TMI Blog2024 (1) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... file of the AO who will adjudicate the issue with proper reasoning after hearing to the assessee. Disallowance of expenditure claimed or incurred on account of movie Aranmanai - AO noted that assessee has failed to produce sufficient evidence in support of his claim and hence he added this amount to the total income of the assessee - CIT deleted the addition simpliciter on the reasoning that major portion of expenditure had suffered TDS and hence genuineness of the same is far from doubting - HELD THAT:- CIT(A) has simpliciter deleted the addition on the basis that the expenditure had suffered TDS and copies of ledger folio of the corresponding expenditure is available in the assessment records . As the findings is incomplete and unreasonable, there may be documents available in the assessment records and the seized material relating to these expenses, the should have been examined and then this issue could have been decided. Hence in the interest of justice, the matter is set aside and remit back to the file of the Assessing Officer who will re adjudicate the issue after examining the seized material in the possession of department. The AO will find out the seized materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: These two appeals filed by the Revenue are arising out of two different orders of the Commissioner of Income Tax (Appeals)-18, (hereinafter the CIT(A) ) Chennai in ITA Nos.281/17-18 and 282/17-18, dated 03.10.2018 respectively for the assessment years 2015-2016 and 2016-2017. The assessments were framed by the Assistant Commissioner of Income Tax, Central Circle 2(2), Chennai for the assessment years 2015-2016 and 2016-2017, u/s. 143(3) r.w.s. 153A of the Income Tax Act, 1961 (hereinafter the Act ) and u/s. 143 (3) of the Act, vide orders of even date 29.12.2017. 2. First we take up ITA No.127/CHNY/2019 for the assessment year 2015-2016 for adjudication. The first issue in this appeal of Revenue is with regard to order of the CIT(A) in deleting the addition made by the Assessing Officer being unexplained amount of gift received from his mother late Smt. Radha Narayanan to the tune of ₹1,74,00,000/-. For this, the Revenue has raised the following grounds of appeal. 2.1. The Learned CIT(A) erred in deleting the addition of Rs. 1,74,00,000/-, claimed by the assessee as gift received from his mother, on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived from his mother late. Smt. Radhananrayanan. In the absence of sufficient evidence/proof in support of the assesse claim of gift amount of Rs. 1,74,00,000/- is not acceptable. 6.4 In view of the above discussion, the assessee claim of gift amount of Rs. 1,74,00,000/- received from his mother late. Smt. Radhananrayanan and undisclosed realization of the picture Aranmanai amounts of Rs. 91,00,000/- was not considered in the absence of proper evidence/proof and accordingly the above amount of Rs. 2,65,00,000/- added back to the assessee total income . Aggrieved, assessee preferred an appeal before the CIT(A). 4. The CIT (A), simpliciter, on the basis of statement of assessee accepted the explanation of the assessee by basing his reasoning on conjectures and surmises and accordingly he deleted the addition that receipt of ₹1,74,00,000/- as unexplained is not backed by proper reasons, hence he deleted the addition by observing as under:- 5.2. Smt. Radha Narayanan is no more and as the legal heir of Smt.Radha Narayanan, the Appellant naturally inherits the amounts held by her. Therefore, the availability of source in the hands of Smt. Radha Narayanan during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that the amount received during the financial year 2011-12 with that of money received in the financial year 2014-15 relevant to the assessment year 2015-2016. Hence, this issue is set aside and remitted back to the file of the Assessing Officer who will adjudicate the issue with proper reasoning after hearing to the assessee. 6. The second issue in this appeal is as regards to the order of the ld. CIT(A) deleting the disallowance made by the Assessing Officer of expenditure claimed or incurred on account of movie Aranmanai amounting to ₹3,36,00,155/-. For this, the Revenue has raised the following ground Nos. 3.1 and 3.2. 3.1. The Learned CIT(A) erred in deleting the disallowance of Rs. 3,36,00,155/-, claimed by the assessee as expenditure incurred for the movie Aranmanai . 3.2. The Learned CIT(A) failed. to appreciate that according to clause 8 of the Minimum Guarantee Agreement, executed by the assessee distributor with the producer, the amounts spent by the assessee towards paper publicity, hoardings, promotion, etc., will be on the producer's account and therefore, there can be no scope for the assessee to claim expenditure towards advertisement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not far from doubt. The copies of Ledger folio of the Corresponding expenditure are also available in the assessment record and it is found that the sums have actually been incurred. On the contrary, the A.O. has not illustrated that the expenses are otherwise bogus. Under such circumstances, when the search proceedings have not revealed anything contrary or adverse with regard to the genuineness of the expenses, the addition made of Rs. 3.36 Crores and 1.07 Crores are incorrect and therefore directed to be deleted. Accordingly, the corresponding Grounds of appeal are allowed . Aggrieved, now the Revenue is in appeal before us. 9. We have heard rival contentions and gone through the facts and circumstances of the case. Before us, the ld. CIT(DR) heavily relied on the assessment order and he argued that the assessee is unable to produce any evidence in respect of claim of expenditure that he has spent ₹3,36,00,000/- for purchase of movie apart from the purchase cost. He argued that CIT(A) without bringing any evidence on record deleted the addition simpliciter on the reasoning that major portion of expenditure had suffered TDS and hence genuineness of the same is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing identical, we restore this issue also back to the file of the AO exactly on the same direction. Hence, this issue is set aside and remitted back to the file of the Assessing Officer. This issue of the Revenue is allowed for statistical purposes. 