TMI Blog2015 (1) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the money was borrowed by the assessee. Subsequent payments by cheques on settlement also show that there remains no reason for making the impugned addition. We, accordingly, set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition of ₹ 3.70 crores. - Decided in favour of assessee. Adhoc disallowance of 20% of motor car expenses, interest on car loan and depreciation - Held that:- Considering that in A.Y. 2004-05 adhoc disallowance was accepted by both parties. We do not find any reason to interfere with the findings of the Ld. CIT(A). Decided against assessee. - I.T.A. No. 3632/Mum/2012, I.T.A. No. 3839/Mum/2012 - - - Dated:- 14-1-2015 - SHRI N.K. BILLAIYA AND SHRI AMIT SHUKLA, JJ. For The Appellant : Shri Hari S. Raheja For The Respondent : Shri S.J. Singh ORDER PER N.K. BILLAIYA, AM: These cross appeals by the assessee and the Revenue are preferred against the order of the Ld. CIT(A)-3, Mumbai dt. 26.3.2012 pertaining to assessment year 2008-09. Both these appeals were heard together and are disposed of by this common order for the sake of convenience. ITA No. 3632/Mum/2012-2008-09 2. The first grievance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been offered for taxation during the year itself. The AO further observed that the assessee is deferring revenue recognition by dividing the whole consideration over the period of the agreement. Drawing support from AS-9 issued by ICAI, the AO concluded by holding as under: A key criterion for determining when to recognize revenue from transaction involving the sale of goods is that the seller has transferred the property in the goods to the buyer for a consideration. The transfer of property in goods. in most cases, results in or coincides with the transfer of significant risks and rewards of ownership to the buyer. When the uncertainty relating to collectability arises subsequent to the time of sale or the rendering of the service, it is more appropriate to make a separate provision to reflect the uncertainty rather than to adjust the amount of revenue originally recorded. In the case of retail sales offering a guarantee of money back if not completely satisfied it may be appropriate to recognize the sale but to make a suitable provision for returns based on previous experience. Thus, AS 9 also stipulates recognizing revenue and recording a sale and if need b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he claim of the appellant that it has offered ₹ 1 Crore in respect of rights of Naya Daur during the year under appeal is also not considered to be correct Appropriation of receipts as the appellant has received adv of ₹ 5.5 Crore during the year. I find that the appellant has transferred home video rights and satellite rights for a total consideration of ₹ 11.50 cores for the period of five years, therefore, it would be appropriate to apportioned the whole consideration of ₹ 11 .50 Crore in 5 years for the term of the contract of exploitation of rights in respect of various films and video rights. Accordingly, the apportionment for the AY under consideration would be at ₹ 2.30 Crore i.e. [11.50/5=2.30]. Therefore the AO is directed to tax the receipt of ₹ 2.30 Crore during the year as against the receipts of ₹ 1 Crore shown by the appellant and ₹ 10.50 Crore assessed by him. This view also supported by the decision of Honble jurisdiction High Court in the case of Prakash Picture 260 ITR 456(Bom) wherein the honorable High Court has held that the assessee had exploited the rights of he film for the period of 10 years therefore, writin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. Counsel relied upon the decision of the Tribunal Mumbai Bench in the case of M/s. Yash Raj Films Pvt. Ltd., in ITA No. 6350/M/2010. The Ld. Counsel further drew our attention to exhibit 22, 23 24 of the Paper Book and claimed that this is how the income has been offered for tax, as and when the assessee received the right on the same, therefore, if the same income is taxed in the first year, it will amount to double taxation of the same income. 8. Per contra, the Ld. Departmental Representative strongly supported the assessment order. The Ld. DR further relied upon the decision of the Tribunal in the case of Star India (P) Ltd. 103 ITD 73. The Ld. DR further relied upon the decision of the Tribunal Mumbai Bench in the case of DDIT (International Taxation) Vs Toronto Dominion Bank Ltd., 26 taxmann. Com 125(Mum). 9. We have given a very thoughtful consideration to the rival submission. We have also perused the orders of the authorities below. The issue before us is whether accrual of income has taken place or not. Whether accrual of income has taken place or not has to be judged on the principles of the real income. 9.1. In CIT Vs Birla Gwalior Pvt. Ltd. 89 ITR 266, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14. Dhund (1973) 1.5.2008 15. Zameer (1975) 1.5.2008 16. Choti Si Baat(1975) 1.5.2008 17. Karm (1977) 1.5.2008 18. Pati Patni Aur Who (1978) 1.5.2008 19. The Burning Train (1980) 1.5.2008 20. Insaf Ka Tarazu (1980) 1.5.2008 21. Agni Pareeksha (1981) 1.5.2008 22. Nikaah (1982) 1.5.2008 23. Mazdoor (1983) 1.5.2008 24. Aaj Ki Awaz (1984) 1.5.2008 25. Kirayaddar (1986) 1.5.2008 26. Dahleez (1986) 1.5.2008 27. Awam (1987) 1.5.2008 28. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that Bhatia Combine shows closing balance at ₹ 4,20,00,000 as against closing balance in the appellant books at ₹ 3,70,00,000 and thus there is difference of ₹ 50,00,000. The reason for difference is that the appellant has taken ₹ 1,75,00,000/- as opening balance whereas Bhatia Combine has taken ₹ 2,25,00,000, hence, the amount of loan in fact is less by the amount of difference. Therefore, the loan has been confirmed. 14.1. In respect of non-compliance by three parties i.e. Ashok Thawani, Devidas Thawani and Jaya Thawani, it was brought to the notice of the Ld. CIT(A) that these persons have filed suit before the High Court for recovery. The suit itself proves that the assessee has borrowed money from these three parties. After considering the facts and the submissions and the remand report, the Ld. CIT(A) confirmed the addition in respect of three parties i.e. Ashok Thawani ₹ 2.25 crores, Devidas Thawani ₹ 1.25 crores and Jaya Thawani ₹ 20 lakhs holding that the assessee failed to furnish confirmation from these parties. 15. Before us, the Ld. Counsel for the assessee drew our attention to the recovery suit filed by various ..... X X X X Extracts X X X X X X X X Extracts X X X X
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