CA Avinash Rajopadhye
Few days after an untimely death [by suicide or murder?] of a film actor in Hindi Film industry hit the headlines in print and electronic media his Chartered Accountant’s name surfaced. As soon as CA’s name flashed Herambh Shastri Chartered Accountant by profession [ not related to any dead or alive Chartered Accountant ] started instantly thinking about the role of CA in such high profile case of death of upcoming actor, sitting in the chair looking at ceiling fan. His analytical mind was working at high speed.
How CA could be a part of investigation of death of the actor? What if the actor phoned his CA before his death? Did the actor want to know pending appeals before income tax authority? Was the actor on the radar of the Income Tax Department? Herambh remembered one such case in Karanataka where CCD owner committed suicide because of harassment by Income Tax department as reported in media. His train of thoughts continued.
Next day Herambh came to know that it was the Enforcement Directorate [ED] who summoned the actor’s CA to clarify banking transactions of the actor and suspected money laundering. Actor’s fiancée indulged in financial irregularities of crores of rupees in the actor’s bank accounts. So Herambh realised the CA might have limited role in the case of death of the actor. But media gave such a big coverage for the entry of CA of the actor for the investigation of bank entries in the bank statement as if he was super hero. Very sensational.
Herambh’s wife as usual became curious when she heard about CA summoned by ED. She started interrogating Herambh. Situation was tense. Herambh explained her the CA was concerned with the financial matters only nothing more. He was not connected with drug addiction or love affair of the actor. Herambh somehow contained his wife.
Next day when Herambh went for morning walk with his group coming from various walks of life. They were anxiously waiting for him at the gate of jogging park. This group is known as “Moon Walkers”by the youngsters running around the jogging track. Harambh’s group earned this prestigious tag because of their style of walking, walking slowly and steadily as if walking on the moon. After the exchange of pleasantries obviously keeping safe distance they started their march on the jogging track.
“So Herambh you may have heard new twist in actor’s case?” Digu Tipanis a friend [ retired from defence coop. credit society as chief accountant ] triggered first salvo when Herambh was watching herd of parrots flying in the sky early in the morning.
“Herambh Oh, Herambh where are you looking? are you counting parrots in the sky?”queried Chakor Shah, running a stationary shop.
Herambh brought down his eyes over Digu Tipanis and said
“Come again what did you say”?
“I was saying did you hear the latest development in actor’s case. His CA has been summoned by ED. ”said Digu Tipanis.
“Oh yes I heard it,let me tell you CA’s role is limited to financial transactions so he is nowhere connected with the death of the actor”replied Herambh.
“It’s OK, I wonder how CA can explain bank transactions? as per my experience CA calls me to explain the entries in bank account almost every year in his office because my accountant cannot explain entries properly”Chakor Shah raised valid point.
“Chakor Bhai who knows his CA may be operating actor’s bank accounts because of busy schedule of the Actor, what do you say Herambh?”Digu Tipnis made valuable addition.
“Look friends I don’t hold a brief for any upcoming or downgoing actor from Hindi film industry as of now or in the past. Long back I remember, I was dealing with income tax matters of part time actor, I mean, he used to act in ad films, plays and street plays etc. but he was in full time job in maintenance department of automobile company. His salary was ten times more than his professional receipts. Whenever the actor met me at some common place like bazaar or temple and if his wife happened to be with him she complained about the actor’s acting fever and asked me to advice the actor to quit the acting forever. ”Digu Tipanis and Chakor Shah silently heard Heramh.
Heramh thought he got free to walk. Again Digu Tipanis having worked in accounts department and having knowledge of income tax law he posed very intelligent question.
“Herambh tell me,I heard this actor who committed suicide, incurred lacs of rupees on his pleasure trips and parties with his girl friends that too through banking channel, how this expenditure would have been claimed against his professional receipts by his CA? Is it considered as expenditure incurred for business promotion?” bouncer by Digu Tipanis
“My dear friend Digu you should have been Assessing Officer. The question you asked is not easy to answer without citing judicial precedents. Whether a particular expenditure is wholly or exclusively for business or profession, it is the assessee who is the right person to decide not the AO. I mean AO cannot put himself in the shoes of the assessee and decide whether or not particular expenditure does not relate to business or profession. Digu once leading actress from Bollywood incurred expenditure for her dental treatment [front teeth] running in lacs AO disallowed it being personal expenditure but Tribunal allowed this expenditure, why? you know because dental treatment enhanced her “Face Value”. She looked more attractive and gorgeous. She got more offers. To stay gorgeous is the soul of her profession as actress”I explained looking at Digu.
I found that he was not still satisfied. He was cunning enough to realise that his main question was being sidelined. So he again asked “what about pleasure trips and rave parties Herambh?”.
“Digu you are very stubborn Yaar ! you are still in the rave party. Very tough question, I can only say if at all this expenditure is claimed as business expenditure it would be an uphill task for his CA. Because this expenditure involves too much “personal”element. Even if the AO happens to be diehard fan of the actor or happens to be in that party itself, he would not hesitate to turn down the claim. Digu let me tell you once a renowned Supreme Court advocate Shanti Bhushan claimed expenditure of his heart surgery as business expenditure pleading that it has direct connection with his “brain”. He contended that healthy heart is must for his brain for running his profession efficiently and effectively. Digu the matter went upto apex court, the court rejected his claim expenditure being personal. ”I elaborated my point. I hoped there would be no more question from Digu.
“Herambh you rightly said these parties and pleasure trips involve “personal element”. Since the actor committed suicide those parties came into media glare. It is “Masala”for them. So they hyped this point”. said Dighu.
“Dighu God forbid, based on this revelation in the media Income Tax Department may get alert to verify expenses on such trips if claimed by the Bollywood actors,they may issue notices for reassessment under section 147 to those living Bollywood actors triggering suicidal thoughts” with this negative note I concluded the brain storming morning walk with Moon Walkers.