Ms. Priyanka Chopra Vs. Dy. CIT (ITAT Mumbai)
IT search and seizure case of Priyanka Chopra: with reference to the materials found specific amount to various heads given wherein the undisclosed income had been utilized, later on retraction by her mother: additions to income held to be justified
In law even retracted confession may form the legal basis of the addition, if the AO is satisfied that it was true and was voluntarily made.
Sub-section (4) of section 132 of the Income Tax Act, 1961 (herein referred to as ‘the Act’), subject to its Explanation, incorporates that the authorised officer may, during the course of the search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under the Act.
Recently, in Priyanka Chopra vs. DCIT & Vice-versa [I.T.A. No. 2769/Mum/2015 and 2524/Mum/2015, decided on 16.01.2018], there were cross appeals by the assessee and the Revenue arising out of the order of the CIT (A) dated 12.02.2015 which pertained to the A.Y. 2008-09. In Revenue’s appeal (ITA No. 2524/Mum/2015), the ground of appeal raised was:
“Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) is justified in deleting the addition of Rs. 50 lacs being cash payment made for acquisition of Studio Aesthetique without appreciating the fact that the addition has been made on the basis of documents seized and voluntarily admitted by the assessee and her mother Smt. Madhu Chopra during the search to be cash component of the payment made to the said party over and above payment of Rs. 3.50 crores made by cheque and subsequently retracted without giving any supporting evidence to the contrary?”
Briefly, in this case, search and seizure action under section 132 of the Act was conducted on 24.01.2011. The assessee is a well known actress of Indian Film Industries. Various incriminating documents were found during search. On this issue during the course of search an amount of Rs. 50 lacs was declared as undisclosed income for cash payment for purchase of Studio Aesthetique. When the same was confronted to Smt. Madhu Chopra, the mother of the assessee who was managing the affairs of the assessee, she admitted the following with respect to Q. No. 19 as under:
“Q. 19 Do you want to state anything else?
Ans. Yes, I admit that based on the above seized papers and the answers to the Q Nos. 11 to 17, I offer following undisclosed incomes, which had accrued to me and Priyanka Chopra through various Events, Shows and Sale of flats in the Years as mentioned above. The application of this cash by the above mentioned activities are as under-
