SMT. USHA SATISH SALVI,MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX, , CENTRAL CIRCLE

ITA 4239/MUM/2023

AI Insights

The case involves Smt. Usha Satish Salvi, who appealed against the orders of the Commissioner of Income-tax (Appeals) confirming additions made by the Assessing Officer under section 69C of the Income Tax Act, 1961, for unexplained cash expenditures related to her film production activities. The Tribunal examined the legality of the assessments made under section 153C, the application of section 153D, and the validity of the additions made for unexplained cash expenditures. The Tribunal found that the approvals for the assessments were not granted in a mechanical manner and that there was a proper application of mind by the authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 37995 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Other Referred Cases: NTPC Ltd. vs. CIT, PCIT vs. Sapna Gupta, PCIT vs. Shiv Kumar Nayyar, Arch Phamalabs Ltd vs. CIT, MDLR Airlines vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KAPOOR
• Assessee Lawyers: SATISH MODI
• Keywords: Corroborative evidences; Unexplained expenditure; Document seized; Documents seized; Retraction; TDS; Search and seizure; Accommodation entries; Loose papers; Assessment record; Competent authority; Validity of assessment
• Section: 143(3); 48; 132; 153A; 69C; 69A; 153C; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “F” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA Nos. 4239, 4237 & 4238/MUM/2023 Assessment Years: 2012-13, 2013-14 & 2014-15 Smt. Usha Satish Salvi, M-214, RNA Countryard, Opp. Shanti Nagar, Sector-8, Mira Road (East), Thane-401107. Vs. Asst. CIT Central Circle-4(4), Air India Building, Mumbai-400024. PAN NO. AQSPS 6935 J Appellant Respondent Assessee by : Mr. Satish Modi Revenue by : Mr. Ankush Kapoor, CIT-DR Date of Hearing : 06/11/2024 Date of pronouncement : 23/01/2025 ORDER PER OM PRAKASH KANT, AM These three appeals by the assessee are directed against a common order dated 15/09/2023 passed by the learned Commissioner of Income-tax(Appeals)-52, Mumbai [in short the Ld. CIT(A)] for assessment years 2012-13 to 2014-15 respectively, arising from orders passed under section 153C of the Income-tax Act, 196( in short the Act) by the Assessing Offi AO), wherein he assessed undisclosed income based on information related to assessee found issue-in-dispute is involved in were heard together and dispose order for convenience and avoid repetition of facts. 2. Briefly stated facts of the case are that the assessee is an individual, who runs a film production house under proprietorship name M/s Shree Swami Samarth Pictures ( in short ‘Samarth Pictures’) . 2.1 For assessment year AY2012 return of income on 29/03/2013 declaring total income at ₹9,06,228/-. For assessment year AY 2013 original return of income on 28/07/2013 declaring total income at ₹6,04,200/- which was scrutini 29/12/2015 accepting the returned income. assessment year AY 2014 income on 28/11/2014 declaring total income at 2.2 Subsequently, a search and seizure action under section 132 of the Act was carried out on 08/12/2015 at the premises of M/s Nadiawala Grandson Entertainment residence of Sh Satish Salve ( Chief Finance officer of Ms/s Viking Media and Entertainment private limited), who was allegedly Act, 196( in short the Act) by the Assessing Officer ( in short the AO), wherein he assessed undisclosed income based on information related to assessee found during search of third person. As common is involved in all the three appeals, were heard together and disposed off by way of this consolidated order for convenience and avoid repetition of facts. Briefly stated facts of the case are that the assessee is an individual, who runs a film production house under proprietorship name M/s Shree Swami Samarth Pictures ( in short ‘Samarth For assessment year AY2012-13, the assessee filed ori return of income on 29/03/2013 declaring total income at . For assessment year AY 2013-14, the assessee filed original return of income on 28/07/2013 declaring total income at which was scrutinized under section 143(3) of 29/12/2015 accepting the returned income. assessment year AY 2014-15, the assessee filed original return of income on 28/11/2014 declaring total income at ₹12,46, Subsequently, a search and seizure action under section 132 f the Act was carried out on 08/12/2015 at the premises of M/s Nadiawala Grandson Entertainment Private Limited residence of Sh Satish Salve ( Chief Finance officer of Ms/s Viking Media and Entertainment private limited), who was allegedly Smt. Usha Satish Salvi 2 ITA Nos. 4239, 4237 & 4238/MUM/2023 cer ( in short the AO), wherein he assessed undisclosed income based on information during search of third person. As common all the three appeals, therefore, same ff by way of this consolidated Briefly stated facts of the case are that the assessee is an individual, who runs a film production house under proprietorship name M/s Shree Swami Samarth Pictures ( in short ‘Samarth 13, the assessee filed original return of income on 29/03/2013 declaring total income at 14, the assessee filed original return of income on 28/07/2013 declaring total income at ed under section 143(3) of Act on 29/12/2015 accepting the returned income. Similarly, for 15, the assessee filed original return of 12,46,360/-. Subsequently, a search and seizure action under section 132 f the Act was carried out on 08/12/2015 at the premises of M/s Private Limited, alongwith residence of Sh Satish Salve ( Chief Finance officer of Ms/s Viking Media and Entertainment private limited), who was allegedly engaged in providing accommodation entries to M/s Nadiawala Grandson Entertainment Private Limited. In said search, certain documents relating to ‘Samarth Pictures which revealed certain instances of acceptance and repayment of cash loan and incurring of cash expenses by ‘Samarth Pictures’ out of its books of accounts. As the documents seized in the course of the search found to be related to the assessee and having bearing on her income , after following due procedure under the law , a satisfaction to the effect that it was a fit case to be covered under section 153C of the Act, was recorded by the relevant authorities and notice under section 153C of the Act was issued on 12/09/2017, requiring the assessee to prepare and file a true a correct returns of income including the undisclosed income for assessment years 2010 income in respect of assessment years involved before us declaring total income as under: S. no. AY 1. 2012 2. 2013 3. 2014 2.3 In the assessments completed on 27/12/2017 under section 153C read with section 153A of the Act, the Assessing Officer made addition for unexplained cash expenditure in respect of the three assessment years as under: ed in providing accommodation entries to M/s Nadiawala Grandson Entertainment Private Limited. In said search, certain documents relating to ‘Samarth Pictures ’ were found and seized, which revealed certain instances of acceptance and repayment of an and incurring of cash expenses by ‘Samarth Pictures’ out of its books of accounts. As the documents seized in the course of the search found to be related to the assessee and having bearing on her income , after following due procedure under the law , a satisfaction to the effect that it was a fit case to be covered under section 153C of the Act, was recorded by the relevant authorities and notice under section 153C of the Act was issued on 12/09/2017, requiring the assessee to prepare and file a true a of income including the undisclosed income for 2010-11 to 2015-16. The assessee filed return of income in respect of assessment years involved before us declaring total income as under: Date of filing 2012-13 13/11/2017 2013-14 13/11/2017 2014-15 13/11/2017 he assessments completed on 27/12/2017 under section 153C read with section 153A of the Act, the Assessing Officer made unexplained cash expenditure in respect of the three assessment years as under: Smt. Usha Satish Salvi 3 ITA Nos. 4239, 4237 & 4238/MUM/2023 ed in providing accommodation entries to M/s Nadiawala Grandson Entertainment Private Limited. In said search, certain ’ were found and seized, which revealed certain instances of acceptance and repayment of an and incurring of cash expenses by ‘Samarth Pictures’ out of its books of accounts. As the documents seized in the course of the search found to be related to the assessee and having bearing on her income , after following due procedure under the law , a satisfaction to the effect that it was a fit case to be covered under section 153C of the Act, was recorded by the relevant authorities and notice under section 153C of the Act was issued on 12/09/2017, requiring the assessee to prepare and file a true and of income including the undisclosed income for 16. The assessee filed return of income in respect of assessment years involved before us declaring Total income ₹9,06,230/- ₹6,04,200/- - ₹12,46,360/- he assessments completed on 27/12/2017 under section 153C read with section 153A of the Act, the Assessing Officer made unexplained cash expenditure in respect of the three S. no. 1. 2. 3. 3. On further appeals, the Ld. CIT(A) rejected the contention of the assessee and sustained the addition for unexplained cash expenditure by way of a detailed finding in the impugned orders. Aggrieved, the assessee is in appeals before the Appellate Tribunal (i grounds and additional ground as reproduced below. 4. Firstly, we take up the appeal for AY 2012 raised in appeal are reproduced as under: On the facts and in Fact and in circumstances The Ld. CIT(A) erred in confirming Rs. 6,45,572/ expenses. U/s 69C of the Income Tax Act, 1961 and the reasons assigned by him, for doing so are wrong and contrary to the facts and circumstances of the case, p rules made there 4.1 Before us, the assessee also raised following additional grounds: On the Facts and in the circumstances of the case and in law the approval granted under section 153D of The Act is no eyes of law as the same has been accorded on presumption and without application of mind and consequently the assessment order u/s 153C of the Act is null and Void as approval granted under section 153D is mechanical in nature and without ap 4.2 Identical grounds and additional grounds have been raised in the remaining two appeals also AY Additions 2012-13 Rs. 6,45,572/ 2013-14 Rs. 1,39,18,769/ 2014-15 Rs. 7,50,000/ On further appeals, the Ld. CIT(A) rejected the contention of the assessee and sustained the addition for unexplained cash expenditure by way of a detailed finding in the impugned orders. Aggrieved, the assessee is in appeals before the e Tribunal (in short the ‘Tribunal’) by way of raising grounds and additional ground as reproduced below. Firstly, we take up the appeal for AY 2012-13. The grounds raised in appeal are reproduced as under: On the facts and in Fact and in circumstances of the case and in law, The Ld. CIT(A) erred in confirming Rs. 6,45,572/- as unexplained casti expenses. U/s 69C of the Income Tax Act, 1961 and the reasons assigned by him, for doing so are wrong and contrary to the facts and circumstances of the case, provisions of Income Tax Act, 1961 and rules made there under. Before us, the assessee also raised following additional On the Facts and in the circumstances of the case and in law the approval granted under section 153D of The Act is no arrival in the eyes of law as the same has been accorded on presumption and without application of mind and consequently the assessment order u/s 153C of the Act is null and Void as approval granted under section 153D is mechanical in nature and without application of Mind. grounds and additional grounds have been raised in the remaining two appeals also except change of amount Smt. Usha Satish Salvi 4 ITA Nos. 4239, 4237 & 4238/MUM/2023 Rs. 6,45,572/- Rs. 1,39,18,769/- Rs. 7,50,000/- On further appeals, the Ld. CIT(A) rejected the contention of the assessee and sustained the addition for unexplained cash expenditure by way of a detailed finding in the impugned orders. Aggrieved, the assessee is in appeals before the Income Tax ) by way of raising grounds and additional ground as reproduced below. 13. The grounds of the case and in law, as unexplained casti expenses. U/s 69C of the Income Tax Act, 1961 and the reasons assigned by him, for doing so are wrong and contrary to the facts and rovisions of Income Tax Act, 1961 and Before us, the assessee also raised following additional On the Facts and in the circumstances of the case and in law the arrival in the eyes of law as the same has been accorded on presumption and without application of mind and consequently the assessment order u/s 153C of the Act is null and Void as approval granted under plication of Mind. grounds and additional grounds have been raised in except change of amount. 4.3 We have heard rival submission of the parties on the issue of admissibility of the additional legal in nature and not requiring investigation of fresh facts, same are admitted for adjudication in view of the settled principle in the case of NTPC Ltd. 229 ITR 283 (SC). 5. Before us, the learned counsel for the assessee filed paperbook containing pages 1to 46. 6. In the additional ground, the assessee has challenged the validity of the assessment under section 153C of the to the assessee the approval granted by the competent authority under section 153D of the without application of the consequently the assessment order under section 153C is null and void. 6.1 The submissions in support of the the learned counsel for the assessee are summarised as under: (i) The letter seeking Commissioner of Income 26/12/2017, limitation of the assessment. The Commissioner has approved the assessment on same date i.e. 26/12/2017, which shows that the approval has been granted in haste (ii) Only the draft assessment order, without assessment record and seized material or apprai e have heard rival submission of the parties on the issue of additional grounds. As the grounds raised legal in nature and not requiring investigation of fresh facts, same are admitted for adjudication in view of the settled principle in the NTPC Ltd. 229 ITR 283 (SC). Before us, the learned counsel for the assessee filed paperbook containing pages 1to 46. In the additional ground, the assessee has challenged the validity of the assessment under section 153C of the to the assessee the approval granted by the competent authority under section 153D of the Act has been accorded on presumption, without application of the mind, which is mechanical in nature, consequently the assessment order under section 153C is null and The submissions in support of the additional ground l for the assessee are summarised as under: letter seeking approval was submitted to the A Commissioner of Income-tax i.e. the approving authority on 2017, which is at the fag end of the expiry limitation of the assessment. The Commissioner has approved the assessment on same date i.e. 26/12/2017, which shows that the approval has been granted in haste, without going through records. Only the draft assessment order, without assessment record and seized material or appraisal report was sent to the Smt. Usha Satish Salvi 5 ITA Nos. 4239, 4237 & 4238/MUM/2023 e have heard rival submission of the parties on the issue of grounds raised are legal in nature and not requiring investigation of fresh facts, same are admitted for adjudication in view of the settled principle in the Before us, the learned counsel for the assessee filed a In the additional ground, the assessee has challenged the validity of the assessment under section 153C of the Act. According to the assessee the approval granted by the competent authority as been accorded on presumption, mechanical in nature, consequently the assessment order under section 153C is null and ground made by l for the assessee are summarised as under: approval was submitted to the Additional tax i.e. the approving authority on which is at the fag end of the expiry of limitation of the assessment. The Ld Additional Commissioner has approved the assessment on same date i.e. 26/12/2017, which shows that the approval has been without going through records. Only the draft assessment order, without assessment record sal report was sent to the approving authority with the letter for obtaining the approval. Therefore approval without examining either the assessment record or the seized material. (iii) A common and consolidated approval has the years AY 2010 no year was reasoning in the said approval. The approval has to be granted separately for each assessment year. (iv) The approval granted was not absolute. (v) The approval is generic and li blanket manner without any reference to any issue in respect of any of the assessment year. (vi) The approval was granted in a mechanical and hurried manner without mentioning the reasons and without application of mind. The approving mentioned anything in the approval memo toward the process of deriving satisfaction so as to exhibit his application of mind. objectively evaluated the draft assessment order with due application of the min order so as to derive its conclusive satisfaction that the proposed action of the Assessing Officer is in conformity with the subsisting law. 6.2 In support of above contentions the learned counsel relied on various decisions of Hon’ble High Court’s (i) Decision dated 06/06/2024 of in the case of Shri Guvinder Singh Duggal in ITA No. 860 to 863/Del/2021 for AY 2012 approving authority with the letter for obtaining the Therefore, the approving authority has granted