TMI Blog2011 (9) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... n the result, appeal filed by the assessee is allowed. - ITA No. 1091/Mum/2009 - - - Dated:- 23-9-2011 - Order The order of the Bench was delivered by R. K. Panda (Accountant Member).-This appeal filed by the assessee is directed against the order dated December 3, 2008 of the Commissioner of Income-tax (Appeals)-XI, Mumbai, relating to the assessment year 1999-2000. The assessee in his grounds of appeal No. 1 has challenged the validity of the reassessment proceedings which has been upheld by the learned Commissioner of Income-tax (Appeals). In the second ground the assessee has challenged the order of the learned Commissioner of Income-tax (Appeals) in confirming the addition of Rs. 20 lakhs made by the Assessing Officer. The facts of the case in brief are that the original return of income was filed by the assessee on October 8, 1999 declaring total income of Rs.20,76,110 which was processed under section 143(1) on February 29, 2000 accepting the returned income. Subsequently, proceedings under section 147 of the Act were initiated and notice under section 148 was issued and served on the assessee on March 24, 2006 for the reasons recorded as under : "In this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cash expenditure not recorded in the books of Tips Films P. Ltd. Accordingly, Shri Kumar Taurani vide his letter submitted on May 10, 2004 and June 10, 2004 has submitted that the amount of Rs. 20,00,000 have been made to the assessee for the services rendered as an artiste in the film "Kachche Dhaage" in cash, over and above Rs. 20,00,000 paid in cheque. During the course of assessment proceedings for the assessment year 2000-01, the assessee was given a copy of the loose paper in which the above mentioned transactions were recorded and was asked to explain why the said cash payment of Rs. 20,00,000 shall not be treated as his concealed income. In response to this the assessee's representative vide letter dated December 27, 2005 expressed his desire to cross examine the person representing Tips Films P. Ltd. Accordingly, an opportunity was given by the Assessing Officer to the assessee on January 9, 2006 and Shri Kumar Taurani, director of Tips Films P. Ltd. was cross-examined by the assessee. During the course of cross-examination Shri Kumar Taurani reconfirmed the cash payments as submitted by the letters mentioned above. However, during the course of cross examination it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned in the said loose paper on various dates and from time to time but not recorded in the regular books of account. In response to query No. 6 during cross-examination, Mr. Taurani was asked about the date of payment to which he replied that he did not recollect the exact date but should be 1996 or 1999. The stand taken by Mr. Taurani and Tips are inconsistent because in their letter of May, 2004 it was mentioned that the payments were made on various dates and from time to time whereas in the cross examination Mr.Taurani stated that the payment was made in 1996 or 1999. The said amount of Rs. 20 lakhs was allowed as expenditure in the hands of Tips in the block assessment relevant to the year ended March 31, 2008. In that case the same could not be taxed in the hands of the assessee in the assessment year 1999-2000. However, the Commissioner of Income-tax (Appeals) was not convinced with the explanation given by the assessee and upheld the action of the Assessing Officer in reopening the assessment as well as making addition of Rs. 20 lakhs. While upholding the action of the Assessing Officer in reopening the assessment, he held that the Assessing Officer came to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 148 was not accompanied with the reasons for reopening of the assessment. Therefore, in view of the decision of the hon'ble Delhi High Court, in the case of Haryana Acrylic Manufacturing Co., the notice issued under section 148 is void. Referring to the decision of the Delhi Bench of the Income-tax Appellate Tribunal in the case of Balwantrai Rai Wadhwan v. ITO in I. T. A. No. 4806/Del/10 for the assessment year 2001-02 order dated January 14, 2011, he submitted that the Tribunal, following the decision of the hon'ble Delhi High Court in the case of Haryana Acrylic Manufacturing Co. [2009] 308 ITR 38 (Delhi) has quashed the reassessment proceedings on the ground that issuance of the notice and the communication and furnishing of reasons would go hand in hand. The reasons are to be supplied to the assessee before the expiry of the period of six years. If it has not been done then validity under section 148 could not be upheld. Since in the instant case, notice under section 148 was served on March 24, 2006 and the reasons for reopening of the assessment was supplied on June 29, 2006, therefore, the notice issued under section 148 becomes barred by limitation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not recollect whom he has handed over the cash, he does not maintain any record for making cash payment, he does not remember the denomination of the cash, he does not remember the place where he made the alleged payment, he does not remember the exact time when he made the payment, he even did not remember whether the cash has been paid directly to the assessee or to any other person. Therefore, in view of all these contradictions, the statement cannot be relied upon. Mr. Taurani was evasive in his replies. Therefore, no emphasis can be given to the loose papers. For this proposition, he relied upon the decision of the hon'ble Bombay High Court in the case of Addl. CIT v. Miss. Lata Mangeshkar reported in [1974] 97 ITR 696 (Bom) wherein it has been held that entries in the books of account regarding payment to an assessee was not sufficient as there was no guarantee that the entries were genuine. The learned Departmental representative, on the other hand, while challenging the preliminary ground on validity of the reopening of the assessment submitted that the law nowhere mandates the Assessing Officer to give the reasons along with section 148 notice. Referring to page 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the amount of Rs. 20 lakhs paid in cash to the assessee is over and above the amount of Rs. 20 lakhs paid to him by cheque. So far as the reliance of the decision of the hon'ble jurisdictional High Court in the case of Addl. CIT v. Miss. Lata Mangeshkar [1974] 97 ITR 696 (Bom), he submitted that the said case is an old case. In the instant case specific details are there, a paper has been found and the director of the company has given his statement. The assessee has never denied that he has not acted in the film. Not a single person as per the loose paper placed at page 3 of the paper book has filed a case against Mr. Taurani or Tips Films P. Ltd. till date. He submitted that the assessee has also acted in the films produced by Tips Films P. Ltd. subsequently. Referring to the provisions of section 292(1) of the Act, he submitted that when the document is found during the course of search under section 132, it may be presumed that the said document belongs to such person and the contents of such document are true. Learned counsel for the assessee, in his rejoinder, again reiterated that a notice under section 148 and reasons recorded for such re-opening go hand in hand. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Against the name of the assessee in the said seized paper, an amount of Rs. 20 lakhs has been shown. A perusal of the seized paper shows that it is neither signed nor dated. Further, it does not contain the name of the picture "Kachche Dhaage". The seized paper does not indicate the year or years to which the alleged unaccounted money relates. It does not contain any narration of "on money" or "cash money" paid to the assessee in terms of agreement dated February 14, 1996 for playing a lead- ing role in the film "Kachche Dhaage". The statement given by Mr. Taurani and the letter addressed by Mr. Taurani and Tips Films P. Ltd. are not supported by any corroborative evidence. Further, Mr. Taurani in his reply to the questions put by Saif Ali Khan during the course of cross-examina- tion has stated that he does not recollect the exact date, but it should be 1996 or 1999. Similarly, Mr. Taurani in his statement has categorically stated that he does not remember the denomination of the cash paid, the place where he paid the money, the time when he paid the money, the person to whom he paid the money, etc. Under these circumstances, the statement given by Mr. Taurani has no evidentiary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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