SUNIL T DOSHI, MUMBAI V. ADDL. CIT RANGE 24(2), MUMBAI

ITA 3208/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1383 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2003-2004
• Appeal Filed On: 14-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANKUR GARG
• Assessee Lawyers: N JAYENDRAN
• Section: 133(6)

Judgement Text

ITA NO. 3208/MUM/2009 ASSESSMENT YEAR : 2003-04 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI D. MANMOHAN (VICE PRESIDENT) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO. 3208/MUM/2009 ASSESSMENT YEAR 2003-04 DATE OF HEARING : 7.6.2010 SUNIL T. DOSHI ...... APPELLANT C/O NATVARLAL VEPARI & CO. ORICON HOUSE, 12, K. DUBHASH MARG MUMBAI 400 023 ABXPD4329F VS. ADDL. COMMISSIONER OF INCOME TAX .. RESPO NDENT RANGE24(2), C13, PRATYAKSHA KAR BHAVAN, BANDRA KULAR COMPLEX BANDRA (EAST), MUMBAI 400 051 APPELLANT BY : SHRI N. JAYENDRAN RESPONDENT BY : SHRI ANKUR GARG O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE HAS CHALLENG ED CORRECTNESS OF ORDER DATED 27 TH FEBRUARY 2009, PASSED BY THE LEARNED COMMISSIONER ITA NO. 3208/MUM/2009 ASSESSMENT YEAR : 2003-04 PAGE 2 OF 6 (APPEALS)XXIV, MUMBAI, FOR ASSESSMENT YEAR 2003-04 . GRIEVANCES RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE OF RS.1,65,000/- MADE BY THE A.O. BEING AMOUNT PAID TO MS EVA GROVER, TOWARDS TALENT FEES ON THE GROUND THAT THE APPELLANT FAILED TO SUBSTANTIATE THE GENUINENESS OF THE EXPEN DITURE WITHOUT CONSIDERING THE DETAILS AND CONFIRMATION FI LED BY THE APPELLANT BOTH BEFORE THE A.O. AND THE CIT(A). THE APPELLANT SUBMITS THAT THE SAID EXPENDITURE OF RS.1 ,65,000 HAS BEEN INCURRED BY THE APPELLANT TOWARDS TALENT F EES TO THE SAID ARTIST FOR ACTING IN HIS TELEVISION SERIAL KARISHMA KA KARISHMA INCOME OF WHICH HAS BEEN OFFERED FOR T AXATION AND, THEREFORE, THE SAME IS ALLOWABLE UNDER LAW. 2. THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE OF RS.3,85,000/- BEING AMOUNT PAID TO MS. YASMIN VILLI BHOY TOWARDS LOCATION HIRE CHARGES FOR WANT OF CONFIRMAT ION AND EVIDENCES IN RESPECT OF SERVICES RENDERED BY THE SA ID PARTY. THE APPELLANT SUBMITS THAT THE DETAILS AND CONFIRMA TION HAVE ALREADY BEEN FILED BOTH BEFORE THE ASSESSING O FFICER AND THE CIT(A). THE APPELLANT SUBMITS THAT THE SAID EXPENDITURE OF RS.3,85,000/- HAS BEEN INCURRED BY T HE APPELLANT TOWARDS LOCATION HIRE CHARGES FOR PRODUCT ION OF HIS TELEVISION SERIAL KARISHMA KA KARISHMA INCOME OF WHICH HAS BEEN OFFERED FOR TAXATION AND THEREFORE T HE SAME IS ALLOWABLE UNDER LAW. 2. THE MATERIAL FACTS ARE AS FOLLOWS. THE ASSESSEE IS ENGAGED, INTER ALIA, IN THE BUSINESS OF PRODUCING TELEVISION SERIALS AND ADVERTISEMENT FILMS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTICED THAT THE ASSESSEE HAS MADE PAYMENTS TO VARIOUS PERS ONS FOR THEIR SERVICES RENDERED. THE ASSESSING OFFICER ISSUED NOTICES UND ER SECTION 133(6) TO ALL OF THEM, AND ALL BUT TWO OF THE PERSONS TO WHOM THE SE NOTICES WERE ADDRESSED COMPLIED WITH THE SAME. ITA NO. 3208/MUM/2009 ASSESSMENT YEAR : 2003-04 PAGE 3 OF 6 3. EVA GROVER WAS ONE OF THE TWO PERSONS WHO DID NOT C OMPLY WITH THESE NOTICES UNDER SECTION 133(6). IN THIS CASE, A PAYMENT OF RS 1,65,000 WAS MADE TO EVA GROVER BY ACCOUNT PAYEE CHEQUE FOR THE ROLE SHE PLAYED IN A TELEVISION SERIAL BY THE NAME OF KARISHMA KA KAR ISHMA. THE NOTICE UNDER SECTION 133(6) ISSUED WAS RESPONDED TO BY EVA GROVE RS MOTHER WHO STATED THAT EVA GROVER DOES NOT LIVE AT THAT ADDRESS ANY L ONGER AND SHE IS NOT AWARE ABOUT HER CURRENT WHEREABOUTS. SHE ALSO STATE D THAT EVA GROVER IS NOT A BIG ACTRESS AND IT IS QUITE POSSIBLE THAT EVA MAY NOT HAVE FILED AN INCOME TAX RETURN AT ALL. ON THESE FACTS, THE ASSES SING OFFICER REQUIRED THE ASSESSEE TO PRODUCE EVA GROVER OR HER CONFIRMATION, FAILING WHICH PAYMENT MADE TO HER WILL BE DISALLOWED. AS ASSESSEE WAS UNA BLE TO COMPLY WITH THIS REQUISITION, PAYMENT OF RS 1,65,000 MADE TO HER WAS DISALLOWED AS FOR NON BUSINESS PURPOSES. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BUT WITHOUT ANY SUCCESS. IT WAS STATED BY THE ASSESSEE THAT HE HAS GIVEN ALL THE DETAILS ABOUT THE PAYMENT, AS ALSO COPIES OF BANK S TATEMENTS REFLECTING SUCH PAYMENTS MADE BY THE ACCOUNT PAYEE CHEQUES, AND MER ELY BECAUSE THE RECIPIENT CHOOSES NOT TO APPEAR BEFORE THE ASSESSIN G OFFICER, THE ASSESSEE CAN NOT BE PUNISHED BY THE DISALLOWANCE OF EXPENSES . THE CIT(A) ONCE SENT ALL THE SUBMISSIONS TO THE ASSESSING OFFICER FOR RE MAND REPORT, BUT ALL THAT THE ASSESSING OFFICER DID WAS TO ISSUE YET ANOTHER NOTICE UNDER SECTION 133(6) WHICH REMAINED UNCOMPLIED WITH. ON THESE FA CTS, THE CIT(A) CONCLUDED THAT THE ASSESSEE HAS NOT DISCHARGED THE ONUS CAST UPON HIM TO SUBSTANTIATE GENUINENESS OF EXPENDITURE. THE ASSESS EE IS NOT SATISFIED AND IS IN SECOND APPEAL BEFORE US. 4. THE OTHER PERSON WHO DID NOT RESPOND TO ASSESSIN G OFFICERS NOTICE UNDER SECTION 133(6) WAS YASHMIN VALIBHOY WHO WAS P AID LOCATION HIRE CHARGES FOR HER BANGLOW @ RS 10,000 PER DAY FOR SHO OTING OF THE SAME SERIAL I.E. KARSIHMA KA KARISHMA. AS THE ASSESSEE W AS UNABLE TO PRODUCE HER ITA NO. 3208/MUM/2009 ASSESSMENT YEAR : 2003-04 PAGE 4 OF 6 IN PERSON, OR EVEN A CONFIRMATION BY HER, THE ASSES SING OFFICER DISALLOWED THE AMOUNT OF RS 3,85,000 PAID TO HER. IN APPEAL, T HE ASSESSEE PRODUCED THE CONFIRMATION DATED 3 RD MAY 2006 FROM THE SAID LADY. THE CIT(A) FORWARDED THE CONFIRMATION TO THE ASSESSING OFFICER. THOUGH T HE ASSESSING OFFICER DID NOT FIND ANY FAULT WITH THE CONFIRMATION, HE AGAIN JUSTIFIED THE DISALLOWANCE ON THE GROUND THAT THIS LADY DID NOT APPEAR BEFORE THE ASSESSING OFFICER IN RESPONSE TO HIS FRESH NOTICE EITHER. THE CIT(A) CON FIRMED THE DISALLOWANCE, AGGRIEVED BY WHICH ASSESSEE IS IN SECOND APPEAL ON THIS COUNT AS WELL. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS A LSO THE APPLICABLE LEGAL POSITION. 6. WE HAVE NOTED THAT IT IS UNDISPUTED POSITION THA T ASSESSEES INCOME FROM THE TELEVISION SERIAL KARISHMA KA KARISHMA HAS BEEN ASSESSED TO TAX IN THIS VERY YEAR, AND, AS SUCH, EXISTENCE OF THE TELE VISION SERIAL IS NOT IN DOUBT OR DISPUTE. WE HAVE ALSO NOTED THAT THE ASSESSEE HA S DULY FURNISHED THE CONFIRMATION FOR LOCATION HIRE CHARGES AND NO DEFEC TS HAVE BEEN POINTED OUT IN THE SAME. THE DISALLOWANCE HAS BEEN MADE IN THAT CASE ONLY ON THE GROUND THAT THE RECIPIENT DID NOT APPEAR BEFORE THE ASSESSING OFFICER. AS REGARDS PAYMENT TO THE LEAD ACTRESS, NEITHER THERE IS ANY DISPUTE ABOUT SERIAL HAVING BEEN PRODUCED WITH HER IN THE LEAD RO LE, NOR ABOUT THE FACT THAT THE PAYMENTS WERE MADE BY ACCOUNT PAYEE CHEQUE S WHICH ARE DULY REFLECTED IN THE BANK STATEMENTS. ONCE AGAIN, DISAL LOWANCE HAS BEEN MADE ONLY BECAUSE SHE DID NOT APPEAR BEFORE THE ASSESSIN G OFFICER. WE HAVE NOTED THAT NOT ONLY THAT EVA GROVERS COUNSEL, ONE SHRI V P SHARMA, CONFIRMED TO THE ASSESSING OFFICER ABOUT HER HAVING RECEIVED THE AMOUNT OF RS 1,65,000 BUT ALSO FILED A COPY OF HER PASS BOOK REFLECTING RECEIPT OF THAT AMOUNT. THE DETAILS OF EVA GROVERS INCOME TAX RETU RNS AND PAN NUMBER ITA NO. 3208/MUM/2009 ASSESSMENT YEAR : 2003-04 PAGE 5 OF 6 ARE ALSO PLACED ON RECORD, AND IT IS CONFIRMED BY H ER COUNSEL THAT THESE RECEIPTS WERE DULY SHOWN IN HER INCOME TAX RETURN. THE TAXES ON THESE AMOUNTS HAVE BEEN DULY DEDUCTED AT SOURCE. THE INCO ME FROM TELEVISION SERIAL IN WHICH SHE WORKED HAS BEEN TAKEN INTO ACCO UNT. KEEPING IN MIND ALL THESE FACTORS, AS ALSO ENTIRETY OF THE CASE, WE SEE NO MERITS IN THE DISALLOWANCES SUSTAINED BY THE CIT(A). WE, THEREFOR E, UPHOLD GRIEVANCE OF THE ASSESSEE, AND DIRECT THE ASSESSING OFFICER TO D ELETE THE IMPUGNED DISALLOWANCES. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED IN T HE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT TODAY ON THIS 3 0 TH DAY OF JUNE 2010. SD/XX SD/XX (D. MANMOHAN) (P RAMOD KUMAR) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI; 30 TH DAY OF JUNE 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. CIT , MUMBAI 4. COMMISSIONER (APPEALS) , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, E BENCH, ITAT, MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR PRADEEP J. CHOWDHURY INCOME TAX APPELLATE TRIBUNAL SR. PRIVATE SECRETARY MUMBAI BENCHES, MUMBAI ITA NO. 3208/MUM/2009 ASSESSMENT YEAR : 2003-04 PAGE 6 OF 6 DATE INITIAL 1. DRAFT DICTATED ON 21.6.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 22.6.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 22.6.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 22.6.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 22.6.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 30.6.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 30.6.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER