TMI Blog2023 (5) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... Lakhs is directed to be deleted; and the addition of Rs.4.73 crores is set aside back to Ld. CIT(A) as directed. CIT-A power to issue directions to AO to reopen the assessment for earlier/subsequent AYs - Action of the Ld. CIT(A) directing the AO to assess the unexplained cash credit in the year in which it was received u/s150(1) - whether, while disposing of the assessee s appeal for Assessment Year 2013-14, whether the Ld. CIT(A) has power to give directions to the AO to reopen the assessment for any other Assessment Year s? - HELD THAT:- As per case of N. KT. Sivalingam Chettiar [ 1967 (3) TMI 16 - SUPREME COURT] observed that a finding within the second proviso to section 34(3) must be necessary for giving relief in respect of the assessment of the year in question; and that the word finding only covers material questions which arise in a particular case for decision by the authority hearing the case or appeal which, being necessary for the subject of the controversy between the interested parties, or on which the parties concerned have been given a hearing. Since no decision contrary to the above case laws has been brought to our notice, respectfully following the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ager and also proprietor of M/s. B. R Entertainment. The AO noted that as per the AIR data, the assessee had deposited cash to the tune of Rs.77,94,000/- and has made credit card payments to the tune of Rs.3,49,000/-. So he asked the assessee to produce the source of cash deposits. The assessee gave his reply which the AO has reproduced at para no. 4.1 4.2 of his assessment order, and thereafter the AO notes that he issued summons to the assessee and his statement was also recorded (which has been reproduced by the AO from page no. 3 to 8 of the order wherein he has explained the source of cash deposit from agricultural/sale of cattle etc). Thereafter, the AO did not accept the assessee s explanation regarding the source of the cash deposits. And thereafter he was pleased to add Rs.75,94,000/-. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) wherein the assessee produced additional evidences before the Ld. CIT(A) and requested for admission of the same under Rule 46A of the Income Tax Rules, 1962 (hereinafter the Rules ) and brought to the notice of the Ld. CIT(A) that those additional evidences are relevant and the assessee was unable to produce at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts showing that Shri Indrajit Chatterjee was the co-producer of the film; and also invoices issued in the name of Shri Indrajit Chatterjee by Hotel the Chancery Pavilion at Bangalore. But the Ld. CIT(A) did not accept the contention of the assessee and was pleased to confirm the action of the AO. Aggrieved the assessee is before us. 5. We have heard both the parties and perused the records, we note that the assessee is an individual who had filed the return of income on 28.09.2013 declaring total income of Rs.12,62,258/-. In the assessment order, the AO has noted that the assessee was business manager to film artist; and was also the proprietor of a concern named M/s. BR Entertainment. And since the AIR report showed that the assessee had deposited Rs.77,94,000/- and had made Credit Card payment of Rs.3,49,000/-, the AO asked the assessee to show the source of the same. Pursuant to which the assessee gave explanation vide letter dated 19.02.2016 (reproduced by the AO) wherein assessee, attributed source of cash to sale of cattle etc which was not accepted by the AO for want of credible material. Thereafter, the AO, directed the assessee to appear before him on 08.02.2016 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poration. And also he furnished the loan confirmation from all the other parties from whom he has availed loans. In order to substantiate the cash deposit, the assessee stated that he was into agriculture and has substantial agriculture income from which he has deposited cash Rs.7.70 Lakhs. He also brought to the notice of the AO to question no. 11 that his movie (joe bhi Carvallo) collected Rs.3.81 crores and sold the Satellite rights, Negative Rights, Internet Rights for Rs.75 Lakhs. He also brought to the notice of the AO as answer to question no. 22 that in the current account of M/s. BR Entertainment at HDFC Bank in the name of M/s. BR Entertainment cheque/RTGS to the tune of Rs.5,25,50,000/- was deposited as under: - S.NO. Date of Deposit Amount Cheque/RTGS Person from 1 17.12.2012 2500000 Cheque 2 28.12.2012 5000000 RTGS Rasraj Enclave 3 04.01.2013 5000000 RTGS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuant thereto, the Ld. CIT(A) called for remand report from the AO who was of the opinion that though there was total cash deposit of Rs.75,94,000/-, the assessee s contention that the cash deposit of Rs.70 Lakhs was made by Shri Indrajeet Chatterjee out of the cash withdrawn by him from the bank account of M/s. BR Entertainment itself has no supporting evidence to prove that the total cash deposited of Rs.70 Lakhs were out of cash withdrawn by Shri Indrajeet Chatterjee to the tune of Rs.75 Lakhs. According to AO other than, the Hotel bills of Shri Indrajeet Chatterjee, Railway ticket etc. and Media report about him co-producing the movie along with assessee the