14. The next issue in this appeal of the Revenue is with regard to order of CIT(A) deleting the addition of attributable expenses such as boarding and lodging, commission paid, office building maintenance and travelling amounting to Rs. 9,46,269/-. For this, the Revenue has raised the following grounds of appeal. 5.1. The Learned CIT(A) erred in deleting the addition of Rs. 9,46,269/-, attributable to expenses, such as, boarding lodging, commission paid, office building maintenance and travelling. 5.2. The Learned CIT(A) failed to appreciate that the assessee did not produce any bills / vouchers to substantiate the expenditure and iIn the absence of bills / vouchers, the only inference could be that the impugned expenditure has not at all been incurred by the assessee. 5.3. The Learned CIT(A) ought to have noted that the burden of proof lies on the assessee to establish the genuineness of expenditure as well as tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue raised by the Revenue in this appeal is with regard to order of the ld. CIT(A) directing the AO to allow carry forward loss claimed in the return of income filed u/s. 153A of the Act. For this, the Revenue has raised the following grounds of appeal. 6.1. The Learned CIT(A) erred in holding that the loss claimed in the return of income u/s. 153A is to be carried forward, by observing that the return of income filed in response to notice u/s. 153A is treated as filed u/s. 139(1) of the I.T. Act, 1961. 6.2. The Learned CIT(A) failed to appreciate that in the case of CIT v. Sun Engineering Works (P) Ltd. (198 ITR 297) and Chettinad Corporation P. Ltd. v. CIT (200 ITR 320), the Hon'ble Supreme Court has held that reopening is only for the benefit of revenue and that assessments made u/s. 153A being in the nature of reassessment proceedings, the said Hon'ble Supreme Court's decisions apply to return of income filed u/s. 153A too. 6.3. The Learned CIT(A) ought to have noted that in corporate cases, the accounts have to be adopted in the Annual General Body meeting which cannot be changed at the whims of the assessee and that a fresh claim, such as a loss, can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years (and for the relevant assessment year or years) referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (Emphasis Supplied) Sec. 148 (As applicable for A Y 2015-16): (1) Before making the assessment, reassessment, or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is issued for such purpose under Section 153A(1)(a) of the Act. If the return is filed by the assessee within the reasonable time permitted by such notice under Section 153A(1)(a) of the Act, such return would then be deemed to have been filed within the time permitted under Section 139 (1) of the Act for the benefit under Section 139(3) of the Act to be availed of by the assessee. He further submitted that, the entire matter was remanded back by the Hon'ble Court by holding as follows: 17. In the light of the substantial questions of law being answered herein, a definitive final order cannot be passed without being sure of the date of issuance of the notice under Section 153A(1)(a) of the Act and the time afforded by such notice for the assessee to file the return. For such purpose, the orders impugned passed by the Appellate Tribunal require to be set aside and the matters remitted back to the Tribunal for the Tribunal to ascertain the details as to the date of the notice and the time afforded to file the return and pass an order in the light of the views expressed herein on the questions of law and it is ordered accordingly. In view of the above, it was argued th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded, in view of the clear opening words of Section 153A(1) till such time that a notice was issued to him under clause (a) of such sub-section. If such is the meaning of Section 153A(1), the operation of Section 139(3) qua the time available for filing a return in order to avail of the benefit of carrying forward any loss stands extended till a return is called for under Section 153A(1)(a) and such return is filed, provided the return is filed within the time indicated in the relevant notice under Section 153A(1)(a) of the Act. There can be no dispute to such being the effect of Section 153A(1)(a). [Para 15] Unfortunately, the notice issued under Section 153A(1)(a) is not available in the records relied upon by the parties nor is there any reference to the date of such notice in any of the orders appended to the papers. Indeed, the time permitted by the relevant notice under Section 153A(1)(a) for the assessee to file the return is also not available. As recorded above, it is the submission of the assessee that such notice was received by the assessee on 27-3-2006 and it afforded a month's time to the assessee to file the assessee's return and the assessee's retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of assessee to carry forward of loss quantified at Rs. 3,35,71,136/- not to be carried forward for the assessment year 2016- 2017. For this, the Revenue has raised the following grounds of appeal. 2.1. The learned CIT(A) erred in holding that the carry forward of loss, quantified at Rs. 3,35,71,136/-, by the learned CIT(A) for the assessment year 2015-16 is to be set-off against the gross total income for the assessment year 2016-17. 2.2 It is submitted that appeal has been preferred for the assessment year 2015-16 on the issue of carry forward of loss and, as a corollary, appeal has been preferred on the set-off of such carry forward loss, for the assessment year 2016-17 25. Since, we have adjudicated the issue in appeal No.127/CHNY/2019 for the assessment year 2015- 2016 and hold that the loss cannot be carry forwarded, the order of the CIT(A) directing the AO to allow carry forward of loss of Rs. 3,35,71,136/- have become redundant since there is no carry forward loss available to the assessee in this assessment year and hence this appeal of the Revenue stands allowed. 26. In the result, the appeal filed by the Revenue in ITA No. 127/CHNY/2019 for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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