9911796707
TMI Blog2013 (9) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer to verify whether this amount taxed in the hands of Sri A. Mallikarjuna and if he has not filed any appeal against this addition in his hand or it reaches the finality by the decision of a superior judicial forum, then it should not be assessed once again in the hands of the present assessee. - Decided in favor of assessee. Addition of Rs. 31.5 lakhs towards CD/DVD/satellite/overseas rights as against Rs. 25 lakhs – Held that:- As per the agreement between the assessee and Gemini Television total consideration is of Rs.31.5 lakhs and out of which the assessee received only Rs. 25 lakhs and the balance is to be paid on the date of signing the agreement - As the agreement entered with G. Harinath was found to be false, the claim of amount received from him at Rs. 25 lakhs is totally contrary to the facts on record. Being so, the CIT(A) is justified in sustaining the addition of Rs. 31.5 lakhs on this count. Addition of Rs. 3 lakhs towards 16MM rights – Held that:- There was a seized document A/SRB/44 which was a xerox copy of agreement dated 16.10.2011 for sale of sole and exclusive exploitation of 16MM rights of the film “Maa Annaiah” for a period of 5 y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, as deductible expenditure in the financial year, and hence, such deemed income did not fall under the head ‘Profits and gains of business or profession’ – Hence, no deduction is allowed in this resect – Decided in favor of Revenue. - IT(SS)A No.19,20/Hyd/2008 - - - Dated:- 22-2-2013 - Chandra Poojari and Asha Vijayaraghavan, JJ. For the Appellant : Sri S Rama Rao For the Respondent : Sri Gnana Prakash ORDER:- Per: Chandra Poojari: These are cross appeals directed against the order of the CIT(A)-I, Hyderabad dated 24th March, 2008 for the block period A.Ys. 1997-98 to 2003-04 (till 21.2.2003). 2. The grievances of the assessee are crystallised as follows: (i) The CIT(A) erred in sustaining addition of Rs. 1.15 crores u/s. 68 of the Act. (ii) The CIT(A) erred in restricting the allowable expenditure at Rs. 4,48,84,521 as against the actual expenditure of Rs. 4,88,87,784. (iii) The CIT(A) erred in holding that the amount received from CD/DVD/satellite/overseas rights is to be at Rs. 31.5 lakhs as against Rs. 25 lakhs found in the seized document. (iv) The learned CIT(A) erred in confirming the action of the Assessing Officer with reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A/SRB/44/87 Karnataka 18,00,000 AA/SRB/5/42 A/SRB/44/125 Aditya 16,00,000 A/SRB/44/128 CD/DVD/Satellite/O verseas rights 31,50,000 AA/SRB/1/33-35 Saffire Printers 2,00,000 A/SRB/44/87 16 MM 3,00,000 A/SRB/44/8 to 9 Total 5,42,46,500 7. On appeal, the CIT(A) observed that there was a difference in computation of the receipts as follows: Distribution right for Area/other rights Amount receivable as per AO (Rs.) Amount received as per assessee (Rs.) Difference added by the AO (Rs.) Vizag area 55,00,000 54,00,000 1,00,000 Nellore area 27,00,000 26,98,000 2,000 Ceded area 90,00,000 85,00,000 5,00,000 Karnataka area 18,00,000 8,75,000 9,25,000 CD/DVD/circulate rights 31,50,000 25,00,000 6,50,000 16MM rights 3,00,000 Nil 3,00,000 Total difference 24,77,000 8. Thus, according to CIT(A) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,03,25,000 Total Rs. 2,46,38,000 13. Thus, according to the Assessing Officer the balance expenditure of Rs. 2,42,49,784 (Rs. 4,88,87,784 Rs. 2,46,38,000) is unexplained expenditure and added the same to the income of the assessee. 14. On appeal, the CIT(A) was of the opinion that there was a double addition on this count. Once in the form of non-deduction of expenditure from the gross receipts to the tune of Rs. 2,42,49,784 and further addition of Rs. 2,42,49,784 towards unexplained expenditure. Accordingly, he directed the Assessing Officer to delete one portion of this expenditure at Rs. 2,42,49,784. Against this, the Department is aggrieved. 15. Further the assessee stated before the CIT(A) that the assessee has received Rs. 1,53,60,000 from various parties including Rs. 1,22,00,000/-from A.M. Group. The Assessing Officer considered only Rs. 7 lakhs out of this and he has not given credit to the balance amount of Rs. 1.15 crores. According to the assessee the receipt of entire amount of Rs. 1.22 crores is reflected in the seized material and pleaded before the CIT(A) accordingly. It was pleaded before the CIT(A) that as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment is aggrieved. 20. Further the CIT(A) sustained the amount received towards satellite rights at Rs. 31.5 lakhs though the seized material represents Rs. 25 lakhs. Against this, the assessee is in appeal before us. 21. The assessee also has grievance regarding sustaining of Rs. 3 lakhs addition relating to 16MM rights. 22. Before us the assessee filed additional evidence as below: 1. Copy of the letter of the appellant herein addressed to Prasad Film Laboratories dated 1.4.2000 duly confirmed by Sri A Mallikarjuna. 2. Letter dated 3.5.2000 of Prasad Film Laboratories Ltd., addressed to Sri Satya Rama Murthy and Sri A. Mallikarjuna. 3. Letter dated 15.10.2000 of the appellant herein addressed to Prasad Film Laboratories Ltd. 4. Letter dated 30.11.2000 of Sri Satya Rama Murthy addressed to Prasad Film Laboratories Ltd. 5. Letter dated 30.11.2000 of Sri A Mallikarjuna addressed to Prasad Film Laboratories Ltd. 6. Letter dated 8.5.2000 of the appellant herein addressed to Prasad Film Laboratories duly accepted by Sri A Mallikarjuna and Sri Satya Rama Murthy. 7. Letter dated 12.12.2001 of Sri A Satya Rama Murthy addressed to Prasad Laboratori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08. Against this, the assessee filed appeal before the Tribunal on 15.5.2008. The Department filed appeal on 16.6.2008. The assessee filed petition for admission of additional evidences vide Tribunal Inward No. 932 dated 3.11.2008. As seen from the additional evidences filed by the assessee, these are not seized materials. In other words, certain evidences were dated after the assessment order. Specifically Sl. Nos. 13 and 14. These are not additional evidences. On the other hand, these are fresh evidences. As per Rule No. 29 of ITAT Rules, 1963 the parties to the appeal shall not be entitled to produce additional evidence either oral or documentary to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or if the Income-tax Officer has decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by him or not specified by him, the Tribunal may allow such document to be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced. 26. In the present case, the Assessing Officer also examined Sri A. Mallika ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... han vs. CWT, AP (102 ITR 757). We also gone through the Judgement of Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (229 ITR 383) (SC). It was clearly observed by the Apex Court that there may be several factors justifying the raising of new plea in an appeal and each case has to be considered on its own facts. The appellate authorities must be satisfied that the ground raised was bona-fide and that the same could not have been raised earlier for good reasons. The appellate authorities should exercise their discretion in permitting or not permitting the assessee to raise an additional ground/additional evidence in accordance with law and reasons. There is no blanket permission to the assessee to raise the additional ground or filing of additional evidence according to his own whims and fancies. There should be reasonable cause for furnishing additional evidence belatedly. In the present case, we find no reasonable cause for raising the additional grounds/evidences so belatedly. Considering the facts of the present case, we have no hesitation in declining to admit the additional evidences filed by the assessee before us and accordingly the additional evidence i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd payments relating to same period are to be compared as observed by the CIT(A) in his order that receipts and payments from 4.7.2000 to 25.11.2000 are to be compared. Being so, the CIT(A) order is to be confirmed on this count. 29. We have carefully gone through the seized material. As per the Trial Balance (4.7.2000 to 25.1.2000) the expenditure is as follows: Particulars Amount (Rs.) Expenditure account 4,05,82,328 Sundry debtors, cash in hand and cash at Bank 38,47,753 Total 4,44,30,081 Further expenditure as per the seized material 4,54,440 Total expenditure 4,48,84,521 30. The Assessing Officer added Rs. 4,54,440 towards further expenditure on the basis of seized material as follows: Particulars Amount (Rs.) Rent paid to Jayabheri guesthouse based on seized material AA/SRB/5 page 76 60,000 Expenditure incurred during the period 22.3.2000 to 24.5.2000 supported by seized material A/SRB/27 3,20,440 Expenditure incurred on direction during the period 1.2.2000 to 29.5.2000 supported by seized material A/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidenced by the letters dated 30.3.2002 and 27.2.2007 of M/s. Prasad Film Laboratories Ltd., Hyderabad and agreement copy dated 2.12.2000 entered with M/s. Gemini Television, Chennai. As the agreement entered with G. Harinath was found to be false, the claim of amount received from him at Rs. 25 lakhs is totally contrary to the facts on record. Being so, the CIT(A) is justified in sustaining the addition of Rs. 31.5 lakhs on this count. This ground of the assessee is rejected. 33. The next grievance of the assessee is with regard to sustaining addition of Rs. 3 lakhs towards 16MM rights. The learned AR submitted that the transaction relating to this was not materialised and also there is seized material and the addition cannot be sustained. The DR relied on the order of the CIT(A). 34. We have heard both the parties on this issue. There was a seized document A/SRB/44 page Nos. 8 and 9 which is a xerox copy of agreement dated 16.10.2011 for sale of sole and exclusive exploitation of 16MM rights of the film Maa Annaiah for a period of 5 years from 25.12.2001. The lessor and the lessee are the assessee firm and Sri MVVS Prasad son of Venkateswara Rao resident of Kovvur, West Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference to his income-tax assessment by the Assessing Officer and decide thereupon. 39. Regarding receipt of Rs. 16 lakhs from Aditya Music for audio rights, the assessee considered the receipts as income. However, he has not given the same receipts as sources for expenditure. Accordingly, we do not find any infirmity in the order of the CIT(A) in giving credit towards this amount as a sources for expenditure. This ground of Revenue is rejected. 40. With regard to Chandana Ramesh and V. Srinivasa Rao, the amounts received from them to be included as sources as the expenditure including sundry debtors have been considered by the Assessing Officer while computing the expenditure. Being so, we do not find any infirmity in the order of the CIT(A) and the same is confirmed. This ground of the Revenue is rejected. 41. The next ground of the Revenue is with regard to deletion of addition towards unexplained expenditure of Rs. 2,42,49,784 as double addition. The Assessing Officer computed the total expenditure at Rs. 4,88,87,784 and sources for this expenditure are Rs. 2,46,38,000 (advance from distributors Rs. 1,43,13,000 + capital and loans at Rs. 1,03,25,000) and made addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, when these provisions apply because no source is disclosed at all on the basis of which the income can be classified under one of the heads of income under section 14, it would not be possible to classify such deemed income under any of these heads including income from other sources which have to be sources known or explained. When the income cannot be so classified under any one of the heads of income under section 14, it follows that the question of giving any deductions under the provisions which correspond to such heads of income will not arise. If it is possible to peg the income under any one of those heads by virtue of a satisfactory explanation being given, then these provisions of sections 69,69A, 69B and 69C will not apply, in which event, the provisions regarding deductions, etc., applicable to the relevant head of income under which such income falls will automatically be attracted. 44. The opening words of section 14 save as otherwise provided by this Act clearly leave scope of deemed income of the nature covered under the scheme of sections 69,69A, 69B and 69C being treated separately because such deemed income is not income from salary, house property, prof ..... X X X X Extracts X X X X X X X X Extracts X X X X
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