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2016 (5) TMI 331 - ITAT HYDERABAD

2016 (5) TMI 331 - ITAT HYDERABAD - TMI - Addition on Cash received - addition made based on a document found at the premises of M/s. R.R. Movie Makers when there was a search at their premises - Held that:- Since the evidentiary value of the document was certainly examined it was held that in the absence of any corroborative evidence, the same will not have any evidentiary value. The Revenue did not establish that the said document was not prepared for distribution purposes. It is also on recor .....

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aid provisions of 292C does not apply. Moreover, the assessment order was not passed even u/s. 153C. Therefore, the addition cannot be sustained in the hands of assessee only because certain documents stated to have been filed for the purpose of marketing the cinema and not the actual expenditure cannot be considered for making an addition in the hands of assessee. Accordingly, the grounds of assessee are allowed, the addition so made is deleted. - Decided in favour of assessee - I.T.A. No. 424/ .....

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2011-12 on 30-09-2011 declaring an income of ₹ 1,98,38,784/-. The case was taken up for scrutiny and the assessment was completed on a total income of ₹ 2,45,24,936/-. While completing the assessment, the Assessing Officer (AO) made certain additions. One of the additions was an amount of ₹ 10,00,000/-, being cash received from M/s. R.R. Movie Makers. This addition was made based on a document found at the premises of M/s. R.R. Movie Makers when there was a search at their prem .....

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akers as income of the assessee. Invoking the provisions of u/s. 292C of the Income Tax Act. 3. The Appellate Commissioner ought not to have confirmed the order of the AO in addition an amount of ₹ 10,00,000/-. 4. The Appellate Commissioner ought not to have confirm the addition on an entirely differed premise ignoring the fact that the AO has confirmed the addition based on the presumption u/s. 292C. 5. The Appellate Commissioner can not draw inference on a different parameters, without f .....

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ating certain cash payments to various people; one such person is assessee, who is the director of the movie. On the basis of the said document and invoking the provisions of Section 292C, AO made the addition of ₹ 10 Lakhs stated to be amount received and not disclosed. 4. Assessee contended before the Ld. CIT(A) that provisions of Section 292C are not applicable to the assessee and the said Phaneendra Reddy denied having paid any amounts in cash and relied on various judgments also. Ld. .....

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ho was searched and assessee was not searched. Therefore, reliance on Section 292C is not correct. Ld. DR however, while justifying the action of the AO submitted that provisions of Section 292C(2) will apply and supported the orders. 6. We have considered the issue and examined. The addition in the hands of Shri G. Mahesh Babu, which was deleted by the Co-ordinate Bench (wherein AM is also co-author) has considered the same documents, as under: 34. The only other ground that survives for consid .....

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on for acting in the film Businessman , assessee had been paid cash of ₹ 2 crores. Whereas it was noticed by the Assessing Officer, assessee had only shown remunrati0on of ₹ 4.87 crores, received in cheque from the movie Businessman without disclosing the amount of ₹ 2 crore in cash as revealed from seized material. The Assessing Officer, therefore, issued summons to both assessee and the producer Shri j.V.Phanindra Reddy. As observed by Assessing Officer, both assessee and Shr .....

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ssing Officer by stating that loose sheets seized from a third party cannot form the basis for addition and also relied upon some judicial authorities in that context, the Assessing Officer rejecting all contentions of assessee treated the amount of ₹ 2 crore as the undisclosed income of the assessee for the year. Though the assessee challenged the addition in appeal, the learned CIT(A) sustained the addition more or less adopting the reasoning of the Assessing Officer. 36. Learned Authori .....

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g before the Assessing Officer have denied of any cash transaction. Therefore, solely relying upon a loose sheet seized from a third party, having no evidentiary value, addition cannot be made. The second argument advanced by the learned Authorised Representative is, even accepting that cash payment recorded in the seized material is correct, no specific date is mentioned against such payment. Drawing the attention of the bench to the seized material at page 3 of the paper-book, he submitted, da .....

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4) 149 ITD 548(Pune) (b) DCIT V/s. K. Babu Rao (2014) 39 CCH 0034 (Hyd. Trib) (c) DCIT V/s. C. Krishna Yadav (2011) 46 SOT 250 (Hyd) 37. Learned Departmental Representative, relied upon the reasoning of the Assessing Officer and the CIT(A). 38. We have considered the submissions of the parties and perused the materials on record. We have also examined the decisions cited at the Bar. Undisputedly, the basis for the addition of ₹ 2 crores as undisclosed income is a loose sheet seized not fro .....

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though a search operation was also carried out in the case of assessee, no incriminating material was found. It is also a fact on record that pursuant to summons issued, both the assessee as well as the producer of the movie appeared before the Assessing Officer and denied of having made any cash transaction as recorded in the seized document. In fact, a confirmation letter obtained from the producer stating therein that entire remunerations are paid in cheques was also submitted before the Ass .....

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ty, there is no other evidence, which could establish the cash payment to assessee. In our view, in the absence of any other corroborative evidence to prove the contents of the seized document to be correct, it will have no evidentiary value in the eye of law, hence, no addition can be made solely relying upon such document. More so, when both the assessee as well as the person from whom the document was seized have denied of having entered into any such transaction/ Therefore, in our view, the .....

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bruary, 2011. Since, all subsequent payments are in chronological order, assessee s contention that payment made to him, if at all, is prior to February, 2011 is acceptable. Keeping these facts in view when the Bench made a specific query to Learned Departmental Representative to explain how Assessing Officer has correlated the payment to the impugned assessment year, he has no valid answer for the same. Therefore, even accepting for argument s sake that contents of seized document are correct, .....

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