FILM KRAFT PRODUCTIONS (INDIA) P.LTD, V. ADDL CIT CIR 11(1),

MA 202/MUM/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3649 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 29 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 01-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Keywords: Depreciation; Business expenditure; Opportunity of being heard

Judgement Text

, F , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI N.K .BILLAIYA, AM MA NO.202/MUM/2015 (ARISING OUT OF ITA NO.7358/MUM/2012) ASST.YEAR 2009-2010 M/S.FILMKRAFT PRODUCTIONS (INDIA) PRIVATE LIMITED PLOT NO.B-27, COMMERCE CENTRE OFF NEW LINK ROAD, ANDHERI (WEST) MUMBAI 400 053. PAN : AAACF3549E. / VS. THE ADDL.COMMISSIONER OF INCOME-TAX CIRCLE 11(1) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPLICANT BY : SHRI K.GOPAL ! /REVENUE BY : SHRI C.W.ANGOLKAR / DATE OF HEARING : 30.10.2015 / DATE OF PRONOUNCEMENT : 30.10.2015. / O R D E R PER N.K.BILLAIYA (AM) : THIS MISCELLANEOUS APPLICATION BY THE ASSESSEE IS D IRECTED AGAINST THE ORDER OF THE TRIBUNAL IN ITA NO. 7358/MUM/2012 DATE D 15.07.2015. 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT WHILE DECIDING GROUND NO. 1 (B), THE TRIBUNAL DID NOT ADJUDICATE ON THE SECOND LIMB OF THE SAID GROUND, WHICH HAS RESULTED INTO ERROR RECTIFIABLE U/S 254 O F THE ACT. 3. WE HAVE CAREFULLY PERUSED THE MISCELLANEOUS APPL ICATION OF THE ASSESSEE QUA THE DECISION OF THE TRIBUNAL. GROUND NO. 1-B READS AS UNDER :- MA NO.202/MUM/2015 M/S.FILMKRAFT PRODUCTIONS (INDIA) PVT.LTD. 2 ALLEGED DISALLOWANCE OF RS. 2,00,00,000/- BEING RE VENUE EXPENDITURE INCURRED, IN THE ORDINARY COURSE OF BUS INESS COMPENSATORY IN PAYMENT, IN RESPECT OF ALLEGED INFR INGEMENT OF COPYRIGHT, MADE TO SHRI RAM SAMPAT, IN TERMS OF CO NSENT TERMS OF THE COURT, OUGHT TO HAVE BEEN HELD AS FULLY ALLO WABLE BUSINESS EXPENDITURE, WHICH IN ANY CASE, WAS ALLOWABLE UNDER RULE 9A OF THE INCOME TAX RULES, 1962. 3.1 THE RELEVANT FINDING OF THE TRIBUNAL IS AT PARA 16 AND 16.1, WHICH READ AS UNDER :- 16. A PERUSAL OF THIS CONSENT TERM CLEARLY SHOWS T HAT THE PLAINTIFFS I.E. SHRI RAM SAMPAT HAS ASSIGNED HIS M USICAL WORK/COMPOSITION THUMP TO THE DEFENDANT ONE OF WH ICH IS ASSESSEE. IT CAN ALSO BE SEEN THAT THE PAYMENT HAS BEEN MADE AFTER DEDUCTING TAX AT SOURCE. THE MOST RELEVANT CL AUSE (4) WHICH CLEARLY SAYS THAT THE PLAINTIFF I.E. SHRI RAM SAMPA T SHALL NOT HAVE ANY RIGHT OF ANY NATURE WHATSOEVER IN THE SAID WORK THUMP. 16.1 A PERUSAL OF THESE RELEVANT CLAUSES OF THE CON SENT TERMS LEAVES NO AMBIGUITY TO HOLD THAT THE ASSESSEE HAS I N FACT ACQUIRED THE COPYRIGHT OF THE MUSICAL COMPOSITION THUMP. THE AO HAS THEREFORE RIGHTLY TREATED THE SAME AS INTANG IBLE ASSET AND ALLOWED PERMISSIBLE RATE OF DEPRECIATION. SINCE THI S ACT OF THE AO HAS BEEN RIGHTLY CONFIRMED BY THE LD. CIT(A), WE DE CLINE TO INTERFERE. GROUND NO. 2 IS ACCORDINGLY DISMISSED. 3.2 WE FIND FORCE IN THE CLAIM OF THE ASSESSEE. THE FINDINGS GIVEN AT PARA 16.1 SHALL BE READ AS UNDER :- THE PERUSAL OF THESE RELEVANT CLAUSES OF THE CONSE NT TERMS LEAVES NO AMBIGUITY TO HOLD THAT THE ASSESSEE HAS IN FACT ACQUIRED THE COPYRIGHT OF THE MUSICAL COMPOSITION (THUMP). THE A O HAS, THEREFORE, RIGHTLY TREATED THE SAME AS INTANGIBLE A SSET. HOWEVER, IN OUR CONSIDERED OPINION, AT THE SAME TIME, THE CLAIM IS TO BE CONSIDERED UNDER RULE 9A OF THE INCOME TAX RULES, 1 962. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF THE A. O. THE A.O. IS MA NO.202/MUM/2015 M/S.FILMKRAFT PRODUCTIONS (INDIA) PVT.LTD. 3 DIRECTED TO CONSIDER THE LIABILITY OF RS. 2 CRORES IN THE LIGHT OF RULE 9A OF THE INCOME TAX RULES AND DECIDED THE ISSUE AF RESH, AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD. NEEDL ESS TO MENTION THAT, IF THE EXPENDITURE IS ALLOWED AS PER RULE 9A, THE DEPRECIATION SHALL BE WITHDRAWN. THE ORDER OF THE ITAT IN ITA NO.7358/MUM/2012 DATED 15.07.2015 IS ACCORDINGLY MODIFIED. 4. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS ALLOWED WITH ABOVE DIRECTIONS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCTOBER, 2015. !' # $ SD/- (SHAILENDRA KUMAR YADAV) SD/- (N.K.BILLAIYA) # ! / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER ! MUMBAI; ! DATED : 30 TH OCTOBER, 2015. LUBHNA* %#&'()(*& / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ' ( //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT, MUMBAI. 4. ) / CIT(A) - 3, MUMBAI 5. ',# ((-. , -. , ! / DR, ITAT, MUMBAI 6. #01 2 / GUARD FILE.