Case Law Details
Nadiadwala Grandson Entertainment Pvt. Ltd. Vs DCIT (ITAT Mumbai)
The Hon’ble Madras High Court in the case of M. Narayan N. Boos. Vs. ACIT, Circle (339 ITR 192) held that addition made by the A.O merely on the basis of retracted statement u/s 132(4) could not be sustained in the absence of any evidence material or recovery of any movable or immovable assets at the time of search to corroborate the disclosure made by the assessee.
Facts-
Search and seizure action u/s 132(1) of the Act was carried out on 08.12.2015 at Nadiadwala Group covering group concerns and connected cases. The assessee company is a film production company and it was incorporated in the year 2005 with main business of the company being production of cinematographic movies.
The case was selected for scrutiny and assessment order u/s 143(3) of the Act was passed assessing total income at Rs.11,06,92,352/-. Consequent to search action a notice u/s 153A of the Act was issued on 22.12.2016 and assessee has filed its ROI declaring total income at Rs.11,06,92,352/-. During the course of the search action statement of some employees of the assessee were recorded u/s 132(4) of the Act in which they stated that assessee had inflated the expenses of various movies with the motive to reduce the taxable profit. One employee Mr. Nushrat Javed Khan has identified some expenses in which bogus bill had been issued by some parties to the assessee. During the course of assessment the A.O stated that Mr. Nushrat J. Khan explained the modus operandi in detail and on the basis of statement of Mr. Nushrat J. Khan certain expenses totaling to Rs.8,60,50,160/- was identified in which bogus bills had been issued by the certain parties. Assessment u/s 143(3) r.w.s 153A of the Act was finalized on 29.12.2017 assessing the total income of the assessee at Rs.21,15,86,117/-.
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