Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCHES “A” MUMBAI
Before: SHRI MAHAVIR SINGH & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the revenue. The relevant assessment year is 2008-09. The appeal is directed against the order of Commissioner (Appeals) – 29, Mumbai and arises out of order u/s 143(3) of the Income Tax Act 1961 (the ‘Act’).
The effective grounds of appeal filed by the revenue read as under:-
i. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in admitting additional evidences filed before it without specifying that the conditions mentioned in Rule 46A are satisfied. ii. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 28,81,450/- out of total addition of Rs.
35,84,200/- on account of sale of tickets on the basis of additional evidences filed before it. iii. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 4,00,000/- out of the total artist fee of Rs. 9,29,500/- u/s 69C of the I.T. Act on the basis of additional evidences filed before it. iv. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs. 2,00,000/- and Rs. 6,50,000/- on account of discrepancies in TDS certificates on the basis of additional evidences filed before it.
We begin with the 1st ground of appeal. The learned CIT(A) has mentioned at para 3 of the appellate order that the assessee could not collect the evidences before the completion of assessment proceedings because of compelling circumstances. The circumstances being that the assessee had to incure huge loss in organising the event at Nasik and thereafter he had to close the business of event management and take up a salaried job to earn income. As the assessee was prevented by sufficient cause for producing before the AO the evidence which is relevant to the grounds of appeal, the learned CIT(A) has rightly admitted the additional evidence under Rule 46A of the Income Tax Rules, 1962. Therefore, the 1st ground of appeal filed by the revenue is dismissed.
We now come to the 2nd ground of appeal. The assessee, during the course of appellate proceeding before the learned CIT(A) had filed additional evidences. Having admitted the same, the learned CIT(A) sent a copy of it to the AO for making further enquiry and submitting a remand report. The AO sent a remand report to the learned CIT(A) on 16.11.2012. Having gone through the assessment order, the remand report of the AO and the explanation of the assessee, the learned CIT(A) found that the assessee had submitted details of tickets sold, free tickets issued and tickets returned. These details were given party-wise and also quantity of tickets in different denominations. The total value of free tickets given to 11 parties come to Rs. 21,96,800/-. The confirmation letters of the above parties were also furnished. Only in the case of ‘Lokmat’, the confirmation was not filed. The learned CIT(A) found that there were actual recorded sale of tickets to ‘Lokmat News Paper’ amounting to Rs. 3,23,000/-. From this he inferred that free tickets of Rs. 3,23,000/- would have been given to Lokmat as an advertisement to this effect was given by the assessee in ‘Lokmat News Paper’ only. However, in respect of free tickets of balance Rs. 3,15,000/- mentioned against ‘Lokmat News Paper’, there is no confirmation from the party. The learned CIT(A) thus held that out of total free tickets claimed by the assessee of Rs. 21,96,000/- the assessee could not provide evidence of free tickets amounting to Rs. 3,15,000/- related to ‘Lokmat News Paper’.
The learned CIT(A) has observed that the tickets returned from various counters to the assessee amount to Rs. 15,04,000/-. The assessee has filed confirmation from these counters. Only in respect of one party i.e. Planet M, there is no confirmation and therefore, the learned CIT(A) has not accepted the assessee’ s contention in respect of the said party. Besides, in respect of two confirmations i.e. one in the name of Kalidas Natyagraha and another in the name of Parasuram Saikhed, the confirmations do not bear stamp and seal of the party and therefore, are not reliable. The amounts mentioned against these parties are Rs. 1,28,000/- and Rs. 1,23,000/- respectively. Therefore, the learned CIT(A) has not accepted the assessee’s explanation in respect of returned tickets amounting to Rs. 3,87,750/- (Rs. 2,51,000/- plus Rs. 1,36,750/-).
Thus the learned CIT(A) restricted the addition to Rs. 7,02,750/- (Rs. 3,15,000/- Plus Rs. 3,87,750/-) out of Rs. 35,84,200/- made by the A.O.
4.1 We have heard the rival submissions and perused the relevant material on record. We find that the addition of Rs. 7,02,750/- confirmed by the learned CIT(A) out of total addition of Rs. 35,84,200/- made by the AO is based on evidence and proper evaluation. The same has been delineated at para 4 here-in-above. In view of the above, we uphold the addition of Rs. 7,02,750/- confirmed by the learned CIT(A) and dismiss the 2nd ground of appeal filed by the revenue.
Now we come to the 3rd ground of appeal. The AO found that total artist fee of Rs. 9,29,500/- was debited and no documents were submitted by the assessee. Therefore, the AO held Rs. 4,00,000/- as unexplained expenditure u/s 69C of the Act. As the AO has not given any reasons for disallowing Rs. 4,00,000/-, the learned CIT(A) has rightly deleted the same. We agree with the finding of the learned CIT(A) and dismiss the 3rd ground of appeal.
6. The 4th ground of the appeal relates to the addition of Rs. 2,00,000/- and Rs. 6,50,000/- made by the AO on account of discrepancies in TDS certificate. As per the TDS certificate of Sapat International Pvt. Ltd. and Kotak Mahindra Mutual Fund, the payment made / credited are shown at Rs. 5,00,000/- and Rs. 9,21,157/-. However, in the P&L account the assessee has shown receipts of Rs. 3,00,000/- and Rs. 2,71,157/- respectively. It is the contention of the revenue that the learned CIT(A) should not have deleted the above addition made by the A.O. on the basis of additional evidence filed before him. We believe that the TDS certificate issued by Sapat International Pvt. Ltd. and Kotak Mahindra Mutual Fund need verification at the level of A.O. Therefore, we set aside the order of the learned CIT(A) only in respect of ground no 4 of the present appeal and restore the matter back to the file of the AO for verification and then passing an order as per the provisions of the Act. Needless to say, the AO is directed to give reasonable opportunity of being heard to the assessee before finalising the order. The assessee is also directed to file the necessary details before the AO Thus ground no 4 of the appeal is allowed for statistical purpose.
In the result, the appeal is partly allowed. Order pronounced in the open court on 16/03/2017