TaxTMI 
TaxTMI 
2025 (7) TMI 296
X X X X Extracts X X X X
X X X X Extracts X X X X
....purchase of Actor Rights of Sh. Amitabh Bachchan. 4. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 3. The relevant facts giving rise to this appeal are that the assessee, a company, is engaged in the business of production of movies and serials/ TV programs. Originally, the assessment at loss (-) of Rs. 3,27,50,903/- was completed under section 143(3) of the Income Tax Act, 1961 (Act) on 16.03.2006 by the Assessing Officer (AO) stationed at Mumbai. Subsequently, the case was reopened under section 148 of the Act by the AO, Central Circle, New Delhi on 30.03.2010. In response to the notice issued under section 148 of the Act, the assessee filed a letter to treat the original Income Tax Return (ITR) filed earlier as ITR in response to the said notice. The assessee challenged the reopening of the case on various reasoning. However, the AO did not drop the reopened assessment proceedings and completed the assessment vide order under section 143(3) r.ws 147 of the Act on 10.12.2010 taxing the excess payment of Rs. 50 crores to Lahiri and AB Corp. Ltd. (ABCL). According to the AO, prior to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....corded the earlier dispute of Lahiri with ABCL and settlement made therein under the arbitration. However, the AO, before making the disallowance, neither provided the copy of the said arbitration award to the assessee nor did he enquire into the circumstances under which such award was passed. The Ld. Counsel drew our attention to the finding of the Ld. CIT(A) that Mr. Amitabh Bachchan was commanding price of Rs. 1 Crore per episode for "Kaun Banega Crorepati" around the time when the said agreement was entered into by the assessee. Accordingly, he contended that the payment made by the assessee was not excessive as the actor's right went very high during the relevant period due to success of "Kaun Banega Crorepati". 6.1 It was further contended that the AO had not disputed the genuineness of the payment nor of the parties. It was contended that the disallowance on the ground that the payments were excessive or unreasonable could only be made under section 40A(2)(a) of the Act, and under Chapter X of the Act. The above provisions apply only if the payments were made to the related parties. In the Instant case, the assessee and Lahiri were not related parties at all and therefore,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ated without stating as to how the transactions between them had a bearing on the assessee and how the income chargeable to tax had escaped assessment in the hands of the assessee. 6.4 The Ld. Counsel submitted that the reassessment proceedings were without jurisdiction and thus the same was bad in law and illegal as the reason for reopening the assessment did not disclose the tangible material on the basis of which AO formed a belief that income of the assessee had escaped assessment. Further, there was no allegation in the said reason recorded by the AO that there was any failure on the part of the assessee to truly and fully disclose all material facts necessary for the assessment, which was a mandatory requirement under 1" proviso to section 147 of the Act as the reopening had been initiated after expiry of four years. Reliance was placed on the following decisions: * PCTT v. DSC Ltd.: 153 taxmann.com 535 (Del) * Avtec Ltd vs DCIT: 395 ITR 434 (Del) * D. T. and T. D. C. Ltd: 324 ITR 234 (Del) * Haryana Acrylic Manufacturing Co Ltd vs CIT: 308 ITR 38 (Del) * CIT v. Indian Farmers Fertilizer Cooperative Ltd: 171 Taxman 379 (Del) * Wel Intertrade (P) Ltd v. ITO 308 IT....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bad in law. Reliance was placed upon the following decisions: * ACTT vs. Dhariya Construction Co. 328 TER 515 (NC) * Chhugamal Rajpal vs S.P. Chaliha: 79 ITR 603 (SC) * Amsa India Pvt. Ltd. vs CTT: 393 ITR 157 (Del HC) 6.7 The Ld. Counsel contended that the AO had not applied his mind to the information received from the Investigation wing before reopening the assessment as evident from the reason for reopening the assessment. Our attention was invited to the decision of the Hon'ble Supreme Court in the case of ACIT vs. Dhariya Construction Company: 328 ITR 515 and the decision of the Hon'ble Delhi High Court in the case of CIT v. SFIL Stock Broking Ltd.: 325 ITR 285 to submit that the reopening was bad in the eyes of the law. Further, reliance in this regard was placed on the following decisions wherein it had been held that the reopening done on the basis of report/information received from the investigation wing without application of mind or to undertake the roving and fishing enquiries by the AO was void-ab-initio: * Signature Hotels P. Ltd. vs. ITO: 338 ITR 51 (Del. HC) * Sarthak Securities vs. ITO: 329 ITR 110 (Del. HC) * Girdhar Gopal Dalmia v. Uol and Ors: 451....