9911796707
TMI Blog1994 (6) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... d, while computing the income of the assessee for the year 1972-73 ? (2) Whether the Appellate Tribunal's finding that the assessee had advanced money in the course of the money-lending business is based on valid materials and is a reasonable view to take on the facts of the case ?" The respondent-assessee is a registered partnership firm, carrying on business in film distribution. As per the agreement entered into with Messrs. Visalakshi Films on September 30, 1964, the assessee advanced a sum of Rs. 80,000 and in consideration of the amount, the assessee was to get exhibition and exploitation rights of the picture "Karuppu Panam", for distribution in Madurai and Ramanathapuram Districts, for a period of ten years. The assessee was als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended to be deposits for requiring the exhibition and exploitation rights, but they were only in the nature of advances made in the nature of lending moneys for interest. The Appellate Tribunal also indicated the names of certain film producers, to whom the assessee advanced moneys. According to the Appellate Tribunal the two film producers, namely, Messrs. Visalakshi Films and Messrs. Kamalalayam Pictures, had failed to repay a portion of the advance and, hence, the same should be allowed as "business loss". Mr. N. V. Balasubramanian, learned junior standing counsel for the income-tax cases, placing implicit reliance on the decision in CIT v. Coimbatore Pictures (P.) Ltd. [1973] 90 ITR 452 (Mad), would contend that the Appellate Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , did not appear to have refuted the transactions referred to therein, as well as the statements mentioned about the course of business activity of the assessee, traceable to film financing. Such being the case, we rather feel that it is too much to contend at this stage that the finding so recorded by the Appellate Tribunal is not based on materials relevant to such a finding. In this view of the matter, we hold that the Appellate Tribunal's finding that the assessee had advanced moneys in the course of moneylending business is based on valid materials and is a reasonable view to take, on the facts and in the circumstances of the case and, accordingly, we answer the second question. The answer, as above, to the second question, we feel, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to exhibit and exploit pictures is the stock in-trade of the business of the assessee and the advances for acquisition of such a right were made in the course of business. Besides, worthy it is to mention here, the Appellate Tribunal has referred to a decision of the apex court in CIT and EPT v. South India Pictures Ltd. [1956] 29 ITR 910, wherein their Lordships held that the advances paid to producers for getting distribution rights are in the nature of business transactions and if any loss occurred, it is in the ordinary course of business and hence a trading loss. For the reasons as aforesaid, we are of the view that, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in holding that the two sums of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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