M/S. KANAKARATHNA MEDIA PVT. LTD.,CHENNAI vs. ITO, NCW-10(6), CHENNAI

The assessee is a company involved in production of motion pictures. The A.O noticed that the assessee generated certain income on which tax has been deducted at source. The A.O further noticed that the assessee has also made certain cash deposits. The A.O initiated reassessment proceedings for the reason that the assessee has not disclosed these transactions in the return of income and issued notice u/s.148 26.03.2018. The assessee filed the return 2 -: of income in response to notice u/s.148 on 09.11.2018. The A.O complete the assessment by disallowing the entire cost of production claimed by the assessee to the tune of Rs. 19,35,04,549/- and also interest on loan to the tune of Rs. 2,64,87,835/-. Aggrieved, the assessee filed further appeal before the CIT(A). The CIT(A) upheld the addition made by the A.O. It is relevant to mention here that the CIT(A) directed the A.O to allow the interest payment on OD to the tune of Rs. 1,47,74,313/- whereas the A.O did not make any disallowance in that regard. The assessee is in appeal before the Tribunal against the order of the CIT(A).

We have heard the parties, and perused the material available on record. The Ld. Authorized Representative (AR) of the assessee submitted that the assessee could not submit any documentary evidences before the lower authorities with regard to the impugn disallowances for the reason that the evidences in support of the expenses such as bills, vouchers etc., were believed to be destroyed and could not be located. The Ld. AR further submitted that subsequently the vouchers/bills are located now and are voluminous (more than 800 pages). The ld AR during the course of hearing presented a paper book containing sample vouchers of 201 pages as additional evidence before us. The ld AR prayed that an opportunity may be given to submit the vouchers and supporting evidences before the AO given that the assessee has now collated the same. The ld DR on the other hand vehemently argued that the vouchers which were not available during assessment and appellate proceedings are created now and hence submitted that the same cannot be accepted. Considering the facts and circumstances peculiar to assessee's case, we are inclined to give one more opportunity to the assessee to substantiate the claim by producing the required details. Accordingly we 3 -: remitting the issue of expenses and interest disallowance the back to the AO with the direction to examine the vouchers, bills etc as submitted by the assessee and call for any further details as may be required to decide the issue in accordance with law. The AO is directed to examine the applicability of TDS to the impugned payments made by the assessee and decide the allowability accordingly. The assessee is required to submit the necessary details in support of the claim of expenses and cooperate with appellate proceedings. It is ordered accordingly.