ACIT 11(1), MUMBAI V. VIOLET PICTURES CO. P.LD, MUMBAI

ITA 3445/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4451 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Department
• Bench Allotted: F
• Next Hearing Date: 25-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Court: TRIBUNAL
• Keywords: Tax effect
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3445/MUM/2013 ASSESSMENT YEAR: 2009-10 AC IT 1 1 ( 1 ) R.NO.439, AAYAKAR BHAVAN, M.K. RD. MUMBAI -400020 / VS. VIOLET PICTURES CO. LTD. 401, 4 TH FLOOR, TROPICANA, RAHEJA COMPLEX, SEVEN BUNGLOW, ANDHERI(W) MUMBAI-400 061 ( REVENUE) (RESPONDENT) P.A. NO. AACCV5517A REVENUE BY SHRI SANTOSH MAN KOSKAR (DR) RESPONDENT BY SHRI HIMANSHU GANDHI (AR) !' / DATE OF HEARING : 26/11/2015 !' / DATE OF ORDER: 6/01/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)-3, MUMBAI {(IN SHORT CIT(A)}, DATED 26.02.2013 FOR T HE VIOLET PICTURES CO. LTD. 2 ASSESSMENT YEAR 2009-10, DECIDED AGAINST THE ASSESS MENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT, ON THE FOLLOWING GROUNDS: '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSEE SHOULD HAVE CREDITED ALL THE RECEIPTS FROM VARIOUS SOURCES IN ITS BOOKS AND THEN CLAIM THE DEDUCTIONS AS PER THE STATUTE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WHETHER THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT THE TRANSACTION BETWEEN THE ASSESSEE A ND STAR INDIA PVT. LTD. IS IN THE NATURE OF PRINCIPAL- AGENT RELATIONSHIP DESPITE THE BILL BEING RAISED BY THE ASSESSEE COMPANY ON BEHALF OF THE ARTISTS? 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, WHETHER THE LD.CIT(A) WAS JUSTIFIED IN HOLDING THAT DISALLOWANCE U/S.40(A)(IA) IS NOT APPL ICABLE ON THE AMOUNT OF RS.24.4 LACS ON WHICH THE ASSESSEE COMPANY HAS NOT DEDUCTED THE TAX AT SOURCE DURING T HE YEAR UNDER CONSIDERATION.' 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI HIMANSHU GANDHI, AUTHORISED REPRESENTATIVE (AR ) ON BEHALF OF THE ASSESSEE AND BY SHRI SANTOSH MANKOSKA R, DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE R EVENUE. 3. THE MAIN ISSUE RAISED IN THIS APPEAL IS WITH REGARD TO ALLEGED FAILURE OF THE ASSESSEE IN DEDUCTION OF TAX AT SOURCE WHILE MAKING THE PAYMENT TO ARTISTS BY THE ASSESSEE AND ITS CONSEQUENT DISALLOWANCE U/S.40(A)(IA). VIOLET PICTURES CO. LTD. 3 3.1. ALTHOUGH, DURING THE COURSE OF HEARING APPEAL WAS HELD ON MERITS BUT SUBSEQUENTLY IT HAS BEEN BROUGHT TO O UR NOTICE THAT RECENTLY CENTRAL BOARD OF DIRECT TAXES HAS ISS UE CIRCULAR NO.21/2015 DATED 10 TH DECEMBER, 2015. 3.2. IT IS NOTED BY US THAT TAX EFFECT IN THIS CASE IS APPARENTLY LESS THAN RS. 10,00,000/-. 3.3. WE HAVE GONE THROUGH THE AFORESAID CIRCULAR OF THE BOARD. IT HAS BEEN PROVIDED IN THE AFORESAID CIRCULAR THAT NO APPEAL SHALL BE FILED BY THE REVENUE IF THE TAX EFFECT INV OLVED IN THE APPEAL DOES NOT EXCEED A SUM OF RS. 10 LACS. IT HAS FURTHER BEEN PROVIDED THAT INSTRUCTIONS CONTAINED THEREIN S HALL APPLY RETROSPECTIVELY TO PENDING APPEALS ALSO. RELEVANT P ART OF THE CIRCULAR IS REPRODUCED BELOW: 10. THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PENDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS/ TRIBUNAL. PENDING APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN/ NOT PRESSED. APPEALS BEFORE THE SUPREME COURT WILL BE GOVERNED BY THE INSTRUCTIONS ON THIS SUBJECT, OPERATIVE AT THE TIME WHEN SUCH AP PEAL WAS FILED. 3.4. IT IS FURTHER NOTED BY US FROM THE ORDER OF LD. C IT(A) THAT TAX EFFECT IN THIS CASE IS LESS THAN THE AMOUNT OF VIOLET PICTURES CO. LTD. 4 RS.10,00,000/-. AS PER LAW, CIRCULAR OF CBDT HAS BI NDING EFFECT ON THE INCOME TAX AUTHORITIES. 3.5. IN VIEW OF THE ABOVE, WE FIND THAT THE APPEAL OF T HE REVENUE IS NOT MAINTAINABLE. THEREFORE, WE DISMISS THE SAME. 3.6. HOWEVER, WITH A VIEW TO FOLLOW PRINCIPLES OF NATUR AL JUSTICE, WE GIVE LIBERTY TO THE REVENUE TO FILE MIS CELLANEOUS APPLICATION U/S 254 IN CASE TAX EFFECT IS FOUND TO BE MORE THAN RS. 10,00,000/-. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH JANUARY, 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) ! / JUDICIAL MEMBER ' ! / ACCOUNTANT MEMBER MUMBAI; $ DATED : /01/2016 CTX? P.S/. .. #$%&'(')% / COPY OF THE ORDER FORWARDED TO : 1. &'( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. +! + , ( & ) / THE CIT, MUMBAI. 4. +! + , / CIT(A)- , MUMBAI 5. /0 )12 , + ! &' 12!3 , / DR, ITAT, MUMBAI 6. 4 / GUARD FILE. / BY ORDER, */& ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI