TaxTMI 
TaxTMI 
2017 (1) TMI 1140
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....1961 (in short 'the Act') vide order dated 10.12.2011, wherein the income of the assessee was determined at Rs. 61,29,100/- in view of the following additions/disallowances: - (i) Disallowance of interest charges Rs. 5,67,403/- (ii) Disallowance of loss on film finance Rs. 6,38,615/- (iii) Disallowance of claim of bad debts written off Rs. 12,56,664/- (iv) Addition on account of deemed dividend under section 2(22)(e) Rs. 29,78,075/- Apart from this short term capital gains on sale of property was assessed at Nil. 2.2 Aggrieved by the order of assessment dated 10.12.2010 for A.Y. 2008- 09, the assessee preferred an appeal before the CIT(A)-17, Mumbai, who disposed off the appeal vide the impugned order dated 31.10.2011 allowing the assessee partial relief. 3. Revenue and the assessee, being aggrieved by the order of the CIT(A)-17, Mumbai dated 31.10.2011, have preferred cross appeals which will be disposed off in seriatum hereunder: - 4. Assessee's appeal in ITA No. 8819/Mum/2011 for A.Y. 2008-09 4.1 In this appeal the assessee has raised the following grounds: - "1. The learned CIT has erred in confirming the d....
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....essee except for raising this grounds has failed to file any documentary evidence to establish the claim of losses incurred in financing of the films 'Jungle Love', 'Dudhwali' and 'Autowali' amounting to Rs. 6,38,615/-. Finding no reason to interfere with the finding of the learned CIT(A) on this issue, we uphold the same and consequently dismiss grounds 1 and 2 raised by the assessee. 5. In the result, assessee's appeal is dismissed. 6. Revenue's appeal in ITA No. 55/Mum/2012 for A.Y. v2008-09 6.1 In this appeal, Revenue has raised the following grounds: - "1. On the facts and circumstances of the case and in law, the Ld CIT(A) erred in deleting the addition of Rs. 33,95,000/- made by the A.O. u/s 2(22)(e) of the IT Act 1961, without considering the fact that the provisions of Sec 2(22)(e) are clearly applicable in this case. 2. On the facts and circumstances of the case and in law, the Ld CIT(A) has failed to appreciate the CBDT's circular No 495 dated 22.09.1987, wherein the provisions of section 2(22)(e) have been explained as under: "The new provision would, therefore, be applicable in a case where a shareholder has 10 percent or more of the equity capita....
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....al contentions and perused and carefully considered the material on record; including the judicial pronouncements cited. On a careful perusal of the order of the Coordinate Bench of the Tribunal in the assessee's own case for A.Y. 2006-07 in ITA No. 3852/Mum/2010 dated 20.05.2011, we find that on similar facts the Coordinate Bench in the aforesaid order for A.Y. 2006-07 (cited supra) has deleted the addition made by the AO on account of deemed dividend under section 2(22)(e) of the Act holding under at paras 7 to 9 thereof: - "7. We have carefully considered the submissions of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that the assessee-company is neither share holder nor the beneficial share holder in the company namely M/s Gazebo Developers Pvt.Ltd. In ACIT vs. Bhaumik Colour P. Ltd. [2009] 118 ITD 1 (MUM.)(SB), it has been held by the Special Bench vide para -41, appearing at page 27, of the report as under: "On the first question: Deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person ....
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.... on account of write off of bad debts standing in the name of the film 'Ganga Jamuna'. The learned A.R. reiterated the submissions put forth before the learned CIT(A) which are extracted at para 4.2 of the impugned order. According to the learned A.R. of the assessee, the learned CIT(A) has rightly observed that the assessee apart from being engaged in the business of film making, was also as per the Article 22 of the Memorandum of Association (MOA) involved in lending and advancing money in the business of film financing which brings it within the purview of exception under section 36(2)(i) of the Act and it is in this context that moneys were advanced to M/s. Mayura Enterprises for making the Bhojpuri film 'Ganga Jamuna'. It is submitted that even alternatively, since these amounts have been advanced in the normal course of the assessee's business of film making the said loss is to be allowed under section 28/37 of the Act. 8.3 We have heard the rival contentions and perused and carefully considered the material on record. From an appreciation of the material on record, it is not disputed that the assessee company is admittedly engaged in the business of film making and financ....