2014 (12) TMI 568

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....i Bench of the Income Tax Appellate Tribunal. The Assessment Year was 2005-2006. The only question and which has been termed as substantial question of law is in relation to the exercise carried out by the Assessing Officer of determining the cost of production allowable under Rule 9A(3) of the Income Tax Rules, 1962 in the assessment year in question and on the footing that part of the expenditure claimed was clearly not includible under explanation (ii) to Rule 9A(1) of the Income Tax Rules, 1962. The Commissioner and the Tribunal concurrently noted that this is an attempt to get over and purporting to reopen an assessment of a partnership firm in which the Assessee before us was a partner. The firm was carrying on business of film produc....

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.... up to 31st March, 2004 as per Rule 9A of the Income Tax Rules, 1962. The balance cost of production has now been claimed by the Assessee as the sole surviving partner and taking over the business of the firm. The Assessing Officer has observed that this is correct accounting but the detailed examination of the Return filed by the Firm for Assessment Year 2004-2005 reveals under statement of the loss and to a substantial extent. The expenses which could not have been claimed in terms of the explanation (ii) of sub-section 1 of Rule 9A have been claimed and to a large extent. It is in these circumstances, that the Assessing Officer reduced the loss of Rs. 1,11,26,990/- as claimed and revised it at Rs. 1,90,26,835/-. He initiated penalty proc....

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....duced and we find that the elaborate exercise commencing from para 23 ends with the following observations and findings recorded in para 29 and 30: "29. Aggrieved by the order of CIT(A), the Revenue has preferred the present appeal before the Tribunal. We have heard the submissions of the ld. DR who relied on the order of the AO. The ld. counsel for the assessee reiterated the submissions as were made before the CIT(A) and also submitted that even if it is considered that Rule 9A could not be applied in this case, the assessee on dissolution of the partnership firm took over the rights of the film Rudraksh at the value found in the balance sheet of the firm i.e. Rs. 2,93,73,793/-. The assessee, on taking over the same, had exploited the ....