TaxTMI 
TaxTMI 
2019 (5) TMI 619
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....s have been filed by assessee and Revenue in ITA No. 6195/Mum/2017 and ITA No. 6291/Mum/2017 respectively for AY 2012-13, both being directed against the appellate order bearing no. CIT(A)-4/IT-26/ACIT-16(1)/14-15 dated 04.07.2017 passed by learned CIT(A) for AY 2012-13, the appellate proceedings had arisen before learned CIT(A) from assessment order dated 26.12.2014 passed by AO u/s 143(3) of the 1961 Act for AY 2012-13. 1.4 The assessee has filed an appeal in ITA No. 6196/Mum/2017 for AY 2013-14 which is directed against the appellate order bearing no. CIT(A)-4/IT.-22/ACIT-16(1)/16-17 dated 04.07.2017 passed by learned CIT(A) for AY 2013-14, the appellate proceedings had arisen before learned CIT(A) from assessment order dated 02.03.2016 passed by learned AO u/s 143(3) of the 1961 Act for AY 2013-14. 2. First, we shall take up assessee‟s appeal in ITA no. 6194/Mum/2017 for AY 2011-12. There is no appeal filed by Revenue for AY 2011-12. 3. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") in ITA No. 6194/Mum/2017 for AY 2011-12, read as under:- "1) On t....
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....e in compensation and interest free rent deposits. The assessee submitted that as per new leave & licence agreement the monthly compensation is agreed at Rs. 4,50,000/- for each such premises excluding service tax. It was explained that besides this interest free refundable rent deposit of Rs. 9,00,00,000/- was also deposited with the licensors. The receipts alongwith leave & licence agreement were duly furnished by the assessee before the AO. The assessee submitted before the AO that the said amount of Rs. 9,00,00,000/- as interest free refundable rent deposit was given out of interest free fund available with the assessee company, the details of which are as under:- (Figures in Lacs) AY 2004-05 AY 2008-09 i) Share Capital 1265.29/- 1730.59/- ii)Reserves and Surplus(Net) 3648.00/- 5273.63/- iii) Total Interest free Fund 4913.29/- 7004.22/- iv) Interest free Refundable Deposit 200.00 700.00 The assessee also relied upon the presumption available wherein if interest free funds available are more than interest free refundable rent deposit, then it will be presumed that the assessee has made deposit of interes....
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....ter plate is only a raw material, the cost of purchase of the raw material is allowable deduction in evaluating the gross profit derived in the manufacture and sale of the copy. In order to produce and market the audio cassettes under its logo "TIPS'' Assessee Company have to purchase audio rights of various films from various producers of feature films for which advances have to be paid on execution of the written agreement from time to time, as the completion of feature film takes approx. 15 to 24 months. Accordingly the Assessee Company had paid advance of Rs. 65,00,000/ to the said producer in the financial year 2002-2003 for acquisition of Audio Rights of music feature film of Production No. 7. Assessee Company had various meetings and discussions with the above said party to recover an amount of Rs. 65,00,000/-. Finally on March 2004 assessee company had reached an understanding to create an lien Overseas Territory of the Feature Film "DIL CHURAKE CHAL DIYE' produced by M/s. Karishma International and assigned to M/s RAMNORD RESEARCH LABORATORIES PVT LTD. In terms of the said letter of understanding dated 22nd March, 2004 it had been mutually agr....
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....onal has discontinued the film production business and as the advance payment towards Audio Rights has been made in the financial year 2002-2003, the said debt has become time barred under the law of limitation Act, and therefore the said amount cannot be legally recoverable from the above said party. Though the Assesses Company had various meetings and discussions with the said party for the recovery of the above amount, but the said party has refused to make payment of the balance amount advanced for acquisition of Audio Rights. The Assessee Company has no other recourse but to write off the said amount as business loss. In view of the above facts and considering the fact that the advance paid to the said party is towards securing raw material for the manufacture of its product the same have become irrevocable and accordingly the said amount have been written off in the books of accounts by debiting in profit and loss. It is submitted that the advance towards acquisition Audio Rights is for bona fide purpose of the Assessee business, as such the same be allowed as business loss." 6.2. The AO rejected the contentions of the assessee by holding that the said amount whic....
