2017 (11) TMI 669
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. In response to the notice issued under section 153A of the Act, the assessee filed her return of income on 31st January 2012, declaring total income of Rs. 95,82,109. During the assessment proceedings, the Assessing Officer found that during the survey / search operation conducted at the premises of assessee's manager Ms. Sandhya Ramchandra, and assessee's agent Matrix India Entertainment Pvt. Ltd. (in short "Matrix") print outs were taken from the computer back-up impounded and seized which were marked as "Annexure-A, B, C, D & E" and were provided to the assessee to reconcile with her books of account. The Assessing Officer found that as per Annexure-B, there is a letter confirming appearance of the assessee as host of ICC Award in Sidney on 11th October 2005 and the fee collected to be paid to the assessee in cash was Rs. 2,50,000 plus service tax. Alleging that the assessee has not submitted any comment in this regard, the Assessing Officer treated 80% of the said amount worked out to Rs. 2,00,000 as income of the assessee. The assessee challenged the addition before the first appellate authority. 5. The learned Commissioner (Appeals), after considering the submissions of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndia, 77 taxmann.com 245 (SC). 8. We have heard rival contentions and perused the material available on record. Undisputedly, on the basis of a print out taken from the computer back-up of Ms. Sandhya Ramchandra, it was concluded by the Assessing Officer that the assessee has received an amount of Rs. 2,50,000 in cash for appearing as a host at an ICC event in Sidney. It is very much clear that apart from this document, there was no other evidence before the Assessing Officer to indicate that the assessee has received cash amount in question. It is a fact that in course of search as well as post search proceedings, the assessee was confronted with seized material and the assessee categorically stated to have neither appeared as a host in the said event nor received any cash from Matrix. In fact, an Affidavit was also filed on behalf of Matrix categorically stating that no such cash payment of Rs. 2,50,000 was made to the assessee. Thus, from the aforesaid facts, it is to be seen that the addition was made on the basis of a print out taken from the computer of a third party who happened to be an employee of Matrix and there are no other corroborative evidence brought on record to p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ffidavit filed on behalf of Matrix clearly stating that no cash amount was paid to the assessee in any assessment year. Thus, on the basis of the aforesaid evidence on record, the learned Commissioner (Appeals) held that the amount of Rs. 30,80,000 cannot be added at the hands of the assessee. However, she observed, the entire amount of Rs. 30,80,000 representing cash receipts in the name of the assessee should be added at the hands of Matrix. 12. Learned Departmental Representative submitted, Ms. Sandhya Ramchandra, in her statement had accepted that she negotiates on behalf of the assessee and Matrix thereby, proving assessee's involvement in cash transaction. He submitted, Ms. Sandhya Ramchandra, was the manager of the assessee, therefore, the data found from Ms. Sandhya Ramchandra's laptop give a correct picture of assessee's dealings. He submitted, while the transaction routed through bank found in the seized material could be reconciled with assessee's books of account, only cash transactions remained un- reconciled. Therefore, it is not possible that some entries are known to the assessee and some are not. Learned Departmental Representative submitted, when there are specif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sence of any other corroborative evidence, except the seized material, which was found from a third party it cannot be presumed that the assessee has received the cash amount of Rs. 30,80,000. That being the case, we do not find any infirmity in the order of the learned Commissioner (Appeals) in deleting the addition. Ground no.2 is dismissed. 15. In ground no.3, Revenue has challenged the deletion of addition of Rs. 2,80,000 received as remuneration from Matrix India Entertainment Pvt. Ltd. 16. The Assessing Officer during the assessment proceedings found that as per Page no.D-63 of Annexure-D, the assessee had received in cash net amount of Rs. 2,80,000 as per income sharing ratio between her and Matrix. Accordingly, he added back the amount to the income of the assessee. 17. Before the learned Commissioner (Appeals), it was explained by the assessee that the amount of Rs. 2,80,000, was received in cheque from Matrix India Entertainment Pvt. Ltd., vide cheque no.000470 dated 4th March 2006, and it has duly been accounted for in the books of account and offered as income. The learned Commissioner (Appeals) after verifying the fact that the assessee has offered an amount of Rs. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d at the hands of Matrix, it cannot be added again at the hands of the assessee. 23. We have heard rival contentions and perused the material available on record. It is evident, except the print out taken from the computer of Ms. Sandhya Ramchandra, there is no other material before the Department to conclusively prove that expenditure of Rs. 6,86,000 was incurred in cash on behalf of the assessee by Matrix. In fact, in an affidavit filed on behalf of Matrix India Entertainment Pvt. Ltd., it has been categorically stated that no cash payment has been made to the assessee. It is also a fact that the amount in dispute was added at the hands of the Matrix India Entertainment Pvt. Ltd. as well. In view of the aforesaid, we uphold the order of the learned Commissioner (Appeals), ground raised is dismissed. 24. In ground no.5, Revenue has challenged deletion of addition of Rs. 57,00,000 on account of unexplained expenditure in purchase of house. 25. As observed by the Assessing Officer, as per Page no.E-11 and E-16 of Annexure-E, found from the laptop of Ms. Sandhya Ramchandra, it was noticed that the assessee has paid cash of Rs. 55,00,000 apart from the amounts paid in cheque toward....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om third parties, it is evident that the cash receipts have been generated by Shri Vijay Kandhari and were also signed by him. We fail to understand why Shri Vijay Kandhari, was not examined by the Department to find out the actual fact. Similarly, it is evident that the Assessing Officer has not made any enquiry with the house owner to find out the exact amount received by him for selling the house to the assessee. Moreover, in an affidavit filed on behalf of Matrix, it was accepted that no cash was either paid or accepted on behalf of the assessee. It is also a matter of record that Ms. Sandhya Ramchandra, from whose computer some of the seized materials were found was never questioned on this issue. Therefore, in the absence of any direct and clinching evidence indicating incurring of cash expenditure of Rs. 57,00,000 for purchasing the house, addition cannot be made on mere presumption and surmises. Therefore, we uphold the order of the learned Commissioner (Appeals) on this issue. 29. In ground no.6, the Revenue has challenged deletion of addition of Rs. 1,43,928, on account of unexplained expenditure. 30. Brief facts are, from Page no.E-17 and E-18 of Annexure-E found from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e payment in cash. She also found that the assessee herself is showing a growth of 320% in return of income filed for seven assessment years. Accordingly, she deleted the addition made by the Assessing Officer. However, she opined that the cash component as found in the seized material has to be dealt with in case of Matrix in the relevant assessment year. 36. Learned Departmental Representative submitted, as per the evaluation sheet seized from the computer of Ms. Sandhya Ramchandra, cash payment made to the assessee was found. As per preponderance of probability, it has to be presumed that the assessee has received the cash as mentioned in the evaluation sheet. 37. Learned Authorised Representative supporting the findings of the learned Commissioner (Appeals) submitted that the evaluation sheet found from computer of Ms. Sandhya Ramchandra, on the basis of which addition has been made does not show any cash payment. He submitted, the said document was not found from the assessee. He submitted, the author of the document was not examined. Ms. Sandhya Ramchandra, in the statement recorded from her expressed her unawareness with regard to the facts mentioned in the said documents ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sheet were correct. Therefore, in the absence of any evidence brought on record, the addition was rightly deleted by the learned Commissioner (Appeals). The decisions relied upon by the learned Authorised Representative also support the aforesaid view. Therefore, we uphold the order of the learned Commissioner (Appeals) on this issue by dismissing the ground raised by the Revenue. 39. In the result, Revenue's appeal is dismissed. ITA No.3093/Mum/2015 40. In this appeal the Department has raised four grounds. Ground No. 1 is against deletion of addition of Rs. 2,00,000 on account of remuneration received in cash from M/s. Matrix. On the basis of page D-82 of the Annexure D of the seized documents the Assessing Officer found that it contains the details of remuneration received by the agent of the assessee for appearance of assessee in a particular event. As per the said seized document the remuneration supposed to have been received was Rs. 2,50,000. Alleging that the assessee did not provide any details or reconciliation of the entries found in the seized document the Assessing Officer added an amount of Rs. 2,00,000 being 80% of the total amount mentioned in the seized documen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dran, from whose lap top the print out was taken, in her statement has stated that she was not aware of the content of the print out as it was prior to her appointment with M/s. Matrix. In the aforesaid facts and circumstances when the print out is only a quotation offering an assignment and there is no other evidence to demonstrate that the assessee has either appeared or has accepted any amount in cash, addition made purely on conjecture and surmises is not sustainable. Accordingly, we upheld the order of the CIT(A) on this issue. 43. In ground No. 2 the Department has challenged the deletion of addition of Rs. 3,80,000 on account of remuneration received in cash for appearance/performance in certain events. 44. The AO relying upon page D-83 of Annexure D of the seized document added back an amount or Rs. 3,80,000 being 80% of Rs. 4,75,000 allegedly received by the assessee for appearance/ performance in some events. Before the CIT(A) it was submitted by the assessee that the document was not seized from the assessee, that the assessee in the statement recorded on oath by the AO has completely denied of having received any cash, that the statement was prepared by some ex-employ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p top of Ms. Sandhya Ramachandran there is no other material on record indicating that the expenditure of Rs. 51,486 was incurred on behalf of the assessee. In any case of the matter, the seized document on the basis of which the addition was made was not found from the possession of the assessee but from a third party. Not only the assessee has questioned the authenticity of the seized document but M/s. Matrix has also come forward with an affidavit denying incurring of any cash expenditure on behalf of the assessee. That being the case, in the absence of any other corroborative evidence to prove the correctness of the seized document, the addition made is unsustainable. Accordingly, we uphold the order of the CIT(A) on this issue by dismissing the ground. 48. In ground No. 4 the Department has challenged the deletion of addition of Rs. 52,68,388 made on estimate basis by the AO on account of alleged cash received by the assessee. In the course of search/survey operation in the case of Ms. Sandhya Ramachandran and M/s. Matrix certain print outs were taken from the laptop/computer amongst which was an evaluation sheet, which according to the AO indicated cash payment to the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncriminating material/evidence was found as a result of search/survey for making the addition on estimate basis for cash payment supposed to have been made to the assessee. It is evident that the AO has made addition on the basis of an evaluation sheet found from a third party marked as Annexure G. It is also an undisputed fact that the said Annexure G mentioning payment to the assessee of Rs. 2,07,00,000 by cheque and Rs. 58,00,000 by cash pertains to financial year 2005-06. In fact, during the appellate proceedings before the CIT(A) when the AO was directed to offer his comments in respect of this particular addition he stated as under: - "Apart from evidences as discussed in Para 5 above, Annexure G was provided to the assessee which is an evaluation with effect from 1.4.2005. As per this document, Katrina Kaif Turcotte received Rs. 2,07,00,000/- by cheque and Rs. 58,00,000/- by cash. The AO came to the conclusion that the assessee was receiving 28% of the amount by cash and accordingly, the AO estimated/extrapolated cash receipts for different years and added to the total income of the assessee in respective years. As the evidence in the form of Annexure G was found for the F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, the transaction relates to the assessee. Accordingly he called upon the assessee to explain why it should not be treated as her income from professional fees. Alleging that the assessee did not offer any explanation he added back the amount of Rs. 20,00,000 being 80% of the amount mentioned in the print out as income of the assessee. The assessee challenged the addition before the CIT(A). Learned CIT(A) found that except the print out of conversation taken from the Blackberry Mobile Digital Backup of Ms. Sandhya Ramachandran, who was an employee of M/s. Matrix there is no other evidence brought on record by the AO to indicate cash receipt of Rs. 20,00,000. Accordingly, she deleted the addition at the hands of the assessee while directing addition of the said amount at the hands of M/s. Matrix. 57. We heard the rival submissions and perused the material on record. Undisputedly, the seized documents on the basis of which the addition was made by the AO is a conversation between Ms. Sandhya Ramachandran and one of the clients of M/s. Matrix. Except the document containing conversation between two third parties there is no other evidence brought on record by the AO to indicate cash....