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TMI Blog2015 (11) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Assessing Officer for verifying whether the claim of the assessee is true. If the submission of the assessee is found to be correct, then the learned Assessing Officer is duty bound to delete the addition made once again in the hands of the assessee for the relevant assessment year. Addition towards the value of gold jewellery - Held that:- It cannot be doubted that the family cannot accumulate jewellery worth ₹ 39,90,000 over a period of time being either purchased from own declared source of income or received as gifts during marriage functions, etc. Shri R. Sivakumar has also admitted during the course of search that he possessed 400 sovereign grams of gold jewellery. It is also pertinent to note that the learned Assessing Officer had made the addition without examining the veracity of the claim of the appellant's father. The learned authorised representative had also stated before the learned Commissioner of Income-tax (Appeals) by furnishing an affidavit of Shri R.Sivakumar dated February 25, 2013 that Shri R. Sivakumar was in the profession of acting nearly 40 years from 1965 to 2005 and his present source of income is from royalty received from the books wr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Commissioner of Income-tax (Appeals) had erred in confirming the addition of ₹ 34,30,000 towards the value of gold jewellery. 3. The brief facts of the case are that the assessee is engaged in the profession of acting in motion pictures, filed his return of income for the assessment years 2009-10 and 2010-11 on July 21, 2011 admitting his total income as ₹ 7,26,06,810 and ₹ 6,49,78,270 respectively. The case was selected for scrutiny for both the assessment years and additions were made against which the assessee is now in appeal before us. Assessment year 2009-10 : Ground No. 1 : Addition of ₹ 2.5 crores received from M/s. UTV Motion Pictures (Mauritius) Ltd. It appears that the learned Assessing Officer has treated the amount of ₹ 2.5 crores received by the assessee as advance from M/s. UTV Motion Pictures (Mauritius) Ltd., as his income for the relevant assessment year because of the following reasons : (i) In the film industry most of the professionals follow cash system of accounting. (ii) These professionals maintain cash system of accounting because the industry is unorganised and often projects never get started and the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the agreement was ₹ 5 crores, which was to be paid in instal ments on specified period stipulated in the agreement. (iv) The script and title of the motion picture, in which the assessee has to perform has not been finalised as on the date of the agreement, however token advance was received as a mark of commitment in the project and to make himself available for the future schedule he has to devote on the project. (v) With the above submissions the learned authorised representative pleaded that the assessee had only received advance of ₹ 2.5 crores and the same has not crystallised as income to the assessee. The learned authorised representative further argued stating that the income would crystallise only on the fulfilment of the obligations specified in the contract. 6. The learned Departmental representative argued in support of the orders of the learned Assessing Officer and the learned Commissioner of Income-tax (Appeals) by reiterating their observations and pleaded that the order of the Revenue may be sustained. 7. We have heard both parties and carefully perused the materials available on record and also the agreement entered into between the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if the assessee fails to comply with the conditions. On the identical situation for the assessment years 2004-05, 2005-06 and 2006-07, the Tribunal in the assessee's own case in I. T. A. Nos. 1329/596 597/Mds/2009 dated January 19, 2010 and August 21, 2009 respectively held the issue in favour of the assessee wherein also the decision of the hon'ble Madras High Court in the case of Lakshminarayana Films v. CIT [2000] 244 ITR 344 (Mad) was distinguished. The relevant portion of the order in R. S. Suriya v. Deputy CIT I. T. A. No. 1329/Mds/2009 dated January 19, 2010 [2010] 2 ITR (Trib) 746 (Chennai) is reproduced hereinbelow (page 749) : 8. We have perused the orders of the authorities below and heard the rival contentions. There is no dispute that the learned Commissioner of Income-tax (Appeals) had confirmed the advance professional fee of ₹ 55 lakhs as income for the impugned assess ment year relying on his own decision in the assessee's appeals for the assessment years 2004-05 and 2005-06. It is clear from the assessment order itself that the amounts received by the assessee from M/s. Photon Factory and M/s. Studio Green were not against any particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken earlier. Therefore, we find that amount of ₹ 55 lakhs received by the assessee as advance could not have been treated as his income for the impugned assessment year. Such addition stands deleted. Grounds Nos. 2 to 9 of the assessee are allowed. 10. From the above discussions and from the ratio laid down in the assessee's own case from the assessment years 2004-05, 2005-06 and 2006-07, we hereby hold that the advance of ₹ 2.5 crores received by the assessee from UTV Motion Pictures (Mauritius) Ltd. during the relevant assessment year cannot be treated as the income of the assessee for the assessment year 2009-10, since the income has not crystallised to the assessee. Accordingly we hereby direct the learned Assessing Officer to delete the addition made for ₹ 2.5 crores which was further confirmed by the learned Commissioner of Income-tax (Appeals) for the relevant assessment year being advance received by the assessee for future performance. Ground No. 2-Addition of ₹ 92,25,750 being amount received from Photon Factory and ₹ 11,50,000 received from AVM Production 11. At the outset the learned authorised representative, submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative on the other hand argued in support of the orders of the Revenue. 14. After hearing both sides, we hereby remit the matter back to the file of the learned Assessing Officer to examine the agreement executed by the assessee with M/s. Red Giant and pass appropriate order as per law and merits and in the light of the decision rendered by us with respect to the advance received by the assessee for ₹ 2.5 crores from UTV Motion Pictures (Mauritius) Ltd., for the earlier assessment year following the decision of the earlier orders of the Tribunal. We have taken this decision because the agreement between the assessee and M/s. Red Giant is not before us for consideration. Ground No. 2-Addition of ₹ 4,31,900 being the value of cement received from Bharathi Cements 15. During the course of assessment proceedings, the learned Assessing Officer observed that the assessee had received cement valued at ₹ 4,31,900 from M/s. Bharthi Cements Depot, Madavaram, Chennai without payment and without consideration, therefore, the learned Assessing Officer added the same to the income of the assessee under the head Income from profession . Before the learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Tamil Nadu for decades. In these circumstances, it cannot be doubted that the family cannot accumulate jewellery worth ₹ 39,90,000 over a period of time being either purchased from own declared source of income or received as gifts during marriage functions, etc. Shri R. Sivakumar has also admitted during the course of search that he possessed 400 sovereign grams of gold jewellery. It is also pertinent to note that the learned Assessing Officer had made the addition without examining the veracity of the claim of the appellant's father. The learned authorised representative had also stated before the learned Commissioner of Income-tax (Appeals) by furnishing an affidavit of Shri R.Sivakumar dated February 25, 2013 that Shri R. Sivakumar was in the profession of acting nearly 40 years from 1965 to 2005 and his present source of income is from royalty received from the books written by him and public lectures. These facts were not taken into consideration by the Revenue. Therefore, we do not find it appropriate on the part of the Revenue to make an addition of ₹ 39,90,000 without verifying the claim of the assessee, the family's financial status and drawings mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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