TMI Blog2013 (4) TMI 951X X X X Extracts X X X X X X X X Extracts X X X X ..... against the order of the CIT(A) for the assessment year 2003-04. Since no appeal has been filed by the Revenue for the assessment year 2003-04, the cross objection No.87/Mds/2011 of the assessee is dismissed as not maintainable. 3. All the five appeals of the Revenue are filed beyond the period of limitation. Affidavits for condonation of delay citing reasons causing delay in filing appeals have been filed by the Department. After perusal of the affidavits, we are satisfied that the delay caused in filing of appeals is not intentional. We, therefore, in the interest of justice condone the delay and admit the appeals for hearing on merits. 4. The assessee has filed cross objections corresponding to the appeals filed by the Revenue. The assessee has filed all the cross objections beyond the period of limitation. Petitions for condonation of delay in filing of cross objections have been filed. The petitions for respective assessment years are supported by affidavit. We are satisfied that the delay in filing of cross objections is unintentional and has occurred because of bonafide mistake on the part of the assessee. The delay in filing of cross objections is condoned and the al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has incurred expenditure towards payments made to distributors of the films. 9. We have heard the submissions made by both the parties and have perused the orders of the authorities below. There is no dispute with regard to quantum of theatre collection based on the seized material. The dispute is only with regard to expenditure incurred for earning undisclosed income. It is also an admitted fact that the assessee has been sharing part of its receipts from theatre business with distributors. The counsel for the assessee has given details of the expenditure towards the distributor s share, which are reproduced herein below:- Name of the Theatre Gross collection accounted in the books Distributor s Share accounted in the books Percentage Lakshmi Talkies ₹ 26,14,509 ₹ 13,38,700 51.20% Little Lakshmi ₹ 25,43,495 ₹ 12,32,420 48.45% 10. A perusal of the above table shows that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. 15. The second ground of appeal of the Revenue is with regard to income received by the assessee from sale proceeds of the canteens. The assessee is running two canteens in his theatres i.e. Mahalakshmi and Little Lakshmi theatre. The assessee had leased out the canteens till the year 2003-04 and the income from lease was admitted by the assessee as lease rental income up to the assessment year 2003-04. From the assessment year 2004-05 onwards the assessee started running canteens on his own. As per the assessee s own admission, daily collection from both the canteens is amounting to ₹ 2,500/- per day. However, in the income returned by the assessee, the assessee did not offer the said income for the assessment. The assessee changed his stance and submitted that there was a family partition according to which the assessee is only entitled to receive 50% of the income from the canteens. Moreover, in the said canteens most of the items sold are branded items and has a margin of not more than 20%. The assessee in support of his contentions has placed a copy of the order of the Hon ble Madras High Court dated 19.01.1966 and Memo of Compromise at page 29 to 37 of the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firmed addition to the tune of ₹ 5,00,000/-. Aggrieved against the findings of the CIT(A), both Revenue and assessee have come in appeal and cross objection before the Tribunal. The stand of the counsel for the assessee is that the assessee has been able to explain expenditure to the extent of ₹ 39.53 lakhs incurred towards construction of the theatre. The matter was referred to DVO under section 142A of the Act. The DVO valued the cost of construction as ₹ 49,02,100/-. The assessee had claimed in his books of account, the cost of construction as ₹ 39,53,321/- The addition was made by the Assessing Officer on account of difference arising from valuation given by DVO and the value declared by the assessee. The CIT(A) held that since valuation made by the DVO is only on estimate basis, the unaccounted investment is restricted to ₹ 5,00,000/- only. The CIT(A) held that since there is no separate income, telescopy of unaccounted investment is allowed against unaccounted income for the assessment years 2000-01 and 2001-02. 18. We have heard the submissions made by both the sides and have perused the orders of the authorities below. We find that the as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations that the assessee has discharged his onus cast on him as all the creditors have confirmed the transactions. We do not find any infirmity in the findings of the CIT(A) on this issue. Therefore, this ground of appeal of the Revenue is dismissed. 21. The fifth ground of appeal of the Revenue relates to deemed profits under section 28(iv) amounting to ₹ 41,49,000/-. The assessee was a partner in a concern under the name style of M/s.Golden Distilleries which was in the business of manufacturing of IMFL products. Subsequently, the firm was taken over by the company M/s. Midas Golden Distilleries P. Ltd. 50,000 shares having face value of ₹ 10/- each were allotted to the assessee and he was made Promoter Director of the said company. During the assessment year 2004-05 share capital of the company was increased and the assessee was allotted 46,100 shares @ 10 per share having price of Rs.. 100/- per share with face value of ₹ 10/- and premium of ₹ 90/- per share. The Assessing Officer held that the amount of premium waived of to the assessee i.e. 46,100 X 90 = ₹ 41,49,000/- is deemed profit in the hands of the assessee. . Before proceedings f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the considered opinion that such investments cannot be said to be a benefit arising out of the business of the assessee . A perusal of the aforesaid observations of the Tribunal in the case of Rupee Finance Management Pvt.Ltd., (supra) and the provisions of Sec.28(iv) of the Act would show that for the income to be chargeable under section 28(iv) of the Act, the income should arise from the business or in the exercise of a profession and there should be a direct link between the business of the assessee and benefit derived there from. 21A. In the instant case, it is an admitted fact that the assessee was one of the partners of M/s.Golden Distilleries, which was subsequently taken over by M/s. Midas Golden Distilleries P. Ltd. The assessee was allotted 50,000 shares in the said company in lieu of giving up his share in partnership firm. The assessee was also made Promoter Director of the company. Subsequently, when the company issued additional share capital in the assessment year 2004- 05, the assessee was further allotted 46,100 shares @ ₹ 10.00 per share instead of ₹ 100/- the rate at which shares were allotted to others. The contention of the A.R. that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in confirming the addition to the tune of ₹ 30,38,000/-. At the time of search,the total jewellery was recorded as 6090 gms. The Assessing Officer made addition of the entire jewellery calculating it @ ₹ 700/- per gram. Before the CIT(A), the counsel for the assessee gave details of jewellery owned by the assessee and its family members. Out of the total jewellery found, gold jewellery to the extent of 1750 gms was taken to be explained in accordance with the CBDT circular No. 1916 dated 11.5.1996. The balance 4340 gms was treated to be as unexplained. The CIT(A) confirmed the remaining jewellery @ ₹ 700/- per gram amounting to ₹ 30,38,000/-. However, in view of unaccounted income earned by the assessee in the assessment year 2000-01, 2001-02, 2004-05 and 2005-06, the CIT(A) gave benefit of telescopy to the extent of ₹ 23,37,351/-. After granting the benefit of telescoping, the remaining amount of ₹ 7,00,649/- was confirmed as unaccounted income on asset basis. The counsel for the assessee submitted that the source of acquisition of jewellery has been explained before the authorities, but the same has not been accepted by them. We find that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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