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.....Y.2004-05 and Rs. 7004.22 lakhs in A.Y.2008-09 and Interest-free Refundable deposit of Rs. 2 crores in A.Y.2004-05 and Rs. 7 crores in A.Y.2008-09 but has not explained as to how such Share Capital and Reserves & Surplus and Refundable deposits were given to the wives of Directors whereas the Assessing Officer has demonstrated that deposits have been given out of business related transactions. The Ld. A.R. has not refuted this factual finding of the Assessing Officer. Therefore, the reply and representation of the Appellant is found to be very vague and general in nature. The argument that interest free deposit has been given from interest free fund, is of no avail because no such truth is there as such deposit of Rs. 9 crores has been given from business transactions. It can be seen from the Balance Sheet of F.Y.2007-08 that shareholder's fund including Reserves & Surplus of Rs. 7004.22 lakhs have been utilized for Inventory of Rs. 2331.83 lakhs, Sundry Debtors of Rs. 101.81 and Cash & Bank Balance of Rs. 3535.43. Further, the Gross Block of Assets as on 31.03.2008 is of Rs. 1755.73 lakhs. Thus, it is very evident that Share capital and Reserves & Surplus of Rs. 7004.22 lakhs....
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.... was held by the Hon'ble Delhi High Court that there was no substantial question of law arises for consideration. Here is not the case like that. Thus, none of the cases is applicable to the facts of the case. In this case, as observed earlier, the Appellant has not demonstrated in facts of the business expediency hence, amount/loan/fund diverted to related person having element of interest is to be taken into consideration for disallowance. For this propositions reference may be had of S.A. Builders Ltd. vs. CIT 288 ITR 1(SC), Madhav Prasad Jatia vs. CIT 118 ITR 200(SC). It can be seen from the set of facts that in spite of giving good rent of Rs. 4,50,000/- per month to the wives of the Directors, such huge amount of Rs. 9 crores has been given for no business purposes. Thus, fund has been given to the wives of the Directors without charging of interest hence, corresponding interest expenditure is disallowable. For this proposals reliance is placed in the following case laws :- "Highways Construction Co. Pvt Ltd. vs. ClT(Gau) 199ITR 702 CIT vs. India Silk House (Mad.) 152 of the Income-tax Rule, 1962 79 Marolia & Sons Vs. CIT(All) 129 of the Income-....
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.... CHAL DIYE" produced by the said party M/s. Karishma International and assigned to M/s. RAMNORD RESEARCH LABORATORIES PVT LTD. In term of the said letter of understanding dated 22.3.2004, it had been mutually agreed that the appellant company had lien on the OVERSEAS TERRITORY of the above said feature film to the extent of the amount of Rs. 65,00,000/-. Xerox copy of the Letter of Arrangement dated 22.3.2004 has been placed on records at the time of assessment proceedings. Appellant Company only could recover an amount of Rs. 45,00,000/- from the OVERSEAS RIGHTS OF THE FILM "SHADI KARKE PHAS GAYA YAAR" from Redsun Exports Pvt. Ltd., on behalf of M/s. Karishma International. Copy of the letter dated 31st July 2004 is placed on records at the time of assessment proceedings. Thereafter, Appellant company rigorously followed with M/s. Karishma International for the recovery of balance amount of Rs. 20,00,000/- but the said party expressed their inability to make further payments as they suffered heavy losses in their various film productions. In fact the said production house had discontinued the business activities of film production, therefore, the advances become irrecover....
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....g to the Appellant, it could recover only an amount of Rs. 45 lakhs from the Overseas Rights of other Film namely, "Shadi Karke Phas Gaya Yaar" from M/s. Redsun Exports Pvt. Ltd. In support of this contention, the Assessee has submitted a copy of letter dated 21.07.2004. For rest of amount of Rs. 20 lakhs, it is submitted that the same was not recovered from M/s. Karishma International because of heavy loss suffered by them. M/s. Karishma International has discontinued the business activities of Film Production hence, according to the Assessee, such an amount of Rs. 20 lakhs becomes Bad debt hence, allowable expenditure. This contention of the Appellant is not tenable because under the Income-tax Act, the allowable Bad debt should be one which has already been included in the Income in earlier year. Sec.36(vii) r.w.s.36(2) is very specific over such issue. Since the Assessee has never shown an amount of Rs. 65 lakhs or Rs. 20 lakhs as Income from earlier year, no such advance could be allowable as Bad debt. The contention that it should be allowed u/s.37 can also not be accepted because of the facts of the case. It can be seen from the admission of the Appellant that it had given R....
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....ed by learned CIT(A), the assessee has filed an appeal before the tribunal challenging appellate order of learned CIT(A) on both the aforesaid issue. The Ld. Counsel for the assessee submitted that the assessee is in the business of manufacturing and sale of Audio Cassettes & CDs, Production and distribution of features film. The learned counsel for the assessee submitted that the assessee paid Rs. 65,00,000/- to M/s. Karishma International to acquire audio rights for the new film to be produced by Karishma International but the said M/s Karishma International could not produce the film due to losses and closure of business. It was submitted that the assessee in order to secure its business interests got M/s. Karishma International to create lien on the overseas rights of another film‟ Dil Churake Chal Diye‟ which was later renamed as "Shaadi Kar Ke Phas Gaya Yaar‟. It was submitted that M/s. Redsun Exports P. Ltd. was under liability to pay to the assessee to the tune of Rs. 65,00,000/- under this agreement on and behalf of M/s Karishma International and it was submitted that ultimately an amount of Rs. 45,00,000/- could be recovered from M/s Karishma Internation....
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....s is revenue in nature. It was submitted that the regular business of the assessee is to deal with manufacturing and sale of Audio Cassettes, CDs, Production and distribution of feature films. It was submitted that these are normal business expenses and the loss incurred is business loss or else it should be treated as bad debt of the assessee company. Thus it was prayed by learned counsel for the assessee that the said loss of Rs. 20 lacs be allowed as deduction from business income either as business loss or bad debts. It was submitted that learned CIT(A) did not allowed the same as bad debt on the ground that the assessee did not showed the said amount as income in earlier years. It was submitted that learned CIT(A) treated this advance written off as capital loss. It was submitted that the said amount was paid by assessee in ordinary course of its business and the other party could not fulfil its business commitment and hence it should be allowed as business loss. The assessee relied on the decision of Hon‟ble Bombay High Court in the case of Harshad J. Choksi v. CIT reported in (2012) 349 ITR 250 (Bom). 8.2 On the second issue, it was submitted by learned counsel for ....
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....2003-04, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13 which are all placed in paper book at page 6-22. Our attention was also drawn to statement of net worth of the assessee company from financial year 2004-05 to 2014-15, which is placed in paper book/page 5. These evidences are filed by the assessee to substantiate that the interest free funds available with the assessee were higher than interest free refundable rent deposit of Rs. 900 lacs. The Reliance was placed by learned counsel for the assessee on the decision of Hon‟ble Bombay High Court in the case of Reliance Utilities and Power Limited(supra) and contentions were made that presumption will apply that the assessee made the payments out of own interest free funds available with it. It is submitted that similar additions were made in AY 2012-13 and 2013-14 wherein the assessee has filed an appeal before the tribunal which is tagged with this appeal of the assessee for AY 2011-12 and it is claimed that similar contentions as were made for this year shall apply to those two years which are also before the tribunal. It was submitted that audited Balance Sheet, profit and Loss and net worth figures for those ye....
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.... Rs. 20 lacs could not ultimately be recovered and was claimed as business loss by the assessee during the impugned assessment year or in alternative claim is made by the assessee to allow the said amount of Rs. 20 lacs as bad debts u/s 36(1)(vii) read with Section 36(2) of the 1961 Act. The contentions of the Revenue in rejecting the claim of the assessee is that this payment towards acquiring audio rights of the proposed feature film got changed to overseas rights of the feature film "Dil Churake Chal Diye‟, which is capital in nature and loss thereof is capital loss which cannot be allowed as revenue loss while computing income of the assessee. It was held by learned CIT(A) that the business of the assessee is not to deal in the overseas rights of the feature film and non recoverability of money is loss of capital and cannot be allowed as revenue loss as it is a capital loss.It is also averred by Revenue that the said amount of Rs. 65 lacs which was advanced by the assessee or an amount of Rs. 20 lacs which ultimately could not be recovered by the assessee, was not included by the assessee as its income while computing income chargeable to tax in earlier years or even duri....
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....national is not placed on record. The agreement of arrangement dated 02.03.2004 entered into by and between assessee and Karishma International is to settle and resolve disputes and differences which arose between assessee and M/s Karsihma International over a period of time in relation to feature film "Dil Churake Chal Diye‟. Perusal of the ledger account of M/s Karishma International in the books of assessee will reveal that first payment of Rs. 30 lacs was made by the assessee to M/s Karishma International on 09th June 1999 itself i.e. the date of original agreement dated 09.06.1999. b) There arose some disputes and differences between assessee and M/s Karishma International while implementing original agreement dated 09.06.1999 relating to film "Dil Churake Chal Diye" The complaint was also filed by the assessee with M/s Film Combine against said M/s Karishma International. The disputes and differences between the assessee and M/s Karishma International stood resolved vide this agreement of arrangement dated 02.03.2004. c) There were three more parties found mentioned in the said agreement of arrangement dated 02.03.2004 who were having disputes and diff....
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.... the assessee had additionally agreed to pay Rs. 45 lacs each to Mrs. Renu K. Taurani and to Mrs. Varsha K. Taurani, aggregating to Rs. 90 lacs. Further, it was agreed by the assessee to pay Rs. 70 lacs to Mega Bollywood Private Limited. Now, under this settlement agreement dated 02.03.2004, it is agreed between the assessee and M/s Karishma International that the assessee will pay Rs. 45 lacs each to Mrs. Renu K. Taurani and to Mrs. Varsha K. Taurani, aggregating to Rs. 90 lacs, out of the aforesaid advance of Rs. 100 lacs agreed by assessee to be paid to M/s Karishma International as refundable advance vide this agreement of arrangement dated 02.03.2004, at the time of effecting of delivery to assessee by Karishma International of Master Tapes/Original Recording Tracks(Dats.) containing all songs, dialogues and musical works of the said picture "Dil Churake Chal Diye‟. The said M/s Karishma International agreed to deliver to assessee aforesaid master tapes/original recording tracks etc on signing of this agreement of arrangement dated 02.03.2004. The said M/s Karishma International agreed and assured assessee vide this agreement of arrangement dated 02.03.2004 to release th....
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.... refundable advance which assessee agreed to release to Karishma International, Rs. 90 lacs were paid to Mrs Renu K Taurani and Mrs Varsha R Taurani, wives of Directors to settle their inter-se disputes and differences with M/s Karishma International. Whether the said advances were released keeping in view commercial expediency or was a gratuitous payment has not been verified by the authorities below. The said advance was secured by refund cheques of Rs. 100 lacs issued by M/s Karishma International in favour of the assessee and whether these cheques stood cleared from bank also has not been verified by the authorities below. The balance of Rs. 10 lacs advance out of fresh advance of Rs. 100 lacs granted by assessee to M/s Karsihma International was adjusted against Rs. 75 lacs now recoverable owing to excess advance keeping in view reduced consideration of Rs. 55 lacs for acquisition of audio rights of the feature film "Dil Churake Chal Diye‟, vide agreement of arrangement dated 02.03.2004, instead of original agreed consideration of Rs. 280 lacs vide original agreement dated 09.06.1999. This left the balance recoverable of Rs. 65 lacs by assessee from M/s Karishma Internat....