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r evidence has been brought on record by the AO to indicate cash payment of Rs. 48,00,000 made to the assessee. In fact, the said conversation also does not mention the name of the assessee. Further, an affidavit has been filed on behalf of Matrix denying any cash payment to the assessee. In fact, Ms. Sandhya Ramachandran in a statement has denied any cash payment made by Matrix to assessee. In the remand report the AO has also not referred to any adverse material indicating cash payment of Rs. 48,00,000 to the assessee. In view of the aforesaid, the addition made was rightly deleted by the CIT(A). This ground is dismissed. 61. In ground No.3 the Department has challenged the deletion of addition of Rs. 24,00,000. 62. Briefly the facts are, on the basis of page NO. E-10 of the seized matter marked as Annexure-E, the AO found that the printout taken from the laptop of Ms. Sandhya Ramachandran contains details of certain agreement and related payments. He found that as per the seized document the assessee had received cash of Rs. 5,00,000 from Bramha Builders over and above the agreement value of Rs. 6,00,000. He also observed that Matrix has received Rs. 25,00,000 in cash from Anc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee. Moreover, the learned CIT(A) has recorded a finding of fact that the printout is nothing but a conversation between the Ms. Sandhya Ramachandran and an employee of some other client of M/s. Matrix. Thus, there is no direct link between the contents of the printout and the assessee. Even otherwise also in an affidavit filed on behalf of the M/s. Matrix it has been stated that no cash payment has been made to the assessee. It is also relevant to note in the remand report dated 24.02.2015 submitted before the First Appellate Authority the AO while dealing on this issue has observed as under: - "The AO made addition of Rs. 4,00,000 (Brahma Buildes) & 20,00,000 (Anchor - Dyna Soap) in the AY 2001-12 on the basis of Annexure E4. However, it is seen that the entry of Rs. 4,00,000 of Brahma Builders is for the period 22.07.2005 to 21.07.2006 and entry of Rs. 20,00,000/- of Anchor Dyna Soap is for the period 31.10.2005 to 31.10.2007. Hence, these entries do not pertain to F.Y. 2010-11. You are requested to take cognizance of these entries in the relevant Assessment Years." 65. Thus, as could be seen from the observations of the AO in the remand report the transaction in question....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 on the gross amount of Rs. 15,28,571 and donated the net amount of Rs. 11,00,000 to Relief Project India. Thus, it was submitted, the tax due on the income has dully been paid by way of TDS. It was further submitted, to avoid any dispute in the return of income filed in response to notice under section 153A, though, assessee offered the amount of Rs. 11,00,000 as income, she did not claim any deduction under section 80G nor she claimed credit for the TDS amount. As far as the donation from Gitanjali Gems P. Ltd. Is concerned, it was submitted that the assessee entered into a two year contract with Gitanjali Brand in February 2010 and charged an amount of Rs. 1,25,00,000 for such contract. It was submitted, during the same period the assessee had charged an amount of Rs. 1,20,00,000 to another client for the same two year contract. Thus, it shows that there was no diversion of income by paying donations to Relief Project India. It was submitted, the donation by Gitanjali Gems Ltd. to Relief Project India has no connection with the assessee as it was done one year after the endorsement contract between the assessee and Gitanjali Gems Ltd. Was executed. The learned CIT(A) after cons....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Matrix India Entertainment P. Ltd. he submitted that on some occasions they receive offers from companies wanting to make part payments in cash. He further submitted, though, they make a note of the conversation but they do not accept cash offers. He also submitted that the scribbling in the loose paper is one such offer but it cannot be said that such offer was accepted. The AO found that apart from the loose paper the Blackberry mobile backup of Ms. Sandhya Ramachandran also revealed SMS conversation depicting the aforesaid transactions. He, therefore, held that receipt of cash by the assessee cannot be ruled out. Accordingly, he called upon the assessee to submit her reply. As alleged by the AO, the assessee failed to respond to the query raised. Therefore a statement was recorded from Ms. Sandhya Ramachandran wherein she categorically stated of not being aware of any cash transaction involving the assessee. As far as the performance at Dhaka event is concerned, she stated that the said event did not materialise. The AO observed, though, Ms. Sandhya Ramachandran denied that Dhaka performance did not materialise, it did happen in February, 2011. Therefore, he held that the facts ....