9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 1404 - AT - Income TaxAssessment u/s 153A - Absence of any incriminating material during the course of search - addition u/s 68 - HELD THAT - CIT(A) has referred purchase/work contract and purchase invoices along with the statement recorded u/s 132(4) holding that because of contrary statements of employees, nature of invoices constituent incriminating material and such facts were not existed at the time of original assessment made in the case of the assessee. No reason to interfere in the decision of the ld. CIT(A), therefore, this ground of appeal of the assessee stand dismissed. Disallowing film production related expenses - Confirming expenses claimed on account of film production as inflated and bogus - HELD THAT - To sustain the disallowance it is necessary to have supporting evidences and documents, in the case of the assessee, basis of additions were only retracted statement of the employees which had no strong evidential value. There was no positive material on record brought by the A.O to substantiate that in fact assessee had inflated its expenses by overbilling. AO has only relied on the retracted statement and there was no independent material /evidences to substantiate the same. A.O has not made further investigation to contrary prove the claim of occurrence of fire as claimed by the aforesaid party. We consider that the decision of ld. CIT(A) to sustain the addition of Rs.5 lac pertaining to the production expenses merely based on retracted statement was contrary to the surroundings facts and material and not justified, therefore, we direct the A.O to delete the addition. Disallowance of Personal Expenses - A.O has disallowed payment made for J.W. Mariot Hotel Membership. -as claimed that hotel was used for holding meetings with the parties related to production of the films - HELD THAT - We observe that the part of the hotel facility for personal use cannot be ruled out however, looking to the fact that the impugned addition was merely made on the basis of the retracted statement without fully linking with specific evidences, therefore we restrict such disallowance to 50% of Rs.2,81,265/-. Therefore, this ground of appeal of the assessee is partly allowed. Expenditure towards production - HELD THAT - The assessee has also produced ledger account and supporting documents before the assessing officer during the course of assessment proceedings to substantiate these facts that the said amount was not claimed as deduction in the books of the assessee during the year consideration, however the assessing officer failed to prove contrary. Revenue could not controvert the finding of the ld. CIT(A), therefore ,this ground of appeal of the Revenue stand dismissed. Unsecured loan u/s 68 - loan taken from 5 parties pertaining to Sh.Bhanwarlal Jain Group - HELD THAT - In the case of the assessee A.O has also failed to controvert the submission of the assessee supported with the relevant material. In the light of the facts and findings of coordinate bench in the Nemichand Jain case as supra, we find that the issue raised before the Tribunal in this year pertaining to the case of the assessee are similar to the case of Nemichand P. Jain. The A.O. had made the impugned addition merely relying upon the retracted statements and failed to corroborate the same with any relevant supporting evidence/material , therefore, addition to be deleted. Decided in favour of assessee. Disallowance of bogus expenses - expenses as Recee expenses for the different films which comprising Air fare and Travelling Visa fees and Insurance Hotels etc - HELD THAT - is observed that disallowance was made on doubtful basis without linking to specific seized material demonstrating that claim of the assessee is totally bogus. There is no material brought on record to support the complete disallowances of such expenses. As the nature of personal element cannot be ruled out therefore, we restrict the disallowance to the 50%. Addition being salary paid to employee in cash - HELD THAT - It is undisputed fact that lower authority has made impugned addition merely on the sole basis of retracted statement without corroborating the allegation of payment of the such salary in cash with any relevant evidence/supporting material .We don t find any justification in the decision of ld. CIT(A). Accordingly, this ground of appeal of the assessee is allowed. Payment towards foreign shooting expenses - HELD THAT - A.O had not disproved the aforesaid material facts of incurring expenses by the assessee for shooting of the film at London and claim of tax rebate of Rs.3.65 cr. Therefore, we do not find any infirmity in the decision of the ld. CIT(A). Accordingly, this ground of appeal of the Revenue stand dismissed. Accommodation entry provided by Viking Media Entertainment Pvt. Ltd. - Addition made on the basis of retracted statement of the employees of the assessee - HELD THAT - During the course of assessment the assessee has submitted the entire document, agreement invoices, bank statement in support of genuineness of transactions. It is undisputed fact that assessee had made the film Baaghi on the basis of remake of the telgue film Varsham . The A.O has purely relied upon the retracted statement without disproving the correctness of the supporting documents furnished by the assessee. No merit in the appeal of the Revenue.
Issues Involved:
1. Absence of incriminating material during the search. 2. Inflated and bogus film production expenses. 3. Disallowance of personal expenses. 4. Deletion of additions made by the AO under Section 68 of the Act for unsecured loans. 5. Disallowance of expenses related to foreign shooting. 6. Deletion of addition related to accommodation entries. Issue-wise Detailed Analysis: 1. Absence of Incriminating Material During the Search: The assessee contended that no incriminating material was found during the search, and the AO made disallowances based solely on employee statements. The CIT(A) held that the statements and invoices constituted incriminating material. The Tribunal upheld the CIT(A)'s decision, noting that the statements and invoices found during the search were sufficient to constitute incriminating material. Thus, the ground of the assessee was dismissed. 2. Inflated and Bogus Film Production Expenses: The AO disallowed expenses claimed by the assessee for film production, alleging they were inflated and bogus, based on employee statements. The CIT(A) partly allowed the appeal, confirming some disallowances but deleting others. The Tribunal noted that the AO relied heavily on retracted statements without corroborating evidence. The Tribunal allowed the assessee's appeal, directing the AO to delete the disallowances, as the expenses were essential for film production and supported by substantial evidence. 3. Disallowance of Personal Expenses: The AO disallowed personal expenses debited to the assessee's accounts based on employee statements. The CIT(A) restricted the disallowance to Rs. 2,81,265 for JW Marriott Hotel Membership, as the assessee could not provide evidence of business use. The Tribunal partly allowed the assessee's appeal, restricting the disallowance to 50% of Rs. 2,81,265, acknowledging the possibility of partial personal use. 4. Deletion of Additions Made by the AO Under Section 68 of the Act for Unsecured Loans: The AO added Rs. 8,50,00,000 as bogus unsecured loans under Section 68, based on the statement of Mr. Nushrat J. Khan and connections to Bhanwarlal Jain entities. The CIT(A) deleted the addition, noting that the assessee provided sufficient evidence of loan transactions, including confirmations, PAN details, and bank statements. The Tribunal upheld the CIT(A)'s decision, citing the lack of corroborative evidence from the AO and the genuineness of the transactions. 5. Disallowance of Expenses Related to Foreign Shooting: The AO disallowed Rs. 16,11,29,496 related to foreign shooting expenses, alleging the transactions were inflated to obtain UK government subsidies. The CIT(A) allowed the appeal, noting that the expenses were genuine and supported by substantial evidence, including tax rebates from the UK government. The Tribunal upheld the CIT(A)'s decision, finding no contrary evidence from the AO. 6. Deletion of Addition Related to Accommodation Entries: The AO added Rs. 50,00,000, alleging the assessee received accommodation entries from Viking Media Entertainment Pvt. Ltd. The CIT(A) restricted the disallowance to Rs. 50,00,000, acknowledging some inflation but finding the transactions generally genuine. The Tribunal upheld the CIT(A)'s decision, noting the lack of corroborative evidence from the AO and the genuineness of the transactions. Conclusion: The Tribunal partly allowed the assessee's appeals and dismissed the revenue's appeals, emphasizing the need for corroborative evidence beyond retracted statements to support disallowances and additions. The Tribunal upheld the genuineness of the transactions and expenses claimed by the assessee, directing the AO to delete unsupported disallowances and additions.
|
