ADIT, New Delhi V. M/s. The Indian Film Company (Cyprus) Ltd., New Delhi

ITA 531/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6575 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 24-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 30-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH CHAND DUBEY
• Assessee Lawyers: TARNDEEP SINGH
• Keywords: Revised return

Judgement Text

1 ITA NOS. 5048/DEL/2012 & 531/DEL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTA NT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.-5048/DEL/2012(A.Y 2008-09) I.T.A .NO.-531/DEL/2014 (A.Y 2009-10) ADIT CIRCLE 1(2), (INTL TAXATION) ROOM NO. 410, DRUM SHAPE BUILDING, I. P. ESTATE NEW DELHI (APPELLANT) VS THE INDIAN FILM COMPANY (CYPRUS) LTD., 403, PRABHAT KIRAN, 17 RAJENDRA PLACE NEW DELHI AACCT7810N (RESPONDENT) APPELLANT BY SH. UMESH CHAND DUBEY, SR. DR RESPONDENT BY SH. TARNDEEP SINGH, CA ORDER PER SUCHITRA KAMBLE, JM THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER DATED 30 TH JULY, 2012 & 13/11/2013 PASSED BY CIT(A)-XXIX, NEW DELHI. 2. THE GROUNDS OF APPEAL IN BOTH THE ASSESSMENT YEA R IS THAT THE CIT(A) ERRED IN HOLDING THAT THE CLAIM OF CARRY FORWARD LO SS MADE BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS TANTAMOUNT TO COR RECTION OF RETURN OF LAW SHOULD BE ALLOW TO CARRY FORWARD. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS:- 3 . THE APPELLANT IS ENGAGED IN THE BUS INESS OF DISTRIBUTION, MARKETING, SALES AND EXPLOITATION OF THE CINEMATOGRAPHIC FILMS RIGHTS AND ACQUIRES ALL OR DATE OF HEARING 24.10.2016 DATE OF PRONOUNCEMENT 05.12.2016 2 ITA NOS. 5048/DEL/2012 & 531/DEL/2014 SOME OF THE RIGHTS IN THE CINEMATOGRAPHIC FILMS FOR EXPLOITATION AROUND THE WORLD INCLUDING INDIA.. FOR THE YEAR UNDER CONSIDERATION THE APPELLANT FILED ITS RETURN OF INCOME ON 30/9/2008 DECLARING A TOTAL INCOME OF RS. 39, 97,805/-. SUBSEQUENTLY, THE SAID RETURN WAS REVISED BY THE AP PELLANT ON 11/1/2010 SHOWING TOTAL INCOME OF NIL. THE LD. ASSESSING OFF ICER HOWEVER IN HIS ORDER OF ASSESSMENT HAS HELD AS UNDER:- (I) THE PROVISIONS OF SECTION 5 ARE APPLICABLE BECA USE THE AMOUNT HAS ACCRUED IN INDIA AND FURTHERMORE, THE INCOME HAS BE EN RECEIVED IN INDIA BY AN AGENT LOCATED/SITUATED IN INDIA FOR AND ON BEHALF OF THE APPELLANT. (II) APPELLANT IS HAVING A BUSINESS CONNECTION IN I NDIA U/S 9(1)(I) OF THE ACT. (III) UNDER ARTICLE 5 OF THE DOUBLE TAXATION AVOIDA NCE AGREEMENT AS ENTERED BETWEEN INDIA AND CYPRUS THE APPELLANT IS H AVING A PE IN INDIA IN THE FORM OF AGENT APPOINTED BY ITS AND HEN CE THE INCOME IS TAXABLE IN INDIA. (IV) THE APPELLANT IS NOT ENTITLED TO THE CARRY FOR WARD THE LOSS AS COMPUTED EMPLOYING THE RULE 9B AS THE SAME HAS NOT BEEN CLAIMED BY THE APPELLANT IN THE RETURN OF THE INCOME. 