9911796707
TMI Blog1983 (11) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... eparately considered below. 2. The first grievance of the revenue is as follows : "On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) has erred in deleting the addition of Rs. 3,500 being the amount of bonus paid to partners in view of the provisions of section 40(b) of the Income-tax Act, 1961. The learned Commissioner (Appeals) failed to appreciate that assessee's only objection to the proposed disallowance of Rs. 3,500 during the course of proceedings under section 144B was that the amount had already been disallowed during the year 1974-75 which plea was found to be factually incorrect and, hence, the objection was not pressed before the IAC." We have considered the rival submissions. As i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 750 to the three partners. The departmental representative could not controvert the facts but submitted that this was a new case, which was not placed before the authorities below and should not be entertained. We do not find any substance in the submission of the revenue. It is open to an assessee to point out mistakes and justify the conclusion in his favour. In the instant case, the assessee's counsel has placed before us the relevant accounts and other particulars, which are included in his paper book and these bear out his submissions that it was due to a mistake that the matter proceeded before the IAC and the true facts are found only now. On the basis of these facts, it is clear that there is no basis whatsoever for considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-1973, in the case of Evergreen Pictures [IT Appeal No. 1514 of 1971-72]. Alternatively, it was submitted that if the amount of Rs. 1,75,000 is held to be inadmissible, the amount of publicity expenses actually incurred and allowed by the ITO at Rs. 63,270 should not be denied to the assessee. 4. We have considered the relevant clauses of the agreement dated 7-6-1974 and these are clauses 4, 8 and 9, which are reproduced below : "4. The distributors shall pay to the producers a sum of Rs. 8,75,000 (Rupees eight lakhs seventy-five thousands only) at Bombay, as and by way of minimum guarantee in consideration of the above appointment as distributors payable as under-- Rs. 15,000 On signing of this agreement (Amount received on 11-4- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commission mentioned in the succeeding para shall also stand proportionately reduced and the accounting will be done on the basis of such reduced minimum guarantee and reduced commission. 9. From the realisations of the said picture in the said territory the distributors shall first recover and recoup to themselves Rs. 8,75,000 being the minimum guarantee amount and then Rs. 1,75,000 (Rs. one lakh seventy-five thousand only) being distributors' fixed commission. After recoupment of the said amount of Rs. 10,50,000 (Rs. ten lakhs, fifty thousand only), the aggregate of MG amount and commission, as stated above, the excess amount shall be retained by the distributors and the producers in the ratio 50 : 50 (fifty per cent) 50 per cent shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curred in connection with the advertisement of the film is not to be treated as part of minimum guarantee. When the gross receipts are to be treated to be belonging to the distributor, it obviously follows that the expenditure incurred on publicity of the film on pre-release and release stage will also be held to be incurred by him. In view of the basis contained in rule 9B, it is not open to the assessee to suggest that the payment of publicity is incurred by the producer and not by the distributor. Such an interpretation will nullify the concept contained in rule 9B. Consequently, we find substance in the ground of the revenue that the Commissioner (Appeals) fell into error in ignoring the mandatory provisions of rule 9B and not appreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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