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TMI Blog2018 (4) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case and in law, the Learned CIT(A) erred in confirming the addition made by the AO of ₹ 2.85 crores as 'Unexplained money' u/s. 69A of the Income Tax Act, 1961 without appreciating the fact that the appellant has provided all the details relating the receipt of funds from USA from third party. The appellant is a Tax Resident of UK and the UK Tax Authority has confirmed his filing return in UK. On the facts and under the circumstances of the case and in law, the Learned CIT (A) erred in confirming the action by ignoring the confirmations, declarations, supporting documents, etc filed by the appellant to establish genuineness of the transaction of ₹ 2.85 crores without appreciating the fact that the appellant cannot prove the creditworthiness of the source of source of funds when questioned by the authority. The appellant has provided all the documents to prove the source of funds received by him. 3. On the facts and under the circumstances of the case and in law, the Learned CIT(A) erred in confirming the addition u/s 69A of the Income Tax Act, 1961, even though the appellant had maintained proper records and recorded the receipt of ₹ 2.8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d transfer confirmation for the amount received in USD. The assessee, vide letter dated 29-05-2011 further informed that he had given the advance of ₹ 2.85 crores to Vishesh Entertainment Pvt Ltd in the year 2004 for the film, Nazar . To ascertain the correctness of claim made by the assessee, the AO has conducted necessary enquiries through proper channel with US tax authority (Department of the Treasury Internal Revenue Service, Washington D.C. In response, US tax authority, vide letter dated 12-12-2011 confirmed that there is an entity registered in the name of Sohail Khan Productions, Inc, incorporated in the state of New York in 2003, but it was inactive. The company has not reported any tax returns or other reports to the department of Treasury Internal Revenue Service. Even the second reply received from US tax authorities vide letter dated 19-11-2012 confirmed that Sohail Khan Productions, Inc. did not file any income-tax return or declared any income to the US government after 2001. The letter further stated that Sohail Khan did not have earned any declared income to support transfer of USD 7,50,000 to Shri Syed Servat Sevi Ali. The AO, after considering relevant su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... establishes the fact that the assessee has failed to establish genuineness of transactions and the source of money received from M/s Vishesh Entertainment Ltd, which had claimed to have received such money in the year 2004 from Sohail Khan Productions, Inc. and the source for such transfer is from Telegroup. Inc, a telecom company situated in UK. The relevant portion of the order of CIT(A) is extracted below:- 6. I have considered the A.O's order as well as the appellant's submission. Having considered both, I find that the appellant is a UK National who was residing in India. The appellant vide his submissions extracted above had stated that he maintained his books of account.. The appellant had advanced a sum of ₹ 2.85 crores in the year 2004, On enquiry by the AO about the sources thereof, the appellant tried to explain the same through its remittance from UK which was basically a receipt from U.S. concern namely, M/s.Sohail Production Inc- However,the fad remains that when the _^ AO made enquiry from U.S. tax authorities, the source of such remittance was not confirmed by the US tax authorities as it is explicitly enumerated by the A.O. in the order extracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Act, 1961 even though the assessee had maintained proper records and recorded receipt of ₹ 2.85 crores and provided explanation to the AO. In this regard, the Ld.AR relied upon the following decisions:- 1. Sushila Ramaswamy vs ACIT (2010) 36 DTR 418 2. Late S Ayyakannu By LR vs ACIT (1998) 62 TTJ 233 3. DCIT vs Madhusudan Rao (2015) 68 SOT 515 (Hyd) 6. On the other hand, the Ld.DR strongly supported the order of the CIT(A). 7. We have heard both the parties, perused the material available on record and gone through the orders of authorities below. We have carefully considered the case laws relied upon by the assessee. The AO made addition of ₹ 2.85 crores u/s 69A of the Income-tax Act, 1961 towards amount credited in assessee s bank account on the ground that the assessee has failed to satisfactorily explained the source of amount. The AO further observed that though the assessee tried to explain the source of money given to Shri Mahesh Bhat, film producer through transfer of funds from USA from Sohail Khan Productions, Inc., failed to file necessary evidence to prove the creditworthiness of Sohail Khan Productions, Inc. as enquiries con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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