TaxTMI 
TaxTMI 
TaxTMI 
2016 (6) TMI 298
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....xpenses. He, therefore, called upon the assessee to justify the claim. In response to the query raised, it was submitted by the assessee that ISO 27001 and ISO 9001:2008 certification are valid for a period of three years but they are neither intangible fixed asset nor transferrable. Hence, the expenditure incurred for obtaining such certificate is revenue in nature as the certificates can be withdrawn if the assessee does not adhere to the requirement of the certificates. The Assessing Officer, however, did not find merit in the submissions of the assessee. He observed, the fact that the assessee has made payment for certificate which is valid for three years, denotes that it is for enduring benefit hence, it is capital in nature. Accordingly, he disallowing claim of deduction, he treated it as part of the assessee's capital asset and allowed depreciation @ 25% by treating it as intangible asset. As a result, the excess claim of Rs. 4,94,710, was added back to the income of the assessee. 4. Though the assessee challenged the disallowance before the learned Commissioner (Appeals), he also confirmed the addition. While doing so, the learned Commissioner (Appeals) further observed t....
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....aim of deduction. As far as the allegation of learned Commissioner (Appeals) that the expenditure does not pertained to the impugned assessment year, we are not convinced with the same. As rightly pointed out by the learned Authorised Representative, there is no dispute that the expenditure was incurred during the relevant previous year. That being the case, assessee is eligible to claim the deduction. Grounds no.1 and 2, are allowed. 8. In ground no.3, assessee has challenged the disallowance of Rs. 52,58,118, on account of cost of production of feature film. 9. Brief facts are, during the assessment proceedings, the Assessing Officer verifying the information / details available on record, found that the assessee has debited an amount of Rs. 52,58,118 towards expenditure on gift. On a query raised by the Assessing Officer it was explained by the assessee that it had given gift of certain items to its business associates who had worked for the film "Billu Barber". Furnishing the details of gift, it was submitted by the assessee that they are in the nature of perquisites to the concerned persons towards their contribution for the production of the film. Assessee also submitted, i....
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....er, Bruhat Bangalore Mahagar Palike, [2015] ITA no.94 of 2015 and 466 of 2015, dated 20th September 2015 (Kar.). 11. Without prejudice to the aforesaid contention learned Authorised Representative, submitted, as per second proviso to section 40(a)(ia), no disallowance can be made in case the payee in terms of proviso to section 201(1) has declared such payment as his income and paid tax. Learned Authorised Representative submitted, in the present case, the payees have declared such items of gift as their income in the return of income filed by them, therefore, in terms of second proviso to section 40(a)(ia), which is retrospective in operation no disallowance can be made. For such proposition, he relied upon the following decisions:- i) CIT v/s Ansal Land Mark Township P. Ltd. [2015] 377 ITR 635 (Del.); ii) DCIT v/s UPS Jetair Express Pvt. Ltd. [2015 56 Taxmann.com 387 (Mum. Trib.); iii) Rajiv Kumar Agarwal v/s ACIT, [2014] 165 TTJ 228 (Agra); iv) DCIT v/s Ananda Marakala, [2014] 150 ITD 323; v) Brijgopal Madhusudan Bhattad v/s ITO, [2015] 155 ITD 90 (Nag. Trib.); and vi) Modi Builders v/s JCIT, [2015] 69 SOT 758 (Pune Trib.). 12. The learned Departmental Representati....
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.... such a case, such person, who would then be an assessee before the Department, would be entitled to adjustment of the amount so deducted as TDS on behalf of the said assessee. When no payment is made by BBMP to the land owner in terms of money, such deduction is neither possible nor is conceived under section 194LA." 14. Thus, applying the principles laid down in the decisions referred to above, we are of the view that since the payment made by the assessee is in kind, the provisions of section 194J are not applicable. Accordingly, allowing assessee's claim, we delete the addition made by the Assessing Officer. Ground no.3, is allowed. 15. In ground no.4, assessee has challenged the disallowance of Rs. 2,39,39,631, out of advertisement and publicity expenses. 16. Brief facts are, on verifying the details submitted by the assessee, the Assessing Officer found that assessee has debited an amount of Rs. 2,62,77,421, on account of advertisement and publicity expenses for the movie "Billu Barber". Referring to rule 9A of the Income Tax rules, 1962, the Assessing Officer observed that expenditure incurred in connection with advertisement of film after its certification by the Board o....
