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2020 (4) TMI 718 - AT - Income TaxAddition towards cost of purchase of film rights u/s 40A(2) - HELD THAT:- Assessee, the mother of assessee and sister of the assessee acquired the impugned property during 1992. The mother of the assessee and sister of the assessee settled their portion of the land by a settlement deed dated 17.06.2011. Assessee has sold and claimed capital gain, in accordance with the case law relied on in CIT vs Manujal J Shah [2011 (10) TMI 406 - BOMBAY HIGH COURT] the period of holding is to be reckoned from the year 1992-93 for the purpose of computing cost of indexation and therefore, we do not find any reason to interfere with the order of the Ld. CIT(A). Claim of interest capitalisation towards cost of acquisition - For the purpose of indexation the assessee has submitted before the CIT(A) that the land was purchased during 1999-2000 relating to assessment year 2000-01. The interest paid was in connection with the acquisition which happened almost 15 to 20 years back. The relevant papers were not able to be produced since the details of capitalisation happened about 20 years back. Assessee has been subject to tax audit in the relevant assessment year and the books of account are duly audited and certified by the CA, the same was duly submitted by the AO as an alternative evidence to substantiate the interest capitalisation which the AO has not considered and made the disallowance. CIT(A) held that he is convinced with the AO’s action on capitalisation interest on capitalising the interest is correct, as per law and directed the AO to include the interest on housing loan borrowed as part of the cost of acquisition. Since, the Revenue has not disputed the findings recorded by the CIT(A) with relevant material, we do not find any reason to interfere with the decision of the CIT(A) on this issue. Disallowance on assessee’s claim on loss of distribution of movie relating to the movie “Badrinath” - CIT(A), the assessee has explained very clearly the nature and the scope of the transaction and made out the case that the amount paid to the company was at arm length which was prevalent as per normal practice in the assessee’s business. The assessee has also made out that there was no unreasonableness in the transaction and the transaction was fully accounted and all the relevant particulars were filed before the AO. As submitted that the AO has not made out the case based on evidence but came to a conclusion that the said transaction was a sham transaction. Considering the material and the plea etc., CIT(A) held that the AO has not made out the case based on evidence. The AO has not determined the fair market value with comparable cases etc. Therefore, he deleted the additions. Revenue is not able to dislodge the findings recorded by the Ld. CIT(A) with relevant material. In the facts and circumstances, we do not find any reason to interfere with the order of the Ld. CIT(A) and hence the corresponding grounds of the Revenue are dismissed.
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