2018 (1) TMI 1150 - AT - Income Tax

Unaccounted income received from Red Chillies - addition has been made on the basis of documents seized during the search from the premises of Personal Secretary of the assessee - CIT-A deleted the addition - Held that - It is not the case of the Revenue, the difference amount which has been explained to be included in the head of unidentified parties is of any different amount. Hence, if the receipt shows unidentified parties and the same is exactly agreeing with the difference between the receipt shown from Red Chillies and its difference from the agreement, the assessee s explanation that the same is actually an amount received from Red Chillies deserves to be accepted. Hence, the submission of the assessee is cogent and the addition in this regard is not justified. - Decided in favour of assessee Unaccounted income received from London Speaker Bureau-Global Leadership Forum 2006 - contention of the assessee that the loose paper found was a draft unsigned contract for attending the event namely the Global Leadership Forum 2006 for a consideration of US 50,000 - Held that - The assessee has not produced any evidence or any letter whereby she has demanded the balance amount to be paid. It is quite unbelievable that in an international performance engagement, the assessee will be paid only half the amount after the performance and she will not make any presentation or submission for realization of the same. Hence, in our considered opinion that addition is based upon cogent material and the assessee has not been able to dislodge the same. Commissioner of Income Tax (Appeals) has deleted the addition on irrelevant reasoning. The addition has not been made on jotting in a loose sheet. Rather, it is based upon a full fledged engagement letter, the veracity of which has not been doubted. Furthermore, the case laws referred by the ld. Commissioner of Income Tax (Appeals) are in context of different facts and circumstances not applicable here - Decided against assessee

Summary

Issues:
1. Addition of unaccounted income received from Red Chillies.
2. Deletion of unaccounted income received from London Speaker Bureau for attending Global Leadership Forum.

Issue 1: Addition of unaccounted income received from Red Chillies:
The case involved a search and seizure action under section 132 of the Income Tax Act. The Assessing Officer added an amount of ?24.87 lakhs as unaccounted income received from Red Chillies based on a contract agreement and discrepancies in the receipts submitted by the assessee. However, the Commissioner of Income Tax (Appeals) noted that the addition was solely based on loose sheets seized during the search, without any concrete evidence. The Commissioner held that no agreement with Red Chillies was found, and the loose sheets were from the premises of the assessee's Personal Secretary, not the assessee. Citing relevant legal precedents, the Commissioner concluded that no addition should be made solely based on loose sheets. The Tribunal upheld the Commissioner's decision, stating that the assessee's explanation was acceptable, and the addition was not justified as the evidence provided aligned with the receipts from Red Chillies.

Issue 2: Deletion of unaccounted income received from London Speaker Bureau for attending Global Leadership Forum:
In this matter, the Assessing Officer added ?11.45 lakhs as undisclosed income based on an agreement with London Speaker Bureau for attending the Global Leadership Forum. The assessee had offered only a portion of the amount received for tax. The Commissioner of Income Tax (Appeals) noted that the addition was made based on loose sheets found during the search, similar to the previous issue. However, the Tribunal differed in its analysis. It found that the loose sheet was a draft copy of a letter confirming engagement with the London Speaker Bureau, specifying a fee of US $50,000. The Tribunal emphasized that the signed document was not in the possession of the Revenue, and the contention that only an unsigned agreement was found was unsustainable. As the engagement letter clearly mentioned the fee, the Tribunal held that the addition was justified, as the assessee failed to provide evidence of receiving only half the amount. The Tribunal overturned the Commissioner's decision, reinstating the Assessing Officer's order.

In conclusion, the Tribunal partly allowed the Revenue's appeal, upholding the addition of unaccounted income received from London Speaker Bureau while rejecting the addition related to income from Red Chillies.