TaxTMI 
TaxTMI 
2015 (2) TMI 110
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....account by the assessee which was in contravention to the provisions of the Income-tax Act and Incometax Rules. 2. The appellant prays that the order of CIT(Appeals) on the above grounds be set aside and that of the Assessing Officer restored." 2. The assessee is in the business of purchasing video rights and other rights of feature films and selling and distribution of the same. It filed its return of income at a loss of Rs. 1,51,35,150/-. During the course of assessment proceedings the AO noticed that assessee has been debiting entire amount of purchase in the year in which it has some revenue. The AO identified such cases and these have been described in table reproduced in the assessment order at page-5, which read as under: A.....
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....ng the said Satellite Rights, the assesssee did not have any Satellite Right available to him for future exploitation of the said firms. In a way the assessee had sold his total Satellite Rights in respect of said 107 films, and therefore assessee was right in valuing the cost of said Satellite Right of 107 films amounting to Rs. 3,40,26,079/- from stock. C) Regarding Serial No.2 of above statement, the assessee states that after selling the said Satellite Rights of film "Split Wide Open" for sum of Rs. 15,00,000/-, the assessee did not have any Satellite Rights available for future exploitation of said film "Split Wide Open" so in a way the assessee had sold his total Satellite rights in respect of the said film "Splitwide Open" and the....
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....quested to accept the originally assessed loss as per order u/s. 143(3) dated 27/11/2006" 3.1 Though AO has held that Rule 9B is not applicable to the case of the assessee as video rights have become operative at least six months later from the date of theatre release . However, AO has rejected the aforementioned contention and added the aforementioned amount to the income of the assessee and by giving benefit of set off of carried forward losses of earlier years to the income, the income of the assessee has been assessed at nil. 4. An appeal was filed before Ld. CIT(A), before whom it was submitted that addition has wrongly been made by the AO. From the details submitted by the assessee it was seen by Ld. CIT(A) that the assessee had....
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....licable to the Appellant and the market value is given more importance. v) Film distributor has not been defined in Rule 9B but by way of Copyright Act, 1957 Section 2(a)(f) the definition of cimematorgraphy film would therefore include film distributor holding copyrights of video. vi) Rule 9B never mentions the world theatre and therefore it cannot be said that it is applicable for theater distribution rights only. In view of the submissions Appellant submitted that the disallowance made by AO was not applicable." 4.1 On these submissions Ld. CIT(A) asked the assessee to establish its practice of closing valuation of closing stock. However, except for a general narration as being on market value by a management the specific clo....
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....g Co. Ltd. 3) Regarding satellite rights of 6 films to M/s. Livewire supra agreements were seen in respect of Roja, Lahu Ke Do Rang, Agnichakra and Joshilay. Regarding Roja, appellant had rights till 1-4-07, Agnichakra till 30-6-05, Joshilay till 31-3-09 and lahu Ke Do Rang till 31-3-05. The details of Muthu Maharaj and Dil Hi dil Mein were not seen. Agreement for sale of these films were for period w.e.f. 28-11-03 for 3 years i.e. 28-11- 06 except Lahu Ke Do Rang which was till 31-3-05. 4.2 On the aforementioned facts Ld. CIT(A) has observed that AO has not made any attempt to establish the facts of the case and has not verified assessee's submission. It is further observed by Ld. CIT(A) that the conclusion of AO is without any base.....
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....assessee for claiming the entire expenditure was not a proper method and AO was right in making the disallowance. It was submitted by Ld. DR that Ld. CIT(A) has wrongly deleted the disallowance and his order should be set aside and that of AO be restored. 6. On the other hand, it was submitted by Ld. AR that assessee did not file any appeal against the sustained disallowance. Ld. CIT(A) after verification of facts has given his finding and it has been demonstrated that no excess expenditure has been claimed by the assessee in respect of items on which addition has been deleted Thus, it was submitted by Ld. AR that order passed by Ld. CIT(A) should be upheld. 7. We have heard both the parties and their contentions have carefully been c....