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TMI Blog2007 (7) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case, the Tribunal was right in confirming the addition of Rs. 34.25 lakhs not received by the appellant as the income of the appellant for the block period April 1, 1987, to March 17, 1997? 2. Whether, on the facts and in the circumstances of the case, the Tribunal having accepted the fact that the sum of Rs. 34.25 lakhs was not received by the appellant, is justified in holding that the said sum represents the appellant's income?" The facts leading to the above substantial questions of law are as under: The assessee is a partnership firm engaged in the production of feature films. There was a search under section 132 of the Income-tax Act, 1961 ("the Act" in short), in the business and residential premises of Shri V. Natarajan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hown on the ground that the same was not accrued and also that the same is not paid till today. With regard to M/s. Nirmala Arts, the assessee had received only Rs. 45,76,000 and the same was offered for regular assessment. The balance amount of Rs. 14.25 lakhs was not shown as it was not accrued. The reason for not receiving the balance amounts was that the said film was a flop. Hence, the said balance amounts should not be considered as undisclosed income under Chapter XIV-B of the Act. The question whether the balance amounts not shown for regular assessment could be considered in the block assessment or not, has not been considered and decided by the Tribunal. Hence, learned counsel appearing for the assessee requested the court to give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TK 15 lakhs 3. M/s. Nirmala Arts Telugu rights 60,01,000" ----------------------------------------------------------- There were written agreements between the parties and the assessee had not received the full amounts mentioned above on the ground that the film was a flop. Due to the same, the assessee was forced to waive a portion of the amount in respect of the above areas. The amount actually received from M/s. GV Films were Rs. 25 lakhs for Salem and Rs. 5 lakhs for TK as against Rs. 50 lakhs as per the agreement and hence the difference of Rs. 20 lakhs was not received. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounts were not offered on the ground that there was a waiver of the said amount of Rs. 34.25 lakhs by mutual agreement and therefore, there was no accrual of income. For the assessment year 1996-97, there was a regular assessment and later the assessment was reopened under section 147 of the Act. There was a further appeal to the appellate authority and the said matter finally came up before this court on a different issue. This court dealt with the matter and the same is reported in Pyramid Films International v. Deputy CIT [2007] 292 ITR 103. In view of the same, the learned senior counsel appearing for the assessee argued that the said amount of Rs. 34.25 lakhs should not be assessed as undisclosed income for the block period and it ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offered for assessment. Later, the block assessment was made in consequence of the search and while making the block assessment, the Assessing Officer noticed that the balance amount of Rs. 34.25 lakhs was not offered for tax and hence he was of the view that it was an undisclosed income for the block period. No details were available on the record in respect of the same. The Tribunal which is the highest fact finding authority ought to have considered the same as to how the impugned amount could be considered as undisclosed income under Chapter XIV-B of the Act, or not. Unfortunately, we lack the precious finding on the crucial factor related to answering the above questions of law. Without the precious finding, it is very difficult for th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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