ITO 16(1)(1), MUMBAI V. B.R. TV, MUMBAI

ITA 5729/MUM/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7096 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 21-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Assessee Lawyers: HARI S RAHEJA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI BEFORE S HRI R.C. SHARMA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 5729 /MUM/2015 ASSESSMENT Y EAR: 2011 - 12 THE INCOME TAX OFFICER 16(1)(1), ROOM NO. 436A, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. MARG , NEW MARINE LINES, MUMBAI - 400020 VS. M/S B R TV., ANAND VILLA, PLOT NO. G - 38, 15 TH ROAD, SANTACRUZ (WEST), MUMBAI - 400054 PAN: AAAFB0941M (APPELLANT) (RESPONDENT) REVENUE BY : SHRI SUMAN KUMAR (DR) ASSESSEE BY : SHRI HARI S. RAHEJA ( A R) DATE OF HEARING: 12/03 /201 8 DATE OF PRONOUNCEMENT: 31 / 05 /201 8 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST ORDER DATED 02.09.2015 PASSED BY THE LD. COMMISS IONER OF INCOME TAX (APPEALS) - 4 , MUMBAI , FOR THE A S S ESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST ASSESSMENT ORDER PASSED U/S 143(3)(II) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE A CT). 2. BRIE F FACTS OF THE CASE ARE THAT THE ASSESSEE FIRM FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING LOSS OF RS. 14,55,761/ - . THE RETURN WAS PROCESSED U/S 143 (1). SINCE, THE CASE WAS SELECTED FOR SCRUTINY, NOTICE U/S 143 (2) (II ) AND 142 (1) WERE ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE TO THE SAID NOTICES, THE AUTHORIZED REPRESENTATIVE (AR) FILED THE DETAILS CALLED FOR BY THE AO AND DISCUSSED THE CASE . IT WAS NOTICED THAT DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSM ENT YEAR UNDER CONSIDERATION , 2 ITA NO. 57 29 / MUM/2015 ASSESSMENT YEAR: 2011 - 12 T HE ASSESSEE FIRM ENTERED INTO AGREEMENT S WITH EIGHT PARTIES FOR SALE OF RIGHT OF OLD TV SERIALS , PRODUCED BY THE FIRM. AS PER THE AGREEMENTS, THE ASSESSEE DELIVERED THE FILMS AND TAPES AND OUT OF THE TOTAL AGREEMENT VALUE O F RS. 1,83,47,000/ - , THE ASSESSEE OFFERED FIRST YEAR OF BOOKING INCOME AMOUNTING TO RS. 18,59,097/ - AND THE REST OF THE AM OUNT WAS SHOWN IN BALANCE SHEET. ACCORDINGLY, THE AO ASKED THE ASSESSEE AS TO WHY THE ENTIRE AGREEMENT VALUE SHOULD NOT BE BROUGHT TO TAX IN THE CURRENT ASSESSMENT YEAR. THE AR RELYING ON THE DECISION OF THE MUMBAI BENCH OF ITAT IN ITA NO. 3632/MUM/2012 DATED 14.01.2015 SUBMITTED THAT THE RIGHTS WOULD COMMENTS IN RESPECT OF EACH OF THE FILMS ON DIFFERENT DATES AND ACCORDINGLY THE ASSESSE E HAS OFFERED THE REMAINING INCOME IN THE SUBSEQUENT YEARS. THE AO REJECTING THE CONTENTION OF THE ASSESSEE MADE ADDITION OF THE BALANCE AMOUNT OF RS. 1,64,87,903/ - TO THE INCOME OF THE ASSESSEE. THE AO ALSO MADE ADDITION OF RS. 68,400/ - U/S 2(24)(X) READ WITH SECTION 36(1)(VA) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT MADE THE DEPOSIT OF EMPLOYEES CONTRIBUTION OF PROVIDENT FUND WITHIN THE PRESCRIBED TIME. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A). THE LD. CIT (A) AFTER H EARING THE ASSESSEE DELETED BOTH THE ADDITIONS. THE REVENUE IS IN APPEAL AGAINST THE FINDINGS OF THE LD. CIT (A). 3 . T HE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) BY RAISING THE FOLLOWING EFFECTIVE GROUND S : - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS JUSTIFIED IN HOLDING THAT THE WHOLE OF THE INCOME OF RS. 1,83,47,000/ - DERIVED FROM SALE OF RIGHTS TO TELECAST OLD TV SERIALS PRODUCED BY THE FIRM DID NOT ACCRUE TO THE ASSESSEE DUR ING THE PREVIOUS YEAR 2010 - 11 BUT SHOULD BE SPREAD OVER THE PERIOD OF AGREEMENT IN EACH CASE. 2. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS JUSTIFIED IN DELETING ADDITION OF RS. 68,400/ - TO THE 3 ITA NO. 57 29 / MUM/2015 ASSESSMENT YEAR: 2011 - 12 INCOME OF ASSESSEE FOR LA TE PAYMENT OF CONTRIBUTION TO EMPLOYEES PROVIDED FUND. 4. BEFORE US, THE LD. DEPARTMENTAL REPRESENTATIVE (DR ) RELYING ON THE ASSESSMENT ORDER PASSED BY THE AO SUBMITTED THAT SINCE THE ASSESSEE FIRM HAD DISCHARGED ITS ENTIRE OBLIGATION BY MAKING DELIVERY OF THE FILMS AND TAPES TO THE PARTIES CONCERNED , THE AO HAS RIGHTLY MADE THE ADDITION IN QUESTION. HENCE, THE LD. CIT(A) HAS WRONGLY DELETED THE ADDITION IN QUESTION. 5. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE LD. CIT (A) HAS PASSED THE ORDER IN QUESTION BY FOLLOWING THE DECISION OF THE ITAT, MUMBAI RENDERED IN THE CASE OF B.R. FILMS VS. ACIT, ITA NO. 3632/MUM/2012 FOR THE A.Y. 2008 - 09 , IN WHICH THE TRIBUNAL HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE, THE RE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT (A) TO INTERFERE WITH THE SAME. THEREFORE, THE APPEAL FILED BY THE REVENUE IS LIABLE TO BE DISMISSED BEING DEVOID OF MERIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE MATERIAL ON RECORD. V IDE THE FIRST GROUND OF APPEAL THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD. CIT (A) IN HOLDING THAT THE WHOLE OF THE INCOME OF RS. 1,83,47,000/ - DERIVED FROM SALE OF RIGHTS TO TELECAST OLD TV SERIALS PRODUCED BY THE FIRM DID NOT ACCRUE TO THE ASSESSE E DURING THE PREVIOUS YEAR 2010 - 11 BUT SHOULD BE SPREAD OVER THE PERIOD OF AGREEMENT IN EACH CASE. THE LD. CIT (A) HAS DECIDED THE SAID ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER: - 3.3 I HAVE CONSIDERED THE ISSUE UNDER APPEAL CAREFULLY, I FIND THAT THESE TV SERIALS NAMELY, MAHABHARAT, MAHABHARAT KATHA, VISHNU PURAAN AND MAA SHAKTI HAD BEEN GIVEN TO THE 8 COMPANIES FOR 2 TO 6 YEARS, HENCE ENTIRE AMOUNT CANNOT BE TAXED IN ONE YEAR. LD. A.O. HAS MENTIONED THE FACT OF DATE OF AGREEMENT AND PERIOD OF SHO W/TELECAST FOR 2 TO 6 YEARS, HENCE ENTIRE PROCEED CANNOT BE PRESUMED TO BE ACCRUED IN THIS VERY YEAR. I FIND THAT IDENTICAL ISSUE 4 ITA NO. 57 29 / MUM/2015 ASSESSMENT YEAR: 2011 - 12 WAS THERE IN THE CASE OF B.R. FILMS VS. ACIT - 11(1) ITA NO. 3632/MUM/2012 - 13 DATED 14.01.2015. RESPECTFULLY FOLLOWING THE DECIS ION OF HONBLE ITAT, THE A.O. IS DIRECTED TO DELETE THE ADDITION OF RS. 1,64,87,903/ - . 7. WE NOTICE THAT THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF B.R. FILMS VS. ACIT(MUM) (SUPRA). SINCE, THE LD. CIT (A) HAS DECIDED THIS ISSUE BY FOLLOWING THE DECISION OF THE COORDINATE BENCH IN ITA NO. 3632/MUM/2012 (SUPRA), WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT (A). WE ACCORDINGLY UPHOLD THE ORDER PASSED BY THE LD. CIT (A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 8. VIDE GROUND NO. 2, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT (A) IN DELETING ADDITION OF RS. 68,400/ - TO THE INCOME OF THE ASSESSEE FOR LATE PAYMENT OF CONTRIBUTION TO EMPLOYEES PROVIDENT FUNDS. 9. TH E LD. DR RELYING ON THE FINDINGS OF THE AO SUBMITTED THAT SINCE THE ASSESSEE HAD FAILED TO TIMELY DEPOSIT THE CONTRIBUTION THE EMPLOYEES CONTRIBUTION, THE AO HAS RIGHTLY MADE THE ADDITION , THEREFORE THE FINDING OF THE LD.CIT(A) IS ERRONEOUS AND LIABLE TO B E SET ASIDE. 10. THE LD. CIT (A) HAS DELETED THE ADDITION MADE ADDITION OF RS. 68, 400/ - HOLDING AS UNDER: - 5.3 I HAVE CONSIDERED THE ISSUE UNDER APPEAL CAREFULLY, I FIND THAT PAYMENT OF CONTRIBUTION OF PROVIDENT FUND AND ESIC, TOTALING TO RS. 68,4 00/ - HAS BEEN DEPOSITED BY THE APPELLANT EITHER IN THE SAME F.Y. OR BEFORE FILING RETURN OF INCOME ON 30.09.2011. HENCE, SUCH EXPENDITURE CANNOT BE DISALLOWED. THUS, THE A.O. IS DIRECTED TO DELETE THE AMOUNT OF RS. 68,400/ - . 5 ITA NO. 57 29 / MUM/2015 ASSESSMENT YEAR: 2011 - 12 11. AS PER THE FINDINGS OF THE LD. CIT (A), THE ASSESSEE HAS DEPOSITED THE SAID AMOUNT EITHER IN THE SAME F.Y. OR BEFORE FILING RETURN OF INCOME ON 30.09.2011. 12. SINCE, THE ASSESSEE HAS DEPOSITED THE ENTIRE AMOUNT , WE AGREE WITH THE LD. CIT (A) AND HOLD THAT SUCH EXPENDITURE CANNOT BE DISALLOWED. IN OUR CONSIDERED VIEW, THE LD.CIT (A) HAS RIGHTLY DELETED THE ADDITION MADE BY THE AO. WE ACCORDINGLY UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. IN THE RESULT, APPEAL FILED BY THE RE VENUE FOR A SSESSMENT YEAR 2011 - 20 12 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY , 2018 . SD/ - SD/ - ( R.C. SHARMA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 31 / 05 / 201 8 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . 6 ITA NO. 57 29 / MUM/2015 ASSESSMENT YEAR: 2011 - 12 / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI