VIP EXHIBITORS, MUMBAI V. ACIT 16(2), MUMBAI

ITA 1848/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3149 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 18-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR PRAYAG JHA
• Keywords: Reopening of assessment; Depreciation; Audit objection; Cost of acquisition; Reason to believe; Reassessment proceedings
• Section: 143(3); 32; 147; 148

Judgement Text

F IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAMIT KOCHAR, AM I.T.A. NO.1848 /MUM/2014 ( / ASSESSMENT YEAR : 2005-06 M/S VIP EXHIBITORS, 1-E, NAAZ CINEMA BUILDING, DR. B.B. MARG, LAMINGTON ROAD, MUMBAI 400 007. VS. ACIT 16(2), MATRU MANDIR, MUMBAI. PAN : AAAFV 2340N ( ! / APPELLANT ) .. ( '#! RESPONDENT ) A PPELLANT BY DR. PRAYAG JHA & SHRI PRATEEK JHA R E SPONDENT BY : SHRI ABANI KANTA NAYAK $ %&' ( / DATE OF HEARING : 07-09-2015 )*+, &' ( / DATE OF PRONOUNCEMENT : 30.09.2015 [ O R D E R PER SHAILENDRA KUMAR YADAV, JM THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT (A) 27, MUMBAI DATED 16-01-2014 PERTAI NING TO A.Y. 2005-06. ITA 1848/M/14 2 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDE R:- 1) THE LEARNED CIT(A) ERRED IN HOLDING 'VALID' THE RE- ASSESSMENT PROCEEDINGS COMMENCED U/S 147 BY AO BASED ON AUDIT OBJECTION. 2) THE LEARNED CIT(A) OTHERWISE ERRED IN LAW IN HOLDING 'VALID' REASSESSMENT PROCEEDINGS ARISING DU E TO INCORRECT INTERPRETATION OF LAW. 3) THE LEARNED CIT(A) ERRED IN LAW IN CONFIRMING TH E ADDITIONS MADE BY AO IN THE ORDER PASSED U/S 143(3) RWS 147 OF INCOME TAX ACT, 1961. 4) THE LEARNED CIT(~) OUGHT TO FOLLOW THE PROVISION S OF INCOME TAX ACT, 1961 READ WITH INCOME TAX RULES, 1962 AND COMPUTE THE INCOME CORRECTLY INSTEAD OF COMPUTING INCOME IN A UNLAWFUL MANNER BY INCORRECTL Y ALLOWING DEPRECIATION ON FILM DISTRIBUTION RIGHTS ACQUIRED INSTEAD OF FOLLOWING THE PROVISIONS OF RUL E 9B OF INCOME TAX RULES, 1962. ALL THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT RESPECTFULLY SUBMITS THAT THE INCOME WAS CORRECTLY ASSESSED U/S. 143(3) AND THE REASSESSMENT PROCEEDINGS COMMENCED WAS BAD IN LAW AND THAT TOO BASED ON AUDIT OBJECTIONS. IN LAW, THEREFORE THE LE ARNED CIT(A) OUGHT TO HAVE HELD THE REOPENING BAD IN LAW. WITHOUT PREJUDICE, THE APPELLANT RESPECTFULLY FURTH ER SUBMITS THAT THE ADDITIONS MADE IS REQUIRED TO BE DELETED BECAUSE THAT HAS HAPPENED DUE TO INCORRECT APPLICATION OF PROVISION OF INCOME TAX ACT, 1961 RE AD WITH RULE 9B OF INCOME TAX RULES, 1962. ITA 1848/M/14 3 3. FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF EXHIBITION AND DISTRIBUTION OF FILMS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE YEAR ON 31-10-2005 DEC LARING NET LOSS OF RS. 37,61,626/-. ASSESSMENT WAS INITIALLY COMPL ETED U/S 143(3) OF THE INCOME TAX ACT, 1961 ON 21-03-2012 DETERMINI NG TOTAL INCOME AT RS. NIL. SUBSEQUENTLY, THE CASE WAS RE OPENED BY ISSUE OF NOTICE U/S 148 OF THE ACT AS THE ASSESSING OFFIC ER HAS REASON TO BELIEVE THAT INCOME TO THE EXTENT OF RS. 1,28,25,00 0/- HAD ESCAPED ASSESSMENT. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER OBSERVED THAT MINIMUM GUARANTEE A MOUNT OF RS. 1,81,00,000/- WAS PAID TO M/S SOHAIL KHAN DISTRIBUT ION AND IT HAD DEBITED RS. 84,02,740/- TO ITS PROFIT AND LOSS ACCOUNT TOWARDS LOSS ON EXHIBITION OF THE FILM DIL NE JISE APNA KA HA. THE ASSESSEE HAD ACQUIRED INTANGIBLE ASSET IN THE FORM OF DISTRIBUTION RIGHTS OF THE SAID FILM FOR A PERIOD OF FIVE YEARS. THE RECEIPTS FROM THE SAID FILM WERE SPREAD FOR FIVE YEARS AND THE EN TIRE RECEIPTS WERE NOT RECEIVED BY THE ASSESSEE IN THE PREVIOUS YEAR U NDER CONSIDERATION. ACCORDING TO THE ASSESSING OFFICER AS PER THE PROVISIONS OF SECTION 32(1)(II) READ WITH RULE 5 OF THE INCOME TAX RULES, 1962, THE DISTRIBUTION RIGHTS BEING INTANGI BLE ASSET IS ELIGIBLE FOR DEPRECIATION @ 25% ONLY AND NOT THE EN TIRE EXPENSES INCURRED, HENCE, AN AMOUNT OF RS. 45,25,000/- ONLY (25% OF RS. 1,81,00,000/-) WAS ALLOWED AS DEDUCTION TOWARDS PAY MENTS OF MINIMUM GUARANTEE OF RS. 1,81,00,000/- OUT OF RS. 1 ,35,75,000/- WAS DISALLOWED AND ADDED BACK TO THE TOTAL INCOME O F THE ASSESSEE. ITA 1848/M/14 4 THE MATTER CARRIED BEFORE THE FIRST APPELLATE AUTHO RITY WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE CONFIRM ED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING AS UNDER:- AS SEEN FROM THE ABOVE, HON'BLE BOMBAY HIGH COURT IN THE TEETH OF THE PROVISIONS OF RULE 9B HAS CLEARLY HELD THAT ADMISSIBILITY OF DEDUCTION PROPORTIONATE TO THE INCOME EARNED/ COLLECTIONS MAD E DURING THE YEAR IN WHICH DEDUCTION IS SOUGHT IS THE RIGHT METHOD OF CALCULATION OF PROFITS FAILING WHICH THE TRUE PROFITS MAY GET DISTORTED. EVEN IN THE PRESENT CASE , I FIND THAT THE APPELLANT HAS NOT FULLY CREDITED THE AMOUNT ON EXHIBITION OF THE FILM OR FOR THE RIGHTS OF EXHI BITION. IT HAS ALSO NOT TAKEN CREDIT FOR THE VALUE OF THE UNEXPLAINED EXPLOITATION RIGHTS WHICH WAS CONSIDERD AS DISTORTING THE TRUE PROFITS BY THE HON'BLE SUPREME COURT IN THE CASE OF A. KRISHNASWAMI MUDALIAR (SUPRA) AND , THEREFORE, BY INVOKING SUB-RULE (5) OF RULE 9B, AS WAS DONE BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE O F PRAKASH PICTURES (SUPRA), I UPHOLD THE ACTION OF TH E LD. AO IN NOT ALLOWING THE DEDUCTION SOUGHT BY THE APPELLANT. THEREFORE, IN THE GIVEN CIRCUMSTANCES, THE ONLY RECOURSE LEFT IS TO ALLOW DEPRECIATION ON THE RIGHTS ACQUIRED BY THE APPELLANT OTHERWISE IT MAY EVEN BE DENIED THE BENEFIT OF DEPRECIATION AS ALLOWED U/S 3 2 OF THE ACT. ACCORDINGLY, GROUND NO. 2 TITLED (B) IS DISMISSED. 4. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS IN THE BUSINESS OF D ISTRIBUTION OF FILMS IN BOMBAY CIRCUIT WHICH ENCOMPASSES AREAS OF MAHARASHTRA, GUJARAT, GOA AND PARTLY KARNATAKA. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE ACQUIRED DISTRIBUTION R IGHTS OF BOMBAY CIRCUIT OF THE FILM DIL NE JISE APNA KAHA FOR A P ERIOD OF FIVE YEARS ITA 1848/M/14 5 FROM M/S SOHAIL KHAN PRODUCTION FOR A CONSIDERATION OF RS. 1.81 CRORES. HE SUBMITTED THAT UNDER THE FACTS AND CIRC UMSTANCES, THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE REASSESSM ENT. THE CIT(A) ERRED IN LAW IN HOLDING 'VALID' REASSESSMENT PROCEE DINGS ARISING DUE TO INCORRECT INTERPRETATION OF LAW. THE CIT(A) ALSO ERRED IN LAW IN CONFIRMING THE ADDITIONS MADE BY AO IN THE ORDER PASSED U/S 143(3) RWS 147 OF INCOME TAX ACT, 1961. THE CIT(A) OUGHT TO FOLLOW THE PROVISIONS OF INCOME TAX ACT, 1961 READ WITH INCOME TAX RULES, 1962 AND COMPUTE THE INCOME CORRECTLY IN STEAD OF COMPUTING INCOME IN A UNLAWFUL MANNER BY INCORRECTL Y ALLOWING DEPRECIATION ON FILM DISTRIBUTION RIGHTS ACQUIRED I NSTEAD OF FOLLOWING THE PROVISIONS OF RULE 9B OF INCOME TAX R ULES, 1962. THE INCOME WAS CORRECTLY ASSESSED U/S. 143(3) AND THE R EASSESSMENT PROCEEDINGS COMMENCED WAS BAD IN LAW AND THAT TOO B ASED ON AUDIT OBJECTIONS. THEREFORE THE CIT(A) OUGHT TO HAV E HELD THE REOPENING BAD IN LAW. FINALLY, HE SUBMITTED THAT TH E ADDITIONS MADE IS REQUIRED TO BE DELETED BECAUSE THAT HAS HAP PENED DUE TO INCORRECT APPLICATION OF PROVISION OF INCOME TAX AC T, 1961 READ WITH RULE 9B OF THE INCOME TAX RULES, 1962. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORTED THE ORDERS OF AUTHO RITIES BELOW. 5. AFTER HAVING CONSIDERED THE RIVAL SUBMISSIONS AN D PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE IS IN THE BUSINESS OF DISTRIBUTION OF FILMS IN BOMBAY CIRCUIT WHICH ENCOMPASSES AREAS OF MAHARASHTRA, GUJARAT, GOA AND PARTLY KARNATAKA. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE ITA 1848/M/14 6 ACQUIRED DISTRIBUTION RIGHTS OF BOMBAY CIRCUIT OF T HE FILM DIL NE JISE APNA KAHA FOR A PERIOD OF FIVE YEARS FROM M/S SOHAIL KHAN PRODUCTION FOR A CONSIDERATION OF RS. 1.81 CRORES. THE ABOVE FILM WAS RELEASED FOR EXHIBITION ON 10-09-2004. MEANTIME , THE ASSESSEE INCURRED EXPENSES FOR ON-PRINT AND PUBLICI TY ETC. OF RS. 58,30,039/-. THUS THE ASSESSEE INCURRED TOTAL COST OF THE FILM OF RS. 2,39,30,039/-. TILL 31 ST MARCH, 2005, THE ASSESSEE COLLECTED TOTAL REVENUE FROM THE FILM OF RS. 1,55,27,299/-. SINCE THE FILM WAS RELEASED MORE THAN 90 DAYS BEFORE THE END OF TH E ACCOUNTING YEAR, AS PER THE PROVISIONS OF RULE 9B OF THE I.T. RULES, 1962, THE LOSS IF ANY INCURRED COULD BE CLAIMED AS LOSS IN TH E P&L ACCOUNT. IN OTHER WORDS, IF THE RELEASE IS LESS THAN 90 DAYS , THE LOSS IS TO BE AMORTISED AND CARRIED FORWARD IN NEXT YEAR. THE PR OVISIONS OF RULE 9B OF THE I.T. RULES, 1962 ARE CONCERNED WITH CALCU LATION OF INCOME ON RELEASE OF FILM BY DISTRIBUTOR. AS PER T HE PROVISIONS OF RULE- 9B, WHICH ARE APPLICABLE TO THE ASSESSEE, THE FILM WAS RELEASED ON 10-09-2004 WHICH IS UNDISPUTEDLY 90 DAY S PRIOR TO 31 ST MARCH, 2005 AND THE TOTAL COST INCURRED INCLUDING COST OF PRINT AND PUBLICITY IS RS. 2,39,30,039/-. AFTER DED UCTING THE REVENUE REALIZED, THE NET LOSS FROM THE FILM OF RS. 84,02,740/- (RS. 1,55,27,299/- (-) RS. 2,39,30,039/-) WAS DEBITED IN THE PROFIT & LOSS. WHEN THE ASSESSMENT PROCEEDINGS FOR A.Y. 2005 -06 U/S 143(3) OF THE ACT WAS IN PROGRESS BEFORE THE DCIT C C-24, ALL THE DETAILS WERE SUBMITTED AND AFTER VERIFYING ALL THE DETAILS, THE ASSESSING OFFICER PASSED AN ORDER U/S 143(3) OF THE ACT ON ITA 1848/M/14 7 28.11.2007 ACCEPTING THE LOSS INCURRED. ACCORDINGL Y, THE RETURNED LOSS OF RS. 37,61,626/- WAS ACCEPTED IN THE ASSESSM ENT ORDER. SINCE THE ASSESSEE WAS IN THE BUSINESS OF DISTRIBUT ION OF FILMS, THE CASE RECORDS WERE TRANSFERRED TO ACIT 16(2) AND A UDIT WAS CONDUCTED BY THE AUDIT PARTY OF THE DEPARTMENT AND CAME TO THE CONCLUSION THAT SUCH RIGHTS ACQUIRED OF THE FILM AR E TO BE CLASSIFIED AS INTANGIBLE RIGHTS WHICH IS SUBJECTED TO DEPREC IATION AS PER SECTION 32(10(II) OF THE I.T. ACT. THE PROVISIONS OF SECTION 32(1)(II) R.W. RULE 5 OF THE INCOME TAX RULES WHICH READS AS UNDER :- INTANGIBLE ASSETS SUCH AS KNOWHOW, PATTERN, TO COP Y RIGHT, TRADEMARKS, LICENCES, FRANCHISES OR ANY BUSI NESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE ACQUIRED ON OR AFTER 1 ST APRIL, 1998 ARE ELIGIBLE FOR DEPRECIATION AT 25 PER ANNUM. BASED ON THE AUDIT OBJECTIONS, THE ASSESSING OFFICE R ISSUED NOTICE U/S 148 WERE DULY SERVED ON THE ASSESSEE. IN THE RE ASONS RECORDED, THE ASSESSING OFFICER EMPHASIZED ON INTA NGIBLE ASSETS ACQUIRED IN THE FORM OF DISTRIBUTION RIGHTS OF THE FILM. IT WAS MENTIONED THAT ON SUCH RIGHTS ACQUIRED DEPRECIATION @ 25% HAS TO BE ALLOWED. ON REOPENING OF ASSESSMENT U/S 148 OF T HE ACT, DURING THE HEARING THE ASSESSEE FILED LETTERS, INTER ALIA, STATED THAT THE ASSESSMENT WAS DONE IN THE CASE OF THE ASSESSEE U/S 143(3) OF THE ACT WAS CORRECT IN LAW AND INVOKING OF SECTION 147 IS UNLAWFUL. HOWEVER, THE ASSESSING OFFICER DECIDED TO ALLOW DEP RECIATION @25% ON THE COST OF ACQUISITION OF FILM OF RS. 1.81 CROR ES I.E RS. 45,25,000/- AND DISALLOWED A SUM OF RS. 1,35,75,000 /- (RS. ITA 1848/M/14 8 1,81,00,000/(-) RS. 45,25,000/-) AND ADDED TO THE T OTAL INCOME DETERMINING THE TOTAL INCOME AT RS. 98,13,370/- INS TEAD OF LOSS RETURNED AT RS. 37,61,626/-. 