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TMI Blog2017 (3) TMI 1375X X X X Extracts X X X X X X X X Extracts X X X X ..... y evidence for its nature of being an agricultural income, and that income is treated by the Revenue as ‘income from other sources’- Held that:- In this case, the assessee stated that he owns vast area of agricultural land, there was no iota of evidence regarding cultivation carried on by the assessee with reference to nature of crop grown, labourers employed, or any details of expenditure incurred or products sold. In the absence of these particulars, it is not possible for Department to give benefit of agricultural income to the assessee. Since the assessee placed no evidence regarding agricultural income, the burden cast upon the assessee, not shifted to the Revenue authority as to prove that there is no agricultural income. Accordingly, we upheld the order of lower authorities. Therefore, this ground raised by the assessee is dismissed. Levy of penalty under section 271(1)(c) - disallowance of expenditure claimed by the assessee towards advertisement - Held that:- The assessee claimed an expenditure towards advertisement for the assessee is not entitled. In respect of this, the assessee made an effort to claim that expenditure. As rightly pointed out by the ld.D.R, had it be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM ] to examine whether the payment is already made and it is not outstanding at the end of the close of this financial year relevant to assessment year 2010-11 and be already paid, no disallowance is warranted under Sec.40(a)(ia) of the Act Disallowance being 20% of the distribution expenses claimed - Held that:- Admittedly, the assessee had not produced the bills, vouchers and other related supporting evidences. In our opinion, the disallowance of distribution expenses @ 20% made by the AO is on higher side. Considering the nature of distribution, we are inclined to arrive at allowing 10% of the distribution expenses against 20% made by the ld. Assessing Officer as not supported by the vouchers. - ITA Nos. 1601/Mds/2016, ITA Nos. 1726, 1727 & 1728/Mds/2016 - - - Dated:- 17-3-2017 - Shri Chandra Poojari, Accountant Member And Shri Duvvuru R. L. Reddy, Judicial Member Assessee by : Shri K. Meenakshisundaram, Advocate Revenue by : Shri Shiva Srinivas, JCIT ORDER Per Chandra Poojari, Accountant Member The appeal in ITA No.1726/Mds./16 by assessee is directed against the order of the Learned Commissioner of Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,000 No ledger Total 45,84,082 Against this, assessee carried the appeal before the Ld.CIT(A). On appeal, the Ld.CIT(A) observed that as can be seen from the Explanation below Rule 9B(1), the expenditure incurred in connection with advertisement of a film is not allowable as a deduction where the film rights have been acquired on a minimum guarantee basis by a film distributor. Further, Ld.CIT(A) observed that the AO noted in the assessment order that the agreements entered between the film producers and the assessee, the expenditure related to advertisement has to be incurred by the producer. Thus, the Ld.CIT(A) arrived at a conclusion that the AO has rightly disallowed the expenditure of ₹ 45,84,082 incurred with regard to advertisement of the films acquired on minimum guarantee basis by the assessee and confirmed the disallowance. Hence, the assessee is in appeal before us. 4. We have heard both the parties and perused the material on record. In our opinion, the claim of assessee cannot be allowed in view of the Explanation below the Rule 9B(1) of the Income Tax Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e incurred or products sold. In the absence of these particulars, it is not possible for Department to give benefit of agricultural income to the assessee. Since the assessee placed no evidence regarding agricultural income, the burden cast upon the assessee, not shifted to the Revenue authority as to prove that there is no agricultural income. Accordingly, we upheld the order of lower authorities. Therefore, this ground raised by the assessee is dismissed. Thus, the appeal in ITA No.1726/Mds./16 is dismissed. ITA No.1727/Mds./16 ITA No.1601/Mds./16 (A.Y: 2011-12) 8. The common ground in these appeals is with regard to levy of penalty under section 271(1)(c) of the Act. 8.1 The facts of the issue are that the AO considered the following disallowances for levy of penalty under section 271(1)(c) of the Act. Written off claim of expenditure : 71,43,420/- Income discussed as Agricultural income 7,45,000/- ₹ 78,88,420/- The AO levied the penalty @ 100% of tax sought to be evaded. Aggrieved, the assessee carried the appeal bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erroneous. Where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c) . A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. 9. On the other hand, ld.D.R submitted that it is not a wrong claim by the assessee and it is a false claim and had it been there no scrutiny, the assessee would ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the opinion that assessee made an attempt to show the non agricultural income as agricultural income and because of scrutiny, the AO is able to find out the claim as false and the same was considered for income from other sources. Accordingly, this kind of conduct of the assessee warrants levy of penalty under section 271(1)(c) of the Act, which is nothing but furnishing inaccurate particulars of income and levy of penalty under section 271(1)(c) of the Act is confirmed. The appeal of assessee in ITA No.1727/Mds./16 is dismissed and the appeal of Revenue in ITA No.1601/Mds./16 is allowed. ITA No.1728/Mds./16 (Assessee s Appeal: A.Y 2011-12) 11. The first ground in this appeal is with regard to disallowance of ₹ 24,80,664/- incurred towards film distribution commission as they do not deduct the TDS in terms of Sec.40(a)(ia) of the Act. 11.1. The facts of the issue are that the assessee claim an expenditure of ₹ 24,80,664/- as film distribution commission on which the assessee had not deducted TDS. As such, the AO invoked the provisions of the Sec.40(a)(ia) of the Act. The contention of the ld.A.R is that net collection from the distribution of film wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year in respect of the expenses either as outstanding expenses or as sundry creditors, this amount cannot be disallowed. This ground is remitted back to the Assessing Officer for fresh consideration. Accordingly, we remit this issue to the file of the ld. Assessing Officer to examine whether the payment is already made and it is not outstanding at the end of the close of this financial year relevant to assessment year 2010-11 and be already paid, no disallowance is warranted under Sec.40(a)(ia) of the Act. With this observation, we remit the issue to the file of the AO for fresh consideration. 12. The next ground is with regard to disallowance of ₹ 11,94,434/- being 20% of the distribution expenses claimed. 13. The AO disallowed he claim of 20% of distribution expenses in the absences of vouchers and other related supporting expenses. Admittedly, the assessee had not produced the bills, vouchers and other related supporting evidences. In our opinion, the disallowance of distribution expenses @ 20% made by the AO is on higher side. Considering the nature of distribution, we are inclined to arrive at allowing 10% of the distribution expenses against ..... X X X X Extracts X X X X X X X X Extracts X X X X
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