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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR.
Before: DR. M. L. MEENA & SH. ANIKESH BANERJEE
ORDER Per:Anikesh Banerjee, JM: The instant appeal of the revenuewas filed against the order of the ld.Commissioner of Income Tax (Appeals)-5, Ludhiana,[in brevity ‘the CIT (A)’] order passed u/s 250(6) of the Income Tax Act 1961, [in brevity ‘the Act’] for A.Y.
2013-14. The impugned order was emanated from the order of the ld. DCIT, CC-II, Jalandhar, (in brevity the AO) order passed u/s 143(3) of the Act.
The revenue has taken the following grounds: “1. Whether Upon the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 17,69,271/- made by the AO on account of unaccounted income, relying on the clause/condition as per agreement made.
2. Whether Upon the facts and circumstances of the case, the Ld. CIT(A) has erred in reducing the addition from Rs. 1,00,00,000/- to Rs.20,00,000/-made by the AO on account of unexplained investment u/s 69 of the Income Tax Act, 1961, relying on the clause/condition as per agreement made.
3. Whether Upon the facts and circumstances of the case, the Ld. CIT(A) has erred in law in reducing the addition from Rs. 1,42,69,428/- made by the AO on account of unexplained expenditure u/s 69C of the Income Tax Act, 1961, which was based on the specific report of the Special Auditor.
4. Whether Upon the facts and circumstances of the case, the Ld. CIT(A) has erred in law in reducing the disallowance made u/s 40A(3) at Rs.82,26,000/- to Rs.2,02,899/- when the same was required to be confirmed at Rs. 11,32,899/-.
5. The appellant craves leave to add, amend, modify, vary, omit or substitute any of the aforesaid grounds of appeal
at any time before or at the time of hearing of the appeal.”
3. Brief fact of the case is that the assessee is a company and doingfilm production. The assessee’s assessment was initiated on basis of a search operation u/s 132(1) of the Act which was undertaken at the residential premises of Sh.Rajan Batra& Sh. Kapil Batra at Jalandhar on 05.12.2012. During the search the incriminating document was found the ld. AO claimed that the assessment was framed u/s 153C/143(3) of the Act. During assessment proceeding, the addition was made in different heads by the ld. AO. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) after considering the submission of the assessee and the report of the Special Auditor the amount of Rs.17,69,271/- was deleted on account of un-accounted income related to agreement. The ld. CIT(A) had received proper evidence and the addition was duly deleted. The ld. CIT(A) has further observed and decided about the addition amount of Rs.1 crore, which was claimed of deduction related to forfeited amount. The assessee paid this advance and the said amount was forfeited. On basis of the supporting evidence Rs.80 lacs was deleted and appeal was partly in favour of the assessee. Only Rs. 20 lacs was upheld in favour of the revenue. Related to addition amount of Rs. 1,42,69,000/- in connection with excess expenses made for production of the movie which was found during search proceeding and the document was seized. In appeal proceeding, the assessee submitted the details documents. Theamount to Rs.61,88,101/- was upheld and rest amount Rs.82,26,600/- was deleted as because the said amount was added back separately by invoking the provision of section 40A(3). As per the ld. CIT(A) the same amount should not be added twice. Related to addition for violation of provision of section 40A(3) Rs.82,26,000/-. The ld. CIT(A) considering the report of the Special Auditor reduced the addition and restricted the addition amount of Rs.2,02,899/- and the balance amount was quashed. Being aggrieved revenue filed an appeal before us.
When the matter was called for hearing, none was present on behalf of the assessee and the adjournment petition was also not submitted before the bench. On perusal of the documents, we find that the assessee has taken several dates and it was informed that on date of hearing on 1st August 2023 that the date which has fixed on 23.08.2023 is a “final opportunity” for hearing. But no response from the end of assessee. Considering the issue, we proceed to dispose of the appeal ex parte qua for assessee after hearing the ld. DR.
The ld. DR vehemently argued and relied on the order of the ld. AO.
We heard the rival submission and considered the documents available in the record. The adjudication of the above appeal is as per the grounds which are as below. Ground No. 1 7. In this ground the relief was granted by the ld. CIT(A) amount of Rs.17,69,271/-. We consider the relevant paragraph in page 15 of the appeal order which is reproduced as below:
Ground No. 2 7.1 Related this ground, the addition wasreduced by the ld. CIT(A)which is mentioned that the relevant paragraph 4.5 of the appeal order is reproduced as below:
Ground No.3 7.2 Related this addition, the ld. CIT(A) reduced the addition. The relevant paragraph 4.6 of the appeal order is reproduced as below:
Ground No. 4 7.3 Related to this ground the ld. CIT(A) reduced the disallowance made u/s 40A(3). The relevant paragraph of appeal order is reproduced as below:_:
The assessee is a producer of the Film. During the appeal proceeding related to relief on additions of Rs.17,69,271/- the assessee properly explained about the source of money which was related to the agreement of sale executed by the assessee. So, the order of the ld. CIT(A) in this issue stands correct. In case of addition of Rs.1 crore out of that the ld. CIT(A) allowed the relief Rs.80 lacs. The relief was granted on basis of the report from special auditor. The amount was supported by the agreement and the mode of payment i.e. the said amount was duly paid by the assessee to M/s Karma Dhanoa Movies, Proprietor Sh. Harjinder Singh Dhanoa. The special auditor had not made any adverse comment in this regard. So, the ld. CIT(A) was correctly allowed the claim of the assessee amount to Rs. 80 lacs. Accordingly, the Ground no 1 & 2 of the revenue are dismissed. 8.1 In addition u/s 69C related to unexplained expenditure the details of expenditure were duly submitted amount to Rs.1,13,73731/-. The ld. CIT(A) found that Rs.82,26,000/- is related to cash expenses and separately added back u/s 40A(3). So, the ld. CIT(A) correctly observed that the same amount cannot be taxed twice. Accordingly, the relief was grantedamount to Rs.82,26,000/- is correct. We are not intervening the appeal order. Accordingly, Ground no-3 of the revenue is dismissed.