hindi Movie there was no other evidence. So he did not accept the ibid explanation of the assessee. In this respect, we note that an amount of Rs.97 Lakhs was withdrawn from the bank account of M/s. BR Entertainment. The details of withdrawal of cash and deposited of cash in the assessee s bank account is as under: - (i) Details of cash withdrawn by Shri Indrajit Chterjee of Rs.97 Lakhs is given below Date Amount 05/01/2013 5,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by both authorities) it is discernable that cash amount of Rs.97 Lakhs has been withdrawn from assessee s bank account from 05.01.2013 to 04.02.2013 and that cash (Rs.70 Lakhs) has been deposited in assessee s bank account from 16.12.2013 to 21.03.2013. And assessee during the first Appellate proceeding has explained that the source of Rs.70 Lakhs deposit was from the aforesaid money withdraw to the tune of Rs.97 Lakhs. However, since the assessee could not produce the confirmation of this fact from Shri Indrajeet Chatterjee, the aforesaid claim made by the assessee was disbelieved. However, it has been brought to our notice that Shri Indrajeet Chatterjee had committed a fraud of fixed deposit involving M/s. West Bengal Infrastructure Development Finance Corporation (hereinafter WBIDFC ) and was arrested by police and that he was languishing in the prison from April, 2013 onwards. And it was brought to the notice of the AO/Ld. CIT(A) that when interrogated by the police (on fraud), he admitted to have diverted the fraudulent money for hindi film production. And to buttress this fact the Ld. AR drew our attention to the page no. 35 of PB (report of Telegraph dated 17.04.2013). F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear any bearing with the transfer of funds to his account, The onus was on the assessee to provide documentary evidences in support of his credit and cash balances in his account by way of Confirmations, Agreements with Financers specified and terms and conditions of how and when dispersed and period to which it would apply alongwith the purpose to enter into the contract. But the assessee has failed to provide with any such agreement which would substantiate the amount of credits appearing in his bank accounts and further no Confirmations with respect to the Unsecured Loans of Rs.1,32,62,104/+ has been provided by the assessee. Further, in answer to Question no, 10 of sworn statement recorded under oath dated 10-03-2016, also mentioned that he is unable to provide any Confirmations with regard to the credits in his account. Thus the source of the deposits of credits of Rs.11.86 crore [i.e.4.73cr + 5cr + 50 + 30 + 1.32 crores] remain to be explained and i: treated as unexplained Credit of the assessee and added back to the total income of the assessee. Addition: Rs.11,85,62,104/- 11. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) wherein the assessee brough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. had deposited Rs. 25 Lakhs each on 17.12.2012 18.02.2013, (Rs.50 Lakhs) and an amount of Rs.50 Lakhs on 28.12.2012 (total 1 crores). It was also brought to the notice of the Ld. CIT(A) that Shri Ram Mohan Chatterjee has given an amount of Rs.50 Lakhs each on 04.01.2013 and on 08.01.2013 (total Rs. one crore) and Rs.75 Lakhs on 21.01.2013 and on 23.01.2013 Rs.98 Lakhs (thus total Rs.2.73 crores). It was also brought to the notice of the Ld. CIT(A) that Shri Ram Mohan Chatterjee was the director of M/s. Rasraj Enclave Maker Pvt. Ltd. and an amount of Rs.50 Lakhs was given by M/s. Mahuvan Dealers Pvt. Ltd on 21.01.2013; Shri Ram Mohan Chatterjee 15.01.2013 and Rs.50 Lakhs by M/s. JCC Holding Pvt. Ltd. on 08.02.2013. Thus it was brought to the notice of the Ld. CIT(A) the source of Rs.4.73 cr along with name of the source, the CIN No./DIN No of the corporate entities which is discernable from the chart (supra) as well as the jurisdiction of the source and details of the amount has been clearly shown (supra) as well as the addresses of the sources has been furnished before the Ld. CIT(A); and it was also brought to his notice that the aforesaid payments were made by those e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , etc. iii) Copies of bills and invoices of Arvind Rathod, Location Recordist, Bangalore, Punith Cabs, Shanthi Tours Travels Siddhivinayak Vanity, Bangalore for providing vehicles/vanity vans etc. iv) Copies of bills/invoices of Light Light, Light Craft Sound Pvt. Ltd., Kodak Indain Pvt. Ltd., Devendra Sound, UNI 10 Media Works Pvt. Ltd., Prime Focus, S.J. Studio Flamingo Films, for providing lights, cameras, sound technical services, etc. v) Karnataka Film Television Co--Artists Association, All Karnataka Cine Stunt Director s and Stunt Artist s Association in the Name of M/s. B.R. Entertainment, etc. From the details furnished by the assessee, prime facie, it appears that the said amount has been spent on making of the movie, however, the ld. CIT(A) may kindly adjudicate upon the issue in appeal on merits. 13. Even though, the AO in the remand report proceedings (after considering the evidence produced before him) has accepted that the assessee s proprietary concern M/s. BR Entertainment has incurred expenses for production of film titled as Joe Bhi Karwalo and has acknowledged that assessee had submitted bills/vouchers/expenses for claiming that expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also brought to the notice that these amounts were given/provided to M/s. B. R. Entertainment on behalf of Shri Indrajit Chatterjee (co-producer) of movie; and that the same has been spend (details of which facts are discernable from extract from the books of accounts of M/s. BR Entertainment specifying expenditure incurred in production in film during the year which is found placed at page no. 63 to 64 of PB). We also note that the assessee had filed from the company master data the details of the three (3) corporate entities their respective certificate of incorporation and the copy of Form no. 23AC and audited financials of all the three entities; and perusal of the same reveals that the M/s. Madhuvan Dealers Pvt. Ltd. have share capital of Rs.1,00,73,400/- and reserve and surplus of Rs.7,11,15,754/- which has given an amount of Rs.50 Lakhs (to M/s. BR Entertainment) (refer page 81 of PB; M/s. JCC Holding Pvt. Ltd. had share capital of Rs.1,68,44,100/- and reserve and surplus of Rs.17,68,91,772/- which has been given an amount of Rs.50 Lakhs to the assessee (refer page no. 105 of PB): M/s. Rasraj Enclave Maker Pvt. Ltd. had share capital of Rs.19,36,040/- and reserve and su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ands explained, so Rs.19.60 Lakhs is directed to be deleted; and the addition of Rs.4.73 crores is set aside back to Ld. CIT(A) as directed (supra). 16. Ground no. 3 is against the action of the Ld. CIT(A) in not directing specific direction to the AO to delete the addition of Rs.6,93,02,104/- since it is (receipts) not pertaining to the relevant AY. 2013-14. In this regard, we note that at para no. 6.2.2, of the impugned order of the Ld. CIT(A) out of the total addition of Rs.11,85,62,104/- made by AO, the addition made of Rs.1,13,02,104/- pertains to period prior to AY. 2013-14 (opening balance); and Rs.5,75,00,000/- pertains to subsequent assessment year i.e. AY. 2014-15; and the Ld. CIT(A) at page no. 17 of his order at para no. 6.2.11 has confirmed only the addition of Rs.4,92,60,000/- which amount was admittedly received during the year under consideration. This action of Ld. CIT(A) according to Ld. AR implies that other additions have been deleted however, no specific directions have been given by the Ld. CIT(A). Moreover, we also finds that the amount of Rs.1,13,02,104/- and Rs.5,75,00,000/- does not pertains to the relevant year under consideration as discussed (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty (c) in any other case, he may pass such orders in the appeal as he thinks fit. (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation.-In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant. 20. It can be seen from the above that this provision empowers the appellate authority in an appeal against the order of assessment to confirm, enhance or annual the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entirely uncalled for and are required to be expunged. In this respect reliance has been placed on the following case laws: a. Mrs. R. H. Dave v CIT [140 ITR 1035 (Cal)] (ABP 640- 645). b. ITO v Murlidhar Bhagwan Das [52 ITR 335 (SC)] (ABP 646-666). c. N. Kt. Sivalingam Chettiar v CIT [66 ITR 586 (SC)] (ABP 667-671). d. Bakshish Singh v ITO [93 ITR 178 (Cal)] (ABP 721- 729). e. Order of the ITAT, Kolkata Bench, in the case of ITO v. Sri Biswajit Chatterjee in ITA no. 565/Kol/2013 dated 10.11.2017 (ABP 672-679). f. Order of the ITAT, Indore Bench, in the case of ACIT v. Shri Mukesh Sharma and others in ITA(SS) no, 88/Ind/2013 dated 04.06.2019 (ABP 680-712). g. Order of the ITAT, Delhi Bench, in the case of Shri Sanjay Thakur v. DCIT in ITA no. 3785/DeS/2015 dated 12.07.2018 (ABP 713-720). 25. We have carefully considered all the above contentions of the assessee. We have also considered the argument of the Ld. D.R. on this issue. The first issue to be decided is as to whether, while disposing of the assessee s appeal for Assessment Year 2013-14, whether the Ld. CIT(A) has power to give directions to the Assessing Officer to reopen the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sposal of the case pertaining to A. 27. The Hon'ble Calcutta High Court finally held that the Tribunal was in error in declining to delete the directions contained in the order of the AAC. 28. A similar view has been taken by the Hon'ble Calcutta High Court in the case of Bakshish Singh vs. ITO (supra), under similar facts. 29. We also find that the following observations of the Hon'ble Supreme Court in the case of ITO vs. Murlidhar Bhagwan Das (supra) are directly on the issue: That the expressions finding and direction , in the second proviso to section 34(3), meant respectively, a finding necessary for giving relief in respect of the assessment for the year in question, and a direction which the appellate or revisional authority,, as the case may be, was empowered to give under the sections mentioned in that proviso. A finding , therefore, could only be that which was necessary for the disposal; of an appeal in respect of an assessment of a particular year. The Appellate Assistant Commissioner might hold, on the evidence, that the income shown by the assessee was not the income for the relevant year and thereby exclude that income from the as ..... 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