approval without examining either the assessment record or the seized material. A common and consolidated approval has been granted for AY 2010-11 to 2015-16 and 2016- no year was reasoning in the said approval. The approval has to be granted separately for each assessment year. The approval granted was not absolute. The approval is generic and listless and accorded in a blanket manner without any reference to any issue in respect of any of the assessment year. The approval was granted in a mechanical and hurried manner without mentioning the reasons and without application of mind. The approving authority anything in the approval memo toward the process of deriving satisfaction so as to exhibit his application of mind. The approving authority has not objectively evaluated the draft assessment order with due application of the mind on the issue contained in such order so as to derive its conclusive satisfaction that the proposed action of the Assessing Officer is in conformity with the subsisting law. In support of above contentions the learned counsel relied on ns of the coordinate benches of the T as follows: Decision dated 06/06/2024 of Delhi bench of the T in the case of Shri Guvinder Singh Duggal in ITA No. 860 to 863/Del/2021 for AY 2012-13 to 2018-19. Smt. Usha Satish Salvi 6 ITA Nos. 4239, 4237 & 4238/MUM/2023 approving authority with the letter for obtaining the the approving authority has granted approval without examining either the assessment record or been granted for -17 and there is no year was reasoning in the said approval. The approval has to be granted separately for each assessment year. stless and accorded in a blanket manner without any reference to any issue in The approval was granted in a mechanical and hurried manner without mentioning the reasons and without authority has not anything in the approval memo toward the process of deriving satisfaction so as to exhibit his The approving authority has not objectively evaluated the draft assessment order with due d on the issue contained in such order so as to derive its conclusive satisfaction that the proposed action of the Assessing Officer is in conformity In support of above contentions the learned counsel relied on the coordinate benches of the Tribunal and Delhi bench of the Tribunal in the case of Shri Guvinder Singh Duggal in ITA No. 860 to (ii) Decision dated 29/04/2024 of the case of MDLR Airline (P) Ltd in ITA No. 1420 & 1421/Del/2023 for AY 2007 (iii) Decision of Hon’ble Allahabad High Court in the case of PCIT vs Sapna Gupta in ITA No. 88 of 2022. (iv) Decision of Hon’ble Delhi High Court in the case of PCIT vs Shiv Kumar Nayyar in ITA 285/2024 & CM Appela 28994/2024 (v) Decision of Mumbai Bench of Tribunal in the case of Arch Phamalabs Ltd in ITA No. 6656/Mum/2017 for AY 2011 and other appeals. (vi) Decision of Hon’b M/s MDLR Hoteles P Ltd in ITA 593/2023 (vii) Decision dated 24/04/2024 of Delhi Bench of Tribunal in the case of Veena Singh in ITA No. 294 & 295/Del/2022 for AY 2016-17 and 2017 7. On the contrary, the grounds have been raised merely on the basis of the presumptions and suspicion that the learned A tax i.e. approving authority had not gone through the seized material and assessment reco application of the mind submitted that after collecting all the material from the search premises, each and every material is being analysed from the angle of possible tax evasion Income-tax authority who conducts DR further submitted that as per the procedure prescribed, of the said appraisal report is sent to the concern Decision dated 29/04/2024 of Delhi Bench of Tribunal in the case of MDLR Airline (P) Ltd in ITA No. 1420 & 1421/Del/2023 for AY 2007-08 and 2008-09. Decision of Hon’ble Allahabad High Court in the case of PCIT vs Sapna Gupta in ITA No. 88 of 2022. of Hon’ble Delhi High Court in the case of PCIT vs Shiv Kumar Nayyar in ITA 285/2024 & CM Appela Decision of Mumbai Bench of Tribunal in the case of Arch Phamalabs Ltd in ITA No. 6656/Mum/2017 for AY 2011 and other appeals. Decision of Hon’ble Delhi High Court in the case of PCIT Vs M/s MDLR Hoteles P Ltd in ITA 593/2023 Decision dated 24/04/2024 of Delhi Bench of Tribunal in the case of Veena Singh in ITA No. 294 & 295/Del/2022 for 17 and 2017-18 On the contrary, the Ld. DR submitted that all the additional grounds have been raised merely on the basis of the presumptions and suspicion that the learned Additional Commissioner of Income tax i.e. approving authority had not gone through the seized material and assessment records leading to allegation application of the mind by the approving authority. after collecting all the material from the search premises, each and every material is being analysed from the angle of possible tax evasion and an ‘appraisal report’ is prepared by the uthority who conducts the search action. The learned DR further submitted that as per the procedure prescribed, of the said appraisal report is sent to the concern Smt. Usha Satish Salvi 7 ITA Nos. 4239, 4237 & 4238/MUM/2023 Delhi Bench of Tribunal in the case of MDLR Airline (P) Ltd in ITA No. 1420 & 09. Decision of Hon’ble Allahabad High Court in the case of of Hon’ble Delhi High Court in the case of PCIT vs Shiv Kumar Nayyar in ITA 285/2024 & CM Appela Decision of Mumbai Bench of Tribunal in the case of Arch Phamalabs Ltd in ITA No. 6656/Mum/2017 for AY 2011-12 le Delhi High Court in the case of PCIT Vs Decision dated 24/04/2024 of Delhi Bench of Tribunal in the case of Veena Singh in ITA No. 294 & 295/Del/2022 for DR submitted that all the additional grounds have been raised merely on the basis of the presumptions dditional Commissioner of Income- tax i.e. approving authority had not gone through the seized allegation of non- proving authority. The learned DR after collecting all the material from the search premises, each and every material is being analysed from the angle prepared by the the search action. The learned DR further submitted that as per the procedure prescribed, a copy of the said appraisal report is sent to the concerned Assessing Officer, concerned Additional Commiss approving authority) and Commissioner of Income appraisal report of the case containing analysis of entire seized material related to case was already available with the approving authority. The learned DR filed affidavits from the approving authority as well as from the Assessing Officer who passed the assessment orders, in support of the contention that assessment orders were approved after due application of mind. officer has deposed that issues between him and approving authority happened regularly based on the appraisal reports and seized/impounded materials .For ready reference, content of the affidavit filed by the then Assessing Officer is reproduced as under: “I, Pawan Bharti, Jt. Commissioner of Income Tax, (AU) stationed at Kalyan and office address at Mohan Plaza, 2nd floor, Wayale Nagar, Khadakkpada affirm and statedin the case of Usha S. Salvi for 4239M2023), A.Y.2013 42382023) as under: It has been more than almost 7 years since these orders were passed after due discussion and guidance from time to time with the approval of Range Head as per the Law. Generally, the appraisal reports of such search/ survey cases are forwarded to the central charge hierarchy including the AO and Range head and in such type Law, approval for passing the assessment orders are to be given by the range head and so Range head has to apply his/her mind and has to give sufficient time. between the range head and AO ha needed. Appraisal report or other communication with the investigation wing of the department and seized/impounded materials explored and discussed from time to time and thereafter assessment order finalised after approval from th range head. In this case also, such type of discussion happened dditional Commissioner of Income approving authority) and the concerned Commissioner or Principal Commissioner of Income-tax. Accordingly, he submitted that appraisal report of the case containing analysis of entire seized d to case was already available with the approving The learned DR filed affidavits from the approving authority as well as from the Assessing Officer who passed the assessment orders, in support of the contention that assessment oved after due application of mind. officer has deposed that in the instant case, discussion on various between him and approving authority happened regularly based on the appraisal reports and seized/impounded materials reference, content of the affidavit filed by the then Assessing Officer is reproduced as under: I, Pawan Bharti, Jt. Commissioner of Income Tax, (AU) - stationed at Kalyan and office address at Mohan Plaza, 2nd floor, Wayale Nagar, Khadakkpada, Kalyan (W)-421301, do hereby solemnly affirm and statedin the case of Usha S. Salvi for A. Y. 2012 4239M2023), A.Y.2013-14 (ITA 42372023), A.Y. 2014 42382023) as under: It has been more than almost 7 years since these orders were passed fter due discussion and guidance from time to time with the approval of Range Head as per the Law. Generally, the appraisal reports of such search/ survey cases are forwarded to the central charge hierarchy including the AO and Range head and in such type of cases, as per Law, approval for passing the assessment orders are to be given by the range head and so Range head has to apply his/her mind and has to give sufficient time. Since in such type of cases, regular discussion between the range head and AO happened regularly whenever needed. Appraisal report or other communication with the investigation wing of the department and seized/impounded materials explored and discussed from time to time and thereafter assessment order finalised after approval from th range head. In this case also, such type of discussion happened Smt. Usha Satish Salvi 8 ITA Nos. 4239, 4237 & 4238/MUM/2023 ioner of Income-tax (i.e. the the concerned Commissioner or Principal tax. Accordingly, he submitted that appraisal report of the case containing analysis of entire seized d to case was already available with the approving The learned DR filed affidavits from the approving authority as well as from the Assessing Officer who passed the assessment orders, in support of the contention that assessment oved after due application of mind. The Assessing in the instant case, discussion on various between him and approving authority happened regularly based on the appraisal reports and seized/impounded materials reference, content of the affidavit filed by the then 1(3), Thane stationed at Kalyan and office address at Mohan Plaza, 2nd floor, hereby solemnly A. Y. 2012-13 (ITA 14 (ITA 42372023), A.Y. 2014-15 (ITA It has been more than almost 7 years since these orders were passed fter due discussion and guidance from time to time with the approval of Range Head as per the Law. Generally, the appraisal reports of such search/ survey cases are forwarded to the central charge hierarchy of cases, as per Law, approval for passing the assessment orders are to be given by the range head and so Range head has to apply his/her mind and has to Since in such type of cases, regular discussion ppened regularly whenever needed. Appraisal report or other communication with the investigation wing of the department and seized/impounded materials explored and discussed from time to time and thereafter assessment order finalised after approval from the range head. In this case also, such type of discussion happened regularly based on the appraisal reporis and seized/impounded materials as per the Law. Since the offices of the range head and the assessing officer at the same floor i.e. 19th fl or meetings were called by the range head or sought by the AO to discuss such cases. The AO had to discuss the assessment records, reply from the assesse etc. across the table with the range head on the one to one discussion basis as such type of search/survey cases are sensitive in nature. single assessment years in combined manner to save the resources of the government and to protect the interest of revenue as d on such cases have already been done to conclude the assessment proceedings in holistic and logical conclusion. In the instant case, such practice was followed. Hence, proper and regular discussions, analysis of appraisal report and seized/impounded materials have been taken place to conclusion to finalise the assessment orders and in this way, thorough application of mind was there to conclude the assessment proceedings in the present case along with other such cases where ap sought. The report has been prepared by recollecting the memories, and events happened at that time. I, solemnly state that the contents of this affidavit are true to the best of my knowledge and beliefand that it conceals nothing of it is false.” 7.1 Similarly, the approving authority also deposed that all issues involved in the assessments were regularly discussed since the stage of issuing notice for query latter to the stage of making draft assessment order. The learned Additional Commissioner of Income authority is reproduced as under: “Affidavit in case of Usha S. Salvi for A.Y.2012 4239M2023) 4238M2023) I, Anu Krishna Aggarwal, Commissioner of Income Tax, Appeals (AU) Delhi, having Office address at Room No. 108, Drum Shaped Building, IP Estate, Delhi regularly based on the appraisal reporis and seized/impounded materials as per the Law. Since the offices of the range head and the assessing officer at the same floor i.e. 19th floor in the Air India Building the discussion or meetings were called by the range head or sought by the AO to discuss such cases. The AO had to discuss the assessment records, reply from the assesse etc. across the table with the range head on the ne discussion basis as such type of search/survey cases are sensitive in nature. Furthermore, approvals are granted for more than single assessment years in combined manner to save the resources of the government and to protect the interest of revenue as d on such cases have already been done to conclude the assessment proceedings in holistic and logical conclusion. In the instant case, such practice was followed. Hence, proper and regular discussions, analysis of appraisal report and ounded materials have been taken place to reach the logical conclusion to finalise the assessment orders and in this way, thorough application of mind was there to conclude the assessment proceedings in the present case along with other such cases where ap The report has been prepared by recollecting the memories, and events happened at that time. I, solemnly state that the contents of this affidavit are true to the best of my knowledge and beliefand that it conceals nothing and that no part approving authority also deposed that all issues involved in the assessments were regularly discussed since the stage of issuing notice for query latter to the stage of making draft assessment order. The content of the affidavit filed by the then dditional Commissioner of Income-tax i.e. the arriving reproduced as under: Affidavit in case of Usha S. Salvi for A.Y.2012 A. Y.2013-14 (ITA 4237M2023), A. Y.2014 I, Anu Krishna Aggarwal, Commissioner of Income Tax, Appeals (AU) Delhi, having Office address at Room No. 108, Drum Shaped Building, Delhi- 110002, do hereby solemnly affirm and state in the Smt. Usha Satish Salvi 9 ITA Nos. 4239, 4237 & 4238/MUM/2023 regularly based on the appraisal reporis and seized/impounded Since the offices of the range head and the assessing officer (AO) were oor in the Air India Building the discussion or meetings were called by the range head or sought by the AO to discuss such cases. The AO had to discuss the assessment records, reply from the assesse etc. across the table with the range head on the ne discussion basis as such type of search/survey cases are Furthermore, approvals are granted for more than single assessment years in combined manner to save the resources of the government and to protect the interest of revenue as deliberations on such cases have already been done to conclude the assessment proceedings in holistic and logical conclusion. In the instant case, such Hence, proper and regular discussions, analysis of appraisal report and reach the logical conclusion to finalise the assessment orders and in this way, thorough application of mind was there to conclude the assessment proceedings in the present case along with other such cases where approval is all the facts I, solemnly state that the contents of this affidavit are true to the best of and that no part approving authority also deposed that all issues involved in the assessments were regularly discussed since the stage of issuing notice for query latter to the stage of making draft avit filed by the then i.e. the arriving Affidavit in case of Usha S. Salvi for A.Y.2012-13 (ITA 14 (ITA 4237M2023), A. Y.2014-15 (ITA I, Anu Krishna Aggarwal, Commissioner of Income Tax, Appeals (AU)-4, Delhi, having Office address at Room No. 108, Drum Shaped Building, 110002, do hereby solemnly affirm and state in the case of Usha S. Salvi for 4237M2023), A. Y.2014 (1) In search case, the search material and relevant record is in the possession of the Assessing Officer and the approval of the Assessment order is not a one the Assessing Officer. The examine the records on regular basis. assessment order is given after a number of meetings are held and the whole case is understood. I have seen the records before giving approval of the case. He comes with the records for discussion and after understanding the content of the record, approval is given. It is not a is given in just one (2) The approval was given on the same