DCIT, CENTRAL CIRCLE-03, NEW DELHI vs. LUV RANJAN, GHAZIABAD

In following grounds have been raised by the assessee:

During the search operation conducted at Mumbai based on the loose documents Annexture as A-3, the Assessing Officer held that the assessee was involved in earning of income from betting. The details are as under:

Based on the above, the Assessing Officer has determined the income based on the figures mentioned on the seized material and brought an amount of Rs.3.62 Cr. u/s 69A of the Act.

Aggrieved, the assessee filed appeal before the ld. CIT(A) who modified the addition made by the AO and computed the net taxable income.

Before us, the ld. DR submitted that the notings on the papers found and seized cannot be disputed and in the absence of plausible explanation, the Assessing Officer has rightly made the addition. On the other hand, the ld. AR relied on the order of the ld. CIT(A).

Heard the arguments of both the parties and perused the material available on record.

The typographical version of the seized material is as under:

After taking into consideration, the ld. CIT(A) computed the income derived by the assessee from betting and tabulated the same as under:

The result, the appeal of the assessee as well as the Revenue on this issue is dismissed.

Based on the seized material page no. 25 of annexure 25 seized from the assessee’s premises at Bunglow No. 159, SVP Nagar, MHADA, Four Bunglows, Andheri, Mumbai. The AO made addition of Rs.13,98,700/- u/s 69A of the Act as unexplained income and Rs.14,29,000/- u/s 69C as unexplained expenditure.

The AO held that the debit and credit entries were unaccounted income and expenses of the assessee in cash which have not been entered in the books of accounts. The AO made addition of all the debit entries u/s 69A and credited entries u/s 69C.

Aggrieved, the assessee filed appeal before the ld. CIT(A) who deleted the addition made by the AO.

Aggrieved, the Revenue filed appeal before the Tribunal.

Before us, the ld. DR submitted that the notings on the papers found and seized cannot be disputed and in the absence of plausible explanation, the Assessing Officer has rightly made the addition u/s 69A as well as u/s 69C. The income and expenditure have to be duly accounted in the books of account & 3046/Del/2022 Luv Ranjan failing which the same shall be treated as undisclosed income and unaccounted expenditure of the assessee. On the other hand, the ld. AR relied on the order of the ld. CIT(A).

Heard the arguments of both the parties and perused the material available on record.

The ld. CIT(A) held that on the top of these entries the narration written is "DEBIT". Against certain entries under the debit column dates are also mentioned which are 20.03.17, 21.03.17 & 22.03.17. On the right hand side of the page the narration on top is mentioned as "CREDIT". Under this column the entries mentioned are Aman - 29,000/-, Aman Dad - 14,00,000/-. The grand total of all debit entries is Rs. 13,98,700/- and that of credit entries is Rs. 14,29,000/-.

Before the AO, during the course of assessment proceedings the explanation furnished by the appellant with regard to this seized paper was that the jottings on the page pertained to cash withdrawn from bank for production related expenses of the film "Sonu Ke Titu Ki Sweety". It was further explained that the cash was utilized on shooting expenses of the film in Delhi/Noida and was handled by Mr. Aman and his Dad. It was clarified that Mr. Aman is spouse of Smt. Vinni Garg who is sister of the appellant and Mr. Aman is a resident of Ghaziabad. The money was paid as imprest to various persons including the production accountant Mr. Manish Parab, executive producer Mr. Naren Kumar and production assistant Mr. Ashvinder. The AO held that the above page details of debit and credit are written which are unaccounted income and expenses & 3046/Del/2022 Luv Ranjan of Sh. Luv Ranjan in cash not entered in the books of accounts. On this reasoning the debit entries amounting to Rs. 13,98,700/- have been added being unexplained income u/s 69A of the Act and credit entries amounting to Rs. 14,29,000/- have been added u/s 69C as unexplained expenditure.

It is a fact on record that the amounts were withdrawn from the declared bank account of Allahabad Bank A/c No. 50360779037. An examination of the same shows that the title of the account is "M/s Luv Films - SKTKS". Therefore, it emerges that a special bank account was opened for expenditure related to production of the film "Sonu Ke Titu Ki Sweety" (SKTKS). The examination of bank account further reveals that there is a cash withdrawal of Rs. 15,00,000/- on 09.03.2017 and Rs.5,00,000/- on 10.03.2017. The dates of cash withdrawals are very near to the dates of giving imprest advances mentioned in the seized documents which is 20.03.2017, 21.03.2017 & 22.03.2017. The ld. CIT(A) has gone through the entire cash book which is reproduced at page no. 20 to 24 of the order and categorically mentioned that the dates of withdrawal of cash from the bank account, the cash book and the seized material have been tallied and hence, the expenses disclosed cannot be considered as bogus.

Since, the assessee had cash available as evident from the bank statement and the cash book for meeting production expenses which is a general pattern of meeting expenses in outdoor shooting of the film, we hold that no addition u/s 69A and u/s 69C are called for and accordingly the decision of the ld. CIT(A) on this issue is affirmed.