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2016 (7) TMI 390

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..... sclosed by the assessee. Further, we have also noticed that the rights and liabilities available with the assessee and M/s AFL/RBEL cannot be considered to be the same. Accordingly, we are of the view that the Ld CIT(A) was not justified in confirming the disallowance made by the AO. Accordingly we set aside the order of Ld CIT(A) passed on this issue and direct the AO to delete the impugned disallowance of ₹ 45.83 lakhs. - Decided in favour of assessee. - I.T.A. No. 6693/Mum/2012 - - - Dated:- 7-6-2016 - Shri B.R. Baskaran (AM) Ramlal Negi (JM) For The Assessee : Dr. P Daniel For The Department : Shri Sacchidanand Dube ORDER Per B.R. Baskaran, AM :- The appeal filed by the assessee is directed agains .....

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..... n 31.08.2007 and was preparing for release of films. In the mean time, some other person released another film titled as Its Breaking News , which resembled the name of the film that is going to be produced by the assessee. Hence the assessee was constrained to change the name of film to Yeh Mera India and the assessee got revised certificate on 20-12-2007. Due to these problems, the production of film could not be fully completed by the assessee. Hence the assessee was burdened with the liabilities that arose under the agreement entered with AFL. 4. By that point of time, the assessee had incurred a sum of ₹ 2.49 crores towards production cost. Since the assessee felt that it may end up with huge losses, it transferred its righ .....

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..... to two different periods. He submitted the market rate of any commodity would vary between two different dates depending upon various external and internal factors. He further submitted that RBEL has also transferred the Satellite rights to Pen India P Ltd and accordingly, the theatrical right was priced at ₹ 1.75 crores and the satellite rights was priced at ₹ 0.55 crores, both aggregating to ₹ 2.30 crores. The Ld A.R submitted that Pen India P Ltd was having certain clout over the television channels and it could pay for the satellite rights a sum of ₹ 0.55 crores. He submitted that the assessee did not have any clout over the television channels nor did it specifically transfer satellite rates separately. Accordin .....

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..... assessee herein is described as assignor and M/s AFL is described as assignee . The agreement further describes the rights and liabilities of each of the above said two persons. It can be noticed that the assessee, in its capacity of assignor has obtained certain rights and liabilities and M/s AFL, in its capacity as assignee has obtained its own rights and liabilities. There should not be any dispute that the rights and liabilities of the assignor and assignee are distinct and different. Accordingly, we are of the view that it may not be correct on the part of tax authorities to view the rights and liabilities of assignor and assignee as one and the same. 9. The assessee has transferred its rights and liabilities obtained by it, .....

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..... une of ₹ 19.00 lakhs. The dispute is with regard to the quantum of loss only. However, in view of the foregoing discussions, we are of the view that the reasoning given by the tax authorities to restrict the loss to ₹ 19.00 lakhs cannot be considered to be correct one. Since the assessee has taken a commercial decision in the normal course of carrying on its business and since the assessing officer has not brought on record any material to show that identical transaction with identical set of facts could have fetched more price at the relevant point of time, we are of the view that there is no reason to disbelieve the consideration disclosed by the assessee. Further, we have also noticed that the rights and liabilities available .....

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