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TMI Blog2019 (5) TMI 1825X X X X Extracts X X X X X X X X Extracts X X X X ..... me gap arrangement - we agree with the Ld. CIT(A) that the interest income earned by the assessee from FDRs cannot be treated as the income from other sources. CIT(A) has passed the order in the present case by following the order of his predecessor passed in assesses own case for the AY 2011-12. No infirmity in the order of the Ld. CIT(A). - Decided against revenue. - I.T.A. No.5956/Mum/2017 - - - Dated:- 17-5-2019 - Shri Shamim Yahya, Accountant Member And Shri Ramlal Negi, Judicial Member Revenue by: Shri. Aarsi Prasad (DR) Assessee by: Shri. Chetan Karia ORDER Ramlal Negi, The revenue has filed the present appeal against the order dated 12.06.2017, passed by the Commissioner of Income Tax (Appeals)-4, (CIT(A)) pertaining to the assessment year 2012-13 whereby the Ld. CIT(A) has partly allowed the appeal filed by the assessee against assessment order passed u/s. 143(3) of the Income Tax (Act). 2. The assessee company engaged in the business of distribution of films, film production, film finance, media campaign, exports of films, service projects including subtitling, hiring of equipments, video studio etc., filed its return of income for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deposits made is to be taxed under the head income from other sources. The Ld. DR further submitted that judgment of the Hon ble Bombay High Court in the case of CIT vs. Lok Holdings 308 ITR 356 (Bom) and CIT vs. Paramount Premium P. Ltd., 190 ITR 259 (Bom) are not applicable to the facts of the present case. Since the AO has rightly treated the income in question under the head income from other sources, the Ld. CIT(A) ought to have confirmed the findings of the AO. The Ld. DR further submitted that since the impugned order passed by the Ld. CIT(A) is not not in accordance with the settled principles of law, the same is liable to be set aside. 6. On the other hand the Ld. Counsel for the assessee submitted that this issue is covered in favour of the assessee by the order of the Ld. CIT(A) passed in assessee s own case for the AY 2011-12. Since there is no change the facts in the present case the Ld. CIT(A) has rightly followed the decision his predecessor rendered in the assesses own case for the AY 2011-12. The Ld. counsel further submitted that in the light of the aforesaid facts there is no infirmity in the order of the Ld. CIT(A). 7. We have perused the material on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort film for IIT Educational Technology and for National Disaster Management Authority. Thus, it can be seen from the details mentioned by the A.O. at page no.6 and 7 of the assessment order that various advances have been received exclusively for the business purposes and all such advances cannot be utilized for production of such big films, advertisement films or short file's instantly as for production of such films, there requires formulation of idea, concept and theme and thereafter requires approval from the respective Departments/Ministry. Further, there is lots of complications, activities and techniques related to production of films, hence such advances could not be utilized immediately. Therefore, with a view to safeguard the advances and make it productive, such advances have been ordered to be kept by the Bank as fixed deposit so that appellant can earn the interest and as and when payments are required to be made in respect of production of such films, such money can be withdrawn immediately. The duration of deposit reveals the fact that such FDRs are not for longer period but for short duration. With a view to make this point more clear, it becomes necessary to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant's case, such investment is not from other source but from the main source i.e.Government of India and its various departments. I find merit in the argument of the id. A.R. that Id. A.O. has only presumed the nature of the income as interest income whereas the embedded fact to the issue under consideration is that advances received are for the purpose of funding media releases and production of big films as well as short films. Also, some of the advances are for the production of regional languages films as per the policy decided by Government of India in 11th Five Year Plan 2007-2012. Obviously, the process of film production undertakes different stages and spread over a period of time, hence such fund could not be utilized immediately. The appellant gets support from the decision ofHon'ble Bombay High Court in the cases ofCIT vs. Paramount Premium Pvt Ltd. C1991) 190 ITR 259 (Bom) and Commissioner of Income tax Vs. Lok Holdings (2009) 308 ITR 356 (Bom). Id. A.O. has tried to distinguish the facts of the case but has not properly appreciated the propositions of the cases supporting the claim of the appellant It is pertinent to point out the various propositions rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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