ITO 4(3)(3), MUMBAI V. VALATION FINANCE & MARKETING P.LTD, MUMBAI

ITA 4104/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4192 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 28-12-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK BATRA
• Keywords: Capital asset; Wrong claim; Revenue expenditure
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUM BAI BEFORE SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSA IN, JM ./ I.T.A. NO. 4104/MUM/2013 ( / ASSESSMENT YEAR: 2003-04) INCOME-TAX OFFICER, 4(3)(3), R.NO.637, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. / VS. M/S. VALATION FINANCE & MARKETING P. LTD. MONICA BUNGALOW 1 ST FLOOR, FAZAL ROAD, CUFFE PARADE MUMBAI-400 005. ./ ./PAN/GIR NO. AABCV1310Q ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI VIVEK BATRA / RESPONDENT BY : SHRI NIRAJ SHETH / DATE OF HEARING : 17/03/2016 !'# / DATE OF PRONOUNCEMENT : 06/04/2016 $% / O R D E R PER SANDEEP GOSAIN, J. M.: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- 8, DATED 04.0 3.2013 FOR A.Y. 2003-04 ON THE FOLLOWING GROUNDS OF APPEAL. 2 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED OF RS.3 8,58,750/- U/S.271(1)(C) OF THE ACT, ON INCOME FOR WHICH INACCURATE PARTICULARS FILED RESULTING IN CONCEALMENT OF INCOME. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE IMPUGNED ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW AND CONSEQUENTLY MERI TS TO BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RETURN OF INCOME WAS FILED ON 30.10.2003 BY THE ASSESSEE THEREBY DECLARING TOTAL LOSS OF RS.1,01,43,720/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE I.T. ACT ,1961 ON 13/02/2006 DETERMINING TOTAL INCOME OF RS.3,56,274/- BY MAKING ADDITIONS OF RS.1,05,00,000/- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH M/S. HARMONE SHO W BIZ LTD. ON 26/04/2002. AS PER THE TERMS AND CONDITIONS OF THE AGREEMENT T HE THEATRICAL DISTRIBUTION EXHIBITION AND EXPLOITATION RIGHTS OF THE FILM DAN GER FOR THE TERRITORIES PRESCRIBED IN THE AGREEMENT BELONGED TO BOTH THE ASSESSEE AND M/S. HARMONE SHOWBIZ PVT. LTD., AS JOINT OWNERS. THE PROFIT/LOSS SHARE RATIO OF BOTH THE PARTIES WAS 60% AND 40%. SINCE IT WAS FOUND THAT THE BUSINESS WAS NOT L IKELY TO BE PROFITABLE THE ASSESSEE DECIDED TO EXIT FROM THE AGREEMENT. AS AGA INST THE SETTLED PAYMENT OF 3 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. RS.1.50 CRORES, THE APPELLANT PAID A TOTAL SUM OF R S.1.05 CRORES AND CLAIMED THE SAID AMOUNT AS BUSINESS LOS. THE ASSESSING OFFICER DISALLOWED THIS AMOUNT AS THE PAYMENT WAS TOWARDS ACQUISITION OF CAPITAL ASSETS A ND THE CANCELLATION OF THE SAME CANNOT BE CONSIDERED AS REVENUE EXPENDITURE. ASSESS ING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C). MEANWHILE THE ASSESSEE P REFERRED AN APPEAL BEFORE CIT(A) WHO ALLOWED THE ASSESSEES APPEAL. THEREAFTE R, DEPARTMENT FILED AN APPEAL BEFORE THE HONBLE ITAT WHO DISMISSED THE ASSESSEE S APPEAL AND ALLOWED THE APPEAL IN FAVOUR OF THE DEPARTMENT. THE ASSESSING O FFICER THEREAFTER ISSUING STATUTORY NOTICE INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT TO THE ASSESSEE. AFTER CONSIDERING THE REPLY FILED BY THE ASSESSEE, THE AO PASSED ORDER OF PENALTY THEREBY LEVYING PENALTY OF RS.38,58,750/- V IDE ITS ORDER DATED 13/02/2006. 