AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 693
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....ars from the date of commencement of each film as per the terms of exploitation. 3. Inter related with this grievance the second grievance of the assessee is that the Ld. CIT(A) was not justified in retaining an addition of Rs. 1.30 crores for the year under appeal and also enhancing the income of the subsequent assessment years. 4. The assessee is in the business of film production. The return was electronically filed on 30.9.2009 declaring a loss of Rs. 1,11,64,360/-. The case was selected for scrutiny under CASS and statutory notices were issued and served accordingly. 4.1. During the year, the assessee has shown realizations from the movies Naya Daur, Fire and Earth and overflows from Baghban and Baabul apart from royalty receipts and hires income. On perusing the balance sheet of the assessee, the Assessing Officer found that the assessee has shown on the liability side of the balance sheet an advance received of Rs. 36.87 crores. This advance inter alia included an advance of Rs. 5.5. crores received from Moser Baer (MBIL). The assessee was asked to explain this transaction with MBIL. The assessee was further asked to show cause why the advances so received be not treated ....
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.... the discussion made above the whole of the consideration a reflected in the agreement with Moser Baer i.e. Rs. 11.50 crores is brought to tax for AY 08-09. Since out of the above Rs. 1 crore has been offered to tax the balance amount of Rs. 10.50 crores is added back to the income of the assessee. As the assessee has filed inaccurate particulars of its total income, with a view to willfully evading income tax, penalty proceedings u/s 271(i)(c) are hereby initiated". 5. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A) and explained the transaction with the relevant clauses of the agreement made with MBIL. It was brought to the notice of the Ld. CIT(A) that the period for the home video rights and the satellite broadcasting rights are both for a period of five years but at the same time their respective date of commencement is different, therefore the income in respect of these rights can accrue to the assessee only when the period commences and not before the commencement of the rights. It was further brought to the notice of the Ld. CIT(A) that the assessee has shown income in next year which has been taxed accordingly. The assessee strongly contended that....
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....read over for the period of coaching imparted to them. Since in the case of appellant, the rights were to be exploited for the period of five years as per the terms of the contract, therefore, it would be appropriate to apportion the consideration received for transferring rights to MBIL for the period of tive years. The AR has also brought to my notice that as per Schedule 18 of Notes on account in the case of the Zee Entertainment Enterprise Ltd the cost of movie rights are charged on a straight-line basis for the license's period for 60 months from the date of acquisition, whichever is shorter. 1.3.2. In the light of above facts and circumstances and decision of Hon'ble jurisdiction High Court in the case of Prakash Pictures (Supra), Mahindra Holidays Resorts India Limited (supra), Rotork Control India Pvt. Ltd. 314 TR 62(SC) and Shri K. K. Khullar 116 lTD 301 (Del) and other decision as discussed above, the AO is directed to tax the income of Rs. 2.30 cores for the year under consideration as against Rs. 10.50 Crore assessed by him. Accordingly the addition of Rs. 2.30 Crore is sustained (including Rs. 1 Crore shown by the appellant) is sustained and balance is deleted. In the....
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....the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book keeping, an entry is made about a 'hypothetical income', which does not materialize. Where income has, in fact, been received and subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable". (emphasis supplied)" 10. Let us now consider the list of films whose rights have been given by the assessee to MBIL and let us also see the date of commencement of such right. Sr. No. List of Film Date of commencement 1. Afsana (1951) 17.5.2009 2. Ek Hi Raasta (1956) 1.5.2008 3. Naya Daur (1957) 1.5.2008 4. Sadhna (1958) 1.5.2008 5. Dhool Ka Phool (1960) 1.5.2008 6. Kanoon (1961) 1.5.2008 7. Dharmputra(1961) 1.5.2008 8. Gumrah(1962) 1.5.2008 9. Waqt(1965) 1.5.2008 10. Hamraaz(1967) 1.5.2008 11. Aadmi Aur Insaan (1969) 1.5.2008 12. Ittefaq (1969) 1.5.2008 13. Dastaan 1.5.2008 14. Dhund (1973) 1.5.2008 15. Zameer (1975) 1.5.2008 16. Choti Si Baat(1975) 1.5.2008 17. Karm (1977) 1.5.2008 18. Pati Patni Au....
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.... has been received from 3 parties i.e. Ashok Thawani, Devidas Thawani, Jay Thawani. In rejoinder to remand report, the AR stated that Bhatia Combine shows closing balance at Rs. 4,20,00,000 as against closing balance in the appellant books at Rs. 3,70,00,000 and thus there is difference of Rs. 50,00,000. The reason for difference is that the appellant has taken Rs. 1,75,00,000/- as opening balance whereas Bhatia Combine has taken Rs. 2,25,00,000, hence, the amount of loan in fact is less by the amount of difference. Therefore, the loan has been confirmed. 14.1. In respect of non-compliance by three parties i.e. Ashok Thawani, Devidas Thawani and Jaya Thawani, it was brought to the notice of the Ld. CIT(A) that these persons have filed suit before the High Court for recovery. The suit itself proves that the assessee has borrowed money from these three parties. After considering the facts and the submissions and the remand report, the Ld. CIT(A) confirmed the addition in respect of three parties i.e. Ashok Thawani Rs. 2.25 crores, Devidas Thawani Rs. 1.25 crores and Jaya Thawani Rs. 20 lakhs holding that the assessee failed to furnish confirmation from these parties. 15. Before us,....