M/S. ANURADHA PAUDWAL, MUMBAI v. THE ACIT CIR 11(1), MUMBAI

ITA 2068/MUM/2008 | 1999-2000
Pronouncement Date: 09-07-2010 | Result: Partly Allowed

Appeal Details

RSA Number 206819914 RSA 2008
Assessee PAN AEUPP9514J
Bench Mumbai
Appeal Number ITA 2068/MUM/2008
Duration Of Justice 2 year(s) 3 month(s) 15 day(s)
Appellant M/S. ANURADHA PAUDWAL, MUMBAI
Respondent THE ACIT CIR 11(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 09-07-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 09-07-2010
Date Of Final Hearing 08-01-2010
Next Hearing Date 08-01-2010
Assessment Year 1999-2000
Appeal Filed On 25-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI BEFORE SHRI R V EASWAR PRESIDENT AND SHRI B RAMAKOTAIAH ACCOUNTANT MEMBER I T A NO: 2068/MUM/2008 (ASSESSMENT YEAR: 1999-2000) SMT ANURADHA PAUDWAL MUMBAI APPELLANT (PAN: AEUPP9514J) VS ASSISTANT COMMISSIONER OF INCOME TAX RESPONDENT CIRCLE 11(1) MUMBAI APPELLANT BY: SHRI JITENDRA SANGHAVI RESPONDENT BY: SHRI ABHIJIT PATANKAR O R D E R R V EASWAR PRESIDENT: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IT REL ATES TO THE ASSESSMENT YEAR 1999-2000. THE ASSESSEE IS A PROFE SSIONAL PLAYBACK SINGER. THE APPEAL ARISES OUT OF THE ASSE SSMENT MADE ON HER UNDER SECTION 143(3) READ WITH SECTION 147 OF T HE INCOME TAX ACT 1961 BY ORDER DATED 30.12.2005. 2. THE ASSESSMENT WAS ORIGINALLY COMPLETED UNDER SE CTION 143(3) ON 15.03.2004 DETERMINING THE ASSESSEES INC OME AT RS.26 74 438/-. ON THE BASIS OF INFORMATION RECEIV ED BY THE CBDT FROM THE DIRECTORATE OF REVENUE NEW DELHI THE ASS ESSMENT WAS REOPENED BY ISSUE OF NOTICE UNDER SECTION 148. THE INFORMATION WAS THAT THE ASSESSEE HAD PERFORMED IN A MUSICAL NI TE ORGANIZED AT NALCO TOWNSHIP DAMANJODI TEMPLE DISTRICT KORAPUT ORISSA ORGANIZED ON BEHALF OF THE JAGANNATH TEMPLE MANAGEM ENT COMMITTEE FOR WHICH SHE RECEIVED CASH PAYMENT OF R S.3 00 000/- AND THIS PAYMENT WAS MADE TO HER BY SEVEN BANK DRAF TS OF LESS ITA NO: 2068/MUM/2008 2 THAN RS.50 000/- EACH ISSUED IN THE NAME OF MR P G PATIL WHO WAS A CONSTABLE EMPLOYED BY THE CISF AND THAT HE CAME T O MUMBAI ENCASHED THE DRAFTS AND PAID CASH OF RS.3 00 000/- TO THE ASSESSEE. A COPY OF THE UNDATED RECEIPT SIGNED BY THE ASSESSEE FOR THE AFORESAID AMOUNT HAD ALSO BEEN SENT TO THE ASSESSING OFFICER ALONG WITH THE INFORMATION. ON THE BASIS O F THIS INFORMATION THE AO CAME TO THE CONCLUSION THAT INCOME OF RS.2 5 0 000/- HAD ESCAPED ASSESSMENT FOR THE YEAR UNDER APPEAL AND IT WAS IN ACCORDANCE WITH THIS INFORMATION THAT THE NOTICE FO R REOPENING WAS ISSUED. 3. IN RESPONSE TO THE NOTICE THE ASSESSEE FILED A R ETURN DECLARING THE SAME INCOME AS ORIGINALLY DECLARED. IT WOULD APPEAR THAT THE ASSESSEE DEMANDED THE REASONS FOR REOPENIN G THE ASSESSMENT AND THEY WERE ALSO PROVIDED TO HER. AFT ER GOING THROUGH THE REASONS THE ASSESSEE CONTENDED THAT ACT ION FOR REOPENING CANNOT BE TAKEN IN THIS CASE SINCE THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO FURNISH FULL AND TRU E PARTICULARS AT THE TIME OF THE ORIGINAL ASSESSMENT. THE ASSESSEES OB JECTION TO THE REOPENING OF THE ASSESSMENT WAS OVERRULED BY THE AO . ON MERITS THE ASSESSEE CONTENDED THAT SHE HAD RECEIVED ONLY R S.50 000/- FROM THE JAGANNATH TEMPLE MANAGEMENT COMMITTEE AS R EFLECTED IN HER BOOKS AND THE RETURN THAT IT WAS THE COMMITTEE WHICH PAID RS.1 25 000/- EACH TO MR GORA UZIR FOR THE MUSICIAN S SINGERS DANCERS AND THEIR TRAVELLING EXPENSES AND TO M/S AU DIO VIBRATION (MOHD. MATIN) FOR PROVIDING LIGHT SOUND AND FOR TR AVELLING EXPENSES AND THAT THERE WAS NO QUESTION OF THE ASSESSEE SUPP RESSING ANY PROFESSIONAL RECEIPT TO THE EXTENT OF RS.2 50 000/- . THE ASSESSEE ITA NO: 2068/MUM/2008 3 ALSO FILED LETTERS OF CONFIRMATION FROM THE JAGANNA TH TEMPLE MANAGEMENT COMMITTEE MR GORA UZIR AND M/S AUDIO VI BRATION TO THE AFORESAID EFFECT. 4. THE AO HOWEVER REFUSED TO ACCEPT THE ASSESSEES EXPLANATION. ACCORDING TO HIM THE ASSESSEE HAD DEC LARED ONLY RS.50 000/- AS PROFESSIONAL RECEIPT FOR THE PERFORM ANCE AND HAD SUPPRESSED THE INCOME TO THE EXTENT OF RS.2 50 000/ -. HE POINTED OUT A PECULIAR FACT THAT A CONSTABLE OF THE CISF I N WHOSE NAME THE DRAFTS WERE ISSUED HAD CARRIED THE DRAFTS TO MUMBA I ENCASHED THE SAME AND HAD ALSO HANDED OVER THE CASH TO THE ASSES SEE WHO HAD ISSUED AN UNDATED RECEIPT DULY SIGNED BY HER STAT ING RECEIVED WITH THANKS THE ENTIRE AMOUNT SENT AND THAT ALL THESE FACTS TAKEN TOGETHER CAN ONLY BE CONSISTENT WITH THE CONCLUSION THAT THE ASSESSEE RECEIVED RS.3 00 000/- FOR THE PERFORMANCE AND NOT MERELY RS.50 000/-. ALL THE RELEVANT CORRESPONDENC E RECEIPTS STATEMENTS ETC. WERE ANNEXED TO THE ASSESSMENT ORD ER. THE AO ALSO REFUSED TO ACCEPT THE ASSESSEES EXPLANATION T HAT A PART OF THE RECEIPTS TO THE EXTENT OF RS.2 50 000/- HAD BEEN PA ID BY HER TO MR GORA UZIR AND M/S AUDIO VIBRATION OUT OF THE RS.3 0 0 000/- RECEIVED BY HER AND THUS HER INCOME WAS ONLY RS.50 000/-. I N THIS VIEW OF THE MATTER HE ADDED RS.2 50 000/- TO THE PROFESSION AL RECEIPTS OF THE ASSESSEE AND ASSESSED THE TOTAL INCOME AT RS.29 24 438/- AS AGAINST RS.26 74 438/- DECLARED BY THE ASSESSEE. 5. THE ASSESSEE APPEALED TO THE CIT(A) AND RAISED T WO CONTENTIONS NAMELY BY QUESTIONING THE JURISDICTIO N OF THE AO TO REOPEN THE ASSESSMENT AND ALSO BY CHALLENGING THE A DDITION OF RS.2 50 000/- ON MERITS. THE CIT(A) REJECTED THE A SSESSEES ITA NO: 2068/MUM/2008 4 OBJECTION AGAINST THE JURISDICTION TO REOPEN THE AS SESSMENT. AS REGARDS THE MERITS HE RECORDED THE FOLLOWING FINDI NGS: - (A) THE ASSESSEE HAS ISSUED AN UNDATED RECEIPT ADDRESSED TO ONE MR SWAIN STATING THAT SHE HAS RECEIVED THE ENTIRE AMOUNT SENT THROUGH THE CISF CONSTABLE MR PATIL AND THIS RECEIPT IS ON RECORD. THIS SHOWS THAT SHE HAS RECEIVED THE ENTIRE RS.3 00 000/ - FROM MR PATIL IN MUMBAI. (B) THE DOCUMENTS ON WHICH THE AO HAS RELIED UPON T O MAKE THE ADDITION THOUGH NOT CONFRONTED TO THE ASSESSEE HAVE BEEN SHOWN TO THE ASSESSEE AT THE APPEAL STAGE BUT THE ASSESSEE WAS UNABLE TO REBUT THEM. (C) THE CONFIRMATION LETTERS FROM M/S AUDIO VIBRATI ON AND MR GORA UZIR CONTAINED IDENTICAL SPELLING MISTAKES THROWING DOUBTS ON THEIR VERACITY. FURTHER THE CONFIRMING PARTIES WERE NOT CONFIRMING THE RECEIPT TO THE TEMPLE ORGANIZING COMMITTEE BUT THEY HAD ACTUALLY ADDRESSED THEIR CONFIRMATIONS TO THE ASSESSEE. THEREFORE NO RELIANCE CAN BE PLACED UPO N THEM. (D) IT IS QUITE IMPROBABLE THAT HAD THE TEMPLE ORG ANIZING COMMITTEE WANTED TO PAY M/S AUDIO VIBRATION AND MR GORA UZIR THEY WOULD HAVE SENT THE AMOUNTS FIRST T O THE ASSESSEE IN MUMBAI SO THAT SHE CAN SEND THE AMOUNTS TO KOLKATA WHERE M/S AUDIO VIBRATION MR GORA UZIR WERE LOCATED. IT WOULD HAVE BEEN EASIER FOR ITA NO: 2068/MUM/2008 5 THE TEMPLE ORGANIZING COMMITTEE TO SEND THE AMOUNT DIRECTLY TO THE PARTIES IN KOLKATA. FURTHER THE MO DE BY WHICH THE AMOUNTS WERE ALLEGEDLY PAID BY THE ASSESSEE TO THE KOLKATA PARTIES IS NOT MADE KNOWN. (E) THERE IS A STATEMENT OF MR SWAIN ON RECORD TO T HE EFFECT THAT THE ASSESSEE INSISTED ON ADVANCE PAYMEN T AND THEREFORE THE MONIES WERE SENT IN MARCH 1998 THOUGH THE PERFORMANCE WAS SCHEDULED TO TAKE PLACE ON 06.04.1998. THIS SHOWS THAT THE MONIES WERE MEANT FOR THE ASSESSEE ONLY AND ALSO CONTRADICTS TH E ASSESSEES STATEMENT THAT THE PAYMENTS WERE MADE TO HER AFTER THE PERFORMANCE. IN THE LIGHT OF THE AFORESAID FINDINGS THE CIT(A) UPHELD THE ADDITION OF RS.2 50 000/-. 6. THE ASSESSEE IS IN FURTHER APPEAL TO THE TRIBUNA L TO CONTEND THAT THE MATERIAL GATHERED BY THE AO FROM THE CISF HAD NOT BEEN PUT TO THE ASSESSEE FOR REBUTTAL DURING THE ASSESSM ENT PROCEEDINGS WHICH IS A FUNDAMENTAL FLAW AND MERELY BECAUSE THEY WERE PUT TO THE ASSESSEE IN THE COURSE OF THE APPEAL PROCEEDING S BEFORE THE CIT(A) IT CANNOT BE SAID THAT THE FLAW IN PROCEDUR E HAS BEEN CURED. IT WAS FURTHER SUBMITTED THAT IN ANY CASE THE RECEI PTS FILED BY THE ASSESSEE FOR PAYMENT OF RS.1 25 000/- EACH TO THE S OUND SYSTEM PROVIDERS AND TO THE ACCOMPANYING SINGERS / ORCHEST RA SHOW THAT WHAT THE ASSESSEE GOT FROM THE PERFORMANCE WAS ONLY RS.50 000/- AND NOTHING MORE. OUR ATTENTION WAS DRAWN TO THE R ELEVANT PAGES IN THE PAPER BOOK. THE ASSESSEE ALSO CONTENDED THA T AS HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PAINTS LTD. VS. ITA NO: 2068/MUM/2008 6 CIT (2008) 296 ITR 90 (BOM) ATLEAST FOUR WEEKS TIM E SHOULD HAVE BEEN GIVEN TO THE ASSESSEE TO OBJECT TO THE REASONS FOR REOPENING THE ASSESSMENT. IT IS POINTED OUT THAT THE AO DID NOT GIVE SUFFICIENT TIME TO THE ASSESSEE TO OBJECT TO THE REASONS RECOR DED FOR REOPENING THE ASSESSMENT. 7. ON THE OTHER HAND THE LEARNED SENIOR DEPARTMENTA L REPRESENTATIVE BESIDES STRONGLY RELYING ON THE ORD ERS OF THE INCOME TAX AUTHORITIES SUBMITTED THAT THERE ARE SE RIOUS HOLES IN THE ASSESSEES STORY AND THAT IT WAS IMPROBABLE THA T THE MONIES WOULD HAVE BEEN SENT FROM ORISSA TO MUMBAI FOR BEIN G TRANSMITTED TO KOLKATA TO THE ORCHESTRA AND SOUND SYSTEM PROVID ERS. IT WAS SUBMITTED THAT THE EVENTS COGENTLY TAKEN CLEARLY PO INT TO THE CONCLUSION THAT THE ENTIRE AMOUNT OF RS.3 00 000/- WAS MEANT FOR THE ASSESSEE AS REMUNERATION FOR HER PERFORMANCE AN D IT WAS SENT TO HER EVEN BEFORE THE PERFORMANCE AS SHE HAD INSIS TED ON ADVANCE PAYMENT. HE CONTENDED THAT THE CONFIRMATIONS ISSUE D BY THE KOLKATA PARTIES WERE TOTALLY UNRELIABLE. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIO NS IN THE LIGHT OF THE FACTS BROUGHT ON RECORD. THE LETTER A DDRESSED BY THE DIRECTORATE OF REVENUE INTELLIGENCE TO THE MEMBER ( INVESTIGATION) CBDT IN FEBRUARY 2000 (PAGE 11 OF THE PAPER BOOK) S HOWS THAT THEY HAD COME TO KNOW THAT A SUM OF RS.3 00 000/- W AS PAID TO THE ASSESSEE BY THE JAGANNATH TEMPLE MANAGEMENT COMMITT EE FOR HER PERFORMANCE ON 6 TH APRIL 1998 IN NALCO TOWNSHIP DAMANJODI ORISSA. THE LETTER ALSO SHOWS THAT THEY HAD INFORM ATION THAT THE AMOUNT WAS SENT THROUGH A CISF CONSTABLE WHO CARRIE D SEVEN BANK DRAFTS EACH BANK DRAFT BELOW RS.50 000/-. IT IS O N THE BASIS OF THIS ITA NO: 2068/MUM/2008 7 LETTER THAT FURTHER FACTS WERE GATHERED BY THE INCO ME TAX AUTHORITIES AND IT WAS FOUND THAT THE FACTS MENTIONED IN THE AB OVE LETTER WERE CORRECT. THE AMOUNT WAS ALSO PAID TO THE ASSESSEE IN MUMBAI ABOUT WHICH THERE IS NO DISPUTE. THERE IS ALSO NO DISPUTE THAT THE ASSESSEE ISSUED A RECEIPT WHICH IS UNDATED ADDRESS ED TO MR SWAIN WHO WAS THE PRESIDENT OF THE TEMPLE MANAGEMENT COMM ITTEE WHEREIN SHE STATED THAT SHE HAS RECEIVED WITH THAN KS THE ENTIRE AMOUNT SENT. THUS THE FACT THAT THE ASSESSEE RECE IVED THE ENTIRE RS.3 00 000/- IN MUMBAI IN CASH STANDS ESTABLISHED. IN FACT THIS IS NOT SERIOUSLY DISPUTED EVEN BY THE ASSESSEE. HOWEV ER WHAT THE ASSESSEE CONTENDS IS THAT A SUM OF RS.1 25 000/- WA S PAID TO EACH OF THE TWO PARTIES WHO HAD ORGANIZED FOR THE SOUND SYSTEM AND FOR THE SINGERS DANCERS ETC. THESE TWO PARTIES ARE M /S AUDIO VIBRATION STATED TO BE SPECIALIST FOR SOUND SYSTEM 11/2 CHRISTOPHER ROAD KOLKATA 700 046 AND UZIRS OF 29 ROBERT STRE ET KOLKATA 700 012. THE COPIES OF THE RECEIPTS FROM THEM HAVE BEE N PLACED AT PAGES 6 AND 7 OF THE PAPER BOOK. THEY ARE NOT DATE D. AS POINTED OUT BY THE CIT(A) BEFORE WHOM