1992 (4) TMI 66 - AT - Income Tax

A Partner Assessing Officer Assessment Order Cash System Partnership Firm Revised Return S. 10 Set On Time Limit For Completion

Summary

Issues Involved:
1. Limitation period for assessment.
2. Validity of revised return under section 139(5).
3. Addition of Rs. 5 lacs as remuneration.
4. Disallowance of motor-car expenses and depreciation.
5. Taxation of over-flow receipts.

Issue-wise Detailed Analysis:

1. Limitation Period for Assessment:
The assessee challenged the assessment order dated 25-09-1984 as time-barred. The relevant dates are:
- Return due: 31-07-1980
- Return filed: 19-06-1981
- Revised return filed: 09-03-1983
- Draft order issued: 30-03-1984
- Final order passed: 25-09-1984

The assessee argued that the assessment should have been completed within the normal time limit. The Tribunal noted the conflicting judicial decisions on whether a return filed under section 139(4) can be revised under section 139(5). The Tribunal held that the revised return filed on 09-03-1983 was valid under section 139(5) and thus the extended period of limitation under section 153(1)(b) was available. The Tribunal concluded that the assessment was within the period of limitation.

2. Validity of Revised Return under Section 139(5):
The assessee contended that the return filed on 09-03-1983 was not a revised return under section 139(5) and therefore the benefit of the extended time limit under section 153(1)(c) was not available. The Tribunal held that a return filed under section 139(4) can be revised under section 139(5), relying on judicial precedents from the Calcutta, Madhya Pradesh, and Madras High Courts. The Tribunal concluded that the revised return filed on 09-03-1983 was valid under section 139(5).

3. Addition of Rs. 5 Lacs as Remuneration:
The assessee argued that the amount of Rs. 5 lacs was not payable until the realization from the distribution of the film exceeded the costs incurred. The Tribunal noted that the entire sum of Rs. 10 lacs was claimed as the cost of acquisition by SRFD, and the agreement between the assessee and SRFD was not disclosed to the Assessing Officer. The Tribunal held that the crediting of the assessee's account in the books of SRFD was a constructive receipt of the amount. The addition of Rs. 5 lacs was confirmed.

4. Disallowance of Motor-Car Expenses and Depreciation:
The assessee challenged the disallowance of 1/3rd of motor-car expenses and depreciation on the grounds of personal use. The Tribunal noted that no specific arguments were advanced in support of this ground. The Tribunal upheld the disallowance, confirming the CIT(A)'s decision.

5. Taxation of Over-Flow Receipts:
The assessee contended that the income from over-flow receipts of the picture 'Anand' had already been taxed in earlier years on an accrued basis. The Tribunal noted that the assessee could not specify the year in which the over-flow receipts of Rs. 45,829 were taxed. Since the assessee followed the cash system of accounting, the Tribunal upheld the taxation of the over-flow receipts in the current year.

Conclusion:
The appeal filed by the assessee was dismissed. The Tribunal upheld the assessment order, confirming the validity of the revised return, the addition of Rs. 5 lacs, the disallowance of motor-car expenses and depreciation, and the taxation of over-flow receipts.