1993 (2) TMI 43 - HC - Income Tax

Summary

Issues:
Whether certain income could be included in the total income of the assessee for the assessment years 1972-73 and 1973-74.

Analysis:
The judgment of the court, delivered by U. T. SHAH J., involved two references with a common issue of whether specific income should be included in the total income of the assessee. The assessee, a well-known film artist, had a permanent assignment with a company to provide services for a fixed remuneration. The Income-tax Officer added certain amounts to the assessee's total income, suspecting tax evasion due to the company's control by the assessee's family members. The Appellate Assistant Commissioner later deleted these additions, citing a previous court decision. The Revenue appealed to the Income-tax Appellate Tribunal, which upheld the deletions based on the same court decision.

For the assessment year 1972-73, the question referred was whether an amount received by the company for the assessee's services should be included in her income. The court considered the decision in a similar case, Shobhna Pictures, where the court ruled against including artists' income in their individual total income. The court found no merit in the Revenue's arguments, stating that the assessee was entitled to only a fixed amount from the company, not the entire income earned by the company. The court held that there was no evidence of tax evasion by the assessee and ruled in favor of the assessee.

The court highlighted that the Revenue failed to provide any material to prove tax evasion attempts by the assessee. The court emphasized that the Income-tax Officer did not indicate any evasion efforts by the assessee in the assessment. Relying on the precedent set by the Shobhna Pictures case, the court concluded that the additions made by the Income-tax Officer were unjustified. The court affirmed the Tribunal's decision to delete the additions and ruled in favor of the assessee for both the assessment years.

In conclusion, the court upheld the Tribunal's decision to delete the additions made by the Income-tax Officer, emphasizing that the assessee was entitled to a fixed amount from the company and rejecting the Revenue's claims of tax evasion. The court ruled in favor of the assessee for both assessment years, based on the precedent set by the Shobhna Pictures case and the lack of evidence supporting tax evasion allegations against the assessee.