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.... it is not disputed by the Department that the assessee has incurred the expenditure towards advertisement of the movie in the normal course of business. That being the case, even though it cannot be considered as part of cost of production in terms of rule 9A, but at the same time, it cannot be denied that the expenditure incurred was in connection with the production of the movie, hence, is business expenditure. It is observed, identical dispute came up for consideration before the Tribunal, Mumbai Bench, in Dharma Productions Pvt. Ltd. v/s DCIT. The co-ordinate bench following the decision of the Hon'ble Madras High Court in CIT v/s Prasad Productions Pvt. Ltd., [1989] 179 ITR 147 (Mad.) and the decision of the Tribunal, Mumbai Bench, in Mukta Arts Pvt. Ltd. v/s ACIT, [2015] 105 ITD 533 (Mum.), held that the advertisement expenditure incurred after certification by Board of Film Censors cannot be included as part of cost of production, hence, provisions of rule 9A, will not apply. It was held, the expenditure incurred in regular course of business has to be allowed under section 37. The ratio laid down by the co-ordinate bench of the Tribunal is squarely applicable to the fa....
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....an to abandon such projects. Hence, it allowable as deduction since it is out of commercial expediency. Learned Authorised Representative referring to the CBDT circular dated 6th October 2015 submitted, the Board has also clarified that cost of production of an abandoned feature film has to be treated as revenue expenditure under section 37 of the Act. In support of his contention the learned Authorised Representative also relied upon the decision of the Hon'ble Jurisdictional High Court in CIT v/s Venus Records and Tapes Pvt. Ltd., ITA no.310 of 2013, judgment dated 28th January 2015 and the decision of the Hon'ble Madras High Court in B. Nagi Reddy v/s CIT [1993], 199 ITR 451 (Mad.). 26. Learned Departmental Representative relied upon the order of the learned Commissioner (Appeals) and the Assessing Officer. 27. We have considered the submissions of the parties and perused the material available on record in the light of the decisions relied upon by the learned Authorised Representative. On a perusal of the orders of the Departmental Authorities, it is observed that the Department has not disputed the fact that the assessee has incurred the expenditure. It is also not d....
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.... as there is no interest expenditure incurred by the assessee on account of investment in shares, no disallowance under section 14A can be made. For such proposition, learned Authorised Representative relied upon following decisions:- i) CIT v/s Delite Enterprises, ITA no.110 of 2009, dated 26th February 2009; ii) Cheminvest Ltd. v/s CIT, [215] 378 itr 33 (Del.); iii) CIT v/s Winsome Textile Industries Ltd., [2009] 319 ITR 204 (P&H); iv) CIT v/s Corrtech Energy P. Ltd., [2015] 372 ITR 97 (Guj.); v) CIT v/s Holcim India Pvt. Ltd., [2014] 272 CTR 282 (Del.); vi) CIT v/s Shivam Motors P. Ltd., [2014 272 CTR 277 (All.); vii) CIT v/s Lakhani Marketing Incl., [2014] 272 CTR 265 (P&H). 31. Learned Departmental Representative on the other hand relied upon the decision of the learned Commissioner (Appeals) and the Assessing Officer. 32. We have considered the submissions of the parties and perused the material available on record in the light of the decisions relied upon. On a perusal of the assessment order, we do not find any observations by the Assessing Officer to the effect that during the relevant previous years, assessee had earned / claimed any exempt income. It is t....