ITO 11(1)-2, MUMBAI V. HIGHLIGHT PICTURES (I) P.LTD ( FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD), MUMBAI

ITA 2344/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49249 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 22-06-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 25-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIWAS RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H , MUMBAI BEFORE SHRI N. V. VASUDEVAN, J.M. AND SHRI T. R. SO OD, A.M. I.T.A. NO.2344/MUM/2010 ASSESSMENT YEAR : 2000-01 THE ITO, 11(1)-2, R.NO.436 A, AAYAKAR BHAVAN, MUMBAI VS. M/S. HIGHLIGHT PICTURES (I) P. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) MATHURADAS MILLS COMPOUND, 126, N. M. JOSHI MARG, LOWER PAREL (W), MUMBAI-400 013 PAN NO: AAACB6674L (APPELLANT) (RESPONDENT) & CO NO: 211/MUM/2010 ASSESSMENT YEAR : 2000-01 M/S. HIGHLIGHT PICTURES (I) P. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) MATHURADAS MILLS COMPOUND, 126, N. M. JOSHI MARG, LOWER PAREL (W), MUMBAI-400 013 PAN NO: AAACB6674L VS. THE ITO, 11(1)-2, R.NO.436 A, AAYAKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI GOLI SRINIWAS RAO RESPONDENT BY : SHRI FARROKH V. IRANI ORDER PER N. V. VASUDEVAN (JM) : I.T.A. NO.2344/MUM/2010 IS APPEAL BY THE REVENUE A GAINST THE ORDER DATED 25.01.2010 OF CIT(A)-3, MUMBAI RELATING TO THE ASSESSMENT YEAR 2000-01. THE ASSESSEE HAS FILED CO NO: 211/MUM/2010 AGAINST THE ORDER OF THE LD. CIT(A). ITA NO: 2344/MUM/2010 & CO NO: 211/MUM/2010 M/S. HIGHLIGHT PICTURES (I) PVT. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) 2 I.T.A. NO.2344/MUM/2010 REVENUES APPEAL 2. THE GROUNDS RAISED BY THE REVENUE ARE AS FOLLOWS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN ALLOWING RELIEF TO THE ASSESSEE TO THE EXTENT IMPUGNED IN THE GROUNDS ENUMERATED BELOW : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE ADDITION M ADE BY THE A.O. AMOUNTING TO RS.3,77,96,672/- WITHOUT APPRECIA TING THE EXPRESS TERMS OF AGREEMENT BETWEEN THE ASSESEE AND FINANCIER AND THEREBY INCORRECTLY TERMING THE ACTIO N OF THE A.O. AS PREMATURE NOT LEADING TO CESSATION OF LIABILITY. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(APPEA LS) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3. THE ASSESSEE IS A COMPANY WHICH IS ENGAGED IN TH E BUSINESS OF PRODUCTION OF FEATURE FILMS AS WELL AS ADVERTISEMEN T OF FILMS. DURING THE PREVIOUS YEAR, THE ASSESSEE COMPLETED PRODUCTION OF A FILM TITLED AS BHOPAL EXPRESS. THE FILM WAS RELEASED DURING THE PREVIOUS YEAR. THE ASSESSEE ON EXPLOITATION OF THE FILM REALISED ONLY A SUM OF RS. 17,50,982/-. FOR THE ASSESSMENT YEAR 2000-01, THE ASSESSEE FILED THE RET URN OF INCOME DECLARING LOSS OF RS.3,71,95,920/-. 