DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, JALANDHAR V. SHRI RUPINDER SINGH GREWAL ALIAS GIPPY GREWAL , MOHALI

ITA 244/ASR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6246 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 26-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARVINDER KAUR
• Keywords: Search and seizure; Set aside
• Section: 143(3); 142(1)

Judgement Text

P A G E | 1 ITA NO. 244/ASR/2018, A.Y. 2013-14 DCIT VS. SH. RUPINDER SINGH GREWAL ALIAS GIPPY GREW AL IN THE INCOME TAX APPELLATE TRIBUNAL CAMP BENCH AT JALANDHAR BEFORE SHRI N.K SAINI, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 244/ASR/2018 ASSESSMENT YEAR: 2013-14 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II, JALANDHAR. VS. SHRI RUPINDER SINGH GREWAL ALIAS GIPPY GREWAL, H. NO. 1013, SECTOR 67, MOHALI. PAN AODPG2832B (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI JATINDER SHARMA, A.R REVENUE BY: SMT. PARVINDER KAUR, C.I.T, D.R DATE OF HEARING: 15.01.2019 DATE OF PRONOUNCEMENT: 11.03.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(APPEALS)-5, LUDHIANA, DATED 13.02.2018, WHICH IN TURN ARISES FROM THE ASSESSMENT ORDER PASS ED BY THE A.O UNDER SEC. 143(3) OF THE INCOME TAX ACT, 1961(FOR S HORT I.T. ACT) FOR A.Y. 2013-14, DATED 29.02.2016. THE REVENUE ASSAILI NG THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUN DS OF APPEAL:- 1 WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS CORRECT IN ALLOWING 50% OF THE RECEIPT AS EXPENSES AND ALLOWING THE EXPENSES OF RS. 72,84,285/- WHICH WERE NEVER CLAIME D IN THE EARLIER YEAR. 2. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROU NDS OF APPEAL ON OR BEFORE IS HEARD AND DISPOSED OFF. P A G E | 2 ITA NO. 244/ASR/2018, A.Y. 2013-14 DCIT VS. SH. RUPINDER SINGH GREWAL ALIAS GIPPY GREW AL 2. BRIEFLY STATED, SEARCH AND SEIZURE PROCEEDINGS W ERE CONDUCTED AT THE PREMISES OF THE ASSESSEE UNDER SEC. 132(1) OF T HE I.T. ACT ON 05.12.2012. THE ASSESSEE IN HIS STATEMENT RECORDED UNDER SEC. 132(4) OF THE I.T. ACT HAD SURRENDERED A SUM OF RS. 1,01,0 0,778/- FOR A.Y. 2013-14, IN ORDER TO COVER UP ANY DISCREPANCY IN HI S BOOKS OF ACCOUNTS. IN COMPLIANCE TO THE NOTICE ISSUED UNDER SEC. 142(1) THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE YEAR UN DER CONSIDERATION VIZ. 2013-14 ON 11.12.2014, DECLARING TOTAL INCOME AT RS. 1,49,02,000/-. SUBSEQUENTLY, THE CASE OF THE ASSESS EE WAS SUBJECTED TO SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE I.T . ACT. 3. THE A.O WHILE FRAMING THE ASSESSMENT OBSERVED TH AT DURING THE SEARCH AND SEIZURE PROCEEDINGS NO BOOKS OF ACCOUNT S WERE FOUND AT THE PREMISES OF THE ASSESSEE. IT WAS NOTICED BY THE A.O THAT THE ASSESSEE AS AGAINST HIS TOTAL RECEIPTS OF RS. 1,34, 94,382/- HAD CLAIMED EXPENSES TO THE TUNE OF RS. 86,33,724/-, AND HAD SH OWN THE BALANCE NET PROFIT OF RS. 49,01,222/- ONLY. AS THE ASSESSEE DESPITE SPECIFIC DIRECTIONS BY THE A.O FAILED TO PRODUCE SUPPORTING DOCUMENTS AND VOUCHERS SUBSTANTIATING HIS AFORESAID CLAIM OF EXPE NSES, THEREFORE, HE WAS CALLED UPON TO EXPLAIN AS TO WHY HIS INCOME MAY NOT BE DETERMINED AS PER THE EVIDENCE AVAILABLE ON RECORD. AS THE ASSESSEE FAILED TO FORTIFY HIS AFORESAID CLAIM OF EXPENSES, THUS THE A.O LEFT WITH NO OTHER ALTERNATIVE PROCEEDED WITH TO ESTIMATE HIS INCOME. IN THE PROCESS OF THE AFORESAID ESTIMATION OF INCOME THE A .O TOOK SUPPORT OF A CASE OF ANOTHER PROFESSIONAL SINGER AND ACTOR IN TH E PUNJABI FILM INDUSTRY VIZ. SH. DILJIT SINGH DOSANJH, WHO ALIKE T HE ASSESSEE WAS DERIVING INCOME FROM STAGE SHOWS IN INDIA AND ABROA D, RECEIPTS FROM MUSIC ALBUMS, SONGS AND RECEIPTS AS AN ACTOR, AND W AS ALSO SUBJECTED TO SEARCH AND SEIZURE PROCEEDINGS. IT WAS OBSERVED BY THE A.O THAT THE AFOREMENTIONED PERSON VIZ. SH. DILJIT SINGH DOSANJH HAD ALSO NOT P A G E | 3 ITA NO. 244/ASR/2018, A.Y. 2013-14 DCIT VS. SH. RUPINDER SINGH GREWAL ALIAS GIPPY GREW AL MAINTAINED ANY BOOKS OF ACCOUNTS. APART THEREFROM, IT WAS ALSO OBSERVED BY THE A.O THAT THE CAREER GRAPHS OF BOTH THE ASSESSEE AND SH. DILJIT SINGH DOSANJH WAS SIMILAR, BECAUSE BOTH OF THEM HAD STARTED THEIR RESPECTIVE CAREERS IN THE YEAR 2005-2 006 THROUGH ONE OR TWO ALBUMS AND STAGE SHOWS. SIMILARLY, BY THE YEAR 2010 BOTH OF THEM HAD GOT RESPECTIVE CHANCES TO ACT IN PUNJABI MOVIES . ON THE BASIS OF HIS AFORESAID DELIBERATIONS THE A.O HELD A STRONG C ONVICTION THAT THE CASE OF SIMILARLY PLACED PROFESSIONAL SINGER AND AC TOR VIZ. SH. DILJIT SINGH DOSANJH COULD SAFELY BE ADOPTED AS A COMPARAB LE FOR ESTIMATING THE INCOME OF THE ASSESSEE. HOWEVER, IT WAS OBSERVE D BY THE A.O THAT AS SH. DILJIT SINGH DOSANJH HAD OFFERED ADDITIONAL INCOME BEFORE THE SETTLEMENT COMMISSION, THUS THE ESTIMATION OF THE E XPENSES IN THE CASE OF THE ASSESSEE WERE TO BE BENCHMARKED AFTER C ONSIDERING THE SAID MATERIAL FACT. ON THE BASIS OF HIS AFORESAID O BSERVATIONS THE A.O CONCLUDED THAT THE ALLOWABLE EXPENSES IN THE HANDS OF THE ASSESSEE WERE TO BE RESTRICTED TO THE EXTENT OF 10% OF HIS T OTAL RECEIPTS. IN THE BACKDROP OF HIS AFORESAID VIEW THE A.O WORKED OUT T HE ALLOWABLE EXPENSES IN THE HANDS OF THE ASSESSEE AT RS. 13,49, 438/- (I.E. 10% OF RS. 1,34,94,382/-). RESULTANTLY, THE A.O DISALLOWED EXPENSES TO THE TUNE OF RS. 72,84,285/- [I.E. RS. 86,33,724/- (-) R S. 13,49,438/-]. ON THE BASIS OF HIS AFORESAID OBSERVATIONS THE A.O INTER ALIA ASSESSED THE TOTAL INCOME OF THE ASSESSEE AT RS. 2,43,55,643/-. 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE CIT(A). IT WAS SUBMITTED BY THE ASSESSEE THAT THE A .O HAD ERRED IN RESTRICTING HIS CLAIM OF EXPENSES ONLY TO THE EXTEN T OF 10% OF HIS TOTAL RECEIPTS. THE CONTENTIONS ADVANCED BY THE ASSESSEE IN ORDER TO IMPRESS UPON THE CIT(A) THAT HIS CLAIM OF EXPENSES WERE SUPPORTED BY VOUCHERS/BILLS, HOWEVER AFTER NECESSARY VERIFICATIO NS DID NOT FIND FAVOUR WITH THE APPELLATE AUTHORITY. INSOFAR THE CO NTENTION OF THE P A G E | 4 ITA NO. 244/ASR/2018, A.Y. 2013-14 DCIT VS. SH. RUPINDER SINGH GREWAL ALIAS GIPPY GREW AL ASSESSEE THAT HIS CASE COULD NOT BE COMPARED WITH T HAT OF SH. DILJIT SINGH DOSANJH WHO WAS MORE POPULAR THAN HIM WAS CON CERNED, THE SAME DID FIND FAVOUR WITH THE CIT(A). HOWEVER, AT T HE SAME TIME THE CIT(A) WAS ALSO NOT PERSUADED TO SUBSCRIBE TO THE C ONTENTION ADVANCED BY THE ASSESSEE THAT HIS CASE COULD BE COM PARED WITH THAT OF AN ANOTHER NRI PROFESSIONAL SINGER VIZ. SH. JASWIND ER SINGH BAINS, WHEREIN THE A.O HAD RESTRICTED THE DISALLOWANCE ONL Y TO THE EXTENT OF 15% OF THE TOTAL EXPENSES THAT WERE CLAIMED BY HIM. THE CIT(A) WAS OF THE VIEW THAT FOR THE PURPOSE OF ESTIMATING THE ALL OWABILITY OF THE EXPENSES THE CASE OF THE ASSESSEE COULD FEASIBLY BE COMPARED WITH THAT OF MS. GURINDER KAUR KAINTH ALIAS MISS POOJA, WHO WAS ALSO COVERED UNDER THE SAME SEARCH AND SEIZURE PROCEEDIN GS. IT WAS OBSERVED BY THE CIT(A) THAT IN THE APPEAL OF MISS P OOJA 50% OF THE TOTAL RECEIPTS WERE ALLOWED AS EXPENSES, AS SHE BEI NG A PROFESSIONAL SINGER/ACTOR HAD ALSO MAINTAINED AN OFFICE FOR WHIC H THE EXPENSES WERE REQUIRED TO BE INCURRED. ON THE BASIS OF HIS A FORESAID OBSERVATIONS THE CIT(A) CONCLUDED THAT ON SIMILAR L INES 50% OF THE EXPENSES COULD SAFELY BE ALLOWED IN THE HANDS OF TH E ASSESSEE. IN THE BACKDROP OF HIS AFORESAID DELIBERATIONS THE CIT(A) ALLOWED AN AMOUNT OF RS. 67,47,191/- (I.E. 50% OF RS. 1,34,94,382/-) AS EXPENSES IN THE HANDS OF THE ASSESSEE, AND AS SUCH ESTIMATED HIS PR OFESSIONAL INCOME AT RS. 67,47,191/-. IT WAS ALSO OBSERVED BY THE CI T(A) THAT ALLOWING OF ONLY 10% OF THE RECEIPTS AS EXPENSES IN THE CASE OF THE ASSESSEE BY THE A.O COULD NOT BE SUSTAINED AS THE SAME WAS NOT BACK ED BY ANY BASIS. APART THEREFROM, IT WAS OBSERVED BY THE CIT(A) THAT AS THE ASSESSEE HAD SURRENDERED AN ADDITIONAL INCOME OF RS. 1,01,00 ,778/-, HENCE NO FURTHER ADDITION WAS CALLED FOR IN CONTEXT OF THE I SSUE UNDER CONSIDERATION AS THE ADDITIONAL INCOME DECLARED WAS MORE THAN THE ESTIMATED INCOME. P A G E | 5 ITA NO. 244/ASR/2018, A.Y. 2013-14 DCIT VS. SH. RUPINDER SINGH GREWAL ALIAS GIPPY GREW AL 5. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF TH E CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LEARNED DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE PASS ED BY THE A.O. IT WAS SUBMITTED BY THE LD. D.R THAT THE A.O HAD RIGHTLY A DOPTED THE CASE OF A SIMILARLY PLACED PROFESSIONAL ACTOR AND SINGER VI Z. SH. DILJIT SINGH DOSANJH FOR ESTIMATING THE ALLOWABLE EXPENSES IN TH E HANDS OF THE ASSESSEE, WHICH HOWEVER HAD WRONGLY BEEN DISLODGED BY THE CIT(A). IT WAS THUS THE CONTENTION OF THE LD. D.R THAT THE ORD ER OF THE CIT(A) BE SET ASIDE AND THAT OF THE A.O IN CONTEXT OF THE ISS UE UNDER CONSIDERATION BE RESTORED. 6. PER CONTRA, THE LEARNED AUTHORIZED REPRESENTATIV E (FOR SHORT A.R) FOR THE ASSESSEE RELIED ON THE ORDER PASSED BY THE CIT(A). IT WAS SUBMITTED BY THE LD. A.R THAT AS SH. DILJIT SINGH D OSANJH WAS A MUCH POPULAR AND RATHER A CELEBRATED PROFESSIONAL ACTOR AND SINGER AS IN COMPARISON TO THE ASSESSEE WHO HAD NOT ATTAINED SUC H HEIGHTS, THUS THE CIT(A) DULY APPRECIATING THE SAID MATERIAL FACT HAD RIGHTLY VACATED THE INFERENCES THAT WERE DRAWN BY THE A.O ON THE BA SIS OF AN INFEASIBLE COMPARISON. IT WAS SUBMITTED BY THE LD. A.R THAT TH E CIT(A) IN ALL FAIRNESS HAD RIGHTLY ADOPTED THE CASE OF MISS POOJA WHO ALIKE THE ASSESSEE WAS A PROFESSIONAL ACTOR AND SINGER OF A S IMILAR STATUS. APART THEREFROM, IT WAS AVERRED BY THE LD. A.R THAT AS TH E ASSESSEE HAD SURRENDERED AN ADDITIONAL INCOME OF RS. 1,01,00,778 /- TO COVER UP ANY DISCREPANCY IN HIS BOOKS OF ACCOUNT, HENCE THE CIT(A) HAD RIGHTLY CONCLUDED THAT AS THE ESTIMATED INCOME OF THE ASSES SEE OF RS. 67,47,191/- WAS LOWER THAN THE DISCLOSED INCOME, TH EREFORE, NO SEPARATE ADDITION WAS CALLED FOR IN HIS HANDS. 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIE S AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE A.O IN HIS GR OUNDS OF APPEAL HAD P A G E | 6 ITA NO. 244/ASR/2018, A.Y. 2013-14 DCIT VS. SH. RUPINDER SINGH GREWAL ALIAS GIPPY GREW AL WRONGLY STATED THAT THE CIT(A) HAD ALLOWED THE EXPE NSES OF RS. 72,84,285/-, AS WE FIND THAT THE LATTER HAD RESTRIC TED THE EXPENSES ALLOWABLE IN THE HANDS OF THE ASSESSEE AT RS. 67,47 ,191/- (I.E. 50% OF THE TOTAL RECEIPTS OF RS. 1,34,94,382/-). WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE BEFORE US AND FIND THAT THE CIT(A) HAD OBSERVED THAT THE CASE OF THE ASSESSEE COULD NOT BE COMPARED WITH THAT OF SH. DILJIT SINGH DOSANJH, AS THE LATTER WAS A MORE POPULAR AND A CELEBRATED PROFESSIONAL ACTOR AND SINGER AS IN CO MPARISON TO THE ASSESSEE. WE MAY HEREIN OBSERVE THAT NEITHER ANY MA TERIAL HAD BEEN PLACED ON OUR RECORD NOR ANY SUCH CONTENTION HAS BE EN ADVANCED BY THE LD. D.R WHICH COULD PERSUADE US TO CONCLUDE THA T THE AFORESAID OBSERVATIONS OF THE CIT(A) SUFFERS FROM ANY PERVERS ITY AND A FEASIBLE COMPARISON COULD SAFELY BE MADE BETWEEN THE ASSESSE E AND SH. DILJIT SINGH DOSANJH. WE THUS DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A), WHO IN OUR CONSIDERED VIEW HAD RIGHTLY CONC LUDED THAT KEEPING IN VIEW THE POPULARITY OF SH. DILJIT SINGH DOSANJH A FEASIBLE COMPARISON COULD NOT BE ARRIVED AT FOR ESTIMATING T HE INCOME OF THE ASSESSEE. IN SO FAR, THE ADOPTION BY THE CIT(A) OF THE CASE OF SMT. GURINDER KAUR KAINTH ALIAS MISS POOJA, A PROFESSION AL ACTOR AND SINGER FOR ESTIMATING THE ALLOWABILITY OF EXPENSES IN THE CASE OF THE ASSESSEE IS CONCERNED, WE FIND THAT NEITHER ANY MATERIAL HAS BEEN PLACED ON OUR RECORD NOR ANY SUCH CONTENTION HAS BEEN ADVANCED BY THE LD. D.R WHICH COULD SHOW THAT THE SAID OBSERVATIONS OF THE FIRST APPELLATE AUTHORITY IS EITHER BASED ON INCORRECT FACTS OR SUF FERS FROM ANY PERVERSITY. RATHER, WE ARE PERSUADED TO SUBSCRIBE T O THE VIEW TAKEN BY THE CIT(A) THAT AS THE STATUS OF SMT. GURINDER KAUR KAINTH ALIAS MS. POOJA AS A PROFESSIONAL SINGER AND ACTOR WAS MORE A LIKE THE ASSESSEE, THUS THE INCOME OF THE ASSESSEE COULD SAFELY BE EST IMATED BY CARRYING OUT A FEASIBLE COMPARISON ON THE BASIS OF THE SAME. WE THUS FINDING NO INFIRMITY IN THE ADOPTION OF THE AFORESAID COMPA RABLE BY THE CIT(A), P A G E | 7 ITA NO. 244/ASR/2018, A.Y. 2013-14 DCIT VS. SH. RUPINDER SINGH GREWAL ALIAS GIPPY GREW AL WHO WE FIND HAD BEEN CAUTIOUS IN NOT ACCEPTING DIFF ERENTLY PLACED ARTISTS VIZ. S/SH. DILJIT SINGH DOSANJH AND JASWIND ER SINGH BAINS, HAD RIGHTLY SELECTED THE CASE OF A SIMILARLY PLACED PRO FESSIONAL ACTOR AND SINGER VIZ. GURINDER KAUR KAINTH ALIAS MISS POOJA F OR ESTIMATING THE INCOME OF THE ASSESSEE. APART THEREFROM, WE ALSO DO NOT FIND ANY INFIRMITY IN THE OBSERVATIONS OF THE CIT(A) THAT AS THE ASSESSEE HAD ALREADY SURRENDERED AN INCOME OF RS. 1,01,00,778/-, HENCE NO SEPARATE ADDITION TO THE SAID EXTENT WAS CALLED FOR IN HIS HANDS. WE THUS IN TERMS OF OUR AFORESAID OBSERVATIONS UPHOLD THE WELL REASONED ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE R EVENUE. 8. THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11/03/2019 SD/- SD/- ( N.K. SAINI) (RAVISH SOOD) VICE PRESIDENT JUDICIAL ME MBER PLACE : CHANDIGARH; DATED 11.03.2019 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. DR, ITAT, CAMP BENCH, JALANDHAR 6. / GUARD FILE. //TRUE COPY// ! / BY ORDER, ' / # $% (DY./ASSTT. REGISTRAR) & '() /ITAT, CAMP. BENCH, JALANDHAR