3. AGGRIEVED BY THE ORDER OF LEVYING PENALTY, THE A SSESSEE FILED APPEAL BEFORE THE CIT(A) AND THE CIT(A) AFTER HEARING ALLOWED THE APPEAL AND DROPPED THE PENALTY LEVIED UPON ASSESSEE VIDE ITS ORDER DATED 0 4/03/2013. 3.1 AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE F ILED THE PRESENT APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREIN ABOVE. 4 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. GROUND NO. 1,2 &3 SINCE ALL THE GROUNDS RAISED BY THE ASSESSEE ARE I NTER-CONNECTED AND INTER- RELATED THEREFORE WE THOUGHT IT FIT TO DISPOSE OFF THE SAME THROUGH THE PRESENT CONSOLIDATED ORDER. 4. AT THE VERY OUTSET LD. DR SUBMITTED WHILE APPEAR ING ON BEHALF OF REVENUE THAT THE AGREEMENT OF THE ASSESSEE WITH M/S. HARMON E SHOW BIZ LTD. REGARDING PAYMENT OF RS.1.05 CRORES WAS MADE FOR ACQUIRING 40 % SHARE IN THE PROFIT /LOSS FROM DISTRIBUTION OF FILM DANGER IN CERTAIN TERRI TORIES. SINCE THE SAID PAYMENT WAS MADE WITH A VIEW TO ACQUIRE THE RIGHTS OF DISTR IBUTION OF THE FILM IN CERTAIN TERRITORIES. SINCE, THE PAYMENT WAS MADE FOR ACQUIR ING A CAPITAL ASSET THEREFORE THE LOSS ON BECOMING IRRECOVERABLE COULD NOT BE ALLOWED AS BUSINESS LOSS. IT WAS ARGUED THAT THE ASSESSEE HAS INTENTIONALLY CLAIMED CAPITAL LOSS AS BUSINESS LOSS THEREFORE THE ASSESSEE HAS FURNISHED INACCURATE PAR TICULARS OF ITS INCOME AND REDUCED THE TAX LIABILITY. LD. DR FURTHER ARGUED TH AT THE FINANCING OR INVESTING IN DISTRIBUTION OF FILM IS NOT CONNECTED WITH THE MAIN OBJECT OF THE ASSESSEE COMPANY. THEREFORE, AS PER LD. DR THE PENALTY WAS RIGHTLY LE VIED BY THE AO. IN THE LAST SETTING ASIDE OF CIT(A) ORDER WAS SOUGHT. 5 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. 5. ON THE OTHER HAND, LD. AR REPRESENTING THE ASSES SEE SUBMITTED THAT THE ASSESSEE HAS DISCLOSED ALL THE PARTICULARS OF ITS I NCOME AS WELL AS EXPENDITURE ETC. IN ITS RETURN AND MERE REJECTION OF LEGAL CLAIM OF ASS ESSEE FOR TAXABLE OF INCOME IS NOT ITSELF SUFFICIENT TO WARRANT PENALTY UPON THE ASSES SEE. SINCE THE ASSESSEE HAS DISCLOSED FULL PARTICULARS THEREFORE THE QUESTION O F CONCEALMENT OR FURNISHING INACCURATE PARTICULARS DOES NOT ARISE. LD. AR FURTH ER ARGUED THAT THERE ARE NO FINDINGS THAT ANY OF THE DETAILS SUPPLIED BY THE AS SESSEE IN ITS RETURN ARE FOUND TO BE FALSE. THE LD. AR ALSO RELIED UPON THE JUDGEMENT RE NDERED BY HONBLE SUPREME COURT IN CASE OF CIT VS. RELIANCE PETROPRODUCTS PR IVATE LTD. 322 ITR 158 SC AND CASE TITLED KANBAY SOFTWARE INDIA (P) LTD. VS. DCI T DECIDED BY ITAT PUNE BENCH. 6. WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE COME ON TO THE MERITS OF THE CASE IT IS N ECESSARY TO EVALUATE THE IMPUGNED ORDER PASSED BY CIT(A) AND THE OPERATIVE P ARAS ARE REPRODUCED HEREIN BELOW: 2.