6. THE FIRST ISSUE BEFORE US IS INVOCATION OF PROV ISIONS OF SECTION 147 WHICH DEALS WITH ESCAPEMENT OF INCOME DUE TO FA ILURE ON THE PART OF THE ASSESSEE TO FILE THE TDS. IN THE RETUR N OF INCOME FILED, THE ASSESSEE HAS SHOWN THE TRANSACTIONS OF THE FILM DIL NE JISE APNA KAHA WHICH RESULTED INTO LOSS AND SUCH LOSS W AS CALCULATED AS PER THE PROVISIONS OF RULE 9B OF THE I.T. RULES, 1962. THE ASSESSING OFFICER DULY SATISFIED AND ACCEPTED THE R ETURNED LOSS AND ASSESSED ASSESSEE TO SAME FIGURE OF LOSS. THE AUDIT PARTY WAS OF THE VIEW THAT ESCAPEMENT OF INCOME HAS TAKEN PLACE AS WRONGLY INVOKING PROVISIONS OF SECTION 32(1)(II) INSTEAD OF ALLOWING CALCULATION TO BE DONE WITH RULE 9B. COMING TO THE MERITS OF THE CASE, WITHOUT PREJUDICE TO THE REOPENING, WE FIND T HAT THE ASSESSEE OFFERED INCOME FROM THE FILM DIL NE JISA APNA KAHA IN THE RETURN OF INCOME FILED AND THE ASSESSING OFFICER HAS REASS ESSED THE INCOME WITH REFERENCE TO THAT TRANSACTIONS BY INVOK ING SECTION 32(1)(II) OF THE ACT. THE ASSESSMENT OF INCOME IN THE HANDS OF FILM DISTRIBUTORS HAS TO BE AS PER SPECIAL PROVISIONS CO NTAINED IN RULE 9B OF THE INCOME TAX RULES, 1962. THE DYNAMICS OF B USINESS INCOME IN THE DISTRIBUTION OF FILM ARE DIFFERENT AN D THEY ARE NOT CATEGORIZED AS INTANGIBLE ASSETS WITHIN THE MEANI NG OF SECTION 32(1)(II). THE LAW HAS MADE SEPARATE PROVISION FOR ASCERTAINING THE INCOME FROM FILM DISTRIBUTOR BY PROVIDING FOR THE S AME IN RULE 9B. ITA 1848/M/14 9 THESE RULES HAVE TO BE FOLLOWED AND NOT GENERAL PRI NCIPLES OF ACCOUNTANCY. FOR THE SAKE OF CONVENIENCE, RULE 9B IS REPRODUCED BELOW:- IN COMPUTING THE PROFITS AND GAINS OF THE BUSINESS OF DISTRIBUTION OF FEATURE FILMS CARRIED ON BY A PERSO N (THE PERSON CARRYING ON SUCH BUSINESS HEREAFTER IN THIS RULE REFERRED TO AS FILM DISTRIBUTOR), THE DEDUCTION IN RESPECT OF THE COST OF ACQUISITION OF A FEATURE FILM SHALL BE ALLOWED IN ACCORDANCE WITH SUB-RULE (2) TO SUB-RULE (4). 7. THE DEDUCTION IN RESPECT OF THE COST OF ACQUISIT ION OF A FEATURE FILM SHALL BE ALLOWED IN ACCORDANCE WITH SUB RULE ( 2) TO SUB-RULE (4). FOR THE PURPOSE OF COST OF ACQUISITION IN REL ATION TO A FEATURE FILM MEANS THE AMOUNT PAID BY THE FILM DISTRIBUTOR TO THE FILM PRODUCER UNDER AN AGREEMENT ENTERED INTO BY THE FIL M DISTRIBUTOR OR SUCH OTHER DISTRIBUTOR, AS THE CASE MAY BE FOR A CQUIRING THE RIGHTS OF EXHIBITION AND WHERE THE RIGHTS OF EXHIBI TION HAVE BEEN ACQUIRED ON A MINIMUM GUARANTEE BASIS, THE MINIMUM AMOUNT GUARANTEED NOT BEING THE AMOUNT OF EXPENDITURE IN CURRED BY THE FILM DISTRIBUTOR FOR THE PREPARATION OF THE POSITIV E PRINTS OF THE FILM AND THE EXPENDITURE INCURRED BY HIM IN CONNECTION W ITH THE ADVERTISEMENT