TWENTY TWENTY TELEVISION CO. LTD, MUMBAI V. ACIT CEN CIR 38, MUMBAI

ITA 3837/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8819 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 02-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income
• Section: 131; 144

Judgement Text

ITA NO.3837/M/2013 TWENTY TWENTY TELEVISION COMPANY LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH E, MU MBAI BEFORE SHRI R. C. SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.3837/MUM/2013 (ASSESSMENT YEAR- 2009-10) M/S TWENTY TWENTY TELEVISION CO. LTD, STANY SALDANHA & ASSOCIATES , 1, ANUP, SUNBEAM CO-OP. HOUSING SOCIETY, JUHU VARSOVA LINK ROAD, ADDHERI (W) MUMBAI-53 PAN:AAGCS7809C VS. ACIT CENTRAL CIRCLE -38 MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE REPRESENTED BY NONE REVENUE REPRESENTED BY -- SH. V. JUSTINE DR DATE OF HEARING: 18.10.2017 DATE OF ORDER: 18.10.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL BY ASSESSEE UNDER SECTION 253 OF INCOME TAX ACT IS DIRECTED AGAINST THE ORDER OF COMMISSIONER (APPEALS) - 41, M UMBAI DATED 28.02.2013 FOR ASSESSMENT YEAR 2009-10. THE ASSESSE E HAS RAISED FOLLOWING GROUNDS OF APPEAL; (I) THE LD. CIT(A) ERRED IN CONFIRMING THE ACTION OF A SSESSING OFFICER ASSESSING THE TOTAL INCOME OF APPELLANT FOR ASSESSM ENT YEAR 2009-10 AT RS. 3,57,06,540/- (II) THE LD CIT(A) APPEAL ERRED IN CONFIRMING IN FACTS AND CIRCUMSTANCES OF THE CASE IN MAKING AN ADDITION OF A SUM OF RS.59,11,102/- BY LD ASSESSING OFFICER ON ACCOUNT O F PROFIT ON SALE OF ITA NO.3837/M/2013 TWENTY TWENTY TELEVISION COMPANY LTD 2 WIP OF MOVIES/ SERIALS (INVENTORY) ON ADHOC BASIS. THE APPELLANT RESPECTFULLY SUBMITS THAT THE ADDITION OF THIS SUM MAY KINDLY BE DELETED. (III) THE LD CIT(A) ERRED IN CONFIRMING IN FACTS AND CIRC UMSTANCES OF THE CASE IN MAKING AN ADDITION OF A SUM OF RS.2,97,95,4 40/-BY THE LANDED ASSESSING OFFICER BY TREATING THE LOAN AS BU SINESS INCOME OF THE ASSESSEE UNDER THE PROVISION OF SECTION 25(IV). THE APPELLANT RESPECTFULLY SUBMITS THAT THE ADDITIONS OF THIS MAY KINDLY BE DELETED . 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE COMPANY H AD NOT FILED THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. NOTICE UNDER SECTION 142 (1) WAS ISSUED TO THE ASSESSEE FOR FILING THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR. HOWEVER, THE ASSESSEE MADE NO COMP LIANCE OF THE NOTICE NOR ANY REPLY WAS RECEIVED BY ASSESSING OFFICER. TH E ASSESSING OFFICER ALSO ISSUED NOTICE UNDER SECTION 144 WHICH WAS SERVED ON THE ASSESSEE ON 7 TH DECEMBER 2011. AGAIN NO REPLY WAS RECEIVED BY ASSES SING OFFICER. THE ASSESSING OFFICER ISSUED SUMMONS UNDER SECTION 131 OF THE ACT TO THE DIRECTORS OF THE ASSESSEE FOR THEIR PERSONAL APPEAR ANCE. IN RESPONSE TO THE SUMMONS NONE OF THE DIRECTORS EITHER APPEARED OR SE ND THEIR REPLY. FROM THE RECORD AVAILABLE WITH ASSESSING OFFICER THE COS T OF WORK IN PROGRESS WAS OF MOVIES/ SERIAL OF RS,2,36,44,408/- WAS SHOWN. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE AVERAGE PROFIT IN THE FILM INDUSTRY WHICH IS AROUND 20-30%. THE ASSESSING OFFICER ESTIMATED THE PROFIT THE RATE OF 25% OF COST OF WORK IN PROGRESS AND MADE ADDITION OF RS. 59,11, 102/- ON ACCOUNT OF AVERAGE PROFIT. THE ASSESSING OFFICER FURTHER NOTIC ED THAT ASSESSEE HAS TAKEN ITA NO.3837/M/2013 TWENTY TWENTY TELEVISION COMPANY LTD 3 UNSECURED LOAN OF RS.2,97,95,440/- IN THE NORMAL C OURSE OF ITS BUSINESS FOR MAKING FILM FROM ANOTHER COMPANY K SERA SERE PRODUC TION LTD. SUCH LOAN WAS TAKEN FOR BUSINESS IN THE PREVIOUS YEAR. DURING THE PERIOD FOR ASSESSMENT YEAR 2009-10, K SERA SERA PRODUCTION LTD WRITTEN OFF OF THE AMOUNT OF RS.2,97,95,440/- IN THEIR BOOKS OF ACCOUN T. THUS, THE BENEFIT ARRIVED TO THE ASSESSEE IN THE CURRENT YEAR. THUS T HE AMOUNT OF RS.2,97,95,440/- WAS TREATED AS BUSINESS INCOME OF THE ASSESSEE UNDER THE PROVISIONS OF SECTION 28(IV) OF THE ACT. ON APPEAL BEFORE COMMISSIONER (APPEALS) BOTH THE ADDITION WAS SUSTAINED. HENCE, F URTHER AGGRIEVED BY THE ORDER OF COMMISSIONER (APPEALS) THE ASSESSEE HAS FI LED PRESENT APPEAL BEFORE THIS TRIBUNAL. 3. NONE APPEARED ON BEHALF OF ASSESSEE DESPITE REPEATE D CALLS. PERUSAL OF RECORD REVEALS THAT NONE APPEARED ON BEHALF OF ASSE SSEE THROUGHOUT THE PROCEEDINGS. NOTICE OF HEARING OF APPEAL WAS SERVED ON THE ASSESSEE ON 03.07.2014 AND AGAIN FOR THE HEARING 20.07.2016 TH ROUGH REGISTERED POST WITH ACKNOWLEDGMENT. THE NOTICE FOR THE HEARING OF APPEAL FOR THIS DAY WAS ALSO SENT TO THE ASSESSEE ON 19 SEPTEMBER 2017 BY REGISTERED POST. ALL THE NOTICES FROM THIS TRIBUNAL WERE SENT AT THE ADD RESS OF ASSESSEE GIVEN UNDER PARA 10 OF APPEAL FORM NO. 36. UNDER THESE CI RCUMSTANCES WE LEFT NO OPTION EXCEPT TO HEAR THE LEARNED DR FOR THE REV ENUE AND TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RECORD . THE LEARNED DR FOR THE ITA NO.3837/M/2013 TWENTY TWENTY TELEVISION COMPANY LTD 4 REVENUE ARGUED THAT THE OFFICIALS OF ASSESSEE COMPA NY AND ITS REPRESENTATIVE ARE HABITUAL IN NOT ATTENDING THE PR OCEEDING BEFORE THE LOWER AUTHORITIES AS WELL. THE ASSESSMENT WAS COMPLETED U NDER SECTION 144 OF THE ACT. DURING THE FIRST APPELLATE STAGE THE REPRESENT ATIVES OF ASSESSEE HAS NOT APPEARED DESPITE A NUMBER OF OPPORTUNITIES GIVEN TO THEM. IT WAS ARGUED THAT THE ASSESSEE IS MOST HABITUAL AND NEGLIGENT IN ATTENDING THE PROCEEDING. THE ASSESSING OFFICER ON THE BASIS OF M ATERIAL AVAILABLE BEFORE HIM PASSED THE ASSESSMENT ORDER MAKING THE ADDITION . THE ASSESSEE HAS NOT PROVIDED ANY INFORMATION AND DOCUMENT NECESSARY FOR ASSESSMENT OF THE INCOME. DURING THE FIRST APPELLATE STAGE THE ASSESS EE NOT PROVIDED ANY INFORMATION ON DOCUMENTARY EVIDENCE TO SUBSTANTIATE THEIR CONTENTION. THE LEARNED CIT (A) HAS NO OPTION EXCEPT TO DECIDE THE CASE ON THE BASIS OF MATERIAL AVAILABLE BEFORE HIM. THE ASSESSEES REPRE SENTATIVE ARE NOT APPEARING BEFORE THIS TRIBUNAL DESPITE REPEATED NOT ICES SERVED UPON THEM. THE ADDITIONS MADE BY ASSESSING OFFICER ARE BASED O N THE EVIDENCES AVAILABLE BEFORE HIM. THE ASSESSEE HAS NOT SUBSTANT IATED THE GROUNDS OF APPEAL RAISED BY THEM AND THE APPEAL FILED BY ASSES SEE IS LIABLE TO BE REJECTED. 4. WE HAVE CONSIDERED THE SUBMISSION OF LEARNED DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE BEFORE US. THE PERUS AL OF THE RECORD REVEALS THAT THE PRESENT APPEAL WAS FILED ONE DAY AFTER THE PRESCRIBED PERIOD OF ITA NO.3837/M/2013 TWENTY TWENTY TELEVISION COMPANY LTD 5 LIMITATION. THE REGISTRY OF TRIBUNAL ISSUED THE DEF ECT MEMO TO THE ASSESSEE FOR REMOVAL THE DEFECT. THE ASSESSEE HAS NOT REMOVE D THE DEFECT DESPITE GIVING THE OPPORTUNITY. THOUGH THE APPEAL IS LIABLE TO BE DISMISSED ON THIS GROUND ALONE. SINCE, NONE HAS APPEARED ON BEHALF OF ASSESSEE, HENCE, WE ARE ALSO CONSIDERING THE MERIT OF THE CASE. THE ASS ESSEE HAS SHOWN THE WORK IN PROGRESS FOR MOVIES AND SERIALS AMOUNTING T O RS. 2,36,44,408/-. THE ASSESSING OFFICER ESTIMATED THE PROFIT OF THE B USINESS ON THE BASIS OF AVERAGE PROFIT IN THE FILM INDUSTRY. THE ASSESSING OFFICER ESTIMATED THE PROFIT AT THE RATE OF 25% OF THE COST OF WORK IN PR OGRESS. THE LD CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER IN ABSENC E OF ANY OTHER MATERIAL BEFORE HIM. WE HAVE NOTED THAT THE ASSESSEE HAS NOT FILED ANY EVIDENCE EITHER BEFORE THE ASSESSING OFFICER OR BEFORE LEARN ED COMMISSIONER (APPEALS) TO SUBSTANTIATE THE CONTENTION THAT ESTIM ATION OF PROFIT IS AT HIGHER SIDE. HENCE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY ASSESSEE. THUS, THE ADDITION MADE BY ASSE SSING OFFICER AND CONFIRMED BY COMMISSIONER (APPEALS), ON ACCOUNT OF BUSINESS PROFIT AT THE RATE OF 25% OF THE COST OF WORK IN PROGRESS IS SUST AINED. 5. THE SECOND ADDITION RELATES TO THE BENEFITS ARISE T O THE ASSESSEE ON ACCOUNT OF UNSECURED LOAN OF RS.2,97,95,440/-WRITTEN OFF B Y LENDERS I.E. K SERA SERA PRODUCTION LTD. THE ASSESSEE HAS NOT FILED ANY DOCUMENTARY EVIDENCE WITH REGARD TO THIS GROUND OF APPEAL EITHER BEFORE ASSESSING OFFICER OR ITA NO.3837/M/2013 TWENTY TWENTY TELEVISION COMPANY LTD 6 BEFORE COMMISSIONER (APPEALS) OR BEFORE US. THUS, W E DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDER PASSED BY LOWE R AUTHORITIES ABOUT THE ADDITION MADE BY ASSESSING OFFICER AND SUSTAINED BY LD. COMMISSIONER (APPEALS). HENCE ALL THE GROUNDS OF APPEAL RAISED B Y ASSESSEE ARE DISMISSED. 6. IN THE RESULT APPEAL FILED BY ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN C OURT ON 18.10.2017 SD/- SD/- R.C.SHARMA PAWAN SIN GH ACCOUNTANT MEMBER JUD ICIAL MEMBER MUMBAI, DATED: 18.10.2017 COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE; 2. THE REVENUE; 3. THE CIT(A); 4. THE CIT, MUMBAI CITY CONCERNED; 5. THE DR, ITAT, MUMBAI; 6. GUARD FILE. BY ORDER SK PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI