ACIT, CHENNAI V. R. Sarath Kumar, CHENNAI

ITA 1739/CHNY/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2630 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2016
• Appeal Filed By: Department
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 10-09-2013
• Court: TRIBUNAL
• Department Lawyers: M M BHUSARI CIT D R
• Assessee Lawyers: A S SRIRAMAN
• Section: 143(3); 145; 12

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1739 /MDS./2013 ( / ASSESSMENT YEAR :2008-09) ASSISTANT COMMISSIONER OF INCOME TAX, MEDIA CIRCLE-II, CHENNAI-34. VS. SHRI R.SARATH KUMAR , 12,KALYANI NAGAR, KOTIVAKKAM, CHENNAI 600 041. PAN AASPS 7005 B ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT ) / APPELLANT BY : MR.M.M..BHUSARI,CIT,D.R / RESPONDENT BY : MR.A.S.SRIRAMAN,ADVOCATE / DATE OF HEARING : 03.03.2016 ! /DATE OF PRONOUNCEMENT : 11.03.2016 . / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE IS DIRECTED A GAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-IV, CH ENNAI DATED 12.06.2013 PERTAINING TO THE ASSESSMENT YEAR 2008- 09 . ITA NO.1739/MDS/2013 2 2. THE FIRST GRIEVANCE OF THE REVENUE IN ITS APP EAL IS THAT CIT(A) ERRED IN DELETING THE ADDITION MADE TOWARDS THE PRO FESSIONAL RECEIPTS OF ` 94.73 LAKHS AS INCOME FOR THE YEAR UNDER CONSIDERA TION. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A FILM ACTOR. HE HAS TAKEN AN ADVANCE OF ` 94,73,330/- TO ACT IN FILM JAGGUBAI. HE HAS TAKEN A CREDIT OF THE TDS CERTIFICATE IN RES PECT OF THIS INCOME. FURTHER CORRESPONDING INCOME HAS NOT OFFERED AND TH E SAME HAS OFFERED TO TAX IN THE ASSESSMENT YEAR 2010-11, AND THE AO GOING THROUGH THE TDS, HE BROUGHT THE ENTIRE AMOUNT FOR T AXATION IN ASSESSMENT YEAR 2008-09. ON APPEAL, THE LD.CIT(A) D ELETED THE ADDITION ON THE REASON THAT THE AMOUNT WAS SUBJECT TO TAX FOR ASSESSMENT YEAR 2010-11. IT WAS ONLY AN ADVANCE RE CEIVED IN ASSESSMENT YEAR 2008-09. AGAINST THIS THE REVENUE WAS IN APPEAL BEFORE US. 4. AFTER HEARING BOTH THE PARTIES, WE ARE OF THE O PINION THAT SIMILAR ISSUE CAME CONSIDERATION BEFORE THIS TRIBUNAL IN TH E CASE OF SHRI ITA NO.1739/MDS/2013 3 MR.R.S.SURIYA VS. ACIT, CHENNAI IN ITA NO.1944 TO 1 946/MDS./2014 VIDE ORDER DATED 30TH JUNE, 2015 WHEREIN IT WAS HEL D THAT:- 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUT HORITIES AND THE DECISIONS RELIED ON. IN THIS CASE, SEARCH WAS C ONDUCTED IN THE PREMISES OF THE ASSESSEE ON 19.01.2010 AND ASSE SSMENTS WERE COMPLETED FOR THE ASSESSMENT YEARS 2004-05 TO 2006-07 ON 30.12.2011 AND WHILE COMPLETING ASSESSMENTS, THE ASSESSING OFFICER ASSESSED VARIOUS AMOUNTS RECEIVED BY THE ASSESSEE AS ADVANCES FROM PRODUCERS. ON GOING THROU GH THE ASSESSMENT ORDERS, WE FIND THAT NO INCRIMINATING MA TERIALS WERE FOUND SO AS TO BRING THESE AMOUNTS TO TAX IN SEARCH ASSESSMENTS. WE ALSO FIND THAT SIMILAR ADVANCES WER E BROUGHT TO TAX WHILE COMPLETING ASSESSMENTS UNDER SECTION 1 43(3) OF THE ACT FOR ALL THESE THREE ASSESSMENT YEARS BY THE ASS ESSING OFFICER AND WHEN THE MATTER CARRIED ON APPEAL, THE TRIBUNAL DELETED THE ADDITIONS FOR THESE ASSESSMENT YEARS IN ITA NOS. 596 & 597/MDS/2009 DATED 21.08.2009 FOR THE ASSESSM ENT YEARS 2004-05 & 2005-06 AND BY ITA NO.1329/MDS/200 9 DATED 19.01.2010 FOR THE ASSESSMENT YEAR 2006-07. WE ALSO FIND FROM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S) THAT THOUGH ASSESSEE PRODUCED THESE ORDERS OF THE TRIBUN AL, HE FAILED TO FOLLOW THESE ORDERS STATING THAT ASSESSEE HAS NOT PRODUCED THE WRITTEN AGREEMENTS AND THEREFORE, HE W AS OF THE VIEW THAT UNLESS WRITTEN AGREEMENTS ARE PRODUCED, O RDERS CANNOT BE FOLLOWED AND HE TRIED TO DISTINGUISH THE ORDERS PASSED ITA NO.1739/MDS/2013 4 BY THE TRIBUNAL. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRING TO PAGE 18 OF THE PAPER BOOK, WHICH IS PA RA 5 OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL ORDER FOR THE ASSES SMENT YEARS 2004-05 AND 2005-06, BROUGHT TO OUR ATTENTION WHERE IN THERE IS A SPECIFIC FINDING BY THE CO-ORDINATE BENCH STATING THAT NO WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND PRODUCERS OF FIL MS WERE ENTERED INTO. THEREFORE, IN THE ABSENCE OF ANY WRI TTEN AGREEMENT THE COMMISSIONER OF INCOME TAX (APPEALS) SHOULD NOT HAVE TRIED TO DISTINGUISH THE ORDERS OF THE TRI BUNAL AND REFUSED TO FOLLOW THE SAME. ON GOING THROUGH THE OR DERS OF THE TRIBUNAL, WE FIND THAT THE ISSUE IN APPEAL IS ALREA DY DECIDED IN THE PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. 6. THE CO-ORDINATE BENCH IN ITA NOS. 596 & 597/MDS/ 2009 DATED 21.08.2009 WHILE ARRIVING AT THE CONCLUSION T HAT TOKEN ADVANCES RECEIVED BY THE ASSESSEE CANNOT BE ASSESSE D AS INCOME OF THE ASSESSEE DURING THESE ASSESSMENT YEAR S OBSERVED AS UNDER:- 5. AFTER CONSIDERING THE RIVAL CONTENTIONS AND THE MATERIALS ON RECORD, WE FIND THAT THE ADVANCES WERE RECEIVED BY THE ASSESSEE FOR TAKING UP THE ASSIGNMENT OF ACTING IN THE FILMS IN FUTURE. THERE IS NO WRITTEN AGREEMENT BETWEEN THE ASSESSEE AND TH E PRODUCERS OF THE FILMS. THE ASSESSEE HAS SHOWN THESE ADVANCES AS LIABILITY IN THE BALANCE SHEETS AND IN VIEW OF THE PECULIAR F ACT THAT IN THE SUBSEQUENT YEARS THESE ADVANCES WERE RETURNED BY THE ASSESSEE AS THE PROPOSED ASSIGNMENTS WERE NOT MATER IALIZED THE ITA NO.1739/MDS/2013 5 ADVANCE TOKEN RECEIPT CANNOT PARTAKE THE CHARACTER OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE COMMIS SIONER OF INCOME TAX (APPEALS) HAS RELIED UPON THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF LAKSHMINARAYANA FILMS VS . CIT (SUPRA), WHEREIN THE AMOUNTS WERE TO BE RECEIVED BY THE ASSE SSEE AS PER THE WRITTEN AGREEMENT AND ON COMPLETION OF CERTAIN FORMALITIES IN FUTURE. THEREFORE, THE HONBLE HIGH COURT HAS HELD THAT THE AMOUNTS WOULD BE INCOME OF THE ASSESSEE IN THE YEAR IN WHICH THE SAID AMOUNTS WERE RECEIVED ON COMPLETION OF THE CON DITIONS AS PER THE AGREEMENT AND CANNOT BE SAID AS ACCRUED AT THE TIME OF EXECUTION OF AGREEMENT. IN OUR VIEW, THE FACTS OF T HE CASE IN HAND ARE DISTINGUISHABLE AND THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT RELIED UPON BY THE CIT(A) IS NOT DIRECTL Y APPLICABLE BECAUSE IN THE PRESENT CASE THERE IS NO WRITTEN AGR EEMENT AS WELL AS THERE IS NO DATES ON WHICH THE AMOUNTS TO BE PAI D ON FULFILLMENT OF CERTAIN CONDITIONS. 6 . FROM THE FACTS OF THE PRESENT CASE, WE FIND THAT TH ESE TOKEN AMOUNTS WERE RECEIVED BY THE ASSESSEE FOR GIVING PR EFERENCE TO THE PARTIES FOR MAKING HIMSELF AVAILABLE FOR FUTURE ASSIGNMENTS, IF FINALIZED AFTER DELIBERATIONS AND CONSIDERATION OF VARIOUS FACTORS AND CRITERIA. WHICH MEANS THAT BY RECEIVING THESE ADVANCES AS TOKEN AMOUNTS, THE ASSESSEE IS BINDING NOT TO TAKE UP ANY OTHER ASSIGNMENT PRIOR TO FINALIZING THE PROPOSED ASSIGNM ENT? IT IS ALSO IMPORTANT TO NOTE THAT ON ACCEPTING THE AMOUNTS, T HE ASSIGNMENTS ITSELF IS NOT FINALIZED BUT THE FINALIZATION OF THE ASSIGNMENT IS ALSO DEPENDANT ON ACCEPTANCE OF THE TERMS AND CONDITION S MUTUALLY BY BOTH THE PARTIES. WHEN THE ASSESSEE HAS RETURNED TH ESE AMOUNTS IN THE SUBSEQUENT YEARS AS THE PROPOSED ASSIGNMENT WERE NOT ITA NO.1739/MDS/2013 6 MATERIALIZED THEN IT WOULD NOT BE PROPER AND APPROP RIATE TO TREAT THESE AMOUNTS AS INCOME OF THE ASSESSEE. IN THE CAS E OF SHRI S.PRIYADARSAN VS. JCIT (SUPRA), THE TRIBUNAL HAS HE LD IN PARA 5 AS UNDER:- '5. AFTER CAREFULLY CONSIDERING THE RECORD AVAILABLE WITH THE TRIBUNAL AND IN THE LIGHT OF THE ARGUMENTS ADVANCED ON BEHALF OF BOTH THE PARTIES, WE FIND THAT THE ASSESSEE HAD SHOWN THE DISPUTED AMOUNT OF RS.25 LAKHS IN THE LIST OF SUNDRY CREDITORS IN THE BALANCE SHEET FILED BY HIM FOR THE PERIOD