9911796707
TMI Blog2016 (7) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... iness of production of films. Shri N. Chandra is one of the directors of the company and he is also a professional director of films. The assessee company started production of a new film titled as "Breaking news". It entered into an agreement on 09-10-2006 with M/s Adlabs Films Ltd (AFL) for assignment of its rights over the film cited above. It was agreed that the production of film shall be commenced by October, 2006 and the same shall be completed by October, 2007. The agreement provided that the above said film shall be directed by Shri N. Chandra and the IPR attached with the film shall be retained by the assessee. It was further agreed that the fixed price to be paid for assignment of work & rights shall be fixed at Rs. 2.25 crores a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reliance Big Entertainment Ltd (RBEL) during the year ending 31.3.2009. Subsequently M/s RBEL transferred its rights over the film to another company named M/s Pen India Ltd on 07-07-2009 for a consideration of Rs. 2.30 crores. The AO, by taking into the above said transaction, took the view that the consideration for transferring assessee's right over the film to Shri N. Chandra should have been Rs. 2.30 crores. Accordingly, the AO took the view that the loss suffered by the assessee should be restricted to Rs. 19 lakhs (Rs.2.49 crores less Rs. 2.30 crores). Accordingly the AO restricted the loss to Rs. 19 lakhs and disallowed the excess claim of Rs. 45 lakhs. The Ld CIT(A) also confirmed the same. 6. The Ld A.R, during the course of hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified in presuming that a businessman shall always make profit from business. The loss from business activities cannot be altogether avoided. He further submitted that the final production cost reached to an amount of Rs. 9.28 crores, where as the film could generate collection of Rs. 13.97 lakhs during the subsequent years. Accordingly, the Ld A.R submitted that the assessee had taken a commercial decision to transfer the rights with the purpose of reducing further losses and hence the Ld CIT(A) was not justified in confirming the disallowance made by the AO. 7. On the contrary, the ld D.R strongly supported the order of Ld CIT(A). He submitted that the RBEL could transfer its rights over the film to a third party for a sum of Rs. 2.30 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have taken place in two different periods. Accordingly, we are of the view that the tax authorities are not justified in treating both the transactions as representing same rights and liabilities attached to the film. 10. Further, we notice that the assessee has adequately demonstrated the circumstances under which it has decided to transfer its rights for a sum of Rs. 1.85 crores along with attached liabilities. According to the assessee, it has taken a commercial decision to transfer its rights with the purpose of reducing further losses. Even though it was contended by the revenue that the transaction has taken with a related person, yet no material was brought on record to show that the transaction value was less than the market price ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