4. THE LD.CIT(A) ALLOWED THIS GROUND OF CARRY FORWA RD LOSS IN LIGHT OF THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF NALVA INVESTMENT LTD. REPORTED IN 322 ITR 233 (DEL). THE CIT(A) OBSERVED THAT IT IS UNDISPUTED FACT THAT IN THE PRESENT CASE BOTH THE ORIGINAL RETURN O F THE INCOME AS WELL AS THE REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE IN TIME. THE CIT(A) FURTHER HELD THAT THOUGH HE AGGRIEVED THE RULE 9B ONLY THE PROFITS FOR COMPUTATION MECHANISM FOR PROVIDING A DEDUCTION IN RESPECT OF E XPENDITURE ON ACCUSATION 3 ITA NOS. 5048/DEL/2012 & 531/DEL/2014 OF DISTRIBUTION OF FEATURE FILMS THE ROLE NOWHERE R ESTRICTS CARRY FORWARD OF THE ASSESS LOSS COMPUTATION OF LOSS IN THE INSTANT CASE IS RESULT OF THE ASSESSMENT PROCEEDINGS AND ONCE IT IS TANTAMOUNT THEN CARRY FO RWARD OF LOSS WAS ONLY A NATURAL CONSEQUENCE PROVIDED OTHER PRE-CONDITIONS A RE SATISFIED. THE CIT(A) HELD THAT IN THE PRESENT CASE PROVISIONS OF SECTION 80 ARE SATISFIED. 5. THE LD. DR SUBMITTED THAT THE CARRY FORWARD OF L OSS WAS DONE DURING THE ASSESSMENT PROCEEDINGS AND NOT AT THE TIME OF FILIN G RETURN OF INCOME HE SUBMITTED THE HON'BLE SUPREME COURT JUDGMENT IN THE CASE OF GOETZ INDIA LTD. VS. CIT 2006 284 ITR 323 AS WELL AS CIT VS. NATRAJ STATIONARY PRODUCTS PVT. LTD 2009, 312 ITR 22 DELHI INFLUENCE VS. CIT 2015 5 5 TAXMAN.COM 192 AND ALSO JAI BHARAT COOPERATIVE HOUSING SOCIETY LTD. VS . ITO 2010 125 ITD, 19 ITAT, MUMBAI. 6. THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER CANNOT ADJUDICATE THE CLAIM OF THE ASSESSEE WHICH WAS NOWHERE ON THE RECO RD IN THE LIGHT OF THE APEX COURT JUDGMENT. 7. THE LD. AR RELIED ON THE ORDER OF THE CIT (A). 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED RELEV ANT RECORDS. IT IS CLEAR AND UNDISPUTED FACT THAT THE ASSESSEE HAS CLAIMED C ARRY FORWARD LOSS DURING THE ASSESSMENT PROCEEDINGS ITSELF THERE WAS NOTHING NEW ON RECORD THE LOSS WAS ALREADY POINTED OUT IN VARIOUS DOCUMENTS SUBMIT TED BEFORE THE ASSESSING OFFICER THERE WAS NO CHANGE OF BOOKS OF ACCOUNTS BA LANCE SHEETS ONLY UNDER THAT THE CLAIM WAS NOT MADE DURING THE FILING OF RE TURN THIS CANNOT BE TREATED AS FILING A NEW RETURN WHICH WAS NOT PRESENT BEFORE THE ASSESSING OFFICER . IN- FACT THE APEX COURT IN GOETZ INDIA LTD CLEARLY STAT ES THAT THE ASSESSEE HAS A PERMISSION UNDER THE ACT TO FILE REVISED RETURN BEF ORE THE AUTHORITIES AND IT IMBIBES THE CLAIM WHICH HE MAKES THERETO. IN THIS CASE AS WELL, THE ASSESSEE HAS AVAILED THAT PROVISION AND CLAIMED CARRY FORWAR D LOSS. THE CIT (A) HAS 4 ITA NOS. 5048/DEL/2012 & 531/DEL/2014 TAKEN INTO ACCOUNT ALL THE CONTENTIONS OF THE ASSES SEE AND HAS RIGHTLY ALLOWED THIS CLAIM. THERE IS NO REQUIREMENT OF INTERFERENC E IN THE ORDER OF THE CIT (A). 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH DECEMBER, 2016. SD/- SD/- (R. S. SYAL) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 05/12/2016 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NOS. 5048/DEL/2012 & 531/DEL/2014 DATE 1. DRAFT DICTATED ON 24/10/2016 PS 2. DRAFT PLACED BEFORE AUTHOR 24/10/2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 5 .12.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 0 5 .12.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 6 ITA NOS. 5048/DEL/2012 & 531/DEL/2014