2013 (4) TMI 951 - AT - Income Tax

Summary

Issues Involved:
1. Suppression of theatre collections
2. Income from canteen receipts
3. Unexplained investment in construction of the theatre
4. Repayment of bank loan
5. Deemed profits u/s 28(iv)
6. Unexplained investment in jewellery
7. Education expenses of the assessee's daughter

Summary:

1. Suppression of Theatre Collections:
The common issue raised by the Revenue for the assessment years 2000-01 and 2001-02 pertains to the suppression of theatre collections. The CIT(A) allowed 40% of the suppressed receipts towards probable expenses, estimating 60% of the gross suppressed receipts as income liable to be taxed. The Tribunal modified the order of the CIT(A), allowing 50% of the unaccounted gross receipts towards expenditure on account of the distributor's share. Consequently, both appeals of the Revenue were dismissed, and the cross objections of the assessee were partly allowed.

2. Income from Canteen Receipts:
For the assessment year 2004-05, the Revenue challenged the CIT(A)'s estimation of gross collections from canteen receipts at Rs. 5,000 per day and the 50% share of the income attributed to the assessee. The Tribunal upheld the CIT(A)'s estimation but adjusted the gross margin on sales to 20%, resulting in the assessee's share being Rs. 1,82,500. This ground of appeal by the Revenue was dismissed, and the cross objection of the assessee was partly allowed.

3. Unexplained Investment in Construction of the Theatre:
The Revenue and the assessee both contested the CIT(A)'s decision regarding unexplained investment in the construction of Mahalakshmi theatre. The Tribunal directed the Assessing Officer to adopt the value as per the Registered Valuer's report, dismissing the Revenue's appeal and allowing the assessee's cross objection.

4. Repayment of Bank Loan:
The Revenue's appeal concerning the deletion of the addition made by the Assessing Officer for repayment of loans was dismissed. The CIT(A) had found that the assessee had provided sufficient details and confirmations from creditors, thus discharging his onus.

5. Deemed Profits u/s 28(iv):
The Revenue's appeal regarding deemed profits u/s 28(iv) amounting to Rs. 41,49,000 was allowed. The Tribunal found a direct nexus between the business of the assessee and the benefit derived from the allotment of shares at a concessional rate, making the benefit taxable under the provisions of Sec.28(iv).

6. Unexplained Investment in Jewellery:
For the assessment year 2006-07, the Revenue's appeal against the deletion of part of the addition for unexplained investment in jewellery was dismissed. The CIT(A) had confirmed part of the addition and allowed telescopy for the rest. The Tribunal upheld the CIT(A)'s detailed and reasoned order.

7. Education Expenses of the Assessee's Daughter:
The Revenue's appeal concerning the education expenses of the assessee's daughter amounting to Rs. 9,34,900 was dismissed. The Tribunal was satisfied with the assessee's explanation that the expenses were met from the sale of agricultural land and other income sources.

Conclusion:
The appeals of the Revenue in ITA Nos. 1978, 1979, 1981, and 1982/Mds./11 were dismissed, while the appeal in ITA No. 1980/Mds./11 was partly allowed. Cross Objection Nos. 85, 86, 88, 89, and 90/Mds/2011 were partly allowed, and C.O.No.87/Mds/2011 was dismissed.