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TMI Blog2020 (6) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... uiring the exhibition rights of a movie is a fixed expenditure for the distributor that is paid to producers irrespective of the fact whether the film generates a profit or incurs losses. Hence, the payments made by the assessee do not fall under the term Royalty and do not attract the provisions of TDS. The appeal of the revenue on this ground is dismissed. Deemed Dividend addition u/s 2(22)(e) - advances out of commercial transaction - HELD THAT:- Assessee has received ₹ 1,50,000/- as commercial advance for granting rights for distribution of movie and the amount was paid to M/s Sukrit Pictures on 03.05.2010 was commercial advance for screening of the movie. It is a fact on record that the amount received from ACEL which is running a Cinema Theatre in Rohtak has given loan to Sukrit Pictures which is the distributor. Thus, this is the amount received from the theatre owner to the distributor of the films. It is a pure commercial transaction between the movie theatre and the distributor. In view of the judgment of CIT Vs Creative Dyeing Printing Pvt. Ltd. . [ 2009 (9) TMI 43 - DELHI HIGH COURT] wherein it has been held that amounts advanced to the assessee by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Unexplained cash deposits in Karur Vysya Bank - HELD THAT:- The fact that assessee is an authorized signatory of those accounts does not establish that accounts belonged to the assessed when both these entities are separately assessed. Therefore, the nature and source of deposits needs to be examined in the hands of M.S. Education Society and Tyagi Public School respectively but not in the hands of the assessee. Hence, we hereby direct that the addition is liable to be deleted in the hands of the assessee. - ITA No. 2880/Del/2016, ITA No. 2439/Del/2016 - - - Dated:- 27-4-2020 - Ms. Sushma Chowla, Vice-President And Dr. B.R.R Kumar, Accountant Member For the Assessee : None For the Revenue : Sh. S. N. Meena, Sr. DR ORDER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER 1. The present appeals have been filed by the revenue and the assessee are directed against the order of Id. CIT (A)-12, New Delhi dated 29.02.2016. 2. In ITA No. 2880/Del/2016, following grounds have been raised by the Revenue: The CIT(A) erred on facts and circumstances of the case by deleting the addition of ₹ 2,00,00,000/- in respect of claim of royalty for non deduction of TD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ans consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head Capital gains ) for- (i) the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property; (ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ; (iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ; [(iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB;] (v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in conne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tak has given loan to Sukrit Pictures which is the distributor. Thus, this is the amount received from the theatre owner to the distributor of the films. It is a pure commercial transaction between the movie theatre and the distributor. In view of the judgment of Hon'ble Jurisdiction High Court in the case of CIT Vs Creative Dyeing Printing Pvt. Ltd. 318 ITR 476 wherein it has been held that amounts advanced to the assessee by another company for the business purpose wherein both the entities are having common Directors and if it is in the nature of a commercial transactions, the provisions of Section 2(22)(e) of the Act are not attracted. We find that the facts of the instant case are similar wherein the ratio of the above judgment is applicable. Hence, the addition made by the AO is hereby directed to be deleted. Unexplained Investments: 11. The Assessing Officer observed that as per capital account appearing in the balance sheet as on 31.03.2010, the capital of the assessee was mentioned at Rs.(-)1,39,578/- whereas as per capital account appearing in the balance sheet as on 31.03.2011, the opening capital of the assessee as on 01.01.2010 was at ₹ 27,37,241/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- offered an amount of ₹ 3,78,000/- to taxation under the head 'income from house property'. The Assessing Officer held that since the rent agreement reflects monthly rent of ₹ 3,00,000/-, the property should be treated as deemed let out and the annual rental value is determined at ₹ 36,00,000/-. After giving deduction u/s 24(a) of the Act of ₹ 10,80,000/- and after giving allowance for ₹ 3,78,000/- declared by the assessee, the Assessing Officer brought to tax an amount of ₹ 21,42,000/-. The ld. CIT (A) held that the deduction of unrealized rent is available subject to conditions prescribed in Rule 4 of the IT Rules. Rent is considered unrealizable if and only if it is proved to be lost and irrecoverable, where- (a) Tenancy is bonafide. (b) Defaulting tenant has vacated, or steps have been taken to compel him to vacate property. (c) Defaulting tenant is not in occupation of any other property of the assessee. (d) Assessee has taken all reasonable steps to institute legal proceedings for the recovery of the unpaid rent or satisfies the Assessing Officer that legal proceedings would be useless. 15. The ld. CIT (A) confirme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be taken to be nil. (3) The provisions of sub-section (2) shall not apply if- (a) the house or part of the house is actually let during the whole or any part of the previous year; or (b) any other benefit therefrom is derived by the owner. (4) Where the property referred to in sub-section (2) consists of more than [one house]- (a) the provisions of that sub-section shall apply only in respect of [one] of such houses, which the assessee may, at his option, specify in this behalf; (b) the annual value of the house or houses, [other than the house] in respect of which the assessee has exercised an option under clause (a), shall be determined under sub-section (1) as if such house or houses had been let.] [(5) Where the property consisting of any building or land appurtenant thereto is held as stock-in-trade and the property or any part of the property is not let during the whole or any part of the previous year, the annual value of such property or part of the property, for the period up to [one year] from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority, sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, we find that there are two different explanation offered by the assessee. No evidence of gold bars received by the assessee. 22. We have gone through the order of the ld. CIT (A) wherein the issues relating to purchase of gold ornaments in the year 1999 and 2000 have been adequately demolished by going through the items purchased and items sold which do not tally and could not be reconciled. Hence, we hereby uphold the decision of the ld. CIT (A) on this issue. Cash deposits: 23. The Assessing Officer made addition of ₹ 64,17,645/- on account of cash deposits in Karur Vysya Bank. Assessing Officer observed that as per AIR information there was cash deposit of ₹ 64,17,645/- in his saving bank account. Assessee stated that amount did not pertain to him or his family members. Assessing Officer added the amount of ₹ 64,17,645/- as the onus to prove the nature and source was on the Assessee which was not discharged. The assessee has stated that cash deposits were not reflected in personal name or in the name of his proprietary concern and, therefore, the deposits were neither in respect of the income of Assessee nor they were made in the bank account of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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