Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (8) TMI 627 - AT - Income TaxDeduction of consultancy fees - contract work for film production - A.O. made disallowance - CIT deleted disallowance - Held that:- although the assessee was engaged in the business of trading in investment and securities and the contracts for film production were executed by it for the first time during the year under consideration, there was complete unity of control and management - if there is common management and common control of the business, the new line of business constitutes expansion of the existing business - business relating to film production was set up in the year under consideration and the expenditure in question on payment of consultancy fees having incurred by the assessee in connection with the said business, the same was allowable as deduction even though the execution of the contract work for film production was not commenced during the year under consideration - Following decision of B.R. Ltd. vs. CIT [1978 (5) TMI 3 - SUPREME Court] - Decided against Revenue. Applicability of Rule 9-A - Expenditure on production of feature films - Whether the assessee is in the business of production of feature films as contemplated in Rule 9A - Held that:- It is manifest from the relevant portion of the agreement between the assessee company and M/s Sahara India TV Network that the role of the assessee company as "production house" was limited to produce the films at the instance of the producer Sahara India TV Network strictly in accordance with the concept, theme, script, production value and production schedule etc. approved by the producer. Even any alteration in the approved details was to be done with the prior written consent of the producer - The activity of production of film was to be monitored and supervised by M/s Sahara India TV Network as producer and the instructions and advice given by M/s Sahara India TV Network to the assessee, be it commercial and otherwise, was binding on the assessee as the production house. M/s Sahara India TV Network as the producer was entitled to use , exhibit, market, sell, distribute, re-produce, assign and exploit etc. the films and parts thereof as may be decided by it being perpetual and global territory holders of the films and the assessee production house was not entitled to any rights, interests and claims whatsoever except the gross consideration expressly provided in the agreement - all these terms and conditions of the agreement are sufficient to show that M/s Sahara India TV Network was the producer of the film as envisaged in Rule 9A and not the assessee and the said Rule therefore was not applicable in computing the business income of the assessee - Decided against Revenue.
|