIONS OF THE ASSESSEE AND ALSO DETAILS FILED BY THE ASSESSEE, DE LETED THE ADDITION ON ACCOUNT OF TRAVELLING EXPENSES AND STUDIO HIRE CHARGES HAS BEEN REDUCED FROM .25,96,733/- TO .60,000/-. 49. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 50. THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFICER AND STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER. 51. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASS ESSEE HAS SUBMITTED THAT REGULAR BOOKS OF ACCOUNTS WERE MAINTAINED WHICH WER E DULY AUDITED, THE TAX I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 28 AUDIT REPORT WAS ENCLOSED ALONG WITH THE RETURN OF INCOME AND HE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(APPEALS). 52. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIAL S ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE CASE O F THE ASSESSING OFFICER IS THAT THE ASSESSEE IS BEING A MUSIC DIRECTOR, THE EXPENSE S INCURRED TOWARDS TRAVEL AND STUDIO HIRE CHARGES HAS TO BE INCURRED BY THE PRODU CER OF THE FIRM. SINCE THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT SUPPORTED BY ANY REGULAR BOOKS OF ACCOUNTS OR VOUCHERS AND TO COME TO THE ABOVE CONCL USION, THE ASSESSING OFFICER APPROACHED THE CBFC AUTHORITIES, WHO ADVISE D THE ASSESSING OFFICER CERTAIN SOURCES LIKE WEB SITES MAINTAINED BY THE ST ARS, TRADE BODIES AND RENOWNED JOURNALISTS AND THEREAFTER, HE DISALLOWED THE CLAIM MADE BY THE ASSESSEE. ON APPEAL, THE LD. CIT(APPEALS) GAVE A SP ECIFIC FINDINGS THAT THE TOTAL FEE RECEIPT BY HE ASSESSEE AS MUSIC DIRECTOR AMOUNT S TO .1,44,84,648/- AND THE PROFIT AND LOSS ACCOUNT AND THE BOOKS OF ACCOUNT SH OW TOTAL EXPENSES OF .20,26,979/- FOR STUDIO HIRE CHARGES. THIS STUDIO C HARGES EXPENSE WAS INCURRED FOR THE PURPOSE OF RECORDING MUSIC FOR THE FILM AGA INST WHICH THE FEE OF .1,44,84,648/- HAS BEEN RECEIVED. ALL THESE EXPENSE S ARE DULY VOUCHED AND DULY RECORDED IN THE BOOKS OF ACCOUNTS. WITH THE AB OVE FINDINGS, THE LD. CIT(APPEALS) DELETED THE ADDITION ON ACCOUNT OF TRA VELLING EXPENSES AND STUDIO HIRE CHARGES HAS BEEN REDUCED FROM .25,96,733/- TO .60,000/-. AT THE TIME OF HEARING, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY BOOKS OF I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 29 ACCOUNTS BEFORE THE ASSESSING OFFICER. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT REGULAR BOOKS OF ACCOUN TS WERE MAINTAINED WHICH WERE DULY AUDITED AND THE TAX AUDIT REPORT WAS ENCL OSED ALONG WITH THE RETURN OF INCOME. ON PERUSAL OF THE ASSESSMENT ORDER, THE ASS ESSING OFFICER HAS STATED THAT THE EXPENSES CLAIMED BY THE ASSESSEE ARE NOT SUPPORTED BY ANY REGULAR BOOKS OF ACCOUNTS OR VOUCHERS, WHICH VIRTUALLY MEA NS, THE ASSESSING OFFICER HAS NOT COME ACROSS ANY BOOKS OF ACCOUNTS OR VOUCHERS A S STATED TO HAVE BEEN FILED BY THE ASSESSEE ALONG WITH THE RETURN. THE LD. CIT( APPEALS) IN HIS ORDER AT PARA 4.2 HAS STATED THAT HE HAS EXAMINED THE RECORDS AND BOOKS OF ACCOUNTS. IF IT IS SO, WE ARE OF THE CONSIDERED OPINION THAT THE LD. C IT(APPEALS) SHOULD HAVE OBTAINED REMAND REPORT FROM THE ASSESSING OFFICER O N THE BOOKS OF ACCOUNTS/RECORDS AS STATED TO HAVE BEEN EXAMINED BY THE LD. CIT(APPEALS) BEFORE ARRIVING ANY CONCLUSION. FURTHER, THE ASSESS ING OFFICER HAS STATED THAT HE HAS APPROACHED THE CBFC IN CONNECTION WITH THE ABOV E ADDITIONS. FOR MAKING ANY ADDITION, THE ASSESSING OFFICER SHOULD HAVE SUP PORTIVE EVIDENCE AND THE ASSESSING OFFICER HAS NOT STATED IN THE ASSESSMENT ORDER THAT BASED ON WHICH EVIDENCE HE MADE THE ABOVE ADDITIONS. SINCE THE LD. CIT(APPEALS) HAS NOT OBTAINED ANY REMAND REPORT FROM THE ASSESSING OFFIC ER, WE SET ASIDE THE ORDER OF THE LD. CIT(APPEALS) AND DIRECT THE ASSESSING OFFIC ER TO DECIDE THE ISSUE AFRESH BASED ON MATERIAL EVIDENCE IN ACCORDANCE WITH LAW, AFTER ALLOWING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY , THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NOS SS S. .. .1388 1388 1388 1388- -- -1391 1391 1391 1391/M/ /M/ /M/ /M/08 0808 08 30 53. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 54. TO SUM UP, THE REVENUES APPEALS IN I.T.A. NO. 1388/MDS/2008 FOR THE ASSESSMENT YEAR 2003-04 IS DISMISSED; I.T.A. NO. 13 89/MDS/2008 FOR THE ASSESSMENT YEAR 2004-05 IS ALLOWED FOR STATISTICAL PURPOSE; I.T.A. NO. 1390/MDS/2008 FOR THE ASSESSMENT YEAR 2005-06 IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE AND I.T.A. NO. 1391/MDS/2008 FOR THE ASSESS MENT YEAR 2006-07 IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE 26 TH OF SEPTEMBER, 2014 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 26.09.2014 VM/- . * (',/0 10%, /COPY TO: 1. &' / APPELLANT, 2. ()&' / RESPONDENT, 3. 2 ( ) /CIT(A), 4. 2 /CIT, 5. 03 (',' /DR & 6. 4! 5 /GF.