day as the letter for approval was received, does not mean that the case has been seen only on that day. The Addl.CIT and the Assessing officer both are involved in the case since the issue of the notices and before sending the questionnaire to the assessee, the record is examined by the Assessing Officer and the Addl.CIT both on a regular basis. may not be brought on the record because generally, the practice of the department is that we don't write order sheet of the meeting with the Assessing Officer. The reason and the Addl.CIT meet a number of a practice to write each and every meeting w Income Tax Department. (3) In this case the offices of the range head and the assessing officer were at the same floor i.e. 19th floor in the Air India Building, sometimes the discussion or and sometimes meetings were sought case. The meeting between the Assessing Officer held on a regular basis as I have already said in the above Assessing Officer and the Addl.CIT meet very of (4) The modifications or amendments are suggested on regular basis. The monitoring is done on regular basis and at every stage of the investigation and the examination of the records, the suggestion is being given. Therefore, it is not possible to sub given and no order sheet is being maintained for discussion and meeting with the Assessing Officer. Actually the Addl.CIT is involved in the process from the start of the assessment process. changes in the assessment Therefore, there is no need to change the draft assessment order as the draft assessment order is being prepared after a due deliberation and discussion with the Assessing Officer. (5) I, the Addi,CIT in the case at application of mind was done in the case when the order was approved u/s. 153D and I was was assigned to the charge. case of Usha S. Salvi for A. Y.2012-13(ITA 42392023), A.Y.2013 4237M2023), A. Y.2014-15 (ITA 4238M2023) as under: (1) In search case, the search material and relevant record is in the possession of the Assessing Officer and the approval of the Assessment order is not a one-day affair, it is done after a series of discussions with the Assessing Officer. The Assessing Officer and the Addl.CTT both examine the records on regular basis. Therefore, the approval to the assessment order is given after a number of meetings are held the whole case is understood. I have seen the records before giving approval of the case. The record is with the Assessing Officer. He comes with the records for discussion and after understanding the the record, approval is given. It is not a case where approval is given in just one day. (2) The approval was given on the same day as the letter for approval was received, does not mean that the case has been seen only on that The Addl.CIT and the Assessing officer both are involved in se since the issue of the notices and before sending the questionnaire to the assessee, the record is examined by the Assessing Officer and the Addl.CIT both on a regular basis. brought on the record because generally, the practice of the artment is that we don't write order sheet of the meeting with the Assessing Officer. The reason for the same is that the Assessing Officer and the Addl.CIT meet a number of times every day. Therefore, it is not a practice to write each and every meeting with the Assessing Officer in Income Tax Department. (3) In this case the offices of the range head and the assessing officer were at the same floor i.e. 19th floor in the Air India Building, sometimes the discussion or meetings were called for by the range and sometimes meetings were sought by the AO to discuss the group case. The meeting between the Assessing Officer and the Addl.CIT were held on a regular basis as I have already said in the above Assessing Officer and the Addl.CIT meet very often. (4) The modifications or amendments are suggested on regular basis. The monitoring is done on regular basis and at every stage of the investigation and the examination of the records, the suggestion is being given. Therefore, it is not possible to submit all the suggestions given and no order sheet is being maintained for discussion and meeting with the Assessing Officer. Actually the Addl.CIT is involved in the process from the start of the assessment process. Therefore, the changes in the assessment order, if any, is a continuous process. Therefore, there is no need to change the draft assessment order as the draft assessment order is being prepared after a due deliberation and discussion with the Assessing Officer. (5) I, the Addi,CIT in the case at that time is confirming that due application of mind was done in the case when the order was approved u/s. 153D and I was involved in the case from the day when the case was assigned to the charge. Smt. Usha Satish Salvi 10 ITA Nos. 4239, 4237 & 4238/MUM/2023 13(ITA 42392023), A.Y.2013-14 (ITA (1) In search case, the search material and relevant record is in the possession of the Assessing Officer and the approval of the Assessment affair, it is done after a series of discussions with Assessing Officer and the Addl.CTT both Therefore, the approval to the assessment order is given after a number of meetings are held the whole case is understood. I have seen the records before The record is with the Assessing Officer. He comes with the records for discussion and after understanding the case where approval (2) The approval was given on the same day as the letter for approval was received, does not mean that the case has been seen only on that The Addl.CIT and the Assessing officer both are involved in se since the issue of the notices and before sending the questionnaire to the assessee, the record is examined by the Assessing Officer and the Addl.CIT both on a regular basis. It brought on the record because generally, the practice of the artment is that we don't write order sheet of the meeting with the for the same is that the Assessing Officer times every day. Therefore, it is not ith the Assessing Officer in (3) In this case the offices of the range head and the assessing officer were at the same floor i.e. 19th floor in the Air India Building, eetings were called for by the range head the AO to discuss the group and the Addl.CIT were held on a regular basis as I have already said in the above point, (4) The modifications or amendments are suggested on regular basis. The monitoring is done on regular basis and at every stage of the investigation and the examination of the records, the suggestion is mit all the suggestions given and no order sheet is being maintained for discussion and meeting with the Assessing Officer. Actually the Addl.CIT is involved in Therefore, the order, if any, is a continuous process. Therefore, there is no need to change the draft assessment order as the draft assessment order is being prepared after a due deliberation and that time is confirming that due application of mind was done in the case when the order was approved involved in the case from the day when the case 1, solemnly state that the contents of this affidavit are my knowledge and belief and that it conceals nothing and that no part of it is false.” 7.2 The learned DR submitted that no evidence by the assessee supporting his contention of non mind by the approving by the AO and approving authority deposing proper application of mind, the contentions of ld counsel of the assessee are liable to be rejected. In this regard, ld DR is reproduced as under: “………………. 2. With regard to the ground raised by the assesse application of mind while granting approval us 153D of the Act it is submitted that the Ld JCIT had duly applied her mind. It was only after applying her mind approval. As informed by the AO, the draft order is not available in records but it is humbly submitted that if a senior officer has confirmed that she had suggested some changes then the same would have been done by AO. Affidavits have also been filed by both officers i.e. the AO, as well as the Range head, wherein they have confirmed that due process was followed, various meetings were held on regular basis and only after the Range head was satisfied the appro shows that the JCIT had applied her mind before granting approval u/s 153D. 3. In this regard it is pertinent to mention that in the seized material consists of only 3 Annexures. Thus this is not a case where huge discussions. 4. Regarding assessee's claim that JCIT should have applied her mind in judicious manner and then drawn conclusions it is submitted that the JCIT in her affidavit has clearly admitted that due appli done. The dictionary meaning of judicious says 'showing good judgement'. It is submitted that if the assessment order is correct in every way, seized material is just a few documents and already discussion has been held many times in person, as central range, considering the sensitive nature of cases, a simple order with no complications can be called judicious. In fact, in this case, some corrections were suggested by the Range head before passing the order. It is also submit 1, solemnly state that the contents of this affidavit are true to the best of my knowledge and belief and that it conceals nothing and that no part learned DR submitted that no evidences have by the assessee supporting his contention of non mind by the approving authority and in view of the affidavit by the AO and approving authority deposing proper application of mind, the contentions of ld counsel of the assessee are liable to be regard, contents of written submission filed by the is reproduced as under: 2. With regard to the ground raised by the assesse regarding non application of mind while granting approval us 153D of the Act it is submitted that the Ld JCIT had duly applied her mind. It was only after applying her mind that she had suggested some changes and gave As informed by the AO, the draft order is not available in records but it is humbly submitted that if a senior officer has confirmed that she had suggested some changes then the same would have been Affidavits have also been filed by both officers i.e. the AO, as well as the Range head, wherein they have confirmed that due process was followed, various meetings were held on regular basis and only after the Range head was satisfied the approval was granted. This shows that the JCIT had applied her mind before granting approval u/s In this regard it is pertinent to mention that in the present case the seized material consists of only 3 Annexures. Thus this is not a case where huge seized material is there requiring extensive 4. Regarding assessee's claim that JCIT should have applied her mind in judicious manner and then drawn conclusions it is submitted that the JCIT in her affidavit has clearly admitted that due appli done. The dictionary meaning of judicious says 'showing good judgement'. It is submitted that if the assessment order is correct in every way, seized material is just a few documents and already discussion has been held many times in person, as per the practice in central range, considering the sensitive nature of cases, a simple order with no complications can be called judicious. In fact, in this case, some corrections were suggested by the Range head before passing the order. It is also submitted that, in a situation where no additionor deletion or Smt. Usha Satish Salvi 11 ITA Nos. 4239, 4237 & 4238/MUM/2023 true to the best of my knowledge and belief and that it conceals nothing and that no part s have been filed by the assessee supporting his contention of non application of authority and in view of the affidavits filed by the AO and approving authority deposing proper application of mind, the contentions of ld counsel of the assessee are liable to be contents of written submission filed by the regarding non application of mind while granting approval us 153D of the Act it is submitted that the Ld JCIT had duly applied her mind. It was only after that she had suggested some changes and gave As informed by the AO, the draft order is not available in records but it is humbly submitted that if a senior officer has confirmed that she had suggested some changes then the same would have been Affidavits have also been filed by both officers i.e. the AO, as well as the Range head, wherein they have confirmed that due process was followed, various meetings were held on regular basis and val was granted. This shows that the JCIT had applied her mind before granting approval u/s present case the seized material consists of only 3 Annexures. Thus this is not a seized material is there requiring extensive 4. Regarding assessee's claim that JCIT should have applied her mind in judicious manner and then drawn conclusions it is submitted that the JCIT in her affidavit has clearly admitted that due application was done. The dictionary meaning of judicious says 'showing good judgement'. It is submitted that if the assessment order is correct in every way, seized material is just a few documents and already per the practice in central range, considering the sensitive nature of cases, a simple order with no complications can be called judicious. In fact, in this case, some corrections were suggested by the Range head before passing the order. ted that, in a situation where no additionor deletion or any correction to the order is required or suggested and the Range head agrees with AO, a simple approval can also be said to suffice. 5. Regarding assessee's contention that there is single approval years it is submitted that different approval has been granted as all the AYrs are clearly mentioned. It is only an approval on a single page. In this regard it is submitted that in case different pages had been used for each AY, even then the sum 6. Reliance is placed on Hon'ble ITAT MUMBAI BENCH \"C\", MUMBAI decision in the case of Pratibha Pipes & Structurals Ltd, DCIT, Cent. Cir. 17 & 28, Mumbai dated 10 the copy of approval was not available but still the decision was given in favour of revenue after considering the facts and circumstances. In that case also affidavit of the Range head was f categorically stated in his affidavit that he had issued necessary approval u/s 153D. 8. We have considered the rival submission of the parties additional grounds raised by the assessee assessment order passed on the ground that approval grant the approving authority is application of the mind. approval granted by the approving authority is reproduced as under: “To, DCIT-CC-4(4) Mumbai. Approval U/s 153D of the I T Act for assessment in the case of Smt Usha Satish Salvi 2016-17 - reg. Please refer to the above. Draft: assessment orders in the abovementioned case u/s 143(3) r.w.s. 153C of the I T Act, of the I T Act for A.Y. 2016 Act, 1961 subject to the corrections made therein order, a copy of the same may be submitted to this office. any correction to the order is required or suggested and the Range head agrees with AO, a simple approval can also be said to suffice. Regarding assessee's contention that there is single approval years it is submitted that different approval has been granted as all the AYrs are clearly mentioned. It is only an approval on a single page. In this regard it is submitted that in case different pages had been used for each AY, even then the sum and substance would have been same. 6. Reliance is placed on Hon'ble ITAT MUMBAI BENCH \"C\", MUMBAI decision in the case of Pratibha Pipes & Structurals Ltd, DCIT, Cent. Cir. 28, Mumbai dated 10 -04-2019 (copy enclosed). In that case even the copy of approval was not available but still the decision was given in favour of revenue after considering the facts and circumstances. In that case also affidavit of the Range head was filed wherein it was categorically stated in his affidavit that he had issued necessary approval u/s 153D. have considered the rival submission of the parties additional grounds raised by the assessee i.e. assailing impugned assed on the ground that approval grant the approving authority is mechanical manner plication of the mind. For ready reference, a copy of the said approval granted by the approving authority is reproduced as Approval U/s 153D of the I T Act for assessment in the case of Smt Usha Satish Salvi (PAN-AQSPS6935J) for A.Ys. 2010-11 to 2015 ---------------------------- Please refer to the above. : assessment orders in the abovementioned case u/s 143(3) r.w.s. T Act, 1961 for A.Ys. 2010-11 to 2015-16 and u/s 143(3) of the I T Act for A.Y. 2016-17 are hereby approved u/s 153D of the I T subject to the corrections made therein. After passing the order, a copy of the same may be submitted to this office.” Smt. Usha Satish Salvi 12 ITA Nos. 4239, 4237 & 4238/MUM/2023 any correction to the order is required or suggested and the Range head agrees with AO, a simple approval can also be said to suffice. Regarding assessee's contention that there is single approval for all years it is submitted that different approval has been granted as all the AYrs are clearly mentioned. It is only an approval on a single page. In this regard it is submitted that in case different pages had been used and substance would have been same. 6. Reliance is placed on Hon'ble ITAT MUMBAI BENCH \"C\", MUMBAI decision in the case of Pratibha Pipes & Structurals Ltd, DCIT, Cent. Cir. 2019 (copy enclosed). In that case even the copy of approval was not available but still the decision was given in favour of revenue after considering the facts and circumstances. In iled wherein it was categorically stated in his affidavit that he had issued necessary have considered the rival submission of the parties on the assailing impugned assed on the ground that approval granted by mechanical manner and without copy of the said approval granted by the approving authority is reproduced as Approval U/s 153D of the I T Act for assessment in the case of Smt 11 to 2015-16 & : assessment orders in the abovementioned case u/s 143(3) r.w.s. 16 and u/s 143(3) 153D of the I T . After passing the 8.1 The learned counsel for the assessee has mainly contended that except draft assessment orders, no material was available with the approving authority granted on the same date of seeking such approval in a combined manner for all the assessment yea authority has merely order but not specified said we find that except such allegation in support of the additional ground, no documentary evidence to support the allegations application of mind by the approving authority the assessee. Whereas representative has filed affidavits from the then Assessing Officer and the approving authority, wherein they have denied the allegations raised by the assessee but n filed by the assessee to controvert the deposition made by the Assessing Officer and the additional Commissioner of income their respective affidavits. In the decisions relied upon by the assessee the main ratio is that approval granted in mechanical manner without application of mind is not sustainable in law. In the decisions relied upon of coordinate benches main allegation that the Assessing Officer only forwarded enclosing assessment records or appraisal report on seized material. In the affidavits filed stated by the Assessing Officer as well as the A learned counsel for the assessee has mainly contended that except draft assessment orders, no material was available with the approving authority. He has further alleged that approval was granted on the same date of seeking such approval in a combined manner for all the assessment year involved. T authority has merely directed for certain modification in the f order but not specified said modification in the approval we find that except such allegation in support of the additional ground, no documentary evidence to support the allegations application of mind by the approving authority have been filed by the assessee. Whereas, on the other hand, the learned departmental representative has filed affidavits from the then Assessing Officer and the approving authority, wherein they have denied the gations raised by the assessee but no counter affidavit has been essee to controvert the deposition made by the Assessing Officer and the additional Commissioner of income their respective affidavits. In the decisions relied upon by the the main ratio is that approval granted in mechanical application of mind is not sustainable in law. In the decisions relied upon of coordinate benches main allegation that the Assessing Officer only forwarded letter seeking approval assessment records or appraisal report on seized . In the affidavits filed before us, it has been unequivocally sessing Officer as well as the A Smt. Usha Satish Salvi 13 ITA Nos. 4239, 4237 & 4238/MUM/2023 learned counsel for the assessee has mainly contended that except draft assessment orders, no material was available with d that approval was granted on the same date of seeking such approval in a combined r involved. The approving for certain modification in the final the approval order. But we find that except such allegation in support of the additional ground, no documentary evidence to support the allegations of non have been filed by on the other hand, the learned departmental representative has filed affidavits from the then Assessing Officer and the approving authority, wherein they have denied the o counter affidavit has been essee to controvert the deposition made by the Assessing Officer and the additional Commissioner of income-tax in their respective affidavits. In the decisions relied upon by the the main ratio is that approval granted in mechanical application of mind is not sustainable in law. In the decisions relied upon of coordinate benches main allegation that letter seeking approval without assessment records or appraisal report on seized it has been unequivocally sessing Officer as well as the Additional Commissioner of Income assessments were discussed between the two authorities same floor of office building. The ld DR submitted that approving authority after considering the queries raised by the Assessing Officer and the reply of the assessee appraisal report and seized record, had in the draft assessment order was granted. In the cases cited by the learned counsel for the assessee the fact of between the two authorities from time to time has not been brought on record and therefore in those decisions this aspect has not been considered. We further note that certain modifications were suggested to the Assessing Officer in the draft assessment order, which have been carried out by the Assessing Officer assessment order passed, which also shows that the approving authority approved the draft order not in mechanical manner, but after due application of mind. the order itself shows that the approving authority ha s gone through drat assessment order and analyed the issue involved therein. In the cases relied upon by the assessee the fact of modification suggested by approving authority is not born out , which distinguish the case of the assessee with the cases relied upon by the assessee. Commissioner of Income-tax that all the issues involved in the assessments were discussed on regular basis from time to time e two authorities as both the authorities were sitting on same floor of office building. The ld DR submitted that approving authority after considering the queries raised by the Assessing Officer and the reply of the assessee report and seized record, had examined each issue dealt in the draft assessment order properly and thereafter only approval . In the cases cited by the learned counsel for the assessee the fact of discussion on various issues of assessment een the two authorities from time to time has not been brought on record and therefore in those decisions this aspect has not been We further note that certain modifications were suggested to the Assessing Officer in the draft assessment order, which have been carried out by the Assessing Officer assessment order passed, which also shows that the approving authority approved the draft order not in mechanical manner, but after due application of mind. The fact of modification suggested in the order itself shows that the approving authority ha s gone through drat assessment order and analyed the issue involved therein. In the cases relied upon by the assessee the fact of modification suggested by approving authority is not born out , istinguish the case of the assessee with the cases relied upon by the assessee. In similar circumstances after considering Smt. Usha Satish Salvi 14 ITA Nos. 4239, 4237 & 4238/MUM/2023 all the issues involved in the from time to time as both the authorities were sitting on same floor of office building. The ld DR submitted that the approving authority after considering the queries raised by the in the light of examined each issue dealt properly and thereafter only approval . In the cases cited by the learned counsel for the discussion on various issues of assessment een the two authorities from time to time has not been brought on record and therefore in those decisions this aspect has not been We further note that certain modifications were suggested to the Assessing Officer in the draft assessment order, which have been carried out by the Assessing Officer in the assessment order passed, which also shows that the approving authority approved the draft order not in mechanical manner, but The fact of modification suggested in the order itself shows that the approving authority ha s gone through drat assessment order and analyed the issue involved therein. In the cases relied upon by the assessee the fact of modification suggested by approving authority is not born out , istinguish the case of the assessee with the cases relied In similar circumstances after considering affidavits filed by the Assessing Officer and the approving the coordinate bench of the T & Structural Ltd in ITA No. 3874 to 3876/Mum/2015 and ITA No. 7120/Mum/2016 in AY 2007 upheld validity of approval granted under section 153D of the act of observing as under: “16. We have heard both the parties, perused th available on record and gone through the orders of authorities below. There is no doubt with regard to the fact that as per provisions of section 153D, the AO needs to take prior approval from the Addl.Commissioner of the range in charge before assessment order u/s 143(3) r.w.s. 153A of the Income 1961. It is also not in dispute that the AO, in his assessment order at para 7 had categorically stated that the mandatory requirement of approval u/s 153D of the Income from the Addl.CIT, Central Range No.Addl.CIT/CR also not in dispute that the assessee has not raised any objection, whatsoever, with regard to the issue of approval u/ before the AO or before the first appellate authority. The assessee has taken the legal filing additional ground of to be apprised in the light of above assessee. Admittedly, the department, in clarified that neither copy of approval request letter to the Addl. Commissioner, nor copy of approval granted u/s of the Act, was fou was further stated that in the 153D approval folder maintained in the office of Addl.CIT, Range cases were traced. The having been taken approval u/s 153D not sufficient and what is required to be seen is department is able to provide copy of approval letter granted by Addl.CIT, or not. Since the department has categorically stated that approval granted u/s 153D of the Act is not available in the assessment folder, assessee that no such 153D before passing order u/s 143(3) 1961. affidavits filed by the Assessing Officer and the approving the coordinate bench of the Tribunal in the case of & Structural Ltd in ITA No. 3874 to 3876/Mum/2015 and ITA No. 7120/Mum/2016 in AY 2007-08 to 2009-10 and 2011 upheld validity of approval granted under section 153D of the act of 16. We have heard both the parties, perused th available on record and gone through the orders of authorities below. There is no doubt with regard to the fact that as per provisions of section 153D, the AO needs to take prior approval from the Addl.Commissioner of the range in charge before assessment order u/s 143(3) r.w.s. 153A of the Income 1961. It is also not in dispute that the AO, in his assessment order at para 7 had categorically stated that the mandatory requirement of approval u/s 153D of the Income-tax Act, 1961 has been taken from the Addl.CIT, Central Range- 4, Mumbai vide letter No.Addl.CIT/CR-4/Approvl-153D/2012-13 dated 25-03 also not in dispute that the assessee has not raised any objection, whatsoever, with regard to the issue of approval u/s 153D either before the AO or before the first appellate authority. The assessee has taken the legal ground for the first time before the Tribunal by filing additional ground of appeal. Therefore, the whole issue needs to be apprised in the light of above facts and also the conduct of the assessee. Admittedly, the department, in reply to RTI application clarified that neither copy of approval request letter filed by the AO to the Addl. Commissioner, nor copy of approval granted u/s of the Act, was found in the assessment order folder. However, it further stated that in the 153D approval folder maintained in Addl.CIT, Range-4, the approval granted in other group cases were traced. The assessee claims that mere mentioning of taken approval u/s 153D in the assessment order is not sufficient and what is required to be seen is department is able to provide copy of approval letter granted by Addl.CIT, or not. Since the department has categorically stated that oval granted u/s 153D of the Act is not available in the assessment folder, obviously, benefit of doubt goes in favour of the assessee that no such approval has been taken by the AO u/s 153D before passing order u/s 143(3) r.w.s. 153A of the I.T. Act, Smt. Usha Satish Salvi 15 ITA Nos. 4239, 4237 & 4238/MUM/2023 affidavits filed by the Assessing Officer and the approving authority, ribunal in the case of Pratibha Pipes & Structural Ltd in ITA No. 3874 to 3876/Mum/2015 and ITA 10 and 2011-12, upheld validity of approval granted under section 153D of the act of 16. We have heard both the parties, perused the materials available on record and gone through the orders of authorities below. There is no doubt with regard to the fact that as per provisions of section 153D, the AO needs to take prior approval from the Addl.Commissioner of the range in charge before passing any assessment order u/s 143(3) r.w.s. 153A of the Income-tax Act, 1961. It is also not in dispute that the AO, in his assessment order at para 7 had categorically stated that the mandatory requirement 961 has been taken 4, Mumbai vide letter 03-2013. It is also not in dispute that the assessee has not raised any objection, s 153D either before the AO or before the first appellate authority. The assessee ground for the first time before the Tribunal by appeal. Therefore, the whole issue needs facts and also the conduct of the reply to RTI application filed by the AO to the Addl. Commissioner, nor copy of approval granted u/s 153D nd in the assessment order folder. However, it further stated that in the 153D approval folder maintained in 4, the approval granted in other group assessee claims that mere mentioning of in the assessment order is not sufficient and what is required to be seen is whether the department is able to provide copy of approval letter granted by the Addl.CIT, or not. Since the department has categorically stated that oval granted u/s 153D of the Act is not available in the obviously, benefit of doubt goes in favour of the approval has been taken by the AO u/s r.w.s. 153A of the I.T. Act, 17. In the above factual background, if we examine the claim of the assessee by way of additional ground, we find that there is a serious suspicion raises additional ground challenging the I.T. Act, 1961, for the first time, before the never disputed this issue before the lower authorities. assessee has taken this issue for the first time before the Tribunal after ascertaining the fact in connection no such approval was available in the assessment folder. When the assessee has not serious doubt arise in the take a legal ground bef if we examine the contents of the the assessment order coupled with affidavits most officers, who were in charge of the assessment we find that b requirement of law under the provisions of section 153D of the Income-tax Act, 1961. The then AO, Shri Milind Rajguru, Joint Commissioner of Income that mandato obtained. Further, Shri Abhijit Pathankar, the an affidavit and stated that he had granted approval given u/s 153D vide his letter No.Addl.CIT/CR 153D/2012-13 dat evidence which cannot be accepted in absence of circumstantial evidences, but in this the assessment record supports both officers. Therefore, the affidavits filed ignored, as not having any evidentiary value. The affidavits filed by the officers coupled with circumstantial available in the assessment folders clearly establish t obtaining necessary approval u/s 153D of the I.T. Act. Though, copy of approval letter is not available in the assessment record, but the contents of approval letter issued by the competent authority has been reproduced in Further, the approval granted in available in the assessment folder. Therefore, it no approval had been taken. Further, the approval u/s administrative procedure which requ officers, who is discharging the assessment functions. The administration for the assessee to justify assessee goes to question the contending its case on merits, that too, after then obviously, a doubt arises about intend of the taking this ground and such an attempt is derail the issue on merits 17. In the above factual background, if we examine the claim of the by way of additional ground, we find that there is a serious suspicion raises about the conduct of the assessee in taking additional ground challenging the issue of approval u/ I.T. Act, 1961, for the first time, before the Tribunal. The assessee never disputed this issue before the lower authorities. assessee has taken this issue for the first time before the Tribunal ascertaining the fact in connection with its RTI application that approval was available in the assessment folder. When the assessee has not raised the issue before the CIT(A), then there is a serious doubt arise in the mind about the intend of the assessee to take a legal ground before the Tribunal. In this factual background, if we examine the contents of the approval mentioned by the AO in the assessment order coupled with affidavits filed by two senior most officers, who were in charge of the assessment we find that both officers have stated in their affidavits about requirement of law under the provisions of section 153D of the Act, 1961. The then AO, Shri Milind Rajguru, Joint Commissioner of Income-tax (Retd) had filed an affidavit and stated that mandatory requirement of approval u/s 153D had been obtained. Further, Shri Abhijit Pathankar, the CIT(DR), has also filed an affidavit and stated that he had granted approval given u/s 153D vide his letter No.Addl.CIT/CR 13 dated 25-03-2013. Although, affidavit is not primary which cannot be accepted in absence of circumstantial but in this case, the circumstantial evidence available in the assessment record supports the contents of affidavits filed by officers. Therefore, the affidavits filed by the officers cannot be ignored, as not having any evidentiary value. The affidavits filed by the officers coupled with circumstantial available in the assessment folders clearly establish t obtaining necessary approval u/s 153D of the I.T. Act. Though, copy approval letter is not available in the assessment record, but the approval letter issued by the competent authority has been reproduced in verbatim in the assessment order at para 7. Further, the approval granted in other group cases is very much available in the assessment folder. Therefore, it cannot be said that no approval had been taken. Further, the approval u/s administrative procedure which requires to be complied with by the officers, who is discharging the assessment functions. The administration action of the department is not very much relevant for the assessee to justify its case, on merits. Therefore, when assessee goes to question the administrative procedure, rather contending its case on merits, that too, after a lapse of 4 to 5 years, then obviously, a doubt arises about intend of the taking this ground and such an attempt is derail the issue on merits Smt. Usha Satish Salvi 16 ITA Nos. 4239, 4237 & 4238/MUM/2023 17. In the above factual background, if we examine the claim of the by way of additional ground, we find that there is a about the conduct of the assessee in taking issue of approval u/s 153D of the Tribunal. The assessee never disputed this issue before the lower authorities. The assessee has taken this issue for the first time before the Tribunal with its RTI application that approval was available in the assessment folder. When the raised the issue before the CIT(A), then there is a mind about the intend of the assessee to Tribunal. In this factual background, approval mentioned by the AO in filed by two senior most officers, who were in charge of the assessment proceedings, oth officers have stated in their affidavits about requirement of law under the provisions of section 153D of the Act, 1961. The then AO, Shri Milind Rajguru, Joint (Retd) had filed an affidavit and stated approval u/s 153D had been CIT(DR), has also filed required to be given u/s 153D vide his letter No.Addl.CIT/CR-4/Approvl- 2013. Although, affidavit is not primary which cannot be accepted in absence of circumstantial case, the circumstantial evidence available in the contents of affidavits filed by by the officers cannot be ignored, as not having any evidentiary value. The contents of affidavits filed by the officers coupled with circumstantial evidences available in the assessment folders clearly establish the fact of obtaining necessary approval u/s 153D of the I.T. Act. Though, copy approval letter is not available in the assessment record, but the approval letter issued by the competent authority has ment order at para 7. other group cases is very much cannot be said that no approval had been taken. Further, the approval u/s 153D is an ires to be complied with by the officers, who is discharging the assessment functions. The action of the department is not very much relevant its case, on merits. Therefore, when nistrative procedure, rather a lapse of 4 to 5 years, then obviously, a doubt arises about intend of the assessee in taking this ground and such an attempt is derail the issue on merits and to escape on techni considered view taken by the assessee passed by the AO u/s 143(3) r.w.s. 1961. Although, the assessee precedents, we find that those case laws were rendered under different set of facts, where the assessee had taken the ground challenging validity of the assessment before the CIT(A) and also fact that there was no specif for taking approval required to be taken u/s 153D of the Income Act, 1961. In this case, the AO has categorically recorded at para 7 of his assessment order in respect of approval taken u/s 153D and such reference has been further strengthened by the affidavits of two officer, who were part of assessment proceedings. Therefore, the case laws relied upon by the assessee cannot be considered as applicable to the facts of assessee case. 18. In this view of the circumstances of the case, we are of the considered view that there is no merit in the additional ground taken by the assessee challenging validity of assessment order passed u/s 143(3) r.w.s. 153A of the I.T. Act, 1961 the I.T.ACT, 1961. Hence, we reject additional ground taken by the assessee.” 8.2 In view of the aforesaid discussion and verification of available, we are of the opinion that approval was granted by additional Commissioner of income mind. The objections of the assessee raise are accordingly rejected. dismissed. 9. Now, we take up the issue raised in the regular grounds challenging the finding of lower authorities on the merit of the addition. 10. The sole ground raised in the appeal relate to addition of unexplained cash expenditure u/s 69C of Rs.6,45,572/ and to escape on technical ground. Therefore, we are of the considered view that there is no merit in the additional ground taken by the assessee challenging validity of assessment order passed by the AO u/s 143(3) r.w.s. 153A of the Income 1961. Although, the assessee has relied upon certain judicial precedents, we find that those case laws were rendered under different set of facts, where the assessee had taken the ground challenging validity of the assessment before the CIT(A) and also fact that there was no specific observation in the assessment order for taking approval required to be taken u/s 153D of the Income Act, 1961. In this case, the AO has categorically recorded at para 7 of his assessment order in respect of approval taken u/s 153D and nce has been further strengthened by the affidavits of two officer, who were part of assessment proceedings. Therefore, the case laws relied upon by the assessee cannot be considered as applicable to the facts of assessee case. 18. In this view of the matter and considering facts and circumstances of the case, we are of the considered view that there is no merit in the additional ground taken by the assessee challenging validity of assessment order passed u/s 143(3) r.w.s. 153A of the I.T. Act, 1961 in light of provisions of section 153D of the I.T.ACT, 1961. Hence, we reject additional ground taken by the view of the aforesaid discussion and verification of available, we are of the opinion that approval was granted by additional Commissioner of income-tax after due application of mind. The objections of the assessee raised in an additional ground are accordingly rejected. The additional ground is accordingly is we take up the issue raised in the regular grounds challenging the finding of lower authorities on the merit of the The sole ground raised in the appeal relate to addition of unexplained cash expenditure u/s 69C of Rs.6,45,572/ Smt. Usha Satish Salvi 17 ITA Nos. 4239, 4237 & 4238/MUM/2023 cal ground. Therefore, we are of the that there is no merit in the additional ground challenging validity of assessment order 153A of the Income-tax Act, certain judicial precedents, we find that those case laws were rendered under different set of facts, where the assessee had taken the ground challenging validity of the assessment before the CIT(A) and also ic observation in the assessment order for taking approval required to be taken u/s 153D of the Income-tax Act, 1961. In this case, the AO has categorically recorded at para 7 of his assessment order in respect of approval taken u/s 153D and nce has been further strengthened by the affidavits of two officer, who were part of assessment proceedings. Therefore, the case laws relied upon by the assessee cannot be considered as matter and considering facts and circumstances of the case, we are of the considered view that there is no merit in the additional ground taken by the assessee challenging validity of assessment order passed u/s 143(3) r.w.s. in light of provisions of section 153D of the I.T.ACT, 1961. Hence, we reject additional ground taken by the view of the aforesaid discussion and verification of records available, we are of the opinion that approval was granted by the tax after due application of an additional ground The additional ground is accordingly is we take up the issue raised in the regular grounds challenging the finding of lower authorities on the merit of the The sole ground raised in the appeal relate to addition of unexplained cash expenditure u/s 69C of Rs.6,45,572/- for assessment year 2012 2013-14 and Rs.7,50,000/ 10.1 The brief facts qua the issue in dispute are that allegation that Shri Satish Salve provided accommodation entries to M/s Nadiadwala Group on the residence of Shri Satish Salve Media and Entertainment Pvt. Ltd. out in the case of Limited ( in short the the search of premises of loose papers and jewellary Rs.3,50,000/- was found and seized. The document seized from the premises of Shri Satish Salve comprises of few documents relating to M/s Swami Samarth Pictures proprietary concern of assessee, expenses by M/s Swami Samarth Picture out of its bank accounts. During the course of search recorded wherein he admitted that he was maintaining entire affairs of ‘M/s Swami Samarth Salve. During the course of assessment analyzed the seized document belonging/rela detailed analysis along with scanned copy of the seized document is available from page 6 to page 12 of the impugned assessment order. The seized documents indicate payment in cash as well a ent year 2012-13; Rs.1,69,18,719/- for assessment year 14 and Rs.7,50,000/- for assessment year 2014 The brief facts qua the issue in dispute are that allegation that Shri Satish Salve provided accommodation entries to ala Group, a search u/s 132 of the Act was carried out on the residence of Shri Satish Salve, Chief Financial Officer Media and Entertainment Pvt. Ltd., along with the search carried out in the case of Nadiawala Grandson Entertainment ( in short the ‘Nadiyadwala’ group) on 08.12.2015 premises of Shri Satish Salve, certain incrementing jewellary worth Rs.2,69,780/- was found and seized. The document seized from the es of Shri Satish Salve comprises of few documents relating marth Pictures ( in short Samarath concern of assessee, which revealed incurring of cash expenses by M/s Swami Samarth Picture out of its bank accounts. During the course of search, statement of Shri Satish Salve was recorded wherein he admitted that he was maintaining entire affairs Swami Samarth’ on behalf of his wife Smt. Usha Sa Salve. During the course of assessment, the Assessing Officer the seized document belonging/related to the assessee. analysis along with scanned copy of the seized document is available from page 6 to page 12 of the impugned assessment order. The seized documents indicate payment in cash as well a Smt. Usha Satish Salvi 18 ITA Nos. 4239, 4237 & 4238/MUM/2023 for assessment year for assessment year 2014-15. The brief facts qua the issue in dispute are that in view of allegation that Shri Satish Salve provided accommodation entries to search u/s 132 of the Act was carried out Chief Financial Officer of M/s along with the search carried Nadiawala Grandson Entertainment Private group) on 08.12.2015. During certain incrementing - and cash of was found and seized. The document seized from the es of Shri Satish Salve comprises of few documents relating ( in short Samarath Pictures) i.e. which revealed incurring of cash expenses by M/s Swami Samarth Picture out of its bank accounts. statement of Shri Satish Salve was recorded wherein he admitted that he was maintaining entire affairs behalf of his wife Smt. Usha Satish the Assessing Officer ted to the assessee. A analysis along with scanned copy of the seized document is available from page 6 to page 12 of the impugned assessment order. The seized documents indicate payment in cash as well as through cheque on behalf of the proprietary concern of the assessee various parties including Shri Rajat, Nandu and director, Lionbel editor etc. The Assessing Officer observed that though the payments made by cheque be entered in the books expenditures were not entered in books of accounts. Officer has aggregated the cash expenditure for three years amounting to Rs.1,53,14,341/ asked the assessee to explain source of such relevant part of show cause notice issued by the Assessing Officer is reproduced as under: “4. As per the seized papers, your concern had incurred cash expenditure in the produ amounting to Rs. 1,53,14,341/ books of accounts of your concern. Under such circumstances explain with supporting evidences why the expenses aggregating to Rs. 1,53,14,341/- and added to your total income for the relevant A. Ys. as per break up of expenses tabulated below : A. Y. 2012-13 2013-14 2014-15 10.2 During the course of the assessment proceedings, the assessee submitted that M/s Suresh ‘Rave Party Project’ with Mr. Naveen Sharma Ground Zero Inc., b production house. So, Salve (i.e. the husband of the assessee) for services of production on behalf of the proprietary concern of the assessee various parties including Shri O.P. Sing, Shri Prashant Nirgude, Rajat, Nandu and director, Lionbel editor etc. The Assessing Officer observed that though the payments made by cheque be entered in the books of accounts of the assessee, the cash expenditures were not entered in books of accounts. Officer has aggregated the cash expenditure for three years amounting to Rs.1,53,14,341/- and in the show cause no asked the assessee to explain source of such cash expenditure. The relevant part of show cause notice issued by the Assessing Officer is reproduced as under: As per the seized papers, your concern had incurred cash expenditure in the production of the movie \"Rave Party Project\" amounting to Rs. 1,53,14,341/- which has been stated to be out of books of accounts of your concern. Under such circumstances explain with supporting evidences why the expenses aggregating to Rs. should not be treated as unexplained cash expenditure and added to your total income for the relevant A. Ys. as per break up of expenses tabulated below :- Cash Expenses (Rs.) 6,45,572 1,39,18,769 7,50,000 During the course of the assessment proceedings, the assessee submitted that M/s Suresh Jajera HUF was producing film title ‘Rave Party Project’ with Mr. Naveen Sharma i.e. pro Ground Zero Inc., but M/s Suresh Jajera HUF did not own a tion house. So, Mr. Suresh Jajera approached Mr. Satish Salve (i.e. the husband of the assessee) for services of production Smt. Usha Satish Salvi 19 ITA Nos. 4239, 4237 & 4238/MUM/2023 on behalf of the proprietary concern of the assessee to O.P. Sing, Shri Prashant Nirgude, Rajat, Nandu and director, Lionbel editor etc. The Assessing Officer observed that though the payments made by cheque were found to of the assessee, the cash expenditures were not entered in books of accounts. The Assessing Officer has aggregated the cash expenditure for three years and in the show cause notice issued expenditure. The relevant part of show cause notice issued by the Assessing Officer is As per the seized papers, your concern had incurred cash ction of the movie \"Rave Party Project\" which has been stated to be out of books of accounts of your concern. Under such circumstances explain with supporting evidences why the expenses aggregating to Rs. not be treated as unexplained cash expenditure and added to your total income for the relevant A. Ys. as per break up Cash Expenses (Rs.) During the course of the assessment proceedings, the assessee producing film titled proprietor of M/s Jajera HUF did not own a approached Mr. Satish Salve (i.e. the husband of the assessee) for services of production house of assessee namely producing said film under the further explained that as per the terms of agreement between M/s Suresh Jajera HUF and HUF was responsible for transferring all funds to M/s Samarth Picture to be utilized as per the direction of M/s Naveen Kumar Sharma for making film title agreement, Samarth Picture was required to provide details of funds received from M/s Suresh Jajra expenditure for making the said film from time to time Suresh Jajra. Further, the assessee submitted that on 12.04.2012 the said agreement was officially documented. Under the terms of agreement, the producer i.e. M/s Suresh Jajra HUF Rs.1,50,00,000/- for the purpose of the production and completion of the said film. Up to September 26, 2012 funds of Rs.1.57 crores were received by M/s Samarth Picture from M/s Suresh Jajra HUF which is recorded in the bank account of the assessee. Further an amount of Rs.1.19 crores had been received from M/s Suresh Jajra HUF in cash which had been transferred to Mr. O.P. Sing for the expenses of the film as per the direction of Mr. Naveen Kumar Sharma till September 26, 2012 funds had been received, h not been completed increased to Rs.3,25,00,000/ of assessee namely M/s Shree Swami Samarth Picture for producing said film under the banner of assessee. The assessee explained that as per the terms of agreement between M/s HUF and M/s Samarth Picture, M/s Suresh Jajra responsible for transferring all funds to M/s Samarth Picture to be utilized as per the direction of M/s Naveen Kumar aking film titled ‘Rave Party Project’. Under the Samarth Picture was required to provide details of funds received from M/s Suresh Jajra HUF and incurred expenditure for making the said film from time to time urther, the assessee submitted that on 12.04.2012 the said agreement was officially documented. Under the terms of agreement, the producer i.e. M/s Suresh Jajra HUF for the purpose of the production and completion p to September 26, 2012 funds of Rs.1.57 crores were received by M/s Samarth Picture from M/s Suresh Jajra HUF which is recorded in the bank account of the assessee. Further an amount of Rs.1.19 crores had been received from M/s Suresh Jajra cash which had been transferred to Mr. O.P. Sing for the expenses of the film as per the direction of Mr. Naveen Kumar Sharma till September 26, 2012. As per the terms of agreeme funds had been received, however, the ‘Rave Party Project at that time. The budget of the said film was increased to Rs.3,25,00,000/- due to financial miss Smt. Usha Satish Salvi 20 ITA Nos. 4239, 4237 & 4238/MUM/2023 M/s Shree Swami Samarth Picture for of assessee. The assessee explained that as per the terms of agreement between M/s M/s Suresh Jajra responsible for transferring all funds to M/s Samarth Picture to be utilized as per the direction of M/s Naveen Kumar ‘Rave Party Project’. Under the Samarth Picture was required to provide details of funds incurred for various expenditure for making the said film from time to time, to Mr. urther, the assessee submitted that on 12.04.2012 the said agreement was officially documented. Under the terms of agreement, the producer i.e. M/s Suresh Jajra HUF was to invest for the purpose of the production and completion p to September 26, 2012 funds of Rs.1.57 crores were received by M/s Samarth Picture from M/s Suresh Jajra HUF which is recorded in the bank account of the assessee. Further an amount of Rs.1.19 crores had been received from M/s Suresh Jajra cash which had been transferred to Mr. O.P. Sing for the expenses of the film as per the direction of Mr. Naveen Kumar s per the terms of agreement the Rave Party Project’ film had . The budget of the said film was due to financial miss-management by Mr. Navin Kumar Sharma, a 26.09.2012 had been executed for increase of budget from Rs.2,50,00,000/- to Rs.3,25,00,000/ time to time the assessee forwarded the details of receipt of cheque and cash to M/s Suresh Jajra and also the details of expenditure incurred in cash and cheque for the production of the fil details were provided through e the above submission, the assessee claimed that she was only the ‘line producer’ of the said film and all the expenses and receipt were on account of M/s Suresh Jajra HUF and received did not belong to the assessee but the assessee was only a ‘pass through entity assessee filed a retraction statement of her husband Shri Satish Salve. But said retraction was rejected by to lack to requisite affidavit along with supporting documentary evidences including sworn statement of The assessee explained that payments received from Suresh Jajra HUF were in the nature of as stated by the husband of the assessee the statement recorded u/s 132(4) of the Act. In the retraction statement, Shri Satish Salve stated that said payments were not loans from Suresh Jajra HUF during the statement recorded u/s 132(4) of the Act. In view of failure on the part of the assessee in explaining the source of the by Mr. Navin Kumar Sharma, accordingly, an undertaking dated 26.09.2012 had been executed for increase of budget from to Rs.3,25,00,000/-. As per the agreement, the assessee forwarded the details of receipt of cheque and cash to M/s Suresh Jajra and also the details of expenditure incurred in cash and cheque for the production of the fil details were provided through e-mail to Mr. Suresh Jajra. In view of the above submission, the assessee claimed that she was only the of the said film and all the expenses and receipt were on account of M/s Suresh Jajra HUF and the said expenses received did not belong to the assessee but the assessee was only a pass through entity’. During the assessment proceedings, the retraction statement of her husband Shri Satish Salve. But said retraction was rejected by the Assessing Officer due to lack to requisite affidavit along with supporting documentary including sworn statement of ‘panchas’ i.e. witnesses The assessee explained that payments received from Suresh Jajra HUF were in the nature of ‘advance’ receipt instead of as stated by the husband of the assessee i.e. Shree Satish Salve the statement recorded u/s 132(4) of the Act. In the retraction Shri Satish Salve stated that said payments were not loans from Suresh Jajra HUF and he mistakenly stated that as loan during the statement recorded u/s 132(4) of the Act. In view of failure on the part of the assessee in explaining the source of the Smt. Usha Satish Salvi 21 ITA Nos. 4239, 4237 & 4238/MUM/2023 ccordingly, an undertaking dated 26.09.2012 had been executed for increase of budget from . As per the agreement, from the assessee forwarded the details of receipt of cheque and cash to M/s Suresh Jajra and also the details of expenditure incurred in cash and cheque for the production of the film. The said mail to Mr. Suresh Jajra. In view of the above submission, the assessee claimed that she was only the of the said film and all the expenses and receipt were the said expenses received did not belong to the assessee but the assessee was only a . During the assessment proceedings, the retraction statement of her husband Shri Satish the Assessing Officer due to lack to requisite affidavit along with supporting documentary ’ i.e. witnesses. The assessee explained that payments received from Suresh Jajra receipt instead of ‘cash loans’ Shree Satish Salve, in the statement recorded u/s 132(4) of the Act. In the retraction Shri Satish Salve stated that said payments were not and he mistakenly stated that as loan during the statement recorded u/s 132(4) of the Act. In view of failure on the part of the assessee in explaining the source of the cash expenditure incurred order passed u/s 143(3) r.w.s. 153C dated 27.12.2017 assessed the unexplained cash expenditure u/s 69C of the Act for assessment years 2012-13 to 2014 Particulars (a) Unexplained cash expenditure u/s 69C for AY 2012 (b) Unexplained cash expenditure u/s 69C for AY 2013 (c) Unexplained cash expenditure u/s 69C for AY 2014 11. On further appeal, the Ld. CIT(A) rejected the contention of the assessee that the assessee was merely the entire expenditure was incurred on behalf of the Suresh Jajra HUF. The relevant finding of the Ld. CIT(A) is reproduced as under: “6.2. One of the primary contention of the appellant is that the movie was being made by M/s Suresh Jajra HUF, funds were provided by them and that the appellant has merely lent its name for this purpose. It is further stated that M/s Shree Swami Samarth Pictures is not responsible for any cost escalation or financial mismanagement in the production of the movie. I am unabl appellant. The agreement of film production dt. 12.04.2012 produced by the appellant shows that the agreement has been entered by Smt. Usha S. Salvi in her capacity as \"PRODUCER\" and Sh. Naveen Kumar Sharma in his capacit as \"JOINT PRODUCER\". Some of the relevant clauses of the agreement are extracted and placed below: General Scope of work cash expenditure incurred, the Assessing Officer in the assessment 43(3) r.w.s. 153C dated 27.12.2017 assessed the unexplained cash expenditure u/s 69C of the Act for assessment 13 to 2014-15 as under: Amount (Rs) Unexplained cash expenditure u/s 69C for AY 2012-13 6,45,572/ cash expenditure u/s 69C for AY 2013-14 1,39,18,769/ Unexplained cash expenditure u/s 69C for AY 2014-15 7,50,000/ On further appeal, the Ld. CIT(A) rejected the contention of the assessee that the assessee was merely a pass through entity an the entire expenditure was incurred on behalf of the Suresh Jajra HUF. The relevant finding of the Ld. CIT(A) is reproduced as under: 6.2. One of the primary contention of the appellant is that the movie was being made by M/s Suresh Jajra HUF, funds e provided by them and that the appellant has merely lent its name for this purpose. It is further stated that M/s Shree Swami Samarth Pictures is not responsible for any cost escalation or financial mismanagement in the production of the movie. I am unable to accept this contention of the appellant. The agreement of film production dt. 12.04.2012 produced by the appellant shows that the agreement has been entered by Smt. Usha S. Salvi in her capacity as \"PRODUCER\" and Sh. Naveen Kumar Sharma in his capacit as \"JOINT PRODUCER\". Some of the relevant clauses of the agreement are extracted and placed below:- Contents of the Agreement WHEREAS producer desire to produce a Motion Picture in colour 35 MM in Hindi Language named \"RAVE PARTY\", starring Divyendu Sharma, Rajkumar Yadav and Others, directed by Rajat Mukherjee hereinafter referred to as the \"said FILM\". c. It is agreed by Joint Producer that they will execute the project in time frame fixed by the producer, As per Schedule A as per mutually agreed by both the parties. d. It is agreed by Joint Producer that if project is not Smt. Usha Satish Salvi 22 ITA Nos. 4239, 4237 & 4238/MUM/2023 the Assessing Officer in the assessment 43(3) r.w.s. 153C dated 27.12.2017 assessed the unexplained cash expenditure u/s 69C of the Act for assessment Amount (Rs) 6,45,572/- 1,39,18,769/- 7,50,000/- On further appeal, the Ld. CIT(A) rejected the contention of the pass through entity and the entire expenditure was incurred on behalf of the Suresh Jajra HUF. The relevant finding of the Ld. CIT(A) is reproduced as under: 6.2. One of the primary contention of the appellant is that the movie was being made by M/s Suresh Jajra HUF, funds e provided by them and that the appellant has merely lent its name for this purpose. It is further stated that M/s Shree Swami Samarth Pictures is not responsible for any cost escalation or financial mismanagement in the production of e to accept this contention of the appellant. The agreement of film production dt. 12.04.2012 produced by the appellant shows that the agreement has been entered by Smt. Usha S. Salvi in her capacity as \"PRODUCER\" and Sh. Naveen Kumar Sharma in his capacity as \"JOINT PRODUCER\". Some of the relevant clauses of the WHEREAS producer desire to produce a Motion Picture in colour 35 MM in Hindi Language named \"RAVE Divyendu Sharma, Rajkumar Yadav and Others, directed by Rajat Mukherjee hereinafter c. It is agreed by Joint Producer that they will execute the project in time frame fixed by the producer, As per s per mutually agreed by both the parties. d. It is agreed by Joint Producer that if project is not Tentative Budget of the Film Credits Records and Accounts completed according to the schedule (Including Grace Period of 30 Days) then producer has the right to take the complete project from Joint Producer and has right to allot the project to other Production House or producer will do himself as the case may be. f. It is agreed by Joint Producer that they are entitled only to rights expressly granted by Producer as per the terms of this agreement. All IPR always rest with Producer. Tentative Budget of a. Producers hereby agree to invest upto Rs. 1,50,00,000/-(Rupees One Core Fifty Lacs only) for the purpose of production and completion of the said Picture in all respects, including censor and backgrou music thereof, and for the purpose of preparation of one final release print of the said Picture. This amount is expected cost of the production as per the budget estimates prepared jointly by both the parties As per Schedule\" B\" b. Joint Producer hereby agrees and acknowledges that he will inform well in advance i.e. 7 days before to producer for requirement of funds. c. Joint Producer hereby agrees and acknowledges that producer will release fund after providing the details of expected expenses. b. And it is further agreed that all the publicity material, advertisement, prints, trailers, and paraphernalia of the said Picture will clearly mention therein as a: Opening Title: SHREE SWAMI SAMARTH PICTURES Present in Associations With Zero Ground inc & H. N. Entertainment. Title Before the Film Start Produce by SHREE SWAMI SAMARTH PICTURES Naven Kumar Sharma Navin Parmar Records and a. Producer shall keep or cause to be kept at a mutually Smt. Usha Satish Salvi 23 ITA Nos. 4239, 4237 & 4238/MUM/2023 completed according to the schedule (Including Grace Period of 30 Days) then producer has the right to take the complete project from Joint Producer and has the right to allot the project to other Production House or producer will do himself as the case may be. f. It is agreed by Joint Producer that they are entitled only to rights expressly granted by Producer as per the ys rest with a. Producers hereby agree to invest upto Rs. (Rupees One Core Fifty Lacs only) for the purpose of production and completion of the said Picture in all respects, including censor and background music thereof, and for the purpose of preparation of one final release print of the said Picture. This amount is expected cost of the production as per the budget estimates prepared jointly by both the parties As per y agrees and acknowledges that he will inform well in advance i.e. 7 days before to Joint Producer hereby agrees and acknowledges that producer will release fund after providing the details of b. And it is further agreed that all the publicity material, advertisement, prints, trailers, and paraphernalia of the said Picture will clearly mention therein as a:- Produce by SHREE SWAMI SAMARTH PICTURES a. Producer shall keep or cause to be kept at a mutually Representation and Warranties agreed upon location all books of account and and all contracts for the business and operations of the Film Project. Each of the parties shall have the right to inspect the books of account and records related to the business and operations of the film project upon one week notice to the other. b. All the money inflow and out flow for this project will be through and approved by producer and Joint Producer. Representation and Producer represents and warrants to Joint Producer that: i. It has the right and capacity to enter into t Agreement and fully perform all its obligations hereunder, ii. It owns all right, title and interest in and to the Project and the Licensed Materials, including but not limited to copyright and the Interactive Rights, Intellectual rights are or shall be wholly original to Producer or the Producer has acquired or will acquire the necessary rights from third parties to contribute same for use in the Project. iii. The Producers have not created any lien, charge, mortgage encumbrance or right of any nature whatsoever on release or the distribution, exhibition and exploitation rights of the said Picture for any of the territories of the World or on the prints or publicity materials, Music, satellite rights, Ring Tones, Caller tunes or any other such rights including rights which may come existence in future, of the said Picture for any of the territories of the World or on the Income recoveries and realizations from the distribution, exhibition and exploitation of the said Picture in any of the territories of the world or on the negatives, positives or other materials of the said Picture or otherwise howsoever. iv. The Producer will invest the said amount in time frame and should not affect the shooting schedule due to unavailability of funds. v. If the producer unable to invest the funds in time, Joint Producer has right to take the finance from the third party and continue the project, in this event Joint Producer will return the amount invested till that date without any interest or profit, and also producer any rights on the said film and issue the NOC to Joint Smt. Usha Satish Salvi 24 ITA Nos. 4239, 4237 & 4238/MUM/2023 agreed upon location all books of account and records, and all contracts for the business and operations of the Film Project. Each of the parties shall have the right to inspect the books of account and records related to the business and operations of the film project upon one b. All the money inflow and out flow for this project will be through and approved by producer and Joint Producer represents and warrants to Joint Producer i. It has the right and capacity to enter into this Agreement and fully perform all its obligations ii. It owns all right, title and interest in and to the Project and the Licensed Materials, including but not limited to copyright and the Interactive Rights, e wholly original to Producer or the Producer has acquired or will acquire the necessary rights from third parties to contribute iii. The Producers have not created any lien, charge, mortgage encumbrance or right of any nature whatsoever on release or the distribution, exhibition and exploitation rights of the said Picture for any of the territories of the World or on the prints or publicity materials, Music, satellite rights, Ring Tones, Caller cluding rights which may come existence in future, of the said Picture for any of the territories of the World or on the Income recoveries and realizations from the distribution, exhibition and exploitation of the said Picture in any of the world or on the negatives, positives or other materials of the said Picture or otherwise iv. The Producer will invest the said amount in time frame and should not affect the shooting schedule due r unable to invest the funds in time, Joint Producer has right to take the finance from the third party and continue the project, in this event Joint Producer will return the amount invested till that date without any interest or profit, and also producer will not any rights on the said film and issue the NOC to Joint Net Profits and Distribution Rights of the Project 6.3.1. From the abov rewards of the movie 'Rave Party' lie with the producer i.e. the appellant. The appellant's contention that the entire transaction was on behalf of M/s Suresh Jajra HUF is not borne from the above agreement. There single clause to this effect in the entire agreement. 6.4. As far as the affidavit dt. 26.09.2012 of Mr. Naveen Kumar Sharma is considered (Pages 38 it is merely a mechanism by which the terms and execution have been laid down between Mr. Naveen Kumar Singh (Joint Producer) and the appellant. In the said stamped but unsigned affidavit, Sh. Sharma has referred to delay in the project, cost escalation and has stated that was from his side. He has agr the film at the minimum price of Rs. 4.25 crores and that he shall adequately compensate the producers. It is also evident from the following 2 clauses of the affidavit: \"13) That I, on behalf of M/s. Ground Zero INC., declare and confirm to, at my own expense, indemnify, save, and hold harmless the Producers and its successors, licensees, Producer. Net Profits and a. The Parties agree that if the Film project is co produced and provided the Parties mutually determine it is commercially advantageous to do so, the agree to enter into a distribution agreement with a distribution company to provide its services to distribute the Project in connection with the distribution of the Film. b. The Parties agree that all Net Profits from the exploitation of the Project shall be shared as follows: 80% to Producer and 20% to Joint Producer. a. It is further agreed that after the recoupment by the Producer of the amounts financed under this agreement all the liens and charges credited to Producer agreement, or any other clause, shall come to an end and thereafter the copyrights, Intellectual Property Rights and other rights of the film, shall be held jointly by the Producers and Joint Producer in 80: 20 proportion. 6.3.1. From the above, it is clear evident that the risks and rewards of the movie 'Rave Party' lie with the producer i.e. the appellant. The appellant's contention that the entire transaction was on behalf of M/s Suresh Jajra HUF is not borne from the above agreement. There is no reference or a single clause to this effect in the entire agreement. 6.4. As far as the affidavit dt. 26.09.2012 of Mr. Naveen Kumar Sharma is considered (Pages 38 - 41 of PB), I find that it is merely a mechanism by which the terms and execution e been laid down between Mr. Naveen Kumar Singh (Joint Producer) and the appellant. In the said stamped but unsigned affidavit, Sh. Sharma has referred to delay in the project, cost escalation and has stated that mismanagement was from his side. He has agreed to guarantee the sell out of the film at the minimum price of Rs. 4.25 crores and that he shall adequately compensate the producers. It is also evident from the following 2 clauses of the affidavit:- \"13) That I, on behalf of M/s. Ground Zero INC., declare and confirm to, at my own expense, indemnify, save, and hold harmless the Producers and its successors, licensees, Smt. Usha Satish Salvi 25 ITA Nos. 4239, 4237 & 4238/MUM/2023 a. The Parties agree that if the Film project is co- produced and provided the Parties mutually determine it is commercially advantageous to do so, the Parties agree to enter into a distribution agreement with a distribution company to provide its services to distribute the Project in connection with the distribution of the b. The Parties agree that all Net Profits from the ct shall be shared as follows: 80% to Producer and 20% to Joint Producer. a. It is further agreed that after the recoupment by the Producer of the amounts financed under this agreement all the liens and charges credited to Producer under this agreement, or any other clause, shall come to an end and thereafter the copyrights, Intellectual Property Rights and other rights of the film, shall be held jointly by the Producers and Joint Producer in 80: 20 e, it is clear evident that the risks and rewards of the movie 'Rave Party' lie with the producer i.e. the appellant. The appellant's contention that the entire transaction was on behalf of M/s Suresh Jajra HUF is not is no reference or a 6.4. As far as the affidavit dt. 26.09.2012 of Mr. Naveen 41 of PB), I find that it is merely a mechanism by which the terms and execution e been laid down between Mr. Naveen Kumar Singh (Joint Producer) and the appellant. In the said stamped but unsigned affidavit, Sh. Sharma has referred to delay in the mismanagement eed to guarantee the sell out of the film at the minimum price of Rs. 4.25 crores and that he shall adequately compensate the producers. It is also evident \"13) That I, on behalf of M/s. Ground Zero INC., declare and confirm to, at my own expense, indemnify, save, and hold harmless the Producers and its successors, licensees, assigns, agents, representatives, and affiliates from and against any and all claims obligations, liability, loss and damage in business, costs, and expenses (including reasonable attorneys' fees), incurred or sustained by reason of or ansing out of any breach or alleged breach of any of the warranties, represe or deliverables herein agreed upon and made by me, any reliance upon any such warranties, obligations, or agreements; 14) That, I on behalf of M/s. Ground Zero INC., do hereby declare and confirm that M/s. Sh are the absolute Copyright Holders of all the Rights of the said Film, free from all encumbrances as mentioned herein. and the said rights vest exclusively with them and shall in any event stand relinquished and surrendered to th 6.4.1. From the above, it is re rewards of the movie Pictures i.e. the proprietary concern of the appellant. Again, this affidavit does not speak of M/s Suresh Jajra HUF. 6.4.2. The fact t undertaken by M/s Shree capacity as a producer is also evident from the undertaking dt. 26.09.2012 submitted by the appellant of paper book assigns, agents, representatives, and affiliates from and against any and all claims, demands, causes of action, obligations, liability, loss and damage in business, costs, and expenses (including reasonable attorneys' fees), incurred or sustained by reason of or ansing out of any breach or alleged breach of any of the warranties, representations, obligations, or deliverables herein agreed upon and made by me, any reliance upon any such warranties, representations, obligations, or agreements; That, I on behalf of M/s. Ground Zero INC., do hereby declare and confirm that M/s. Shree Swami Samarth Pictures are the absolute Copyright Holders of all the Rights of the said Film, free from all encumbrances as mentioned herein. and the said rights vest exclusively with them and shall in any event stand relinquished and surrendered to them:\" 6.4.1. From the above, it is re-affirmed that the risks and rewards of the movie belong to M/s. Shree Swami Samarth Pictures i.e. the proprietary concern of the appellant. Again, this affidavit does not speak of M/s Suresh Jajra HUF. 6.4.2. The fact that the movie production has been undertaken by M/s Shree Swami Samarth Pictures in its capacity as a producer is also evident from the undertaking dt. 26.09.2012 submitted by the appellant in pages 46 to 48 of paper book Page. Smt. Usha Satish Salvi 26 ITA Nos. 4239, 4237 & 4238/MUM/2023 assigns, agents, representatives, and affiliates from and demands, causes of action, obligations, liability, loss and damage in business, costs, and expenses (including reasonable attorneys' fees), incurred or sustained by reason of or ansing out of any breach or alleged ntations, obligations, or from representations, That, I on behalf of M/s. Ground Zero INC., do hereby ree Swami Samarth Pictures are the absolute Copyright Holders of all the Rights of the said Film, free from all encumbrances as mentioned herein. and the said rights vest exclusively with them and shall in em:\" affirmed that the risks and belong to M/s. Shree Swami Samarth Pictures i.e. the proprietary concern of the appellant. Again, this affidavit does not speak of M/s Suresh Jajra HUF. hat the movie production has been Swami Samarth Pictures in its capacity as a producer is also evident from the undertaking in pages 46 to 48 Smt. Usha Satish Salvi 27 ITA Nos. 4239, 4237 & 4238/MUM/2023 6.4.3. The appellant undertaking dt. Sharma has affirmed as follows: “2. I solely take responsibility to sell the said Film at price of Rs 425 (Sale Price) Lac which intimated to me (Ground Zero) by Suresh B Jajra HUF Pictures.\" I am of the view that such a self credibility as can be seen from the second page of this undertaking. The witnesses are Sh. O P Singh, Sh. Mukerjee and Sh. Rajiv Ranja signed this document. This being the case, would it be fair to hold such a person as the sole architect of this entire transaction? To draw an analogy, if I were to draw an affidavit stating that I agree to buy the White House President of USA for a sum of Rs. 100 crores where there is no concurrence by the other party, does that make the credibility of the undertaking vis better? 6.4.3. The appellant has referred to clause No. 2 of the undertaking dt. 26.09.2012 wherein, Sh. Naveen Kumar Sharma has affirmed as follows:- solely take responsibility to sell the said Film at price of Rs 425 (Sale Price) Lac which intimated to me (Ground Zero) sh B Jajra HUF Partner of Shree Swami Samarth I am of the view that such a self-serving statement has no credibility as can be seen from the second page of this undertaking. The witnesses are Sh. O P Singh, Sh. Mukerjee and Sh. Rajiv Ranjan. Sh. Suresh B Jajra has not document. This being the case, would it be fair to hold such a person as the sole architect of this entire transaction? To draw an analogy, if I were to draw an affidavit stating that I agree to buy the White House from the President of USA for a sum of Rs. 100 crores where there is no concurrence by the other party, does that make the credibility of the undertaking vis-a-vis the other party any Smt. Usha Satish Salvi 28 ITA Nos. 4239, 4237 & 4238/MUM/2023 has referred to clause No. 2 of the 26.09.2012 wherein, Sh. Naveen Kumar solely take responsibility to sell the said Film at price of Rs 425 (Sale Price) Lac which intimated to me (Ground Zero) Partner of Shree Swami Samarth serving statement has no credibility as can be seen from the second page of this undertaking. The witnesses are Sh. O P Singh, Sh. Rajat n. Sh. Suresh B Jajra has not document. This being the case, would it be fair to hold such a person as the sole architect of this entire transaction? To draw an analogy, if I were to draw an from the President of USA for a sum of Rs. 100 crores where there is no concurrence by the other party, does that make the vis the other party any 6.4.4 To be sure, clause 3 of the above undertaking reads as follows:- \"З. Net Profit (Sales Prices after TDS Less COP Rs. 325 Lacs = Balance) will be taken by Shree Swami Samarth Pictures and no money from this Net Profit will be shared with me (Ground Zero).\" The above makes it clear that profits of the movie belong M/s Shree Swami Samarth Pictures i.e. the appellant only. It is in this background that the case needs to be examined. 11.1 The Ld. CIT(A) further observed that expenses appearing in loose papers incurred in cheque were duly entered in the books of accounts of the assessee. The Ld. CIT(A) referred to the balance sheet for financial year 2012 accounted for three movie projects including creditors and other particulars were shown project CIT(A) noted that there is no entry related to Mr. Suresh Jajra HUF in balance sheet as on 31.03.2013. The relevant finding of the Ld. CIT(A) is reproduced as under: “6.7. The balan has accounted. for 3 movie projects including 'Rave Party' and the creditors and other particulars are shown project wise. As far as unsecured loans are concerned, they are from 4 parties including Suresh B Jajra. There is no entry related to Suresh B Jajra HUF in the balance sheet as on 31.03.2013. Thus, the books of account paint a totally different picture. 6.8. Contrary to its written submissions, the appellant has not produced any evidence that the and that the appellant was only a name lender. If the appellant claims that M/s Suresh Jajra HUF was actually the producer, it needs to prove the same. Unfortunately, no such documents seem to have been found during the search, and most certainly, no such evidence has been furnished before me as well (as part of submissions before AO). the appellant had its own separate financial relationships or understanding with M/s Suresh Jajra HUF, but the fact remains the appellant is the producer of the movie and has right to all risk and To be sure, clause 3 of the above undertaking reads as Net Profit (Sales Prices after TDS Less COP Rs. 325 Lacs = will be taken by Shree Swami Samarth Pictures and no money from this Net Profit will be shared with me (Ground The above makes it clear that profits of the movie belong M/s Shree Swami Samarth Pictures i.e. the appellant only. It is in this background that the case needs to be examined. The Ld. CIT(A) further observed that expenses appearing in loose papers incurred in cheque were duly entered in the books of counts of the assessee. The Ld. CIT(A) referred to the balance sheet for financial year 2012-13, wherein the assessee had counted for three movie projects including ‘Rave Party creditors and other particulars were shown project CIT(A) noted that there is no entry related to Mr. Suresh Jajra HUF balance sheet as on 31.03.2013. The relevant finding of the Ld. CIT(A) is reproduced as under: 6.7. The balance sheet for FY 2012-13 of the appellant shows that it has accounted. for 3 movie projects including 'Rave Party' and the creditors and other particulars are shown project wise. As far as unsecured loans are concerned, they are from 4 parties including esh B Jajra. There is no entry related to Suresh B Jajra HUF in the balance sheet as on 31.03.2013. Thus, the books of account paint a totally different picture. 6.8. Contrary to its written submissions, the appellant has not produced evidence that the movie was produced by M/s Suresh Jajra HUF and that the appellant was only a name lender. If the appellant claims that M/s Suresh Jajra HUF was actually the producer, it needs to prove the same. Unfortunately, no such documents seem to have been found ing the search, and most certainly, no such evidence has been furnished before me as well (as part of submissions before AO). the appellant had its own separate financial relationships or understanding with M/s Suresh Jajra HUF, but the fact remains the appellant is the producer of the movie and has right to all risk and Smt. Usha Satish Salvi 29 ITA Nos. 4239, 4237 & 4238/MUM/2023 To be sure, clause 3 of the above undertaking reads as Net Profit (Sales Prices after TDS Less COP Rs. 325 Lacs = will be taken by Shree Swami Samarth Pictures and no money from this Net Profit will be shared with me (Ground The above makes it clear that profits of the movie belong to M/s Shree Swami Samarth Pictures i.e. the appellant only. It is in this background that the case needs to be examined.” The Ld. CIT(A) further observed that expenses appearing in loose papers incurred in cheque were duly entered in the books of counts of the assessee. The Ld. CIT(A) referred to the balance wherein the assessee had Rave Party’ and the creditors and other particulars were shown project-wise. The Ld. CIT(A) noted that there is no entry related to Mr. Suresh Jajra HUF balance sheet as on 31.03.2013. The relevant finding of the Ld. 13 of the appellant shows that it has accounted. for 3 movie projects including 'Rave Party' and the creditors and other particulars are shown project wise. As far as unsecured loans are concerned, they are from 4 parties including esh B Jajra. There is no entry related to Suresh B Jajra HUF in the balance sheet as on 31.03.2013. Thus, the books of account paint a 6.8. Contrary to its written submissions, the appellant has not produced movie was produced by M/s Suresh Jajra HUF and that the appellant was only a name lender. If the appellant claims that M/s Suresh Jajra HUF was actually the producer, it needs to prove the same. Unfortunately, no such documents seem to have been found ing the search, and most certainly, no such evidence has been furnished before me as well (as part of submissions before AO). Maybe the appellant had its own separate financial relationships or understanding with M/s Suresh Jajra HUF, but the fact remains that the appellant is the producer of the movie and has right to all risk and rewards arising therefrom. The funding of the movie by availing loans from M/s Suresh Jajra HUF is of no consequence. To draw an analogy, if a builder were to construct a buildin investors, the builder is still accountable for all the financial transactions and cannot cite any investor who provided cash as the reason. The onus remains firmly on the appellant to explain its nexus with M/s Suresh Jajra simple fact of the matter is that the appellant has incurred cash expenses which are not explained enough. Hence, I am of the view that the AO was right in bringing the unaccounted cash expenditure incurred for the movie, for which the appellant was involved in the capacity as producer, as unexplained expenditure u/s 69C of the Act. 11.2 Further, the assessee contended that actual cash expenditure mentioned in the loose papers was only of Rs.1,41,96,735/ against amount of Rs.1,53,14,341/ assessee is reproduced as under: AY 2012-13 2013-14 2014-15 Total 11.2 The Ld. CIT(A) however rejected the assessee and sustain “6.10. Its evident that the appellant has cash receipts and cash expenditure but has not come clean on the same. As regards the sums which are actually spent, they are taxable sums, being unaccounted cash and not having been disputed of being received by the appellant, are confirmed to be taxed u/s 69A of the Act. Accordingly, the following additions are confirmed for each of the 3 years:- AY 1 2012 2 2013 3 2014 rewards arising therefrom. The funding of the movie by availing loans from M/s Suresh Jajra HUF is of no consequence. To draw an analogy, if a builder were to construct a building by pooling funds from several investors, the builder is still accountable for all the financial transactions and cannot cite any investor who provided cash as the reason. The onus remains firmly on the appellant to explain its nexus with M/s Suresh Jajra HUF, terms of agreement between them, etc. The simple fact of the matter is that the appellant has incurred cash expenses which are not explained enough. Hence, I am of the view that the AO was right in bringing the unaccounted cash expenditure incurred or the movie, for which the appellant was involved in the capacity as producer, as unexplained expenditure u/s 69C of the Act.” Further, the assessee contended that actual cash expenditure mentioned in the loose papers was only of Rs.1,41,96,735/ against amount of Rs.1,53,14,341/-. The bifurcation given by the assessee is reproduced as under: Alleged Cash Expenditure (Rs.) 6,45,572/- 1,35,51,163/- - 1,41,96,735/- The Ld. CIT(A) however rejected the contention the of the assessee and sustained the additions observing as under: 6.10. Its evident that the appellant has cash receipts and cash expenditure but has not come clean on the same. As regards the sums which are actually spent, they are taxable u/s 69C. The remaining sums, being unaccounted cash and not having been disputed of being received by the appellant, are confirmed to be taxed u/s 69A of the Act. Accordingly, the following additions are confirmed for each of the 3 Addition confirmed u/s 69C Addition confirmed u/s 69A 2012-13 6,45,572/- - 2013-14 1,35,51,163/- 3,67,606/- 2014-15 - 7,50,000/- Total 1,41,96,735/- 11,17,606/- Smt. Usha Satish Salvi 30 ITA Nos. 4239, 4237 & 4238/MUM/2023 rewards arising therefrom. The funding of the movie by availing loans from M/s Suresh Jajra HUF is of no consequence. To draw an analogy, g by pooling funds from several investors, the builder is still accountable for all the financial transactions and cannot cite any investor who provided cash as the reason. The onus remains firmly on the appellant to explain its nexus HUF, terms of agreement between them, etc. The simple fact of the matter is that the appellant has incurred cash expenses which are not explained enough. Hence, I am of the view that the AO was right in bringing the unaccounted cash expenditure incurred or the movie, for which the appellant was involved in the capacity as Further, the assessee contended that actual cash expenditure mentioned in the loose papers was only of Rs.1,41,96,735/- as . The bifurcation given by the contention the of the as under: 6.10. Its evident that the appellant has cash receipts and cash expenditure but has not come clean on the same. As regards the sums u/s 69C. The remaining sums, being unaccounted cash and not having been disputed of being received by the appellant, are confirmed to be taxed u/s 69A of the Act. Accordingly, the following additions are confirmed for each of the 3 confirmed u/s Total addition confirmed 6,45,572/- 1,39,18,769/- 7,50,000/- 1,53,14,341/- 12. Before us, the Ld. counsel for the assessee reiterated the submissions made before the lower authorities and submitted that assessee was only a ‘ for the production of the movie on behalf of Shri Suresh Jajra The Ld. counsel submitted that movie has now been completed and given to Shri Suresh Jajra assessee has no right over the movie which even today by the Assessing Officer. The assessee submit the cash belonged to Shri Mr. Suresh Jajra HUF and it was not loan to the assessee. The Ld. counsel submitted that during the course of assessment, the addition has been made on the basis of the statement of assessee’s husband without any cross done with Mr. Suresh Jajra. The Ld. counsel contended that this fact was also brought to the notice of the Ld. CIT(A) that no cross verification are made regarding the nature of the amount. It is further submitted that assessee provided a PAN Suresh Jajra. Before us, the assessee also filed a registered agreement (which was not filed before the lower authorities) to support that movie belong amount received was not production of the movie was also on account of M/s Suresh Jajra HUF and the assessee was only counsel submitted that the statement on the basis of Before us, the Ld. counsel for the assessee reiterated the submissions made before the lower authorities and submitted that ‘pass through entity’ for incurring the expenses for the production of the movie on behalf of Shri Suresh Jajra The Ld. counsel submitted that movie has now been completed and given to Shri Suresh Jajra HUF for distribution and release and assessee has no right over the movie which in fact can be verified even today by the Assessing Officer. The assessee submit to Shri Mr. Suresh Jajra HUF and it was not loan to the assessee. The Ld. counsel submitted that during the course of assessment, the addition has been made on the basis of the statement of assessee’s husband without any cross done with Mr. Suresh Jajra. The Ld. counsel contended that this fact was also brought to the notice of the Ld. CIT(A) that no cross verification are made regarding the nature of the amount. It is further submitted that assessee provided a PAN Suresh Jajra. Before us, the assessee also filed a registered agreement (which was not filed before the lower authorities) to support that movie belonged to M/s Suresh Jajra HUF hence the amount received was not a loan and the expenses incurr production of the movie was also on account of M/s Suresh Jajra and the assessee was only a pass through entity. The Ld. counsel submitted that the statement on the basis of Smt. Usha Satish Salvi 31 ITA Nos. 4239, 4237 & 4238/MUM/2023 Before us, the Ld. counsel for the assessee reiterated the submissions made before the lower authorities and submitted that for incurring the expenses for the production of the movie on behalf of Shri Suresh Jajra HUF. The Ld. counsel submitted that movie has now been completed and and release and fact can be verified even today by the Assessing Officer. The assessee submitted that to Shri Mr. Suresh Jajra HUF and it was not a loan to the assessee. The Ld. counsel submitted that during the course of assessment, the addition has been made on the basis of the statement of assessee’s husband without any cross verification done with Mr. Suresh Jajra. The Ld. counsel contended that this fact was also brought to the notice of the Ld. CIT(A) that no cross verification are made regarding the nature of the amount. It is further submitted that assessee provided a PAN number of Mr. Suresh Jajra. Before us, the assessee also filed a registered agreement (which was not filed before the lower authorities) to to M/s Suresh Jajra HUF hence the loan and the expenses incurred on the production of the movie was also on account of M/s Suresh Jajra through entity. The Ld. counsel submitted that the statement on the basis of which addition was made, assessee. 13. On the contrary, the Ld. Departmental Representative (DR) relied on the order of the lower authorities and submitted that Shri Satish Salve husband of the assessee who use affairs of the assessee concern recorded u/s 132(4) of the Act on 09.12.2015 that out of total amount, Rs.1.64 crores unaccounted cash. This statement was retracted after two years without any affidavit or providing any documents. The referred to para 7.9 of the impugned order and submitted that Shri Satish Salve himself stated that by Swami Samarth Picture towards project of Rave Party Project which was done outside books of accounts. The Ld. the agreement dated 12.04.2012 where Smt. Usha Salve appearing in capacity of the producer and Mr. Navin Kumar Sharma is appearing in further referred to the affidavit of Mr. Navin Kumar Sharma discussed by the Ld. CIT(A) in para 6.4 of the that there was no mention of Suresh jajara , being claimed as received undertaking given by Shri Navin Kumar Sharma and not signed by Shri Suresh Jajra. evidence was filed to prove was made, has been retracted by the husband of the On the contrary, the Ld. Departmental Representative (DR) relied on the order of the lower authorities and submitted that Shri Satish Salve husband of the assessee who used to look after the affairs of the assessee concern, has explained in hi recorded u/s 132(4) of the Act on 09.12.2015 that out of total crores was received from Mr. Suresh Jajra HUF as unaccounted cash. This statement was retracted after two years without any affidavit or providing any documents. The referred to para 7.9 of the impugned order and submitted that Shri stated that cash of Rs.1.53 crores by Swami Samarth Picture towards project of Rave Party Project which was done outside books of accounts. The Ld. the agreement dated 12.04.2012 where Smt. Usha Salve capacity of the producer and Mr. Navin Kumar is appearing in capacity of the joint producer. The Ld. DR further referred to the affidavit of Mr. Navin Kumar Sharma the Ld. CIT(A) in para 6.4 of the impugned that there was no mention of Suresh jajara , from whom cash is as received. He further submitted that undertaking given by Shri Navin Kumar Sharma is self serving and not signed by Shri Suresh Jajra. The Ld. DR submitted that no evidence was filed to prove that movie was being produced by Mr. Smt. Usha Satish Salvi 32 ITA Nos. 4239, 4237 & 4238/MUM/2023 has been retracted by the husband of the On the contrary, the Ld. Departmental Representative (DR) relied on the order of the lower authorities and submitted that Shri to look after the as explained in his statement recorded u/s 132(4) of the Act on 09.12.2015 that out of total received from Mr. Suresh Jajra HUF as unaccounted cash. This statement was retracted after two years without any affidavit or providing any documents. The Ld. DR referred to para 7.9 of the impugned order and submitted that Shri cash of Rs.1.53 crores was incurred by Swami Samarth Picture towards project of Rave Party Project which was done outside books of accounts. The Ld. DR referred to the agreement dated 12.04.2012 where Smt. Usha Salve is capacity of the producer and Mr. Navin Kumar capacity of the joint producer. The Ld. DR further referred to the affidavit of Mr. Navin Kumar Sharma, as impugned Officer, from whom cash is He further submitted that the is self serving one The Ld. DR submitted that no movie was being produced by Mr. Suresh Jajra HUF and the assessee was only According to the Ld. DR all with the assessee. The Ld. DR submitted that there is no dispute as cash expenditure of Rs.1.5 crores has been incurred on the production of the movie and which is not appearing in the books of accounts of the assessee although expenditure incurred in ch is appearing in the books of accounts of the assessee and therefore in terms of section 69C of the Act explain source and nature of the expenditure and due the part of the assessee sustaining the addition in terms of section 69C of the Act. 14. We have heard rival submissions of the parties and perused the relevant material on record. The only issue is with regard to source and nature of the cash expenditure incurred a the document seized from the premises of the husband of the assessee. It is not in dispute that been incurred. The intermediate party and expenses have Mr. Suresh Jajra HUF in cheque on the production of the movie have been duly entered in the books of accounts of the assessee and therefore, the cash expenditure incurred was also required to be entered of accounts of the assessee assessee and therefore onus Suresh Jajra HUF and the assessee was only for According to the Ld. DR all risks and rewards of the project lie with the assessee. The Ld. DR submitted that there is no dispute as cash expenditure of Rs.1.5 crores has been incurred on the production of the movie and which is not appearing in the books of accounts of the assessee although expenditure incurred in ch is appearing in the books of accounts of the assessee and therefore in terms of section 69C of the Act, the assessee was required to explain source and nature of the expenditure and due the part of the assessee, the lower authorities are sustaining the addition in terms of section 69C of the Act. We have heard rival submissions of the parties and perused the relevant material on record. The only issue is with regard to and nature of the cash expenditure incurred a the document seized from the premises of the husband of the assessee. It is not in dispute that the cash expenditure has . The claim of the assessee is that she party and expenses have been incurred on beh Mr. Suresh Jajra HUF, but we find that all the expenditure incurred in cheque on the production of the movie have been duly entered in the books of accounts of the assessee and therefore, the cash expenditure incurred was also required to be entered of accounts of the assessee, which has not been done by the assessee and therefore onus lies on the assessee to explain source Smt. Usha Satish Salvi 33 ITA Nos. 4239, 4237 & 4238/MUM/2023 for name lending. of the project lied with the assessee. The Ld. DR submitted that there is no dispute as cash expenditure of Rs.1.5 crores has been incurred on the production of the movie and which is not appearing in the books of accounts of the assessee although expenditure incurred in cheque is appearing in the books of accounts of the assessee and therefore the assessee was required to explain source and nature of the expenditure and due to failure on the lower authorities are justified in sustaining the addition in terms of section 69C of the Act. We have heard rival submissions of the parties and perused the relevant material on record. The only issue is with regard to and nature of the cash expenditure incurred as appearing in the document seized from the premises of the husband of the the cash expenditure has not claim of the assessee is that she is an been incurred on behalf of but we find that all the expenditure incurred in cheque on the production of the movie have been duly entered in the books of accounts of the assessee and therefore, the cash expenditure incurred was also required to be entered in the books which has not been done by the to explain source of such expenditure. The assessee is claiming amount received from Mr. Suresh Jajra HUF. Before the Ld. assessee claimed that Assessing Officer verification from M/s Suresh Jajra HUF. In our opinion, assessee is claiming that said cash expenditure was incurred by Mr. Suresh Jajra, the onus the Ld. Assessing Officer or the Ld. CIT(A) along with source of cash expenditure but no such effort was made by the assessee wants to shift his onus to th establish that cash was advanced by Shri Suresh Jajra HUF. Now a period of more than 12 years taking any action in the hands of Mr. Suresh Jajra HUF within the provision of the Income making such claim for making shifting the burden Accordingly, we reject the contention of the assessee and the finding of the Ld. CIT(A) on the issue in dispute. The addition on the merit for all the three years is accordingly confirmed. 15. In the result, the appeals of the assessee for all the three years are dismissed. Order pronounced in the open Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER expenditure. The assessee is claiming amount Mr. Suresh Jajra HUF. Before the Ld. assessee claimed that Assessing Officer should have M/s Suresh Jajra HUF. In our opinion, assessee is claiming that said cash expenditure was incurred by Mr. onus lies on the assessee to produce the Ld. Assessing Officer or the Ld. CIT(A) along with source of cash expenditure but no such effort was made by the assessee and the to shift his onus to the Assessing Officer cash was advanced by Shri Suresh Jajra HUF. Now a period of more than 12 years has elapsed and the limitation for taking any action in the hands of Mr. Suresh Jajra HUF within the provision of the Income-tax has already expired and therefore, for making enquiry from Mr Suresh jajera on Shri Suresh Jajra HUF is of no relevance. Accordingly, we reject the contention of the assessee and the finding of the Ld. CIT(A) on the issue in dispute. The addition on merit for all the three years is accordingly confirmed. In the result, the appeals of the assessee for all the three years nounced in the open Court on 23/01/2025. - Sd/ (SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Smt. Usha Satish Salvi 34 ITA Nos. 4239, 4237 & 4238/MUM/2023 expenditure. The assessee is claiming amount as advance Mr. Suresh Jajra HUF. Before the Ld. CIT(A) the should have made cross M/s Suresh Jajra HUF. In our opinion, since the assessee is claiming that said cash expenditure was incurred by Mr. roduce him before the Ld. Assessing Officer or the Ld. CIT(A) along with source of cash assessee and the e Assessing Officer to cash was advanced by Shri Suresh Jajra HUF. Now a and the limitation for taking any action in the hands of Mr. Suresh Jajra HUF within the tax has already expired and therefore, from Mr Suresh jajera and s of no relevance. Accordingly, we reject the contention of the assessee and uphold the finding of the Ld. CIT(A) on the issue in dispute. The addition on merit for all the three years is accordingly confirmed. In the result, the appeals of the assessee for all the three years /01/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Mumbai; Dated: 23/01/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Smt. Usha Satish Salvi 35 ITA Nos. 4239, 4237 & 4238/MUM/2023 BY ORDER, Registrar) ITAT, Mumbai "