1994 (6) TMI 11

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....720 claimed as business loss should be allowed, while computing the income of the assessee for the year 1972-73 ? (2) Whether the Appellate Tribunal's finding that the assessee had advanced money in the course of the money-lending business is based on valid materials and is a reasonable view to take on the facts of the case ?" The respondent-assessee is a registered partnership firm, carrying on business in film distribution. As per the agreement entered into with Messrs. Visalakshi Films on September 30, 1964, the assessee advanced a sum of Rs. 80,000 and in consideration of the amount, the assessee was to get exhibition and exploitation rights of the picture "Karuppu Panam", for distribution in Madurai and Ramanathapuram Districts, ....

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....that the advances made by the assessee were not intended to be deposits for requiring the exhibition and exploitation rights, but they were only in the nature of advances made in the nature of lending moneys for interest. The Appellate Tribunal also indicated the names of certain film producers, to whom the assessee advanced moneys. According to the Appellate Tribunal the two film producers, namely, Messrs. Visalakshi Films and Messrs. Kamalalayam Pictures, had failed to repay a portion of the advance and, hence, the same should be allowed as "business loss". Mr. N. V. Balasubramanian, learned junior standing counsel for the income-tax cases, placing implicit reliance on the decision in CIT v. Coimbatore Pictures (P.) Ltd. [1973] 90 ITR ....

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.... such a situation, the Revenue, as seen from the order, did not appear to have refuted the transactions referred to therein, as well as the statements mentioned about the course of business activity of the assessee, traceable to film financing. Such being the case, we rather feel that it is too much to contend at this stage that the finding so recorded by the Appellate Tribunal is not based on materials relevant to such a finding. In this view of the matter, we hold that the Appellate Tribunal's finding that the assessee had advanced moneys in the course of moneylending business is based on valid materials and is a reasonable view to take, on the facts and in the circumstances of the case and, accordingly, we answer the second question. ....