2017 (11) TMI 669 - AT - Income Tax

Undisclosed income arising out of appearance fee in ICC Awards function - no evidence except the computer print out taken from a third party - Held that - The addition was made on the basis of a print out taken from the computer of a third party who happened to be an employee of Matrix and there are no other corroborative evidence brought on record to prove the fact that the payment mentioned in the seized material was actually received by the assessee. On the contrary, the passport submitted by the assessee clearly established the fact that neither she had travelled to Sidney in relevant period nor hosted the ICC event for which she was supposed to receive cash payment. It is further relevant to observe, even Ms. Sandhya Ramchandra, from whose computer such print out was taken had stated before the Departmental Authorities that she was not aware of the fact mentioned in the said Annexure as it was for a period prior to her appointment in Matrix. In these circumstances, simply relying upon a untested / unverified document and without any other corroborative evidence to demonstrate that the assessee has actually received cash payment of ₹ 2,50,000 for hosting an event in Sidney, the addition, in our view, is unsustainable. Therefore, we uphold the order of the learned Commissioner (Appeals) on this issue by dismissing the ground raised. Addition on account of cash receipts - addition as per the document found and seized from the computer of Ms. Sandhya Ramchandra - Held that - Undisputedly, the aforesaid seized documents was not found from the possession of the assessee but from a third party. It is also a fact that apart from this seized material, there is no other corroborative material on record to demonstrate that the cash payment mentioned in the seized material was actually made to the assessee. On the contrary, the assessee when was confronted with the seized material had categorically denied of having received the cash payment. Further, an affidavit was also filed on behalf of Matrix India Entertainment Pvt. Ltd., stating that no cash payment was made to the assessee. In fact, Ms. Sandhya Ramchandra, in her statement also could not state anything about cash payment as it was prior to her employment. Thus, in the absence of any other corroborative evidence, except the seized material, which was found from a third party it cannot be presumed that the assessee has received the cash amount of ₹ 30,80,000. That being the case, we do not find any infirmity in the order of the learned Commissioner (Appeals) in deleting the addition Addition of sum received as remuneration from Matrix India Entertainment Pvt. Ltd. - Held that - As discussed by the learned Commissioner (Appeals), the assessee had received amount of ₹ 2,80,000 in cheque and has accounted for in her books of account. She has also offered it as income in the impugned assessment year. The aforesaid factual finding of the learned Commissioner (Appeals) has not been controverted by the learned Departmental Representative. Therefore, we uphold the order of the learned Commissioner (Appeals) on this issue. Ground raised is dismissed. Addition on account of various expenditure - Held that - It is evident, except the print out taken from the computer of Ms. Sandhya Ramchandra, there is no other material before the Department to conclusively prove that expenditure of ₹ 6,86,000 was incurred in cash on behalf of the assessee by Matrix. In fact, in an affidavit filed on behalf of Matrix India Entertainment Pvt. Ltd., it has been categorically stated that no cash payment has been made to the assessee. It is also a fact that the amount in dispute was added at the hands of the Matrix India Entertainment Pvt. Ltd. as well. In view of the aforesaid, we uphold the order of the learned Commissioner (Appeals), ground raised is dismissed. Addition on account of unexplained expenditure in purchase of house - Held that - The addition made on account of expenditure incurred in cash for purchase of house was made on the basis of certain documentary evidences seized from third parties, it is evident that the cash receipts have been generated by Shri Vijay Kandhari and were also signed by him. We fail to understand why Shri Vijay Kandhari, was not examined by the Department to find out the actual fact. Similarly, it is evident that the Assessing Officer has not made any enquiry with the house owner to find out the exact amount received by him for selling the house to the assessee. Moreover, in an affidavit filed on behalf of Matrix, it was accepted that no cash was either paid or accepted on behalf of the assessee. It is also a matter of record that Ms. Sandhya Ramchandra, from whose computer some of the seized materials were found was never questioned on this issue. Therefore, in the absence of any direct and clinching evidence indicating incurring of cash expenditure for purchasing the house, addition cannot be made on mere presumption and surmises. Addition made on estimation / extrapolation - Held that - In the absence of any direct evidence demonstrating that the assessee had received cash payment from Matrix, as shown in the evaluation sheet, no addition can be made merely on presumption and surmises and on estimate basis. For making the addition on account of cash component, it was the duty of the Assessing Officer to bring on record corroborative evidence to establish the fact that the entries made in the evaluation sheet were correct. Therefore, in the absence of any evidence brought on record, the addition was rightly deleted by the learned Commissioner (Appeals). The decisions relied upon by the learned Authorised Representative also support the aforesaid view. Therefore, we uphold the order of the learned Commissioner (Appeals) on this issue by dismissing the ground raised by the Revenue. Revenue appeal dismissed.

Summary

Issues Involved:
1. Deletion of addition on account of undisclosed income from appearance fee.
2. Deletion of addition on account of cash receipts.
3. Deletion of addition on account of remuneration received.
4. Deletion of addition on account of unexplained expenditure.
5. Deletion of addition on account of unexplained expenditure in house purchase.
6. Deletion of addition on account of unexplained expenditure for interior decoration.
7. Deletion of addition on account of estimated cash receipts.
8. Deletion of addition on account of remuneration received in cash from M/s. Matrix.
9. Deletion of addition on account of remuneration received in cash for appearance/performance in events.
10. Deletion of addition on account of cash expenditure incurred by M/s. Matrix.
11. Deletion of addition on account of estimated cash income.
12. Deletion of addition on account of fees received from Multi Screen Media P. Ltd.
13. Deletion of addition on account of cash payment received for performance in Dhaka.
14. Deletion of addition on account of estimated cash receipts.

Detailed Analysis:

1. Deletion of Addition on Account of Undisclosed Income from Appearance Fee:
The Revenue challenged the deletion of an addition of ?2,00,000 on account of undisclosed income arising from an appearance fee at an ICC Awards function. The Assessing Officer (AO) based the addition on a document found from a third party's computer, indicating a cash payment to the assessee. The Commissioner (Appeals) deleted the addition, noting that the document was not found from the assessee's possession, and there was no corroborative evidence of the payment. The Tribunal upheld this decision, emphasizing the lack of direct evidence and the fact that the assessee's passport showed no travel to Sidney for the event.

2. Deletion of Addition on Account of Cash Receipts:
The AO added ?30,80,000 to the assessee's income based on documents found from a third party, indicating cash receipts for various appearances. The Commissioner (Appeals) deleted the addition, noting that the documents were not found from the assessee and there was no corroborative evidence. The Tribunal upheld this decision, emphasizing the absence of direct evidence and the affidavit from Matrix denying any cash payments.

3. Deletion of Addition on Account of Remuneration Received:
The AO added ?2,80,000 to the assessee's income, alleging it was received in cash. The Commissioner (Appeals) deleted the addition after verifying that the amount was received by cheque and accounted for in the books. The Tribunal upheld this decision, noting the lack of contrary evidence from the Revenue.

4. Deletion of Addition on Account of Unexplained Expenditure:
The AO added ?6,86,000, alleging it was incurred in cash by Matrix on behalf of the assessee. The Commissioner (Appeals) deleted the addition, noting that the same amount was added in Matrix's case, and there was no corroborative evidence. The Tribunal upheld this decision, emphasizing the lack of direct evidence.

5. Deletion of Addition on Account of Unexplained Expenditure in House Purchase:
The AO added ?57,00,000, alleging it was paid in cash for a house purchase. The Commissioner (Appeals) deleted the addition, noting that the receipts were self-generated by a third party and there was no corroborative evidence. The Tribunal upheld this decision, emphasizing the lack of direct evidence and the absence of any inquiry with the house owner.

6. Deletion of Addition on Account of Unexplained Expenditure for Interior Decoration:
The AO added ?1,43,928, alleging it was paid in cash for interior decoration. The Commissioner (Appeals) deleted the addition, noting the lack of corroborative evidence. The Tribunal upheld this decision, emphasizing the absence of direct evidence.

7. Deletion of Addition on Account of Estimated Cash Receipts:
The AO added ?32,65,574 on the basis of an evaluation sheet found from a third party, estimating cash receipts. The Commissioner (Appeals) deleted the addition, noting the lack of corroborative evidence. The Tribunal upheld this decision, emphasizing the absence of direct evidence and the reliance on mere estimation.

8. Deletion of Addition on Account of Remuneration Received in Cash from M/s. Matrix:
The AO added ?2,00,000 based on a document found from a third party. The Commissioner (Appeals) deleted the addition, noting the lack of corroborative evidence. The Tribunal upheld this decision, emphasizing the absence of direct evidence.

9. Deletion of Addition on Account of Remuneration Received in Cash for Appearance/Performance in Events:
The AO added ?3,80,000 based on a document found from a third party. The Commissioner (Appeals) deleted the addition, noting the lack of corroborative evidence and the fact that the assessee received the remuneration by cheque. The Tribunal upheld this decision.

10. Deletion of Addition on Account of Cash Expenditure Incurred by M/s. Matrix:
The AO added ?51,486 based on a document found from a third party. The Commissioner (Appeals) deleted the addition, noting the lack of corroborative evidence. The Tribunal upheld this decision.

11. Deletion of Addition on Account of Estimated Cash Income:
The AO added ?52,68,388 on an estimated basis. The Commissioner (Appeals) deleted the addition, noting the lack of corroborative evidence. The Tribunal upheld this decision, emphasizing the absence of direct evidence and the reliance on mere estimation.

12. Deletion of Addition on Account of Fees Received from Multi Screen Media P. Ltd.:
The AO added ?25,28,571, alleging it was diverted income. The Commissioner (Appeals) reduced the addition to ?14,28,571, noting that the assessee had already offered ?11,00,000 as income. The Tribunal upheld this decision, emphasizing that the amount had already been offered as income.

13. Deletion of Addition on Account of Cash Payment Received for Performance in Dhaka:
The AO added ?60,00,000 based on a loose paper found during a survey. The Commissioner (Appeals) deleted the addition, noting that the event was conducted through another agency and the fees were received by cheque. The Tribunal upheld this decision, emphasizing the lack of direct evidence.

14. Deletion of Addition on Account of Estimated Cash Receipts:
The AO added ?3,99,53,661 on an estimated basis. The Commissioner (Appeals) deleted the addition, noting the lack of corroborative evidence. The Tribunal upheld this decision, emphasizing the absence of direct evidence and the reliance on mere estimation.

Conclusion:
In all instances, the Tribunal upheld the deletions made by the Commissioner (Appeals), emphasizing the lack of direct evidence, reliance on documents found from third parties, and absence of corroborative evidence. The Tribunal consistently highlighted the importance of direct and clinching evidence to sustain additions and rejected additions based on mere presumption, conjecture, and surmises.