4. THE RETURN WAS PROCESSED U/S.143(1) OF THE ACT O N 20.02.2002. LATER A NOTICE U/S.148 OF THE ACT DATED 29.03.2006 WAS IS SUED BY THE AO. IN RESPONSE TO THE NOTICE U/S.148, THE ASSESSEE FURNIS HED RETURN OF INCOME DECLARING THE SAME LOSS AS WAS DECLARED IN THE ORIG INAL RETURN OF INCOME. 5. THE AO NOTICED THAT FOR PRODUCTION OF THE FILM BHOPAL EXPRESS, THE ASSESSEE HAD BORROWED A SUM OF RS.3,77,96,672/- FRO M A PARTNERSHIP FIRM BY NAME M/S. BHOPAL EXPRESS PASSENGER (M/S. BEP). T HERE WAS AN AGREEMENT DATED 05.11.1998 BETWEEN THE ASSESSEE AND THE FIRM M/S. BEP. ITA NO: 2344/MUM/2010 & CO NO: 211/MUM/2010 M/S. HIGHLIGHT PICTURES (I) PVT. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) 3 AS PER THE TERMS OF THE AGREEMENT THE FIRM M/S. BEP AGREED TO FINANCE A SUM OF RS.3 CRORES FOR THE PURPOSE OF PRODUCTION OF THE FILM BHOPAL EXPRESS BY THE ASSESSEE. THE MAIN TERMS OF THE AGR EEMENT BY WHICH THE FIRM M/S. BEP LENT A SUM OF RS.3 CRORES TO THE ASSE SSEE ARE AS FOLLOWS:- 5. IT IS AGREED THAT : (A) THE FIRST REALISATIONS ARISING FROM EXPLOITATION OF THE FILM IN THE TERRITORY (WHICH IS HEREINAFTER REFERRED TO FOR THE PURPOSES OF THIS AGREEMENT AS PROFIT) REMAINING AFTER MEETIN G CURRENT EXPENSES (BUT EXCLUDING REPAYMENT OF ANY FINANCE CO NTRIBUTED BY ANY OTHER PARTY, OR ANY RETURN ON SUCH CAPITAL) SHALL BELONG TO PARTY NO.4 TO THE EXTENT OF THE PRINCIPAL AMOUNT CONTRIBUTED BY PARTY NO.4. THIS PAYMENT SHALL BE MADE TO PARTY NO.4 IMMEDIATELY BUT NOT LATER THAN THE END OF THE MONTH IN WHICH SUCH PROFIT IS DETERMINED TILL THE ENTIRE PRINCIPAL AMOUNT IS REPAID: (B) THE NEXT REALISATIONS ARISING FROM SUCH EXPLOITATIO N OF THE FILM AFTER PARTY NO.4 IS PAID THE PRINCIPAL AMOUNT BUT B EFORE ANY OTHER PAYMENT IS MADE, SHALL BELONG TO PARTY NO.4 T O THE EXTENT OF AN AMOUNT EQUIVALENT TO SIMPLE INTEREST A T THE RATE OF 16% PER ANNUM ON THE PRINCIPAL AMOUNT CONTRIBUTED B Y THEM FROM THE DATE OF THEIR HAVING PAID THE FINANCE TO P ARTY NO.1 TILL THE REPAYMENT OF THE PRINCIPAL AMOUNT. THIS AMOUNT OF INTEREST SHALL BE PAID TO PARTY NO.4 WITHIN ONE WEEK OF THE END OF THE CALENDAR MONTH IN WHICH SUCH PROFIT IS DETERMINED; (C) IN THE EVENT OF FURTHER PROFIT FROM THE FILM 50% OF SUCH SURPLUS PROFIT ARISING FROM EXPLOITATION OF THE FILM IN THE TERRITORY SHALL BELONG TO PARTY NO.4 AND SHALL BE PAID ON QUARTERLY BASIS, AND THE BALANCE 50% OF SUCH PROFIT SHALL ALONE BE THE R EAL INCOME OF PARTY NO.1 ARISING FROM THE FILM. THIS AMOUNT SH ALL BE PAID TO PARTY NO.4 WITHIN ONE WEEK OF THE END OF THE QU ARTER IN WHICH SUCH PROFIT IS REALISED; (D) TO GIVE EFFECT TO THIS INTENTION, THE PARTIES DECLA RE AND AGREE THAT THE AMOUNTS DUE TO PARTY NO.4 UNDER SUB-CLAUSE S (A) TO (C) ABOVE SHALL NEVER BELONG TO PARTY NO.1, AND THAT PA RTY NO.1 WILL MERELY ACT AS TRUSTEES OF PARTY NO.4 IN RESPEC T OF THE AMOUNTS DUE TO PARTY NO.4 UNDER SUB-CLAUSES (B) TO (D) ABOVE UNTIL THESE AMOUNTS ARE PAID OVER TO PARTY NO.4. AT ALL TIMES THE BENEFICIAL INTEREST IN THESE AMOUNTS SHALL VEST WITH PARTY NO.4 BY OVERRIDING TITLE. ANY ACT OR CLAIM OF, OR O N BEHALF OF, PARTY NO.1 WHICH IS CONTRARY TO OR INCONSISTENT WIT H THIS DECLARATION AND AGREEMENT SHALL AMOUNT TO, AND BE T REATED AS, BREACH OF TRUST COMMITTED BY PARTY NO.1; ITA NO: 2344/MUM/2010 & CO NO: 211/MUM/2010 M/S. HIGHLIGHT PICTURES (I) PVT. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) 4 (E) THE PARTIES AGREE THAT THE FINANCE CONTRIBUTED BY P ARTY NO.4 AND INTEREST THEREON SHALL ONLY BE REPAID OUT OF PR OFIT. IN THE EVENT OF THE PROFIT BEING INSUFFICIENT OR A LOSS BE ING MADE IN EXPLOITATION OF THE FILM IN THE TERRITORY, OR THE F ILM NOT BEING COMPLETED, OR NOT EXPLOITED, FOR ANY REASON PARTY N O.4 SHALL NOT BE ENTITLED TO BE REPAID ANY AMOUNT FINANCED AN D SHALL HAVE NO CLAIM AGAINST PARTY NOS. 1 TO 3; (F) THE FINANCE PROVIDED BY PARTY NO.4 SHALL BE USED ON LY TOWARDS EXPENSES FOR PRODUCTION OF THE FILM, COMPLE TION OF THE FILM, AND FOR EXPLOITATION OF THE FILM IN THE TERRI TORY; 6. THE REFERENCE TO PARTY NO.4 IS REFERENCE TO THE FIRM M/S.BEP IN CLAUSE-5 OF THE AGREEMENT REFERRED TO ABOVE. THE A O NOTICED THAT UNDER CLAUSE 5(E) OF THE AGREEMENT, THE ASSESSEE NEED NOT REPAY THE FIRM M/S. BEP THE AMOUNT FINANCED BY THEM, IN THE EVENT OF THEIR BEING NO PROFIT ON EXPLOITATION OF THE FILM BHOPAL EXPRESS. THE AO A LSO NOTICED THAT THE ASSESSEE HAD INCURRED A LOSS ON EXPLOITATION OF THE FILM BHOPAL EXPRESS. THE AO WAS, THEREFORE, OF THE VIEW THAT THE LIABILI TY OF THE ASSESSEE TO REPAY THE FIRM M/S. BEP NO LONGER EXISTS AND, THEREFORE, THE AMOUNT OUTSTANDING IN THE NAME OF THE FIRM M/S. BEP IN THE BOOKS OF TH E ACCOUNTS OF THE ASSESSEE AS LIABILITY SHOULD BE TREATED AS INCOME OF THE ASSESSEE. SINCE THERE WAS NO REPLY ON THE SPECIFIC QUERY RAISED BY THE AO, THE AO HELD THAT THE SUM OF RS.3,77,96,672/- BEING THE AMOUNT OUTSTA NDING ON PAYABLE BY THE ASSESSEE TO THE FIRM M/S. BEP SHOULD BE TREATED AS INCOME OF THE ASSESSEE. [IN THIS REGARD, IT IS RELEVANT TO POIN T OUT THAT THOUGH ON THE AGREEMENT DATED 05.11.1998 THE FIRM M/S. BEP AGREED TO FINANCE ONLY A SUM OF RS.3 CRORES BUT LATER THEY FINANCED A SUM OF RS.3,77,96,672/-.] 7. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE LD. CIT(A). 8. BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED T HAT THE FIRM M/S. BEP HAD FINANCED THE FILM BY MAKING A CAPITAL CONTRIBUT ION OF RS.3 CRORES AND AS PART OF THE STANDARD TERMS OF SAFE GUARD THE AGREEM ENT PROVIDED THAT ITA NO: 2344/MUM/2010 & CO NO: 211/MUM/2010 M/S. HIGHLIGHT PICTURES (I) PVT. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) 5 IN CASE OF A LOSS NO AMOUNT SHALL BE DUE TO THE FIR M M/S. BEP. THIS CLAUSE WAS INSERTED AS A GENERAL SAFEGUARD FOR AVOIDING AN Y CLAIM BY THE FIRM M/S.BEP BUT DOES NOT MEAN THAT IT IS TO BE ACTED UP ON SUO-MOTO. THE ASSESSEE SUBMITTED THAT WHILE PASSING THE ORDER TAX ING RS.3,77,96,672/-, THE AO HAS NOT MENTIONED UNDER WHICH PROVISION THE SAID AMOUNT IS BEING BROUGHT TO TAX. ACCORDING TO THE ASSESSEE, THE SUM COULD PRESUMABLY BE BROUGHT TO TAX UNDER THE PROVISION OF SEC.41(1) OF THE INCOME TAX ACT, 1961 (THE ACT). THE ASSESSEE POINTED OUT THAT THE AMOUN T IN QUESTION CANNOT BE CONSIDERED AS INCOME U/S.28. THE ASSESSEE ALSO SU BMITTED THAT THE GENUINENESS OF THE LOANS HAVE ALSO BEEN PROVED BY T HE ASSESSEE AND NO ADDITION HAS BEEN MADE U/S.68 OF THE ACT. THE ASSES SEE POINTED OUT THAT CLAUSE 5(E) OF THE AGREEMENT WAS INSERTED AS A COMM ERCIAL SAFEGUARD FOR THE ASSESSEE BUT THE ASSESSEE DID NOT ENFORCE THE SAME AND ACTUALLY RETURNED THE LOAN TO THE FIRM M/S.BEP. THE ASSESSEE POINTED OUT THAT BY THE TIME THE ASSESSMENT WAS COMPLETED, AN AMOUNT OF RS.1,87, 50,000/- HAD ALREADY BEEN REFUNDED. THE ASSESSEE THUS SUBMITTED THAT TH E ACTION OF THE ASSESSING OFFICER IN TAXING THE AMOUNT IN QUESTION AS INCOME WAS THEREFORE BAD IN LAW AND WITHOUT JURISDICTION AND PREMATURE. AS REGARDS THE APPLICABILITY OF THE PROVISIONS OF SEC.41(1) OF THE ACT TO THE TRANSACTION, THE ASSESSEE SUBMITTED THAT IT NEVER CLAIMED ANY AMOUNT OF THE LOAN RECEIVED AS A DEDUCTION IN THE EARLIER YEARS NOR HAS IT DEBITED THE PROFIT AND LOSS ACCOUNT THE AMOUNT OF LOAN RECEIVED AND THEREFORE I T CANNOT BE BROUGHT TO TAX UNDER THE PROVISIONS OF SEC.41(1)OF THE ACT. IT WAS ALSO ARGUED THAT THE ASSESSEE HAS NOT WRITTEN BACK THE SAID AMOUNT ON AC COUNT OF ANY CESSATION OF LIABILITY. IT WAS SUBMITTED THAT TO TAX THE AMO UNT U/S.41(1) OF THE ACT, THE PREREQUISITE CONDITION WAS RECEIPT OF BENEFIT ON AC COUNT OF REMISSION OR CESSATION OF A LIABILITY WHICH HAS NOT HAPPENED IN THE CASE OF THE ASSESSEE. 8. THE ASSESSEE ALSO SUBMITTED THAT THE FILM BHOPA L EXPRESS WAS RELEASED IN MAHARASHTRA ON 10.12.1999, DURING THE P REVIOUS YEAR. THE ASSESSEE ALSO POINTED THAT THE FILM WAS NOT EXPLOIT ED IN THE OTHER TERRITORY THROUGH OUT THE WORLD. THE ASSESSEE POINTED OUT THA T THE PROFIT ON ITA NO: 2344/MUM/2010 & CO NO: 211/MUM/2010 M/S. HIGHLIGHT PICTURES (I) PVT. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) 6 EXPLOITATION OF THE FILM CAN BE ARRIVED AT ONLY AFT ER COMPLETE EXPLOITATION OF THE FILM AND, THEREFORE, IT WAS PREMATURE ON THE PA RT OF THE AO TO HAVE COME TO THE CONCLUSION THAT THE LIABILITY OF THE ASSESSE E HAD CEASED TO EXISTS. THE ASSESSEE ALSO POINTED OUT THAT THE FIRM M/S. BEP AL WAYS HAS RIGHT TO THE SURPLUS AS AND WHEN IT ARISES. 9. ON CONSIDERATION OF THE ABOVE SUBMISSIONS, THE L D. CIT(A) HELD AS FOLLOWS : 4.4 FACTS AND MATERIAL ON RECORD ARE CONSIDERED. I N VIEW OF THE PROVISIONS OF SUB CLAUSES 5(A) TO (D), MEANING OF T HE TERM PROFIT AND DEFINITIONS OF THE TERMS FILM, TERRITORY IN THE AGREEMENT, IT IS CONSIDERED THAT INVOKING OF CLAUSE 5(E) IN THE S UBJECT A.Y. BY THE A.O. WAS PREMATURE AS EXPLOITATION OF ALL RIGHT S IN THE ENTIRE TERRITORY WHICH COULD HAVE RESULTED IN FIRST REALIZ ATIONS ARISING FROM THE EXPLOITATION OF FILM WAS NOT COMPLETE. THE TERM PROFIT ALSO HAS TO BE CALCULATED AS NARRATED IN THE AGREEM ENT. FURTHERMORE, SUB CLAUSE (D) OF CLAUSE 5 STATES CATE GORICALLY THAT THE AMOUNTS DUE TO PARTY NO.4 UNDER SUB CLAUSES (A) TO (C) WOULD NEVER BELONG TO PARTY NO.1. THE OWNERSHIP OF THE MO NEY LENT HAS THEREFORE, BEEN CLARIFIED IN THE BODY OF THE AGREEM ENT ITSELF, WHEREAS THE A.O. HAS NOT ESTABLISHED CESSATION OF L IABILITY IN THE CASE OF APPELLANT. IN VIEW OF THE FACTS AND MATERIA L ON RECORD AND BASED ON THE DISCUSSION IN PARAS SUPRA, THE ADDITIO N MADE BY A.O. OF RS.3,77,96,672/- IS HELD AS NOT JUSTIFIED. THE ADDITION MADE IS DELETED. 10. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE R EVENUE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 11. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR WHO REITERATED THE STAND OF THE AO AS REFLECTED IN THE ORDER OF THE AS SESSMENT. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE LD. CIT(A) AND FURTHER RELIED ON THE ORDER OF THE LD. C IT(A). 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN OU R VIEW THE ORDER OF THE LD. CIT(A) HAS TO BE UPHELD. ADMITTEDLY THE FILM B HOPAL EXPRESS HAD NOT BEEN COMPLETELY EXPLOITED AS ON THE LAST DATE OF TH E PREVIOUS YEAR, THEREFORE, IT IS PREMATURE ON THE PART OF THE AO TO APPLY THE PROVISION OF CLAUSE 5(E) OF ITA NO: 2344/MUM/2010 & CO NO: 211/MUM/2010 M/S. HIGHLIGHT PICTURES (I) PVT. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) 7 THE AGREEMENT AND COME TO THE CONCLUSION THAT THERE WAS NO PROFIT ON EXPLOITATION OF THE FILM BHOPAL EXPRESS AND, THER EFORE, THERE WAS NO LIABILITY ON THE PART OF THE ASSESSEE TO PAY THE FIRM M/S. BE P THE AMOUNT LENT TO THE ASSESSEE. IN THIS REGARD, WE ARE OF THE VIEW THAT N OBODY HAS REALLY EXAMINED THE MEANING OF THE TERM PROFIT AS USED IN THE AGR EEMENT. THIS CAN BE SEEN FROM CLAUSE 5(A) OF THE AGREEMENT WHICH IS AS FOLLO WS: THE FIRST REALISATIONS ARISING FROM EXPLOITATION OF THE FILM IN THE TERRITORY (WHICH IS HEREINAFTER REFERRED TO FOR THE PURPOSES OF THIS AGREEMENT AS PROFIT) REMAINING AFTER MEETING CURRENT EXPENSES (BUT EXCLUDING REPAYMENT OF ANY FINANCE CONTRIBUTED BY ANY OTHER PARTY, OR ANY RETURN ON SUCH CAPITAL) SHALL BELONG TO PART Y NO.4 TO THE EXTENT OF THE PRINCIPAL AMOUNT CONTRIBUTED BY PARTY NO.4. THI S PAYMENT SHALL BE MADE TO PARTY NO.4 IMMEDIATELY BUT NOT LATER THAN T HE END OF THE MONTH IN WHICH SUCH PROFIT IS DETERMINED TILL THE ENTIRE PRINCIPAL AMOUNT IS REPAID: THUS PROFIT FOR THE PURPOSE OF THE AGREEMENT IS ANY REALISATION ON EXPLOITATION OF THE RIGHTS OF THE PICTURE BHOPAL E XPRESS. THE INTENTION OF THE PARTIES THEREFORE UNDER CLAUSE 5(E) OF THE AGRE EMENT WAS TO PAY WHATEVER ARE THE REALISATIONS FROM EXPLOITATION OF THE PICTURE BHOPAL EXPRESS AND NOT THE SURPLUS OVER THE REALISATIONS ON EXPLOITATION OF THE FILM AFTER MEETING ALL COSTS OF PRODUCTION OF THE FILM. THUS THE VERY BASIS OF THE CASE OF THE AO IS FOUND TO BE UNSUSTAINABLE. 13. APART FROM THE ABOVE, THE ASSESSEE, NOTWITHSTAN DING OF CLAUSE 5 (E) OF THE AGREEMENT, HAS INFACT REPAID THE FIRM M/S. BEP THE AMOUNT OF LOAN TAKEN ON VARIOUS DATES FROM 22.02.2003 TO 03.02.200 9. THUS AS ON 31.03.2009 ONLY A SUM OF RS.1,71,60,304/- IS SHOWN AS OUTSTANDING LIABILITY OF THE ASSESSEE TO THE FIRM M/S. BEP. THI S DOCUMENT WAS FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) AS ADDITIONAL EV IDENCE. IN THE LIGHT OF THESE DOCUMENT, THE ADDITION MADE BY THE AO ON THE PRESUMPTION THAT THERE WAS A CESSATION OF LIABILITY, WHICH RESULTED IN TAXABLE INCOME IN THE HANDS OF THE ASSESSEE CANNOT BE SUSTAINED. IN OUR V IEW, THE LD. CIT(A) HAS RIGHTLY CONSIDERED THE TERMS OF THE AGREEMENT AS WE LL AS THE ABSENCE OF ITA NO: 2344/MUM/2010 & CO NO: 211/MUM/2010 M/S. HIGHLIGHT PICTURES (I) PVT. LTD. (FORMERLY BHOPAL EXPRESS FILMS CO. P. LTD.) 8 MATERIAL TO SHOW ANY CESSATION OF LIABILITY AND HAS RIGHTLY COME TO THE CONCLUSION THAT THE IMPUGNED ADDITION SHOULD BE DEL ETED. WE THEREFORE, CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISSED T HE APPEAL FILED BY THE REVENUE. CO NO: 211/MUM/2010 ASSESSEES APPEAL 14. THE ASSESSEE DID NOT PRESS FOR ADJUDICATION OF THE CO, CONSEQUENTLY THE CO IS DISMISSED AS NOT PRESSED. 15. IN THE RESULT, BOTH THE APPEAL AS WELL AS THE C O IS DISMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JUNE, 2011. SD/- SD/- ( T. R. SOOD ) ( N. V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT: 30/06/2011 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, H- BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI