Tamil Actor Vijayakant gets Partial Relief from ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Chennai bench has granted partial relief to the Tamil movie actor Vijayakant in various income tax issues.

In one of the cases, the department observed that the actor had returned entire property as his own building in the wealth tax appellate proceedings. The fact that the co-owners were employees of the assessee and had no source to purchase the property, was also confronted. However, the replies remained evasive. Consequently, the assessee was held to be the sole owner of the property.

The improvement in the property was shown by the assessee to be Rs.40 Lacs which was stated to be funded out of Rs.36.06 Lacs declared under VDIS 1997 and another Rs.30 Lacs disclosed by the assessee during the course of earlier search on 09.08.1988. However, in the absence of any such valid link established by the assessee between aforesaid declaration and cost of improvement, the explanation was not to be accepted. Further total expenditure on improvement worked out to be around 2 Crores and the share of assessee therein was Rs.40 Lacs. In the absence of any proof, Ld. CIT(A) held that only 10% of the expenditure on improvement could be allowed to the assessee considering the fact that without some improvement, the property could not have been sold by the assessee.

Overruling the contentions of the assessee-actor, the Tribunal bench comprising Shri Mahavir Singh, Vice President and Shri Manoj Kumar Aggarwal (Accountant Member) has observed that the assessee is the sole owner of the property and other owners are namesake owners to avoid the provisions of Land Ceiling Act.

Confirming the additions, the Tribunal held that “In fact, in wealth tax proceedings, this property has been shown by the assessee as sole owner. Therefore, the findings to that extent, could not be faulted with.”

The Tribunal also addressed another issue regarding the disallowance of repair expenses for Rs.1.47 Lacs. As per the documents, the assessee incurred expenses on maintenance and repair of a vehicle stated to be used for his profession. However, the expenditure was treated as unexplained expenditure.

The assessee contended that it was propaganda Van and was a gifted vehicle. The expenses were met by the donor. Further, the seized documents showed payment of only Rs.1 Lacs which may be taken as the expenditure. However, the CIT(A), going by the presumption of Sec.132, upheld the addition of unexplained expenditure.

Upholding the order of the department, the Tribunal held that “from the factual matrix, it is clear that the document has been found from the possession of the assessee’s premises. The same reveal payment on account of repair of vehicle which is in the possession of the assessee. The onus was on assessee to negate the allegation of revenue. However, no such onus was discharged. Accordingly, no infirmity could be found in the impugned order on this issue. In the result, this ground stand dismissed. The appeal stands partly allowed to the extent indicated in the order.”

To Read the full text of the Order CLICK HERE

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