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....ispute and difference or was this additional advance of Rs. 100 lacs was gratuitous payment by the assessee to said M/s Karishma International to protect the interest of wives of the Director of the assessee company. It is also important to understand the fate/clearance of cheques of Rs. 100 lacs ( 10 cheque of Rs. 10 lacs each) given by said Karishma International to the assessee as refund of this additional advance of Rs. 100 lacs. k) The agreement of arrangement dated 02.03.2004 also provides that M/s Karishma International acknowledged that it is liable to pay to assessee Rs. 65 lacs as well fresh additional advance received Rs. 100 lacs received by it from assessee, wherein M/s Karishma International agreed that it will pay Rs. 65,00,000/- to the assessee before effecting delivery of any prints of the said picture for any of the territories of the world including the Overseas territories. M/s Karishma International agreed that it will not release, distribute, exhibit or exploit the said picture "Dil Chuarke Chal Diye‟ in any of the territories of the world directly or indirectly until this amount of Rs. 65 lacs is first paid to the assessee. M/s Karishma Interna....
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....is letter dated 22.03.2004 written by Karishma International to M/s Ramnord Research Laboratories Private Limited is placed in paper book at page 75. The said laboratory vide letter dated 08.04.2004 written to the assessee acknowledged that it will not deliver negatives of the said feature film "Dil Churake Chal Diye‟ for overseas territory unless the assessee is paid Rs. 65 lacs.The said letter is placed in paper book at page 76. o) On page 77 of the paper book is a letter written by Redsun Exports Private Limited to M/s Karishma International with copy to the assessee acknowledging that Rs. 65 lacs shall be paid on behalf and on account of M/s Karishma International to the assessee, which is in accordance with the understanding vide inter-se agreement Karishma International had with Redsun Exports Private Limited, dated 20.08.1999 for overseas circuit. p) Then there was further change in understanding between M/s Karishma International with assessee, vide fresh agreement of arrangement dated 18.03.2005, which is placed at page 78 of paper book. In this revised agreement of arrangement dated 18.03.2005, it is recorded that release of film "Dil Churake Chal ....
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....y of aforesaid cheque of Rs. 45 lacs is also placed in paper book at page 82. 10.6 Thus, what transpires from the analysis of the above documents which are placed on record before us is that the facts were not properly explained by the assessee before the authorities below nor were these facts properly appreciated by the authorities below. Keeping in view our aforesaid detailed analysis of the material on record, it is now required to look into, as follows: a) The original agreement between assessee and M/s Karishma International dated 09.06.1999 is required to be placed on record by the assessee. b) The commercial expediency and prudence in further advancing Rs. 100 lacs by the assessee to said M/s Karishma International vide agreement of arrangement dated 02.03.2004 needs to be explained, more so when the amount already advanced was Rs. 130 lacs which was in excess of reduced consideration of Rs. 55 lacs for acquiring audio rights of feature film "Dil Churake Chal Diye‟ and the said additional advance of Rs. 100 lacs is disbursed by assessee for and on behalf of Karishma International to the tune of Rs. 90 lacs to wives of Directors of the assessee comp....
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....of the case and as culled out by us in this order in preceding para's. The AO is directed to give proper and adequate opportunity of being heard to the assessee in accordance with principles of natural justice in accordance with law in set aside proceedings. The AO is directed to admit all evidences/explanations submitted by the assessee in set aside proceedings before the AO its defence which shall be then adjudicated by the AO on merits in accordance with law. We have also noted that the tribunal vide orders dated 06.08.2018 in assessee‟s own case in ITA no. 1894/Mum/2017 for AY 2010-11 has held that expenditure incurred for purchase of audio video rights is revenue in nature. This ground of appeal being ground no. 1 filed by the assessee in memo of appeal with tribunal is allowed for statistical purposes. We order accordingly. 11. Coming to the second issue, we have observed that the assessee has taken on leave & licence basis commercial premises bearing numbers 501-601, Durga Chambers, 278/E, Linking Road, Khar West, Mumbai 400052 from Mrs. Renu K Taurani and Mrs Varsha R. Taurani, wives of the Director of the assessee company for a period of three years w.e.f. 01.04.2....
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....ee refundable rent deposit granted by licensee of the similar commercial premises in vicinity in favour of licensors of the premises. No such comparables are brought on record by the authorities below to prove that these interest free refundable rent deposits were unconscionably high defying commercial expediency and only bald statement is made that the said rent deposits are excessive and in the absence of cogent incriminating material, the interest free refundable rent free deposit of Rs. 9.0 crores cannot be held to be excessive or exorbitant. The assessee has placed all leave and license agreements on record in paper book filed with tribunal at page 23-42. 11.2. We have gone through audited financial statements of the assessee for financial year 2003-04 and also from financial year 2007-08 to financial year 2012-13, which are all placed in paper book filed with the tribunal at page 6-18. The perusal of these financial statements clearly shows that the assessee has its own interest free funds available with it which are more than the interest free refundable rent deposit released by the assessee in favour of licensors of the aforesaid commercial premises.The net worth stateme....
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....in ITA no. 6194/Mum/2017 for AY 2011-12 is partly allowed as indicated above. 13. Since the issue involved in appeal(s) in ITA no. 6195 to 6196/Mum/2017 for AY 2012-13 and 2013-14 respectively are similar to the issue in appeal in ITA no. 6194/Mum/2017 which is concerning disallowance of interest of Rs. 1,08,00,000/- being interest@12% on rent deposit of Rs. 9.0 crore granted by the assessee for taking commercial premises on leave and license basis, our decision in ITA No. 6194/Mum/2017 for AY 2011-12 shall apply mutatis mutandis to appeals of the assessee in ITA no. 6195 to 6196/Mum/2017 for AY 2012-13 and 2013-14 respectively. The appeals of the assesee‟s in ITA No. 6195 and 6196/Mum/2017 for AY 2012-13 and 2013-14 respectively are allowed. We order accordingly. 14. Now we will take up appeal of the revenue in ITA no. 6291/Mum/2017 for AY 2012-13. 14.2. The grounds of appeal raised by the revenue in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:- "1. "Whether on the facts, in the circumstances of the case and as per law, the Ld. CIT(A) has erred in directing to delete the addition ....
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.... its logo "TIPS' for which they have to purchase audio rights of various films from different producers and from its own productions of motion pictures which ultimately are reproduced and transmitted in audio cassettes either manufactured by the assessee firm or manufactured or purchased from outside on job work basis. In view of the above facts of case, it is clear that acquiring of audio rights is the basic ingredient for production of the Audio Cassettes without which pre-recorded cassettes of motion pictures cannot conceived as such the same is to be treated as part and parcel of raw material used for manufacturing the Cassettes. Since Audio rights is itself an item to be used for production and not an equipment to help the production, expenses incurred on this items directly vary with the turnover of the goods produced and sold as evident from the enclosed statement of purchases of audio rights and sales for past three years. As such, the said expenses is rightly claimed as manufacturing expenses and debited to trading account (to the extent of cassettes released during the year) and claimed as expenses for amount paid to producers or during the year purchase of a....
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....sound track for it is outdated very fast. The master plate of one could not substituted for another and for every new music recording a totally different plate is required, indicated very clearly that the plate is nothing more than a raw material. It is contended that merely for the reason that the payment of the master plate is paid in a lump sum format, it does not make any difference because, without the contents of the plate, the plate are worthless and it is for the contents that the price is paid and it can never be equated with purchase of any technical know how. It is further contended that nor than the payment, the important fact that has to be given consideration of is nature of the item that is acquired. Since the plate, is a basic material to facilitate the copying of, the payment made for it, is nothing more than the revenue. We once again reiterate that unlike the tangible and visible products that have raw material that is either visible, tangible the present product is reproduction of sound music etc. embedded into magnetic tapes or gramophone records. The payment of audio rights is relatable to the magnetic tapes or the gramophone records or compact discs ....
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..... T.Act. In view of the facts and considering the nature of expenses of the assessee all the expenses incurred by purchase of audio rights are of the revenue natured and the same is allowable in business expenses as claimed by the assessee. We respectfully submit in view of the above Facts of the case of the case, we pray that you be kind enough to follow the decision of ITAT an allow the audio rights as claimed as business expenses u/s 3 7(1) of the I. T.Act." 14.4 The AO rejected the contentions of the assessee by holding that the Revenue has not accepted the decision of the ITAT, Mumbai which is challenged by Revenue before Hon‟ble Bombay High Court, wherein the AO vide assessment order dated 26.12.2014 passed u/s 143(3) of the 1961 Act, decided the issue against the assessee by holding as under:- "5.3 The issue as to whether audio expenses of Rs. 3,10,99,925/- debited to the P&L account are capital or revenue in nature has been deliberated in detail in the earlier assessment years right from A.Y.1990-91. In this regard, the stand of the Revenue is that these expenses are of enduring nature and therefore, should be treated as capital expenses.....
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....al to be revenue expenses: S.No. AY ITA No Order dated 1. 2004-05 ITA no. 2407/Mum/2008 06.08.2009 2. 2005-06 ITA no. 599/Mum/2009 29.01.2010 3. 2006-07 ITA no. 5535/Mum/2009 10.12.2010 4. 2007-08 ITA no. 3503/Mum/2010 10.11.2010 5. 2008-09 ITA no. 6925/Mum/2011 29.01.2013 6. 2009-10 ITA no. 7222/Mum/2012 14.02.2014 7. 2010-11 ITA no. 1894/Mum/2017 06.08.2018 Both the parties did not bring to our notice any decision of Hon‟ble Bombay High Court with respect to appeals filed by Revenue on this issue challenging the aforesaid appellate order of the tribunal. 17. We have considered rival contentions and perused the material on record included cited case laws. We have observed that the assessee has paid Rs. 3,10,99,925/- for purchase of audio rights which was claimed as Revenue expenses. The assessee is engaged in the business of manufacturing and sale of audio Cassettes & CDs, Production and distribution of features films. 17.2 We have observed that the tribunal in assessee‟s own case in earlier years has held that these expenses incurred f....
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....he assessee as revenue expenditure. The income-tax department has been since assessment year 1990-91, disallowing the claim of the assessee on the ground that the expenditure is capital in nature. The Tribunal for all the earlier assessment years has been deciding the issue in favour of the assessee. The assessing officer made the addition observing at paragraph 3.3 on page 7 that the revenue has not accepted the decision of the Tribunal and has filed an appeal before Hon'ble Bombay High Court and that the addition is made by following the stand of the revenue in the earlier years to keep the issue alive. The first appellate authority applied the decision of the tribunal and deleted the addition. We see no infirmity in the same. In fact, ground IB of the revenue appeals states that the ground is taken because the department has not accepted the decision of the Tribunal. In view of the above discussion, we respectfully apply the decision of the coordinate bench of the Tribunal in the assessee's own case for earlier years and dismiss the ground taken by the revenue. In view of the same, ground of appeal No. 1 is rejected," 5. As no distinguishing facts have been brou....
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....iculars 9-6-1999 Cr BANK OF BARODA [20034] Ch. No.: 254385 ISSUED TO PARTY TOWARDS THE SIGNING AMOUNT OF THE AUDIO RIGHTS OF THE FILM PRODUCTION NO. 07. 9-7-1999 Cr BANK OF BARODA [20034] Ch. No.: 254498 ISSUED TO PARTY AGAINST THE AUDIO RIGHTS OF THE FILM PRODUCTION-NO. 07. Dr Closing Balance Page 1 Vch No. Debit Credit 06/0021 30 J0,000.00 Payment 07/0034 20,00,000.00 50,00,000.00 50,00,000.00 50,00,000.00 50,00,000.00 50,00,000.00 Payment 10,00,000.00 Payment 10,00,000.00 1-4-2000 Cr Opening Balance 11-10-2000 Cr BANK OF BARODA [20034] Ch. No. 292378 ISSUED TOWARDS AUDIO RIGHTS OF PRODUCTION NO 7 16-10-2000 Cr BANK OF BARODA [20034] Ch. No.: 292379 ISSUED TOWARDS AUDIO RIGHTS FOR PRODUCTION NO 7 15-1-2001 Cr BANK OF BARODA [20034] Ch. No.: 293677 ISSUED TO KARISHMA INTERNATIONAL TOWARDS AUDIO RIGHTS FOR PRODUCTION NO 7 29-1-2001 Cr BANK OF BARODA [20034] Payment 10,00,000.00 Payment 5,00,000.00 Payment 75,000.00 Ch. No.: 293811 ISSUED TOWARDS AUDIO RIGHTS PRODUCTION NO 5 5-3-2001 Cr BANK OF BARODA [20034] Ch. No.: 032314 ISSUED TO ....
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....,00,000.00 20,00,000.00 65,00,000.00 65,00,000.00 20,00,000.00 Journal 5454 20,00,000.00 1-4-2010 Cr Opening Balance 31-3-2011 Dr Bad Debts trid to bad debts Being amount not receivable from party now 20,00,000.00 20,00,000.00 Document 3 K Το KARISHMA INTERNATIONAL Tips Industries Ltd., MOTION PICTURES PRODUCER 601. Durga Chambers, 6th Floor, Linking Road, Khar (W), Mumbai 400 052. Dear Sirs, Re: Film "DIL CHURAKE CHAL DIYE" 2 March 2004 We refer to the Agreement dated 9th June 1999 signed and executed by and between you and ourselves, hereinafter referred to as "the said Agreement", and the disputes that have arisen between you and ourselves in connection therewith as disclosed in the correspondence exchanged between you and ourselves and our respective advocates and the Complaint filed by us against you with Film Makers Combine in the matter of the said disputes and to the talks that we now have had with you and Ms Renu K. Taurani, Ms Varsha R. Taurani and Dashmesh International Ltd. We are pleased to place on record that all the disputes and differences between you an....
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.... Pvt. Ltd. have waived their claim for Rs.70,00,000/- against you and that they have no claim of any nature whatsoever against you; d) On the basis of the consideration amount having been mutually agreed to be a sum of Rs.55,00,000/-, there shall remain the balance of Rs.75,00,000/-, out of the said sum of Rs. 1,30,00,000/-, which has been paid to you in excess and after crediting a sum of Rs. 10,00,000/-, being the balance out of the said advance amount of Rs.1,00,00,000/-, towards the said sum of Rs.75,00,000/-, there remains a sum of Rs.65,00,000/-, which is liable to be refunded by us to you, apart from the said advance amount of Rs.1,00,00,000/-. We shall pay to you the said sum of Rs.65,00,000/- (Rupees Sixty Five Lakhs only) before effecting delivery of any prints of the said picture for any of the territories of the world including the Overseas territories and we agree that we shall neither release, distribute, exhibit or exploit the said picture in any of the territories of the world nor cause the same to be done directly or indirectly until and unless the said sum of Rs.65,00,000/- is first paid to you in full and that we....