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2023 (11) TMI 989 - ITAT HYDERABADAddition u/s 40A - cash purchases for purchase of movie satellite rights, which the assessee had paid to the producers of movies - AR submitted that as the movie industry is volatile, assessee has to purchase / sell satellite rights only in cash and that the same is evident from the agreements entered into by the assessee with various vendors and further contended that the sellers insist the assessee to make payment in cash - HELD THAT:- Assessee has to deal with the agreements with the purchases of Film Rights which were not disputed by the Assessing Officer and rather the additions were sought to be made on the basis of said agreements. The agreement with the purchaser and the cash payment made by the assessee after receiving it from the purchaser to the seller are not disputed by the revenue authorities. Thus, the genuineness of the transactions has not been doubted by the revenue authorities. Once the genuineness of the cash payment for purchasing the movie rights have been considered by the revenue authority with respect to the other transaction namely, for the other part of the amount which was paid through the banking channel , then the transaction cannot be doubted by the revenue authorities. In our view, once the transaction has not been doubted by the revenue authority, then for the purposes of violation of provision of section 40A(3), we may fruitfully rely upon on the decisions of Basu Distributor (P) Ltd[2012 (2) TMI 307 - DELHI HIGH COURT], HONEY ENTERPRISES [2015 (12) TMI 519 - DELHI HIGH COURT] and CPL TANNERY [2008 (8) TMI 356 - CALCUTTA HIGH COURT] we hereby allow the appeal of assessee and direct the Assessing Officer to delete the addition - Assessee appeal allowed.
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