OF THE FILM. WHERE A FEATURE FILM IS ACQUIRED BY THE FILM DISTRIBUTOR IN ANY PREVIOUS YEAR AND IN SUCH P REVIOUS YEAR THE FILM DISTRIBUTOR SELLS ALL RIGHTS OF EXHIBITION OF THE FILM, THE ENTIRE COST OF ACQUISITION OF THE FILM SHALL BE ALLOWED AS A DEDUCTION IN COMPUTING THE PROFITS AND GAINS OF SUCH PREVIOUS YE AR OR THE FILM DISTRIBUTOR HIMSELF EXHIBITS THE FILM ON A COMMERCI AL BASIS IN ALL OR ITA 1848/M/14 10 SOME OF THE AREAS OR SELLS THE RIGHTS OF EXHIBITIO N OF THE FILM IN RESPECT OF SOME OF THE AREAS OR HIMSELF EXHIBITS TH E FILM ON A COMMERCIAL BASIS IN CERTAIN AREAS AND SELLS THE RIG HTS OF EXHIBITION OF THE FILM ON RESPECT OF ALL OR SOME OF THE REMAIN ING AREAS. IN THIS CASE, AS STATED M/S SOHAIL KHAN DISTRIBUTION HAS GI VEN RIGHTS OF DISTRIBUTION TO THE ASSESSEE. IN SUCH SITUATION, FI LM WAS RELEASED ON COMMERCIAL BASIS AND EXHIBITED FOR MORE THAN 90 DAYS BEFORE THE END OF PREVIOUS YEAR, THE ENTIRE COST OF ACQUIS ITION OF THE FILM SHALL BE ALLOWED AS A DEDUCTION WHILE COMPUTING THE PROFITS AND GAINS OF SUCH PREVIOUS YEAR. IN THIS CASE M/S SOHA IL KHAN SOLD THE RIGHTS TO THE ASSESSEE IN CERTAIN AREAS AND UND ISPUTEDLY FILM HAS BEEN RELEASED ON COMMERCIAL BASIS ATLEAST FOR 9 0 DAYS BEFORE THE END OF THE PREVIOUS, SO THE ENTIRE AMOUNT OF AC QUISITION SHALL BE DEDUCTED IN COMPUTING THE PROFITS AND GAINS OF S UCH PREVIOUS YEAR. IN VIEW OF OUR ABOVE DISCUSSION, THE CIT(A) W AS NOT JUSTIFIED IN MAKING THE DISALLOWANCE OF RS. 1,35,75,000/- BEC AUSE CALCULATION OF LOSS IN THE RELEASE OF FILM BY A DIS TRIBUTOR FOR THE PURPOSE OF DISTRIBUTION TO BE DONE, AS PER RULE 9-B OF THE RULE. THE PROVISIONS OF SECTION 9B OF THE I.T. RULES ARE APPLICABLE TO THE ASSESSEE AS THE FILM WAS RELEASED ON 10-9-2004 WHIC H IS 90 DAYS PRIOR TO 31 ST MARCH, 2005 AND THE TOTAL COST INCURRED INCLUDING COST OF PRINT AND PUBLICITY IS RS. 2,39,30,039/-. AFTER DEDUCTING THE REVENUE REALIZED, THE NET LOSS FROM THE FILM OF RS. 84,021,740/- (RS. 1,55,27,299/- (-) RS. 2,39,30,039/-) WAS RIGHT LY DEBITED IN THE P&L ACCOUNT. ITA 1848/M/14 11 8. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY MERIT I N THE ACTION OF LOWER AUTHORITIES DECLINING THE CLAIM OF THE ASSESS EE. THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2015. &)*+, -$ . . *&/% SD/- SD/- (RAMIT KOCHAR) (SHAILENDRA KU MAR YADAV ) ACCOUNTANT MEMBER 0123435678798: ;% MUMBAI; -$ DATED 30/09/2015 [ $ R.K. , EX. SR. PS ! ' #$%& ' &$ COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '#! / THE RESPONDENT. 3. <' = > / THE CIT(A) 27, MUMBAI 4. <' / CIT- 16, MUMBAI 5. ?@ /''$AB (AB , ;% / DR, ITAT, MUMBAI F BENCH 6. / CDE % GUARD FILE. ! ( / BY ORDER, # ?''' //TRUE COPY// )/(* + ( DY./ASSTT. REGISTRAR) , ;% / ITAT, MUMBAI