Photon Kathaas Production Private Limited v. Deputy Commissioner of Income-tax

Parties Involved

Facts Summary

The assessee, a company engaged in film production, filed its return of income for the assessment year 2018-19 on 30.03.2019, admitting Nil total income and a current year business loss of Rs.9,55,920/-. A survey was conducted at the business premises on 15.02.2018, during which it was found that the assessee had maintained its books of accounts in Tall package and the cash balance found as per the books of accounts as on 26.09.2017 was at Rs.27,00,832/-, however there was no physical cash found at the premises. During the assessment proceedings, the Assessing Officer asked the assessee to explain the cash deficit of Rs.27,00,832/-. The assessee stated that cash had been withdrawn and given to production manager to the tune of Rs.27 lakhs for which a copy of bank statements was filed. However, the Assessing Officer was not convinced and added the cash deficit at Rs.27,00,832/- as unexplained expenditure u/s. 69C of the Act and passed the assessment order u/s. 143(3) of the Act on 17.06.2021. Aggrieved by the order of the Assessing Officer, the assessee preferred an appeal before the ld.CIT(A). During the appellate proceedings, the assessee was asked to submit cash book from 07.09.2017 to 15.02.2018 and the assessee submitted the same. On perusal of the submissions made by the assessee, the ld.CIT(A) has reduced the amount of addition made u/s. 69C of the Act to Rs.22,84,069/- as the difference between the total amounts withdrawn as per cash book from 07.09.2017 to 15.02.2018 …

Legal Issues

• 1. The order of the Learned Commissioner of Income Tax (Appeals), Chennai u/s.250 of the Income Tax Act, 1961 is opposed to law, facts and circumstances of the case.
• 2. The Ld. CIT(Appeals) erred in confirming the disallowance of Rs.22,84,069/- made under section 69C of the Act.
• 3. The Learned CIT(Appeals) Ought to have appreciated the fact that the appellant had withdrawn the cash from its bank accounts for which the Bank statements were produced.
• 4. The Learned CIT(Appeals) ought to have appreciated the fact that the appellant had submitted the cash book from 07.09.2017 to 25.01.2018.
• 5. The Learned CIT(Appeals) ought to have appreciated the fact that the entire cash was kept at the shooting spot therefore it was not kept in officer during the time of Survey.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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