ACIT, Bangalore V. Sri. B.M. Upendra Kumar, Bangalore

ITSSA 14/BANG/2011

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9590 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 21-10-2013
• Assessment Year: misc
• Appeal Filed On: 01-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHUTOSH CHANDRA CITIDR
• Assessee Lawyers: G N BHAT IRS RETD
• Section: 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER IT(SS)A NO. 14/BANG/2011 ASSESSMENT YEAR : BLOCK PERIOD 1997-98 TO 21.02.20 03 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 7(2), BANGALORE. VS. SHRI B.M. UPENDRA KUMAR, NO.7A, 1 ST CROSS, 6 TH PHASE, BANASHANKARI III STAGE, BANGALORE. PAN : AACPU 6153E APPELLANT RESPONDENT APPELLANT BY : SHRI ASHUTOSH CHANDRA, CIT-I(DR) RESPONDENT BY : SHRI G.N. BHAT, IRS (RETD.) DATE OF HEARING : 21.10.2013 DATE OF PRONOUNCEMENT : 25.10.2013 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER D ATED 30.09.2011 OF THE CIT(APPEALS)-V, BANGALORE RELATING TO BLOCK ASS ESSMENT YEARS 1997-98 TO 2002-03 I.E., BLOCK PERIOD FROM 1.4.2002 TO 21.0 2.2003. 2. THE EFFECTIVE GROUNDS RAISED BY THE REVENUE READ S AS FOLLOWS:- IT(SS)A NO.14/BANG/2011 PAGE 2 OF 8 2. THE LEARNED CIT(A) ERRED IN DELETING THE UNDISC LOSED INCOME DETERMINED BY THE AO WITHOUT APPRECIATING TH E FACT THAT THE ASSESSEE RECEIVED AN AMOUNT OF RS.25,61,846/- A S REMUNERATION FROM THE MOVIE RAA AS PER THE DOCUME NT WHICH WAS SEIZED DURING THE COURSE OF SEARCH ACTION U/S. 132 IN THE PREMISES OF S. RAMESH BABU AT HYDERABAD. 3. THE LEARNED CIT(A) ERRED IN DELETING THE UNDISCL OSED INCOME DETERMINED BY THE AO WITHOUT APPRECIATING TH E SURROUNDING CIRCUMSTANCES LIKE PAYMENTS MADE TO OTH ER ARTISTES AND TECHNICIANS OF THE SAID MOVIE AND ALSO THE FACT THAT THE AMOUNT OF REMUNERATION MENTIONED IN THE DOCUMENT IS AN ODD SUM AND NO BASIS HAS BEEN SHOWN FOR ARRIVING AT THE SAID FIGURE OF RS.25,61,846/- PAID TO THE ASSESSEE. 3. THE ASSESSEE IS AN INDIVIDUAL, A FILM ARTISTE BY PROFESSION. THERE WAS A SEARCH & SEIZURE OPERATION CARRIED OUT BY THE REVENUE U/S. 132 OF THE INCOME TAX ACT, 1961 (THE ACT) IN THE PREMISES OF SHRI SINGANAMALA RAMESH BABU (S.RAMESH BABU) AT HYDERABAD ON 21.02.2 003. IN THE COURSE OF SEARCH, A DOCUMENT WHICH WAS MARKED AS AN NEXURE AA/SRB/1 WAS FOUND. THE SAID DOCUMENT IS GIVEN AS ANNEXURE-I TO THIS ORDER FOR BETTER APPRECIATION OF THE CASE. AS CAN BE SEEN FR OM THE SEIZED DOCUMENT, WHICH IS A COMPUTER GENERATED PRINT OUT, THERE ARE COLUMNS OF DEPOSITS AND WITHDRAWALS IN THE PROPRIETARY CONCERN OF SHRI S.RA MESH BABU, SRI SAI MOVIES. AGAINST THE NAME OF THE ASSESSEE, A SUM OF RS.25,61,846 WAS SHOWN AS WITHDRAWAL. BASED ON THE AFORESAID SEIZED DOCUMENT, THE REVENUE CAME TO THE CONCLUSION THAT THE ASSESSEE WA S PAID THE AFORESAID SUM FOUND IN THE SEIZED DOCUMENT AS REMUNERATION FO R ACTING IN A MOVIE, RAA. IT(SS)A NO.14/BANG/2011 PAGE 3 OF 8 4. THE REVENUE BASED ON THE SEIZED DOCUMENT INITIAT ED PROCEEDINGS AGAINST THE ASSESSEE U/S. 158BD OF THE ACT. IN THI S REGARD, THE SATISFACTION NOTE OF THE AO OF THE SEARCHED PERSON VIZ., AICT, C ENTRAL CIRCLE, TIRUPATI, HAD BEEN FORWARDED TO THE AO OF THE ASSESSEE. THE AO ISSUED NOTICE U/S. 158BD TO THE ASSESSEE, CALLING UPON HIM TO FILE THE RETURN OF INCOME FOR THE BLOCK PERIOD. THE ASSESSEE FILED A RETURN FOR THE BLOCK PERIOD DECLARING NIL INCOME AS UNDISCLOSED INCOME. 5. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS ASKED TO FURNISH DETAILS OF THE REMUNERATION RECEIVED FOR ACTING IN THE FILM RAA. THE ASSESSEE SUBMITTED THAT HE HAS RECEIVED A SUM O F RS.5 LAKHS BY DD FOR ACTING IN THE MOVIE, RAA, FROM SAI MOVIES AND T HAT THE SAME HAS BEEN DEPOSITED IN HIS BANK ACCOUNT AND ALREADY ACCOUNTED FOR AS INCOME FOR THE PERIOD 2000-01. THE DD HAD BEEN DEPOSITED IN THE A SSESSEES BANK ACCOUNT ON 20.12.2000. THE ASSESSEE THUS DENIED HA VING RECEIVED ANY CONSIDERATION OVER AND ABOVE THE SUM OF RS. 5 LAKHS . 6. THE AO WAS OF THE VIEW THAT UNDER THE PROVISIONS OF SECTION 132(4A) OF THE ACT, DOCUMENTS FOUND AND CONTENTS THEREOF AR E PRESUMED TO BE TRUE AND THAT THE BURDEN OF SHOWING THAT THE CONTENTS OF THE DOCUMENTS WERE NOT CORRECT WAS ON THE ASSESSEE. THE AO FURTHER HE LD THAT THE ASSESSEE DID NOT GIVE ANY AGREEMENT BETWEEN HIM AND SRI SAI MOVIES FOR ACTING IN A TELUGU MOVIE, RAA. THE AO ALSO REFERRED TO THE CIR CUMSTANCES VIZ., MUSIC DIRECTOR OF THE FILM HAVING BEEN PAID A SUM OF RS.4 ,79,625 IN THE MOVIE, IT(SS)A NO.14/BANG/2011 PAGE 4 OF 8 RAA. ACCORDING TO THE AO, WHEN THE MUSIC DIRECTOR WAS PAID A SUM OF RS.4,79,625, IT IS HARD TO BELIEVE THAT THE ASSESSE E FOR ACTING AS HERO IN THE SAID FILM WAS PAID ONLY A SUM OF RS.5 LAKHS. FOR T HE AFORESAID REASONS, THE AO ADDED A SUM OF RS.20,61,846 [25,61,846 MINUS 5,0 0,000] AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PE RIOD. 7. ON APPEAL BY THE ASSESSEE, IT WAS CONTENDED BEFO RE THE CIT(APPEALS) THAT THE ASSESSEE WAS A SENIOR ARTISTE , WHO STARTED HIS CAREER AS A SONG WRITER AND STORY WRITER IN 1995-96 AND LA TER ON STARTED DIRECTING AND ACTING IN MOVIES AND BECAME A FULL-FLEDGED ACTO R. THAT THE ASSESSEE WAS NOT KEEPING REGULAR BOOKS OF ACCOUNTS, BUT HAS BEEN DECLARING PROFESSIONAL CHARGES RECEIVED IN THE RETURN OF INCO ME FILED FOR THE VARIOUS ASSESSMENT YEARS. THE ASSESSEE REITERATED THAT HE HAD RECEIVED ONLY A SUM OF RS.5 LAKHS FOR ACTING IN THE FILM, RAA. THE ASSESSEE POINTED OUT THAT THE PRESUMPTION U/S. 132(4A) OF THE ACT, IS NO T APPLICABLE TO THE ASSESSEE, AS THE DOCUMENTS IN QUESTION WAS NOT SEIZ ED FROM THE POSSESSION OF THE ASSESSEE. THE ASSESSEE ALSO POIN TED OUT THAT THE SEIZED DOCUMENT DID NOT BEAR ANY SIGNATURE AND WAS NOT IN THE HANDWRITING OF ANY PERSON. THERE WAS NO EVIDENCE ON RECORD REG ARDING THE SEIZED DOCUMENT IN THE FORM OF STATEMENT RECORDED U/S. 132 (4) OF THE ACT. THE ASSESSEE POINTED OUT THAT THE STATEMENT OF S. RAMES H BABU RECORDED AT THE TIME OF SEARCH WAS ALSO NOT FURNISHED TO THE AS SESSEE NOR ANY OPPORTUNITY OF CROSS-EXAMINING S. RAMESH BABU ON TH E IMPUGNED DOCUMENT WAS AFFORDED BY THE AO. THE ASSESSEE THUS SUBMITTED THAT THE IT(SS)A NO.14/BANG/2011 PAGE 5 OF 8 IMPUGNED ADDITION HAS BEEN MADE ON MERE SUSPICION, CONJECTURES AND SURMISES. THE ASSESSEE ALSO FILED AN AFFIDAVIT BEF ORE THE CIT(APPEALS), IN WHICH THE ASSESSEE SUBMITTED THAT IN THE STATEMENT, ONE MR. SINGANAHALLI RAMESH HAD STATED THAT THE ASSESSEE WAS TO BE PAID A SUM OF RS.25 LAKHS FOR ACTING IN THE MOVIE, RAA, BUT ONLY A SUM OF RS. 5 LAKHS WAS PAID. THE SUM OF RS.25 LAKHS WAS AGREED TO BE PAID ONLY IF TH E MOVIE, RAA RUNS FOR 100 DAYS FROM THE DATE OF RELEASE. THE ASSESSEE FU RTHER SUBMITTED THAT SINCE THE MOVIE DID NOT RUN FOR 100 DAYS, ONLY A SU M OF RS.5 LAKHS WAS PAID FOR ACTING IN THE SAID FILM. IN THIS REGARD, THE C ONFIRMATION FROM RAMESH BABU WAS ALSO FILED. THE SAME IS GIVEN AS ANNEUXRE-II TO THIS ORDER . 8. ON A CONSIDERATION OF THE SUBMISSIONS AND THE A FFIDAVIT, THE CIT(APPEALS) DELETED THE ADDITION MADE BY THE AO OB SERVING AS FOLLOWS:- 7. AS MENTIONED IN PARA 3 ABOVE THE APPELLANT HAD FILED AN AFFIDAVIT BEFORE ME ON 28.09.2011. THE CONTENTS OF THE AFFIDAVIT ARE AS UNDER. I AM THE INCOME TAX ASSESSEE FROM LAST 15 YEARS AN D I FILED MY FIRST INCOME TAX RETURN IN THE YEAR 1995 - 96. I SUBMIT THAT FROM THE DAY ONE I CAME TO BE AN INCOME TAX ASSESSEE, I AM FILING MY ACCURATE AND PROPER INCOME TAX RETURN EACH YEAR BY DISCLOSING EACH AND EVERY INCOME EARNED BY ME AS A CINE ARTIST AND DIRECTOR IN THE SAID ASSESSMENT YEAR AND I AM PAYING THE APPLICABLE INCOME TAX TO THE INCOME TAX DEPARTMENT REGULARLY AND PROMPTLY. I SUBMIT THAT DURING THE YEAR 2000, ONE MR. S. RAMESH HAD PAID ME ONLY A SUM OF RS. 5 LAKHS THOUGH IN HIS STATEMEN T HE HAD STATED HE HAS TO PAY SUM OF RS. 25 LAKHS TO ME. ACCORDING TO THE UNDERSTANDING BETWEEN ME AND THE SAID MR. S. RAMESH, SAID SUM OF RS. 25 LAKHS SHALL BE PAYABLE TO ME ONLY IF MY MOVIE NAMELY IT(SS)A NO.14/BANG/2011 PAGE 6 OF 8 RAA RUNS FOR 100 DAYS FROM THE DAY OF RELEASE. I SUBMIT THAT IN TERMS OF THE UNDERSTANDING THE SAID MR. S. RAMESH HAD PAID ONLY A SUM OF RS. 5 LAKHS BY DEMAND DRAFT BEARING NO. 13341 DATED 13.12.2000 ISSUED BY VIJAYA BANK, HANUMNANTHANAGAR BRANCH, BANGALORE, AS THE SAID MOVIE RAA DID NOT RUN FOR 100 DAYS. I SUBMIT THAT I HAVE NOT RECEIVED ANY MONEY APART FROM THE ABOVE SAID AMOUNT OF RS. 5 LAKHS FROM THE SAID MR. S. RAMESH. I REITERATE THAT I AM A REGULAR AND PROMPT PAYEE OF INCOME TAX AND NEVER DEFAULTED OR EVADED IN PAYING MY INCOME TAX A T ANY TIME. 8. AFTER CAREFUL CONSIDERATION OF THE FACTS AND DE VELOPMENTS AS MENTIONED ABOVE, I AM UNABLE TO AGREE WITH THE STAND TAKEN BY THE A.O. IN HIS ORDER DATED 29.08.2007. EXCEPT AN U NSIGNED PAPER SEIZED ON 21.02.2003 THERE IS NO OTHER CORROBORATIV E EVIDENCE TO PROVE THAT THE APPELLANT RECEIVED ANY AMOUNT OVER A ND ABOVE RS 5 LAKHS RECEIVED BY WAY OF DD. IN VIEW OF THIS THE AD DITION MADE BY THE A.O IS DELETED AND THE APPEAL IS ALLOWED. 9. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE REVENUE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 10. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, WH O SUBMITTED THAT THE ASSESSEE DID NOT GIVE PARTICULARS OF THE AGREEM ENT BETWEEN THE ASSESSEE AND S. RAMESH BABU, NOR DID THE ASSESSEE G IVE AGREEMENT WITH OTHER FILM PRODUCERS WHICH CAN SHOW THE REMUNERATIO N THE ASSESSEE USUALLY CHARGES FOR ACTING AS HERO IN FILMS. HE AL SO POINTED OUT THAT THE MUSIC DIRECTOR WAS ALSO PAID ALMOST THE SAME AMOUNT AS HAS BEEN PAID TO THE HERO FOR ACTING IN FILMS. IT WAS HIS SUBMISSI ON THAT THE REQUIRED DETAILS SHOULD BE OBTAINED AND THE ISSUE CONSIDERED AFRESH BY THE AO, DIRECTING THE ASSESSEE TO GIVE ALL PARTICULARS IN HIS POSSESS ION. IT(SS)A NO.14/BANG/2011 PAGE 7 OF 8 11. WE HAVE CONSIDERED THE SUBMISSIONS MADE ON BEHA LF OF THE REVENUE AND WE ARE OF THE VIEW THAT THE SAME CANNOT BE ACCE PTED. AS RIGHTLY SUBMITTED ON BEHALF OF THE ASSESSEE, THE SEIZED DOC UMENT IS NOT IN THE HANDWRITING OF ANY PERSON AND IS ALSO NOT SIGNED. THE CONTENTS OF THE SEIZED DOCUMENT HAVE NOT BEEN CORROBORATED BY ANY I NDEPENDENT EVIDENCE. THE PRESUMPTION U/S. 132(4A) CANNOT EXTE ND TO THE ASSESSEE AND IS LIMITED TO THE PERSON, WHO WAS SUBJECTED TO A SEARCH. THE ORDER OF ASSESSMENT IS SILENT AS TO HOW THE SEIZED DOCUMENT HAS BEEN CONSIDERED IN THE CASE OF S. RAMESH BABU, THE PERSON WHO WAS S EARCHED. APART FROM THE ABOVE, WE FIND THAT THE ASSESSEE HAS FILED AN A FFIDAVIT AFFIRMING THAT HE HAS BEEN PAID ONLY A SUM OF RS.5 LAKHS. A CONFIRMAT ION HAS ALSO BEEN FILED THAT IF THE FILM RUNS FOR MORE THAN 100 DAYS FROM T HE DATE OF RELEASE, THE ASSESSEE WOULD BE PAID RS.25 LAKHS. ADMITTEDLY, TH E FILM DID NOT RUN FOR 100 DAYS FROM THE DATE OF RELEASE. IN THESE CIRCUM STANCES, WE ARE OF THE VIEW THAT THERE IS NO EVIDENCE BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE RECEIVED THE SUM AS REFLECTED IN THE SEIZED DOCUMEN T. WE ARE THEREFORE OF THE VIEW THAT THE CONCLUSIONS OF THE CIT(APPEALS) A RE CORRECT AND DO NOT CALL FOR ANY INTERFERENCE. WE ARE ALSO OF THE VIEW THAT THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE DO NOT JUSTIFY GI VING AN OPPORTUNITY TO THE AO TO MAKE FURTHER INVESTIGATIONS TO SUBSTANTIATE H IS CASE. WE THEREFORE FIND NO GROUNDS TO INTERFERE WITH THE ORDER OF THE CIT(APPEALS). CONSEQUENTLY THE APPEAL BY THE REVENUE IS DISMISSED . IT(SS)A NO.14/BANG/2011 PAGE 8 OF 8 12. IN THE RESULT, THE APPEAL BY THE REVENUE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF OCTOBER, 2013. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUDEVA N ) ACCOUNTANT MEMBER JUDICIAL MEMBE R BANGALORE, DATED, THE 25 TH OCTOBER, 2013. /D S/ ENCLOSURES : ANNEXURES I & II. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.