COMMISSIONER OF INCOME TAX Vs. A. H. KHAIS

JUDGEMENT

(1.) THIS is an appeal filed by the Revenue against the order of the Tribunal confirming the CIT(Appeals) order cancelling block assessment made on the respondent-assessee. We have heard Senior counsel Sri. P.K.R. Menon appearing for the Revenue and Adv. Sri. Arun Raj appearing for the respondent-assessee.

(2.) BLOCK assessment was made on the respondent-assessee based on evidence collected in search conducted on 29.7.1997 along with search in the premises of the film distributor by name Sri. P.D. Abraham @ Appachan of Swargachitra Films and assessee's own brother Sri. A.M.Fazil, another film director. The questions raised in the appeal relate to the addition of undisclosed income of Rs.4.5 lakhs for 1994-95 and Rs.1,17,140.00 for the assessment year 1995-96. The addition is based on evidence recovered in the course of search in the form of realisation statement from the premises of another partner namely, Sri. A.M. Fazil who is assessee's brother. The addition relates to 40% share income which the respondent-assessee is entitled to as partner of the firm M/s. Khais Productions, wherein assessee's brother Sri. A.M. Fazil has 20% shares. We have today disposed of I.T.A. No.1583/2009 filed by the Revenue against Sri. A.M. Fazil, wherein we have upheld the determination of undisclosed income from the very same film "Pappayude Sontham Appoose". In that judgment we have sustained addition of 20% income of the assessee's brother for the year 1994-95 for the reasons stated in detail in the said judgment. We extract hereunder the findings from that judgment on this issue.

(3.) IN the case of assessee's brother, we have not considered the addition for the year 1995-96 in respect of the same film as the amount involved was low. The findings therein apply to this assessee also for the year 1995-96 . Based on the findings in the above said judgment we allow this appeal in part by upholding the assessment of assessee's share of income from the firm which is 40% i.e. Rs.4.5 lakhs for the year 1994-95. For the year 1995-96, we do not think the addition should be separately considered in the case of this assessee alone. Consequently we allow the appeal to the extent indicated above i.e. by sustaining addition of Rs.4.5 lakhs for the film "Pappayude Sontham Appoose" for the year 1994-95 only.