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2017 (1) TMI 1245 - AT - Income TaxDisallowance under section 40(a)(ia) - Held that - From the above findings of the ld. CIT(A), it is amply clear that he has given any decision in any of the issues on merits. On perusal of the appellate order, we find that before the ld. CIT(A) the assessee vide his letter sought for time till November, 2012 and accordingly, the case was posted for hearing on 22.11.2012. Again the assessee vide his letter dated 19.11.2012 asked for three months time. When the case was again posted for hearing, the assessee once again asked for three months. Despite sufficient opportunities were given to the assessee, the assessee has not furnished any particulars in support of his claim. However, the ld. CIT(A) has not decided the issue on merits. Under the above facts and circumstances, we direct the ld. CIT(A) to decide the issue of disallowance made under section 40(a)(ia) of the Act on merits in accordance with law. Disallowance under section 40A(3) - Held that - No details are emanating from the assessment order as to on what purpose the distributors have directly paid the amounts to the Gemini Laboratories. Moreover, the Assessing Officer has not distinguished or given any valid reason as to why the case law relied on by the assessee in the case of K.R. Film Pvt. Ltd. v. ITO (1998 (9) TMI 113 - ITAT BOMBAY-A ) is not applicable. For this issue also, the ld. CIT(A) has not given any findings. After obtaining necessary details, the ld. CIT(A) is directed to decide the issue on merits in accordance with law. Disallowance of loss of the production for movie Ashoka Mitran - CIT(A) has not decided the issue on merits. Accordingly, we direct the ld. CIT(A) to decide the issue on merits in accordance with law by keeping in view of the decision of Hyderabad Benches of the Tribunal in the case of RGV Film Factory Ltd. v. DCIT (2015 (9) TMI 1237 - ITAT HYDERABAD ).
Issues:
1. Delay in filing the appeal before the Tribunal. 2. Disallowance of payments to Artists under Sec. 40(a)(ia) of the Income Tax Act. 3. Disallowance under Sec. 40A(3) of the Act for payments made by Film Distributors to Gemini Lab. 4. Disallowance of loss related to the aborted film "Ashok Mithran." Issue 1: Delay in filing the appeal before the Tribunal The appeal was filed late by eight days, and the assessee sought condonation of delay due to medical reasons supported by a medical certificate. The Tribunal, after reviewing the medical certificate and petition, found sufficient cause for the delay and admitted the appeal for hearing and adjudication. Issue 2: Disallowance of payments to Artists under Sec. 40(a)(ia) of the Income Tax Act The Assessing Officer disallowed payments made to artists and technicians for film production under Sec. 40(a)(ia) as TDS was not deducted. The Tribunal upheld this disallowance as the payments made without TDS deduction attracted tax deductibility, leading to the disallowance of the total amount under the said section. Issue 3: Disallowance under Sec. 40A(3) of the Act for payments made by Film Distributors to Gemini Lab The Assessing Officer disallowed a portion of payments made to Gemini Laboratories by distributors directly in cash under Sec. 40A(3). The Tribunal directed the CIT(A) to decide this issue on merits as the purpose of these payments and the applicability of the law were not adequately addressed in the assessment or appellate orders. Issue 4: Disallowance of loss related to the aborted film "Ashok Mithran" The assessee reported a loss for film production expenses of the film "Ashok Mithran," which was disallowed by the Assessing Officer without valid reasons. The Tribunal directed the CIT(A) to decide this issue on merits, considering relevant legal precedents, to ensure a fair and lawful decision. In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the CIT(A) to decide on the issues of disallowances made under Sec. 40(a)(ia) and Sec. 40A(3) on merits in accordance with the law. The Tribunal emphasized the importance of a thorough examination of the issues to ensure a fair and just decision based on legal principles and precedents.
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