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE CONTENTION OF THE APPELLANT. I FIND THAT THE ASSESSING OFFICER LEVIED THE PENALTY ON THE GROUND THAT THE APPELLANT IN AGREEMENT WITH M/S . HARMONE SHOWIZ PVT. LTD. WAS REGARDING THE THEATRICAL DISTRIBUTION EXHIBITION AND EXPLOITATION RIGHTS OF THE FILM DANGER FOR THE TE RRITORIES PRESCRIBED IN THE AGREEMENT ON JOINT OWNERSHIP BASIS. SUBSEQUENTL Y, THE AGREEMENT 6 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. WAS TERMINATED AND APPELLANT MADE AN EXIT BY SETTLI NG ON A PAYMENT OF RS. 1.50 CRORES AND THE APPELLANT ACCORDINGLY PAID RS. 1.50 CRORES AND CLAIMED THE SAME AS BUSINESS LOSS. THE LD. CIT CONF IRMED THE ADDITION MADE BY THE ASSESSING OFFICER BY RELYING ON SEVERAL HIGH COURT/SUPREME COURT DECISIONS. THE MATTER WAS TAKEN UP BY THE APP ELLANT BEFORE THE HON'BLE TRIBUNAL AND TRIBUNAL HELD THAT IT IS NOT R EVENUE LOSS BUT A CAPITAL LOSS AND THEREFORE, CANNOT BE ALLOWED AS A DEDUCTION. THE PENALTY THEREFORE WAS LEVIED BY THE ASSESSING OFFIC ER STATING INTER ALIA THAT THE APPELLANT HAD FURNISHED INACCURATE PARTICU LARS OF INCOME BY MAKING A FALSE CLAIM. HOWEVER, I DO NOT FIND THE CL AIM OF THE ASSESSING OFFICER LEGALLY TENABLE. IT IS A SETTLED PRINCIPLE OF LAW THAT MAKING A CLAIM CANNOT BE A SUBJECT MATTER OF LEVY OF PENALTY . 2.3(A) PENALTY PROCEEDING CAN BE INITIATED ON TWO C HARGES I.E. (1) CONCEALMENT-OF PARTICULARS OF INCOME AND (2) FURNIS HING OF INACCURATE PARTICULARS OF INCOME. IF PROCEEDINGS ARE INITIATED ON CHARGE OF CONCEALMENT THEN PENALTY CANNOT BE LEVIED ON THE CH ARGE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME AND VICE VERSA.( C IT-V- LAKHDHIRLALJI 85 ITR 77(GUJ)). THUS, THERE MUST BE A CLEAR FINDIN G ABOUT THE CHARGE OF PENALTY. IT IS INCUMBENT UPON THE AO TO STATE WHETH ER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THE ABSENCE OF SUCH FINDI NG, THE ORDER WOULD BE BAD IN LAW.-MANU ENGG. WORKS 122 ITR 306 (GUJ), NEW SORATHIA ENGG.CO 282 ITR, 642 (GUJ), PADMA RAM BHARALI 110 I TR 54 (GAU): THUS, BASIS OF SATISFACTION CAN NOT BE ALTERED SUBS EQUENTLY BY IAC.-CIT- V-KEJRIWAL IRON STORES 168 ITR 715 (RAJ). 2.3(B) AT THIS STAGE, IT IS NECESSARY TO UNDERSTAND THE DISTINCTION BETWEEN THE TWO CHARGES ON THE BASIS OF WHICH PENALTY CAN B E LEVIED I.E. (1) CONCEALMENT OF PARTICULARS OF INCOME AND (2) FURNIS HING OF INACCURATE PARTICULARS OF INCOME. IT IS THE PARTICULARS OF INC OME WHICH IS THE COMMON SUBJECT MATTER OF BOTH THE CHARGES WHICH WIL L BE DISCUSSED LATER. THE WORD 'CONCEAL' AS PER WEBSTER'S DICTIONARY MEAN S 'TO HIDE, WITHDRAW, OR REMOVE FROM OBSERVATION; COVER OR KEEP ' FROM SIGHT; TO KEEP SECRET; TO AVOID DISCLOSING OR DIVULGING. THAT MEANS NON DISCLOSURE OF PARTICULARS OF INCOME. ON THE OTHER HAND, WHERE PARTICULARS ARE DISCLOSED BUT SUCH DISCLOSURE IS NOT CORRECT, TRUE OR ACCURATE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME. FOR EXAMPLE, IN CASE OF BUSINESSMAN, IF A PARTICULAR TRANSACTION OF SALE IS NOT SHOWN IN THE BOOKS, IT WOULD AMOUNT TO CONCEALMENT OF PARTIC ULARS OF INCOME 7 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. WHILE SALE IS SHOWN BUT AT A LESSER VALUE, IT WOULD AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. 2.3(C) IT IS PERTINENT TO NOTE THAT THRUST OF THE L EGISLATURE IS UPON THE PARTICULARS OF INCOME WHICH ARE EITHER CONCEALED OR FURNISHED INACCURATELY BY THE ASSESSEE. THEREFORE, ONE MUST U NDERSTAND THE MEANING OF THE WORDS 'PARTICULARS OF INCOME'. RECEN TLY, THE INCOME TAX TRIBUNAL HAD TO CONSIDER THE MEANING OF THE EXPRESS ION 'FURNISHING OF INACCURATE PARTICULARS OF INCOME' APPEARING IN SECT ION 271 (1)(C) IN THE CASE OF KANBAY SOFTWARE INDIA (P) T.TD. 122 IT J 72 1 (PUNE). IT WAS HELD THAT THE EXPRESSION 'PARTICULAR' REFERS TO FACTS, D ETAILS, SPECIFICS OR THE INFORMATION ABOUT SOMEONE OR SOMETHING. THUS, THE D ETAILS OR INFORMATION ABOUT THE INCOME WOULD DEAL WITH FACTUA L DETAILS OF INCOME AND CANNOT B~ EXTENDED TO AREAS WHICH ARE SUBJECTIV E SUCH AS STATUS OF THE TAXABILITY OF AN INCOME, ADMISSIBILITY OF A DED UCTION AND INTERPRETATION OF LAW. ACCORDINGLY, IT WAS HELD THA T MERE REJECTION OF 'A' LEGAL CLAIM WOULD NOT AMOUNT TO FURNISHING OF INACC URATE PARTICULARS OF INCOME. THIS VIEW IS NOW FORTIFIED BY THE RECENT SU PREME COURT JUDGMENT IN THE CASE OF RELIANCE PETROPRODUCTS322 I TR 158 SC. IN THIS CASE, THE CLAIM OF 'A' U/S 36(1)(III) WAS REJECTED BY THE A.O. AND THE ORDER OF A.O. WAS UPHELD BY THE TRIBUNAL. AS A RESU LT THEREOF, THE PENALTY U/S 271 (1)(C) WAS IMPOSED ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE PENALTY WAS HELD TO BE I LLEGALLY IMPOSED BY THE TRIBUNAL SINCE FACTUAL DETAILS OF INCOME FURNIS HED BY THE 'A' WERE FOUND TO BE CORRECT. THE MATTER ULTIMATELY REACHED THE SC AND THE HON'BLE COURT UPHELD THE VIEW OF THE TRIBUNAL BY HO LDING THAT 'MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE LN LA W, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE CLAIM OF FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE.' 2.3(D) EXPLANATION 1 TO SECTION 271 (1 )(C) CANNOT BE APPLIED WHERE CHARGE AGAINST THE 'A' IS FURNISHING OF INACCURATE PARTICULARS OF INCOME SINCE IT PROVIDES A DEEMING FICTION QUA CONCEALMENT OF PARTICULARS OF INCOME ONLY AND CONSEQUENTLY CANNOT BE EXTENDED TO A CASE WHERE CHARGE AGAINST THE 'A' IS FURNISHING OF INACCURATE PARTICULARS OF INCOME. ON THE OTHER HAND, WHERE CHARGE AGAINST THE 'A' IS CONCEALMENT OF PARTICULARS OF INCOME, THE AO HAS TO ESTABLISH EITH ER THAT 'A' HAS NOT DISCLOSED THE PARTICULARS OF INCOME UNDER THE MAIN PROVISIONS OR THE CASE OF 'A' FALLS WITHIN THE SCOPE OF THE DEEMING F ICTIONS CREATED UNDER THE EXPLANATIONS. FOR EXAMPLE, THE 'A' MIGHT NOT DI SCLOSE PARTICULAR SALES OR DIVIDEND INCOME OR INCOME FROM ANY SOURCE. SUCH INSTANCES 8 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. WOULD FALL UNDER THE MAIN PROVISIONS ITSELF. IN SUC H CASES, THE BURDEN IS ON THE AO TO ESTABLISH THE EXISTENCE OF THE CHARGE ON THE BASIS OF MATERIAL ON RECORD. 