TMI Blog2015 (9) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... nly issue in both the appeal and cross objection is that whether the advance received by the assessee for his professional work has to be assessed in the year of receipt or in the year of performing the contract. 2. Counsel for the assessee submits that the issue in the appeal has been decided by the co-ordinate Bench in the case of R.S.Suriya in ITA Nos. 1944 to 1946/Mds/2014 dated 30th June, 2015, who is a film actor wherein it was held that advance received by the assessee for acting in films is to be assessed in the year in which the contract is performed and not in the year of receipt. Counsel for the assessee submits that the assessee in the present case is a music director and received advances from Sri Rajalakshmi (P) Ltd. and Film Workes, Boat Club. So far as the advance of ₹ 9,50,000/-received from Sri Rajalakshmi P.Ltd., counsel submits that as no project materialized the advance was subsequently refunded in June/July, 2005 and with regard to advance of ₹ 3,00,000/- received from Film Workes, counsel submits that the amount is still outstanding as on date, therefore placing reliance on the order of the co-ordinate Bench in the case of R.S.Suriya (supra), c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the details furnished by the appellant, the advance received from Mis Film Works is for a project which has not yet started. The advance, therefore, was not received as advance for exploration of possibility for working in a project but was received for a specific and concrete project. Even if the project has not started, for the facts of this advance the decision of Hon ble ITAT, Chennai in the case of D.Meena is squarely applicable. For the advances received from Mis Sri Rajalakshmi (P) Ltd it is the submission of the ld.A.R. that the advances were received only for exploration of possibility for working in a project and as no project materialised, the advances were subsequently refunded. The decision of the Hon ble ITAT, Chennai in the case of R.S.Suriya is therefore applicable to the fact of these advances. 15. Accordingly, I hold that advance of ₹ 3,00,000/ from M/s Film Works is assessable as professional income of the appellant on receipt basis and advances of ₹ 9,50,000/ received from M/s Sri Rajalakshmi (P) Ltd are not assessable as professional income of the appellant in assessment year 2005-06 The addition of ₹ 12,50,000/-made in the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hrough the orders of the Tribunal, we find that the issue in appeal is already decided in the proceedings under section 143(3) of the Act. 6. The co-ordinate Bench in ITA Nos. 596 597/Mds/2009 dated 21.08.2009 while arriving at the conclusion that token advances received by the assessee cannot be assessed as income of the assessee during these assessment years observed as under:- 5. After considering the rival contentions and the materials on record, we find that the advances were received by the assessee for taking up the assignment of acting in the films in future. There is no written agreement between the assessee and the producers of the films. The assessee has shown these advances as liability in the balance sheets and in view of the peculiar fact that in the subsequent years these advances were returned by the assessee as the proposed assignments were not materialized the advance token receipt cannot partake the character of income for the assessment year under consideration. The Commissioner of Income Tax (Appeals) has relied upon the Hon ble jurisdictional High Court in the case of Lakshminarayana Films Vs. CIT (supra), wherein the amounts were to be received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce givers were examined and that service was rendered by the assessee to them during the period. Therefore, in our considered opinion and in the light of the Supreme Court decision cited supra there is no part of the said advance accrued to the assessee to constitute income to be chargeable to tax during the period. Thereby the addition of ₹ 25 lakns to the returned income of the assessee is unsustainable under law and it is to be set aside. 7. Similarly, in the case of K.K. Khullar Vs. Deputy Commissioner of Income Tax, the Delhi Benches of this Tribunal has held in paragraph 8 and 9 as under: 8. We have considered the facts of the case and rival submissions. We may refer to the charging section 4 of the Act to the effect that income tax shall be charged for any assessment year (It the rate or rates provided in any Central Acts in respect of the total income of the previous year of every person. Section 5 deals with the scope of total income , which is defined in respect of any previous year in terms of accrual, deemed accrual, receipt and deemed receipt, etc. Section 145 deals with the method of accounting in respect of profits and gains of business or professi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. Therefore, this amount did not become the income. Accordingly, we are of the view that the learned Commissioner of Income Tax (Appeals) erred in finding that the assessee was following the hybrid system of accounting on the ground that the whole of the amount received from the clients as retainership fees was not declared as income in the year of receipt of the amount. 9. Coming to the issue of consistency of assessments, it may be mentioned that the Hon ble Supreme Court itself mentioned in the case of Radhasoami Satsang [1992] 193 ITR 321{ that their findings should not be taken as a general proposition of law to be followed in every case as it was confirmed to the facts of that case. We may add that if a manifestly wrong decision has been taken by the Assessing Officer in one year or in a number of years/ it will not bind the Assessing Officer in tile assessment of a subsequent year because there cannot be any estoppel against the law. However, in this case, we find the earlier and subsequent assessment were made on correct appreciation of the principle of the cash system of accounting. Since the assessee succeeds on merits on this aspect, there is no need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te to treat professional advance received as income, unless until proposed assignments had materialized. Though the Ld. DR put great efforts to submit that fact situation for the impugned assessment year could have been different from that of the earlier years, which was dealt with by the Tribunal in ITA No. 596 597/Mds/2009 as aforesaid. We find that Ld. CIT(A) had confirmed the order of the Assessing Officer for the impugned assessment year based on his own decision for the earlier years, which was later reversed by the Tribunal. As for the reliance placed by the Ld. Counsel for the Revenue on the decisions of A. Ramki (supra) and D .Meena; the former case was decided relying on the latter decision. If we advert to the decision of D.Meena s case, there the assessee who was also a cine artist, had received advance on the basis of a contract for acting in a film. In other words, there was a subsistent contract foracting in a particular- film, whereas in the given case the advances were received from two parties with no clear crystallization of film or the storyline or other aspens of the proposed film. Hence, we are of the opinion that D. Meena s case (supra) is not applicable her ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
