2023 (5) TMI 1210 - AT - Income Tax

Unaccounted income - income from film distribution - difference between the amount being the collection as per document impounded and as shown by the assessee on account of assessee s share received from the film distributor on account of the movie Pokiri - HELD THAT - A perusal of the fax received from Asha Film Distributor, clearly shows the share of the assessee on account of the picture Pokiri . The above amount is for 91 days. The said fax clearly gives all the details and was recovered from the office of the assessee which was received in his Fax number only. When the said document gives the time, date, name of the Centre with whom the assessee is doing business giving full details of the share of the assessee, it cannot be said that it is a dumb document. Although film distributor has stated that he has given only Rs.1,40,00,000/-, however, he did not produce any books of account to support his claim nor he has given any explanation as to how and why the fax was sent from his office to the assessee. Since the impounded document clearly gives full details of the share of the assessee and since the learned CIT (A) out of the above has allowed certain expenses towards commission, therefore, in absence of any contrary material brought to our notice, the order of the learned CIT (A) is upheld and the grounds raised by the assessee on this issue are dismissed. CIT (A) power in directing AO to enhance the income - HELD THAT - As held in various decisions that the power of the CIT (A) is co-terminus with that of the power of the AO and the CIT (A) can do which the Assessing Officer has failed to do. Since CIT (A) has already deleted an amount and another amount subject to certain verification, therefore, by directing the AO to rectify the mistake amounting to Rs.31.00 lakhs does not amount to any enhancement of income. Therefore, he is not required to issue any notice for enhancement of income. In any case, the learned CIT (A) has given a simple direction to rectify the mistake which the AO has committed by not adding the amount which has attained finality . Therefore, the order of the CIT (A) on this issue is justified. The grounds raised by the assessee on this issue are accordingly dismissed.

Summary

Issues Involved:
1. Addition of Rs.3,02,75,200/- related to collections from the movie "Pokiri".
2. Disallowance of Rs.38,00,000/- claimed as payment to M/s Prasad Film Laboratories.
3. Addition of Rs.31,00,000/- based on cash receipts noted in an impounded diary.
4. Direction to rectify a mistake apparent from the record regarding Rs.31,00,000/-.

Summary:

1. Addition of Rs.3,02,75,200/- related to collections from the movie "Pokiri":
The Tribunal had previously remitted the issue back to the Assessing Officer (AO) for fresh consideration, emphasizing that the agreement produced by the assessee was a self-serving document and could not be relied upon. Upon reassessment, the AO made an addition of Rs.3,02,75,200/- based on the difference between the gross collection of Rs.4,42,75,200/- and the claimed Rs.1,40,00,000/-. The CIT(A) partly allowed the appeal, sustaining an addition of Rs.1,97,12,723/- after considering the impounded document and the lack of supporting evidence from the distributor. The Tribunal upheld the CIT(A)'s decision, noting that the document was not a "dumb document" and provided detailed information on the collections.

2. Disallowance of Rs.38,00,000/- claimed as payment to M/s Prasad Film Laboratories:
The Tribunal had restored this issue to the AO for detailed examination, noting that the payments were claimed to be made by third parties on behalf of the assessee. The CIT(A) had deleted the addition of Rs.38,00,000/- subject to verification, which the Tribunal found justified.

3. Addition of Rs.31,00,000/- based on cash receipts noted in an impounded diary:
The CIT(A) in the first round of litigation had sustained this addition, and the assessee had not appealed this decision. The Tribunal found that the AO had correctly retained this addition, as the assessee could not provide further evidence to support his claim that the amount was part of an already disclosed sum.

4. Direction to rectify a mistake apparent from the record regarding Rs.31,00,000/-:
The CIT(A) directed the AO to rectify a mistake in the computation of revised total income, noting that the AO had failed to add Rs.31,00,000/- which had attained finality. The Tribunal upheld this direction, stating that the CIT(A)'s power is co-terminus with that of the AO and that the rectification did not amount to an enhancement of income requiring a notice.

Conclusion:
The Tribunal dismissed the appeal filed by the assessee, upholding the CIT(A)'s decisions on all issues. The order was pronounced in the Open Court on 16th May, 2023.