2.3(E) EXPLANATION 1 CREATES A LEGAL FICTION AND RA ISES A PRESUMPTION AGAINST THE 'A'. IT PROVIDES THAT IF IN RESPECT OF ANY FACT WHICH IS MATERIAL TO THE COMPUTATION OF TOTAL INCOME, 'A' (I) DOES NO T OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE BY AO, OR (II) OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL MAT ERIAL FACTS HAVE BEEN DISCLOSED THEN, THE AMOUNT ADDED OR DISALLOWED SHAL L BE DEEMED TO BE INCOME IN RESPECT OF WHICH PARTICULARS ARE CONCEALE D. IT IS PERTINENT TO NOTE THAT THIS EXPLANATION IS RESTRICTED TO A CASE WHERE 'A' IS UNABLE TO OFFER AN EXPLANATION OR IS UNABLE TO SUBSTANTIATE T HE EXPLANATION OFFERED BY HIM IN RESPECT OF FACTUAL DETAIL OF THE INCOME. THEREFORE, EVEN THIS EXPLANATION DOES NOT AND CANNOT APPLY TO A CASE WHE RE ADDITION/DISALLOWANCE HAS BEEN MADE BY MERE REJECTI ON OF LEGAL CLAIM MADE BY AO. THIS VIEW HAS ALSO BEEN TAKEN BY PUNE B ENCH OF THE TRIBUNAL IN THE CASE KANBAY SOFTWARE (SUPRA). THERE FORE BONA FIDE OF LEGAL CLAIM IS NOT THE SUBJECT MATTER OF THE EXPLAN ATION 1. IN MY VIEW THE RATIO OF THE APEX COURT, IN THE CASE OF RELIANCE PE TROPRODUCTS (SUPRA), TO THE EFFECT THAT MERE REJECTION OF LEGAL CLAIM WOULD NOT INVITE THE PENALTY WOULD ALSO APPLY WHERE THE CHARGE AGAINST THE 'A' I S CONCEALMENT OF PARTICULARS OF INCOME. IN THE VIEW OF THE FOREGOING, THE APPEAL IS ALLOWED . IN THE RESULT, THE APPEAL IS ALLOWED. 7. WE HAVE CAREFULLY CONSIDERED THE IMPUGNED ORDER PASSED BY CIT(A) AND WE HAVE ALSO CONSIDERED THE ARGUMENTS ADVANCED BY THE COUNSEL FOR PARTIES. LD. DR. THE FIRST AND FOREMOST ARGUMENT RAISED BY LD. DR WA S THAT, THE FINANCING OR INVESTING IN DISTRIBUTION OF FILM IS NOT CONNECTED WITH THE MAIN OBJECT OF THE ASSESSEE COMPANY. IN THIS CONTEXT OUR ATTENTION WAS DRAWN TO PAGE NO. 40 OF PAPER BOOK WHERE MEMORANDUM AND ARTICLES OF ASSOCIATION O F ASSESSEE COMPANY HAS BEEN PLACED AND ON PERUSAL OF THE SAME WE FOUND IN PARA NO. 1 ITSELF THAT IT HAS 9 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. BEEN CATEGORICALLY MENTIONED THAT THE MAIN OBJECT O F THE COMPANY IS TO CARRY ON BUSINESS AS FINANCIERS AND TO UNDERTAKE, CARRY ON A ND EXECUTE ALL KINDS OF FINANCIAL OPERATIONS AS MAY BE PERMITTED BY ALL LAWS AND REGU LATIONS AS ARE IN FORCE FROM TIME TO TIME WHICH MAKES IT CLEAR THAT THERE WAS N O HURDLE FOR THE ASSESSEE TO FINANCE OR INVEST IN THE BUSINESS OF DISTRIBUTION O F FILMS. NOW ANOTHER MAJOR ARGUMENTS OF LD. DR IS THAT BY CLAIMING CAPITAL LOS S AS BUSINESS LOSS THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND REDUCE THE TAX LIABILITY, IN THIS RESPECT, OUR ATTENTION WAS DRAWN TO PAPER BOOK AT PAGE NO. 62 WHEREIN AGREEMENT BETWEEN THE ASSESSEE AND M/S. HORMONE SHO WBIZ PVT. LTD., WAS EXECUTED AND AS PER THE CONDITIONS OF AGREEMENT, CE RTAIN TERMS AND CONDITIONS WERE AGREED BETWEEN THE PARTIES AND BY VIRTUE OF THOSE T ERMS AND CONDITIONS THE ASSESSEE WAS REQUIRED TO MAKE PAYMENT OF RS.1.50 CRORES. WE HAVE ALSO PERUSED THE P&L A/C AT PAGE NO. 34 WHERE THERE IS A DISCLOSURE BY T HE ASSESSEE REGARDING THE LOSS OF FILM DISTRIBUTION IN ADDITION WE HAVE ALSO PERUSED PAGE NO. 37 OF THE PAPER BOOK WHERE SCHEDULE E WHICH IS PART OF