THEY WERE FILED THEY ARE SEEN TO HAVE BEEN ADDRESSED TO THE ASSESSEE. THESE LETTERS HAVE BEEN FILED BEFORE THE AO IN AN ATTEMPT TO SHOW THAT THE ASSESSEE WAS PAID ONLY RS.50 000/- FOR HER PERFORMANCE AND THE B ALANCE OF RS.2 50 000/- OUT OF THE CASH OF RS.3 00 000/- RECE IVED BY HER WAS MEANT FOR MR GORA UZIR AND M/S AUDIO VIBRATION FOR THEIR SERVICES. THE QUESTION IS WHETHER THESE PAYMENTS STAND ESTABL ISHED. IT IS TRUE AS POINTED OUT ON BEHALF OF THE DEPARTMENT T HAT IT IS IMPROBABLE THAT THE CASH MEANT FOR THESE TWO PARTIE S OF KOLKATA WOULD HAVE BEEN SENT FROM ORISSA TO THE ASSESSEE AT MUMBAI SO ITA NO: 2068/MUM/2008 8 THAT SHE CAN SEND THE SAME TO KOLKATA. IT WOULD HA VE BEEN EASIER AND QUITE IN KEEPING WITH THE NORMAL COURSE OF HUMA N CONDUCT THAT THE PAYMENTS WERE MADE BY THE TEMPLE COMMITTEE DIRE CTLY TO THE KOLKATA PARTIES INSTEAD OF ROUTING THEM THROUGH THE ASSESSEE AT MUMBAI. HOWEVER THE ASSESSEE HAS FILED THE CONFIR MATIONS FROM THE KOLKATA PARTIES BEFORE THE AO AND HE HAS ACKNOW LEDGED THE SAME AT PAGE 2 OF THE ASSESSMENT ORDER. SINCE THE ADDRESSES AND TELEPHONE NUMBERS OF THE KOLKATA PARTIES WERE AVAIL ABLE IN THE CONFIRMATIONS THEMSELVES HE COULD HAVE CARRIED OUT A VERIFICATION WITH THEM BY ISSUING LETTERS UNDER SECTION 133(6) O R THROUGH THE DEPARTMENTAL AUTHORITIES AT KOLKATA TO FIND OUT WHE THER THEY ACTUALLY ISSUED SUCH RECEIPTS AFTER RECEIVING THE MONEY FROM THE ASSESSEE. THE ASSESSEES CLAIM THEREFORE STANDS UNVERIFIED. WE ARE THEREFORE OF THE VIEW THAT THE ASSESSMENT SHOULD BE SET ASIDE ON THIS POINT. WE HOLD ACCORDINGLY AND REMIT THE MATTER TO THE FIL E OF THE AO WITH A DIRECTION TO HIM TO CARRY OUT THE VERIFICATION WITH THE KOLKATA PARTIES AND TAKE A DECISION AFRESH AS TO THE ASSESSEES CLA IM IN ACCORDANCE WITH LAW. THE ASSESSEE SHALL BE GIVEN A DEQUATE OPPORTUNITY OF BEING HEARD. 9. THE ASSESSEES OBJECTION TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT IS NOT ACCEPTABLE. THE ONLY POINT A RGUED WAS THAT THE ASSESSEE WAS NOT GIVEN SUFFICIENT TIME TO PRESE NT HER OBJECTIONS TO THE REASONS RECORDED FOR REOPENING THE ASSESSMEN T. WE HOWEVER FIND FROM THE ASSESSMENT ORDER THAT THE ASS ESSEE HAS OBJECTED TO THE REASONS RECORDED AND SUCH OBJECTION S HAVE ALSO BEEN DEALT WITH BY THE AO IN PAGE 2 OF THE ASSESSME NT ORDER. THEREFORE THE VALIDITY OF THE REOPENING OF THE ASS ESSMENT IS UPHELD. ITA NO: 2068/MUM/2008 9 10. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JULY 2010. SD/- SD/- (B RAMAKOTAIAH) (R V EASWAR) ACCOUNTANT MEMBER PRESIDENT MUMBAI DATED 9 TH JULY 2010 SALDANHA COPY TO: 1. SMT ANURADHA PAUDWAL DHAIRYA RESIDENCY 233 12 TH ROAD KHAR (WEST) MUMBAI 400 052 2. ACIT CIRCLE 11(1) 3. CIT-XI 4. CIT(A)-XI 5. DR A BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT MUMBAI