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TMI Blog2006 (2) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... e block period at Rs. 53,01,738. This figure included an addition of Rs. 23,33,000 as receipts for match-fixing activity and several other additions for investment in properties, unexplained expenditure, unexplained credits and so on and so forth. The assessee's appeal before the CIT(A) being only partly successful, a further appeal was filed to the Tribunal on several grounds and they are discussed and decided in the following paragraphs. 2. While deciding the various grounds taken in the appeal, we have taken into consideration, as we are bound to, the orders of the IT authorities, the facts marshalled therein, the rival contentions made elaborately before us, the contents of the paper books filed both by the assessee and the Department and the authorities and precedents to which our attention was drawn. 3. The first ground, which is in two parts, is directed against the addition of Rs. 23,33,000 made on account of receipts from match-fixing. The AO adverted to the reference made by the Ministry of Culture, Youth Affairs and Sports to the CBI to conduct enquiries into the allegations of match-fixing going on regarding test and one-day matches and the role played by cricketers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Sangita Bijlani in his match fixing 7. 1995 Ajay Jadeja 18,000 Paid to Mukesh Gupta for Ajay Jadeja ---------- Total : 23,33,000 ---------- 4. On appeal, the assessee contended before the CIT(A) that the addition is based on mere allegations and there is no evidence unearthed during the search to conclusively prove the receipt of money on account of match-fixing, that no opportunity was given to the assessee to cross-examine persons whose statements were relied on by the CBI and, the Madhavan Commission and, therefore, the additions ought to be deleted. The CIT(A) rejected the contention, holding that even in block assessment proceedings, the AO is entitled to act on the basis of "materials" as contrasted with "evidence" to produce which is the duty of the assessee, that "material" is wider than "evidence", that the only condition is that the "material" relied on by the AO should be relevant to the addition, that the AO is not bound by technical rules of evidence and can act on the basis of materials, that though the statements were not recorded in proceedings under the IT law, they were nonetheless material on which the AO can rely, that the assessee himself had ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erma, stoutly defended the assessment and filed a paper book in support of his submissions. He filed a copy of the statement of MK made before the CBI and submitted that the statement contained enough evidence to come to the conclusion that the assessee received monies for match-fixing. He contended that the report of the CBI is a public document on which the AO can rightly place reliance in support of the addition. He pointed out that the assessee was confronted with the contents of the report of the CBI on6th Nov., 2000, when a statement was recorded from him and thus the assessee has been given an opportunity of knowing and explaining the evidence against him in deference to the rules of natural justice. As regards the assessee's links with Ajay Gupta, Mr. Verma pointed out that the bill of Muskan Travels, seized during the search, established the links and, therefore, it was permissible to draw the inference that the assessee did receive monies from him for match-fixing. According to Mr. Verma, the reports of the CBI and Madhavan Commission were "material" collected by the AO after the search and is relatable to the evidence gathered during the search within the meaning of s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, dt.31st Oct., 2000and Madhavan Commission report, dt.24th Nov., 2000, which are the same in the case before us. Having noted the evidence on the basis of which the addition for match-fixing was made and the arguments of the assessee, the Tribunal held in para 14 as under: "After going through the entire material, we find force in the submissions of the learned counsel for the assessee. In the block assessment, undisclosed income can be worked out on the basis of the material found during the course of search. In the present case, no incriminating document or other evidence was found during the course of search from the possession of the assessee to establish link between bookies and players. Further, the addition has been made on the basis of statement of Mr. Mukesh Gupta, but neither the copy of his statement was provided to the assessee nor was he confronted against the same, and, therefore, the evidence against which the assessee was not confronted cannot be taken into consideration because such procedure is against the settled rules of natural justice. In our view, therefore, the addition made on the basis of statement of Mukesh Kumar Gupta or on estimate basis cannot be u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adhavan Commission also stand on the same footing, in our opinion. Those statements only constitute the basis for the reports of the above authorities (CBI and Madhavan Commission). In these circumstances, the ruling of the Delhi Bench of the Tribunal in the case of Manoj Prabhakar fully applies to the facts of the present case. We, therefore, hold that the addition for alleged match-fixing receipts cannot be supported. We delete the same. 9. The second ground is directed against the addition of Rs. 5,81,607 as amount received from BCCI/DDCA/Ranji Trophy. During the search, documents showing cricketing receipts from BCCI, etc. were seized. The AO conducted post-search enquiries from DDCA, BCCI, etc. and noted that except for the asst. yr. 1991-92 the assessee did not declare any cricketing receipts in his returns. The total amount received from BCCI, DDCA, etc for playing matches, according to the AO, was Rs. 8,19,847. These receipts were not shown in the returns and, therefore, the assessee was asked to clarify. The assessee would seem to have stated that the amounts were in the nature of reimbursement of expenses and fees from BCCI towards representingIndiain tests and one-day c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that at any rate disallowance of expenditure is not permissible in a block assessment. If there is no effective addition, then obviously the assessee cannot have any grievance. As regards expenditure, the AO has rightly held that the circular of the Board is not applicable to the assessee's case, he being a professional, and hence not entitled to any deduction against the receipts. We agree with the view taken by the CIT(A) and dismiss the ground. 13. The third ground is directed against the addition of Rs. 30,000 sustained by the CIT(A) out of the addition of Rs. 4,05,000 on account of fees for paying in other cricket matches. The AO jotted down a list of matches played by the assessee as "unofficial" matches during the block period and asked the assessee to inform how much fees he received for playing such matches. The assessee relied on the Circular No. 1432 issued on 26th Nov., 1981, and also stated that he did not remember the amount of fee or prize money. The AO estimated Rs. 15,000 for each match and for 27 matches, added Rs. 4,05,000. 14. On appeal. the CIT(A) held that the money received upto September, 1997, cannot be taxed and only a sum of Rs. 30,000 for the asst. yrs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also filed stating that the amount was paid to him on weekly basis after deduction of all applicable taxes. The AO was of the view that the two affidavits were contradictory to each other, since if there was no income element in the receipt, there would have been no liability to deduct taxes. He, therefore, held that the amount of 3,500 pounds was taxable in the financial year 2000-01. In the absence of any proof of payment of taxes inUKby way of deduction at source, he refused to give credit for any TDS. The entire amount, converted into Indian rupees, came to Rs. 2,10,000 which was brought to tax. 17. On appeal, the CIT(A) held that that the facts showed that the assessee received monies for the exercise of his profession and so the amount was taxable, but held that the gross amount cannot be taxed and some allowance has to be made for expenses, which he estimated at 50 per cent of the gross receipt and thus sustained an addition of Rs. 1,05,000. 18. The argument of the assessee before us is that the amount was received by way of reimbursement of expenses and hence not income, that even the contract with the PCC confirmed this, that since the assessee was out of India for 22 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in two years-Rs. 40,000 for the asst. yr. 2000-01 and Rs. 20,000 for the asst. yr. 2001-02. The CIT(A) having confirmed the same, the assessee is in further appeal before the Tribunal. 21. On a careful consideration of the matter, we are of the view that the addition cannot be made in a block assessment, since no material or evidence has been seized during the search to show that the amount was paid to the assessee for services rendered by him to Video Track. It is only on the basis of statements made by the assessee's wife and Mr. Kohli during the search that the AO has come to the. conclusion that the amount is taxable in the assessee's hands, disbelieving the claim of the assessee. This is not a matter that can be tackled in a block assessment and is perhaps to be dealt with only in the regular assessment. We, therefore, delete the addition and allow the ground. 22. The sixth ground is directed against the addition of Rs. 53,000 sustained by the CIT(A) out of an addition of RS. 70,000 made by the AO on account of amount spent by the assessee in the purchase of a car. A perusal of the assessment order shows that it was only during the post-search enquiries that it came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal. 25. The argument advanced on behalf of the assessee was that the receipt was admitted by the assessee, that tax was deducted 'at source from the same, that since the assessee was not in India during April to September, 2000, he could not file the return, that he filed it immediately on his return to India from UK and that the assessee cannot be said to have concealed the income. On the other hand, the learned CIT (Departmental Representative), besides strongly relying on the orders of the IT authorities, relied also on the judgment of the Madras High Court in B. Noorsingh vs. Union of India (2000) 160 CTR (Mad) 124 : (1999) 105 Taxman 101 (Mad) and the order of the Mumbai Bench of the Tribunal in Overseas Chinese Cuisine (India)(P) Ltd. vs. Asstt. CIT (1996) 55 TTJ (Mumbai)(TM) 304: (1996) 56 ITD 67 (Mumbai)(TM). 26. On a careful consideration of the matter, we see no reason to interfere. The fact remains that the assessee received the amount of Rs. 1 lakh in March, 2000, and the same has to be included in the return for the asst. yr. 2000-01. This return ought to have been filed on or before30th June, 2000. The return was not filed within the due date. It may be that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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