BALANCE SHEET. IT HAS BEEN CATEGORICALLY MENTIONED THERE THATCOMPANY ENTERED INTO A JOINT VE NTURE FOR DISTRIBUTION OF FILM AND SINCE THE FILM COULD NOT DO WELL THEREFORE IN O RDER TO EXIT FROM THE VENTURE THE COMPANY HAD PAID RS.1.50 CRORES AS TERMINATION COST AND THEREFORE THE SAME IS BOOKED AS LOSS FROM JOINT VENTURE. THE SOURCE OF SA ID PAYMENT HAS BEEN CATEGORICALLY SHOWN AT PAGE NO. 30 OF PAPER BOOK. 10 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. 8. WE HAVE ALSO PERUSED THE COMMUNICATIONS AND CORR ESPONDENCES BETWEEN THE ASSESSEE AND M/S. M/S. HORMONE SHOWBIZ PVT. LTD., W HICH ARE ALSO PART AND PARCEL OF PAPER BOOK AND SINCE THERE AROSE OCCUR DISPUTE B ETWEEN THE PARTIES THEREFORE, THE AGREEMENT ENTERED BETWEEN THE PARTIES WAS CANCELLED BY EXECUTING THE DEED OF CANCELLATION WHICH IS AT PAGE NO. 74 OF THE PAPER B OOK. 9. NOW, THE IMPORTANT QUESTION BEFORE US IS TO ANAL YSE AS TO WHETHER IN THE PRESENT FACTS AND CIRCUMSTANCES THE PROVISION OF SE CTION 271(1)(C) ARE ATTRACTED OR NOT? WE WOULD LIKE TO MENTION THAT IN ORDER TO ATTR ACT PENALTY U/S 271(1)(C) THE ASSESSEE MUST HAVE CONCEALED THE PARTICULARS OF IN COME OR FURNISHING INACCURATE PARTICULARS. SINCE THE ONUS IS ALWAYS ON THE AO TO PROVE AS TO WHAT PARTICULARS OF INCOME HAS BEEN CONCEALED BY THE ASSESSEE OR WHAT I NACCURATE PARTICULARS HAVE BEEN FURNISHED BY THE ASSESSEE. IN THE PRESENT CASE THE LD. DR WAS NOT IN A POSITION TO CONVINCE US AS TO WHAT PARTICULARS FURNISHED BY THE ASSESSEE ARE INACCURATE. EXCEPT SUBMITTING THAT CLAIMING CAPITAL LOSS AS BUS INESS LOSS, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS. 10. AFTER THE CO-JOINT READING OF ALL THE ARGUMENTS CITED BY THE CIT(A) IN HIS ORDER WE ARE OF THE CONSIDERED VIEW THAT MERE REJEC TION OF LEGAL CLAIM WOULD NOT 11 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. AMOUNT TO FURNISHING OF INACCURATE PARTICULARS AND OUR VIEW IS FORTIFIED BY HONBLE SUPREME COURT JUDGEMENT OF CIT VS. RELIANCE PETROP ROUDUCTS PVT. LTD. 10. AFTER ANALYZING THE AFORE MENTIONED ORDER, WE F OUND THAT THE CIT(A) HAS DEALT WITH THE ALL THE ISSUES AND HAS PASSED JUDICI OUS ORDER AND NO CIRCUMSTANCES HAVE BEEN BROUGHT BEFORE US IN ORDER TO CONTROVERT OR REBUT THE FINDINGS RECORDED BY THE CIT(A). THEREFORE, WE SEE NO REASON TO DEVIA TE OR INTERFERE INTO THE FINDINGS RECORDED BY THE CIT(A) AND HENCE, WE REJECT THESE G ROUNDS RAISED BY THE ASSESSEE AND UPHOLD THE ORDER OF THE CIT(A). 11. GROUND NO.3 IS GENERAL IN NATURE AND NEEDS NO S EPARATE ADJUDICATION IN VIEW OF OUR ABOVE DECISION. 12. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH APRIL, 20 16 SD/- SD/- (JASON P. BOAZ) (SANDEEP GO SAIN) $ / ACCOUNTANT MEMBER &' $ / JUDICIAL MEMBER ( ) MUMBAI; *$ DATED :06.04.2016 PS. ASHWINI 12 ITA NO. 4104/MUM/2013 (A.Y. 2003-04) ITO VS. M/S. VALATION FINANCE & MARKETING P. LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT - CONCERNED 5. ./0 ''12 , 12# , ( ) / DR, ITAT, MUMBAI 6. 045 6 / GUARD FILE / BY ORDER, / !'# (DY./ASSTT. REGISTRAR) #$ %, ( ) / ITAT, MUMBAI