ENDING 31 ST MARCH, H97. AS PER THE CONTENTION OF THE ASSESSEE ONLY THAT PART OF THE ADVANCE IS TREATED AS INCOME FOR WHICH HE RENDERED SERVICE TO THE GIVER OF THE ADVANCE AND THE BALANCE WAS SHOWN AS CREDIT IN THE ACCOUNTS. SO WHEN ONCE THE SAID ADVANCE IS SHOWN AS CREDIT THE SAME CANNOT BE TREATED AS INCOME OF THE ASSESSEE UNDER ANY STRETCH OF IMAGINATION. IT IS NOT THE CASE OF THE REVENUE THAT THE SAID ADVANCE GIVERS WERE EXAMINED AND THAT SERVICE WAS RENDERED BY THE ASSESSEE TO THEM DURING THE PERIOD. THEREFORE, IN OUR CONSIDERED OPINION AND IN THE LIGHT OF THE SUPREME COURT DECISION CITED SUPRA THERE IS NO PART OF THE SAID ADVANCE ACCRUED TO THE ASSESSEE TO CONSTITUTE INCOME TO BE CHARGEABLE TO TAX DURING THE PERIOD. THEREBY THE ADDITION OF ` 25 LAKNS TO THE RETURNED INCOME OF THE ASSESSEE IS UNSUSTAINABLE UNDER LAW AND IT IS TO BE SET ASIDE.' 7. SIMILARLY, IN THE CASE OF K.K. KHULLAR VS. DEPU TY COMMISSIONER OF INCOME TAX, THE DELHI BENCHES OF THIS TRIBUNAL HAS HELD IN PARAGRAPH 8 AND 9 AS UNDER: '8. WE HAVE CONSIDERED THE FACTS OF THE CASE AND RIVAL SUBMISSIONS. WE MAY REFER TO THE CHARGING SECTION 4 OF THE ACT TO THE EFFECT THAT INCOME TAX SHALL BE CHARGED FOR ANY ASSESSMENT YEAR (IT THE RATE OR RATES ITA NO.1739/MDS/2013 7 PROVIDED IN ANY CENTRAL ACTS IN RESPECT OF THE TOTAL INCOME OF THE PREVIOUS YEAR OF EVERY PERSON. SECTION 5 DEALS WITH THE 'SCOPE OF TOTAL INCOME', WHICH IS DEFINED IN RESPECT OF ANY PREVIOUS YEAR IN TERMS OF ACCRUAL, DEEMED ACCRUAL, RECEIPT AND DEEMED RECEIPT, ETC. SECTION 145 DEALS WITH THE METHOD OF ACCOUNTING IN RESPECT OF 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' OR 'INCOME FROM OTHER SOURCES'. THUS, WHILE SECTIONS 4 AND 5 DEAL WITH THE SCOPE OF INCOME AND ITS CHARGE TO INCOME TAX, SECTION 1.45 IS A PROCEDURAL SECTION REGARDING THE METHOD TO BE FOLLOWED FOR RECORDING OF INCOME IN THE BOOKS OF ACCOUNT. IT IS NO DOUBT TRUE THAT FOR THE ASSESSMENT YEAR 1997-1998 AND ONWARDS, THE ASSESSEE CAN FOLLOW EITHER THE CASH OR THE MERCANTILE SYSTEM OF ACCOUNTING AND THE HYBRID SYSTEM OF ACCOUNTING IS PROHIBITED. HOWEVER, WHAT IS TO BE TAXED IS INCOME AND RECEIPT OF AN AMOUNT IS NOT BE THE BASIS FOR THE LEVY OF THE TAX. IN THE CASE OF MESSRS. SHOORJI VALLABHDAS AND COMPANY [1962] 46 ITR 144, THE HON'BLE SUPREME COURT POINTED OUT THAT THE INCOME TAX ACT TAKES INTO ACCOUNT TWO POINTS OF TIME ON WHICH THE LIABILITY TO TAX IS ATTRACTED NAMELY - (I) ACCRUAL OF INCOME OR (II) RECEIPT OF INCOME. IT IS FURTHER MENTIONED THAT THE SUBSTANCE OF THE MATTER IS 'INCOME'. IT MAY BE EMPHASIZED THAT IT IS ACCRUAL OF INCOME OR RECEIPT OF INCOME THAT CAN BECOME THE SUBJECT MATTER OF TAX AND IT IS THE INCOME WHICH HAS TO BE RECORDED AS PER THE SYSTEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE IN VIEW OF SECTION 145 OF THE ACT, BECAUSE THE SUBSTANCE OF THE MATTER IS 'INCOME'. THEREFORE, THERE IS AN INFIRMITY IN THE ORDER OF THE LEARNED COMMISSION OF INOME TAX (APPEALS) IN PARAGRAPH 4.7 WHERE IT WAS STATED THAT THE ENTIRE AMOUNT RECEIVED WHETHER ARREARS OR ADVANCE IS TO BE SHOWN AS INCOME UNDER THE CASH SYSTEM OF ACCOUNTING. THE CORRECT ITA NO.1739/MDS/2013 8 POSITION WOULD BE THAT THE ENTIRE INCOME RECEIVED, WHETHER ARREAR OR ADVANCE OF INCOME HAS TO BE SHOWN AS INCOME UNDER THE CASH SYSTEM OF ACCOUNTING. COMING TO THE FACTS OF THIS CASE, THE ASSESSEE RECEIVED CERTAIN AMOUNTS FOR SERVICES TO BE PERFORMED OVER A PERIOD OF TIME, THE AMOUNT RELATABLE TO THE SERVICES RENDERED IN THE YEAR UNDER CONSIDERATION WAS SHOWN AS INCOME, THE REASON BEING THAT THE ASSESSEE BECAME ENTITLED TO RECEIVE THAT AMOUNT FROM THE CLIENT IN RESPECT OF THE SERVICES RENDERED. IN OTHER WORDS, DEBT TO THE EXTENT OF THE AMOUNT PERTAINING TO SERVICES RENDERED ONLY GOT VESTED IN THE ASSESSEE. THE REST OF THE AMOUNT WAS TAKEN AS LIABILITY TO BE ADJUSTED IN SUBSEQUENT YEARS AS AND WHEN THE SERVICE WAS RENDERED. IT IS BUT CLEAR THAT THE EXCESS AMOUNT WOULD HAVE TO BE RETURNED IN CASE THE SERVICE WAS NOT PERFORMED IN SUBSEQUENT YEAR AND THEREFORE, IN RESPECT OF SUCH AMOUNT NO DEBT CAME INTO EXISTENCE IN FAVOUR OF THE ASSESSEE. THEREFORE, THIS AMOUNT DID NOT BECOME THE INCOME. ACCORDINGLY, WE ARE OF THE VIEW THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN FINDING THAT THE ASSESSEE WAS FOLLOWING THE HYBRID SYSTEM OF ACCOUNTING ON THE GROUND THAT THE WHOLE OF THE AMOUNT RECEIVED FROM THE CLIENTS AS RETAINERSHIP FEES WAS NOT DECLARED AS INCOME IN THE YEAR OF RECEIPT OF THE AMOUNT 9. COMING TO THE ISSUE OF CONSISTENCY OF ASSESSMENTS, IT MAY BE MENTIONED THAT THE HON'BLE SUPREME COURT ITSELF MENTIONED IN THE CASE OF RADHASOAMI SATSANG [1992] 193 ITR 321{ THAT THEIR FINDINGS SHOULD NOT BE TAKEN AS A GENERAL PROPOSITION OF LAW TO BE FOLLOWED IN EVERY CASE AS IT WAS CONFIRMED TO THE FACTS OF THAT CASE. WE MAY ADD THAT ITA NO.1739/MDS/2013 9 IF A MANIFESTLY WRONG DECISION HAS BEEN TAKEN BY THE ASSESSING OFFICER IN ONE YEAR OR IN A NUMBER OF YEARS/ IT WILL NOT BIND THE ASSESSING OFFICER IN TILE ASSESSMENT OF A SUBSEQUENT YEAR BECAUSE THERE CANNOT BE ANY ESTOPPEL AGAINST THE LAW. HOWEVER, IN THIS CASE, WE FIND THE EARLIER AND SUBSEQUENT ASSESSMENT WERE MADE ON CORRECT APPRECIATION OF THE PRINCIPLE OF THE CASH SYSTEM OF ACCOUNTING. SINCE THE ASSESSEE SUCCEEDS ON MERITS ON THIS ASPECT, THERE IS NO NEED FOR US TO GIVE A FINDING THAT THE ASSESSING OFFICER WAS BOUND IN THIS YEAR TO FOLLOW THE PAST OR FUTURE ASSESSMENT 1/ 8. SINCE, THE FACTS AND CIRCUMSTANCES OF THE CASE IN HAND ARE SIMILAR TO THE CASE RELIED UPON BY THE ASSESSEE. TH EREFORE, FOLLOWING THE DECISION OF THIS TRIBUNAL AS WELL AS THE DELHI BENCHES OF THIS TRIBUNAL; WE HOLD THAT WHEN THE ASSESSEE HAS SHOWN AS THESE ADVANCE RECEIPT AS LIABILITY IN HIS BALANCE SHEET AND TILE ADVANCES WERE NOT ON THE FINALIZATION OF ANY AGREEMENT BUT WERE R ECEIVED AS A TOKEN AMOUNT FOR GIVING A PRIORITY TO THE PARTIES T O NEGOTIATE FOR FUTURE ASSIGNMENT WITHOUT FINALIZING THE TERMS AND CONDITI ONS. WHEN THE FUTURE ASSIGNMENTS WERE NOT MATERIALIZED AND THE AMOUNTS WERE RETURNED, THEN THE SAID ADVANCES CANNOT BE TREATED AS INCOME OF THE ASSESSEE. ACCORDINGLY, WE ASIDE THE ORDERS OF L OWER AUTHORITIES, QUA THIS ISSUE AND DELETE THE ADDITION IN THIS RESP ECT. 7. SIMILARLY, THE CO-ORDINATE BENCH FOR THE ASSESSM ENT YEAR 2006- 07 IN ITA NO.1329/MDS/2009 BY ORDER DATED 19.01.201 0 HELD AS UNDER:- 7. WE HAVE PERUSED THE ORDERS OF THE AUTHORITIES B ELOW AND HEARD THE RIVAL CONTENTIONS. THERE IS NO DISPUTE THAT LD. CIT(A) HAD CONFIRMED THE ADVANCE PROFESSIONAL FEE OF RS.55 LAK HS AS INCOME FOR THE IMPUGNED ASSESSMENT YEAR RELYING ON HIS OWN DECISION IN ASSESSEE'S APPEALS FOR THE ASSESSMENT YEARS 2004-05 & 2005-06. IT IS CLEAR FROM THE ASSESSMENT ORDER ITSELF THA T THE AMOUNTS RECEIVED BY THE ASSESSEE FROM M/S. PHOTON FACTORY AND M/S.STUDIO ITA NO.1739/MDS/2013 10 GREEN WERE NOT AGAINST ANY PARTICULAR FILMS. ASSESS EE'S CONTENTION THAT INCOME COULD NOT BE RECOGNIZED TILL THE ARTIST HAD ACTED IN THE FILM, FOR WHICH THE ADVANCES WERE RECEIVED, CARRIES GREAT STRENGTH. STORYLINE WAS NOT FIXED, NEITHER WAS THE NAME, NOT EVEN THE CO- ARTISTS WERE KNOWN. JUST BECAUSE ASSESSEE WAS FOLLO WING THE CASH SYSTEM, IT WAS NOT OBLIGED TO CONSIDER ALL SUMS REC EIVED BY IT AS INCOME UNLESS SUCH RECEIPT COULD BE CATEGORIZED AS INCOME. WHETHER IT IS CASH SYSTEM OR MERCANTILE SYSTEM, A RECEIPT CAN BE TREATED AS INCOME ONLY IF SUCH INCOME CAN BE CONSIDERED AS RECOGNIZED. JUST BECAUSE ASSESSEE AD RECEIVED AN AM OUNT OF ADVANCE SUCH SUM CANNOT BE TREATED AS INCOME, ONLY FOR A REASONING THAT IT WAS FOLLOWING CASH SYSTEM OF ACCO UNT. IT IS ON ACCOUNT OF THIS REASON THAT IN ASSESSEE'S OWN CASE FOR EARLIER YEARS, THIS TRIBUNAL HAD HELD THAT IT WOULD NOT BE PROPER AND APPROPRIATE TO TREAT PROFESSIONAL ADVANCE RECEIVED AS INCOME, UNLESS UNTIL PROPOSED ASSIGNMENTS HAD MATERIALIZED . THOUGH THE LD. DR PUT GREAT EFFORTS TO SUBMIT THAT FACT SITUAT ION FOR THE IMPUGNED ASSESSMENT YEAR COULD HAVE BEEN DIFFERENT FROM THAT OF THE EARLIER YEARS, WHICH WAS DEALT WITH BY THE TRIB UNAL IN ITA NO. 596 / 597/MDS/2009 AS AFORESAID. WE FIND THAT LD. C IT(A) HAD CONFIRMED THE ORDER OF THE ASSESSING OFFICER FOR TH E IMPUGNED ASSESSMENT YEAR BASED ON HIS OWN DECISION FOR THE E ARLIER YEARS, WHICH WAS LATER REVERSED BY THE TRIBUNAL. AS FOR TH E RELIANCE PLACED BY THE LD. COUNSEL FOR THE REVENUE ON THE DE CISIONS OF A. RAMKI (SUPRA) AND D .MEENA; THE FORMER CASE WAS DEC IDED RELYING ON THE LATTER DECISION. IF WE ADVERT TO THE DECISIO N OF D.MEENA'S CASE, THERE THE ASSESSEE WHO WAS ALSO A CINE ARTIST , HAD RECEIVED ADVANCE ON THE BASIS OF A CONTRACT FOR ACTING IN A FILM. IN OTHER WORDS, THERE WAS A SUBSISTENT CONTRACT FOR- ACTING IN A PARTICULAR- FILM, WHEREAS IN THE GIVEN CASE THE ADVANCES WERE R ECEIVED FROM TWO PARTIES WITH NO CLEAR CRYSTALLIZATION OF FILM OR THE STORYLINE OR OTHER ASPENS OF THE PROPOSED FILM. HENCE, WE ARE OF THE OPINION THAT D. MEENA' S CASE (SUPRA) IS NOT APPLICABLE HER E ON FACTS. IN ANY EVENT, SINCE THIS TRIBUNAL HAD TAKEN A VIEW IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR EARLIER YEARS ON SIMILAR FACT SITUATION, WE FIND NO COMPELLING REASONS TO DEPART FROM THE VIEW TAKEN EARLIER. THEREFORE, WE FIND THAT AMOUNT OF ` 55 LAKHS RECEIVED BY THE ASSESSEE AS ADVANCE COULD NOT HAVE BEEN TREA TED AS HIS INCOME FOR THE IMPUGNED ASSESSMENT YEAR. SUCH ADDIT ION STANDS DELETED. GROUNDS NUMBER 2 TO 9 OF THE ASSESSEE ARE ALLOWED. ITA NO.1739/MDS/2013 11 WE ALSO FIND THAT THE CO-ORDINATE BENCH HAS DISTING UISHED THE DECISIONS RELIED ON BY THE DEPARTMENTAL REPRESENTATIVE IN THE CASE OF MS. D.MEENA (SUPRA) AND THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF LAKSHMINARAYANA FILMS VS. CIT (SUPRA),WHILE ARRIVIN G AT THE CONCLUSION THAT ADVANCES RECEIVED BY THE ASSESSEE CANNOT BE TA XED AS INCOME OF THE ASSESSEE FOR THE RESPECTIVE ASSESSMENT YEARS. 8. IT IS ALSO FURTHER NOTICED THAT IN ASSESSEES OW N CASE, THE TRIBUNAL FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO.1241/MDS/2013 BY ORDER DATED 8.4.2015 HAS TAKEN A SIMILAR VIEW HOLDING THAT INCOME HAS NOT CRYSTALLIZED TO T HE ASSESSEE. 9. RESPECTFULLY FOLLOWING THE SAID ORDERS, WE HOLD THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM VARIOUS PRODU CERS TOWARDS ADVANCES CANNOT BE ASSESSED AS INCOME OF TH E ASSESSEE. THEREFORE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND DELETE THE ADDITIONS IN RESPECT OF THE ADVANCES TREATED AS INCOME OF THE ASSESSEE. 10. IN THE RESULT, ALL THESE APPEALS OF THE ASSESSE E ARE ALLOWED. IN VIEW OF THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL CITED ABOVE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF TH E CIT(A) AND DISMISS THIS GROUND TAKEN BY THE REVENUE. ITA NO.1739/MDS/2013 12 5. THE SECOND GRIEVANCE OF THE REVENUE IN ITS APPE AL IS THAT CIT(A) ERRED IN DELETING THE ADDITION MADE ON INTER EST ON OD TO THE EXTENT OF ` 13.16 LAKHS AS PERSONAL EXPENDITURE IN NATURE. 6. IN THIS CASE, THE ASSESSEE IS SAID TO BE INCURR ED INTEREST EXPENDITURE OF ` 26,24,763/-. THE ASSESSEE HIMSELF DISALLOWED ` 6,56,191/- TOWARDS PERSONAL EXPENDITURE. THE AO D ISALLOWED 75% OF THE INTEREST COMING TO ` 26,24,763/- AND DISALLOWED ANOTHER AMOUNT OF ` 13,12,381/-. THUS, TOTALLY WORKED OUT AT ` 1,97,75,702/- TOWARDS PERSONAL EXPENDITURE OF INTEREST. AGAINST THIS, TH E ASSESSEE WAS IN APPEAL BEFORE THE CIT(A). LD.CIT(A) OBSERVED THAT WHEN THE ASSESSEE HIMSELF DISALLOWED 25% OF TOTAL INTEREST E XPENDITURE AT ` 6,56,191/-, THERE IS NO BASIS FOR AO TO DISALLOW AR BITRARILY 75% OF TOTAL INTEREST EXPENDITURE. AGAINST THIS, THE REVE NUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. AS OBSERVED BY THE LD.CIT(A), THE AO HAD N OT BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THE INTEREST EXPEN DITURE INCURRED TO ITA NO.1739/MDS/2013 13 THE EXTENT OF 75% ON HIS PERSONAL PURPOSE. HAD IT BEEN ANY MATERIAL TO SUGGEST THAT THE SO CALLED BORROWED AMOUNT WAS U SED BY THE ASSESSEE FOR HIS PERSONAL BENEFIT, NOT FOR THE PROF ESSIONAL BUSINESS, THE AO WOULD JUSTIFIED. IN THE ABSENCE OF ANY MATE RIAL BROUGHT BY THE AO, WE ARE NOT IN A POSITION TO UPHOLD HIS ORDER. A CCORDINGLY, WE DO NOT INTERFERE WITH THE ORDER OF THE LD.CIT(A) AND T HE SAME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON FRIDAY, THE 11 TH OF MARCH,2016 AT CHENNAI. SD/- SD/- ' # $ . % & ' ( DUVVURU RL REDDY ) ) ( ( ( ) * + ) ) ' CHANDRA POOJARI ', JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 11 TH MARCH,2016 . K S SUNDARAM. -.,, /0,10 /COPY TO: , 1. /APPELLANT 2. /RESPONDENT 3. , 2,'' /CIT(A) 4. , 2 /CIT 5. 034, 5 /DR 6. 4,6 /GF