TMI Blog2019 (9) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... the life tax has to be added to the cost of the car because it adds to the value of the car. It is also pertinent to mention that the loan processing charges is an expense incurred by the assessee before the acquisition of the asset and therefore the same has also to be added to the cost of the car. Needless to mention that depreciation has to be granted after taking into consideration the life tax and the loan processing charges as the cost of the car. Disallowance of expenditure u/s 40A(3) - cash payments - HELD THAT:- It is the practice in the business to hand over the collection as soon as the film is screened. Therefore the assessee is forced to pay the amount collected from the theatres on Sunday night itself after screening the film when the banks are closed. Hence the exclusion prescribed under Rule 6DD.2(j) of the Rules is applicable in the case of the assessee for the payment made during the period when the Bank do not function. For the above stated reason we hereby direct the Ld.AO to delete the addition made by invoking the provision of Section 40A(3) of the Act. Disallowance of expenditure towards purchase of pictures / movies by invoking the provisions of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sides though we do not appreciate the lapse on the part of the assessee to obtain legal opinion promptly and file the appeal, considering the issues involved in the appeal, in the interest of justice we hereby condone the delay in filing the appeal and proceed to hear the issues on merits. 3. The assessee has raised several grounds in its appeal however the cruxes of the issues are that (i) The Ld.CIT(A) has erred in confirming the order of the Ld.AO who had disallowed the claim of 50% depreciation, interest, loan processing charges, life tax and insurance aggregating to ₹ 22,48,934/- on the car acquired by the firm in the name of the partner (ii) The Ld.CIT(A) has erred in confirming the order of the Ld.AO who had disallowed the expenditure of ₹ 3,50,000/- U/s.40A(3) of the Act towards payment made by cash for acquiring rights of film. (iii) The Ld.CIT(A) has erred in confirming the order of the Ld.AO who had invoked the provisions of Section 40(a)(ia) of the Act for violation of Section 194J of the Act, since tax was not deducted at source towards the payment made for acquiring distribution rights fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtners are collectively called as firm . Thus Partnership is merely an association of individuals and the firm s name is only a collective name of those individuals who constitute the firm. Therefore as per common law the partnership firm is not a legal entity. Only the Income Tax law for the purpose of income tax recognize partnership firm as a distinct personality. Therefore the partnership firm can own assets only in the name of the partners. In the case of the assessee firm, the car is owned in the name of the partner of the firm. If the car is purchased from the resource of the firm or the purchase consideration is credited to the partner s current account or capital account then it shall be construed that the firm is the owner of the car. Further in the case CIT vs. Nidish Transport Corporation in 185 ITR 669 the Hon ble Kerala High Court had held that for the transfer of ownership of the motor vehicle, mutation of the name in the certificate of registration was not necessary and the vehicle could be sold and purchased without following the procedure prescribed under Section 31 of the Motor Vehicles Act. The assessees were the owners of the vehicles and they used them in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n tendered by the Ld.AR. It is the practice in the business to hand over the collection as soon as the film is screened. Therefore the assessee is forced to pay the amount collected from the theatres on Sunday night itself after screening the film when the banks are closed. Hence the exclusion prescribed under Rule 6DD.2(j) of the Rules is applicable in the case of the assessee for the payment made during the period when the Bank do not function. For the above stated reason we hereby direct the Ld.AO to delete the addition of ₹ 3,50,000/- made by invoking the provision of Section 40A(3) of the Act. 6. Ground No.3(iii) : Disallowance of expenditure towards purchase of pictures / movies by invoking the provisions of Section 194J r.w.s. 9(1)(v) 40(a)(ia) of the Act for ₹ 1,93,50,000/- During the course of scrutiny assessment proceedings it was observed by the Ld.AO that the assessee had purchased movie rights of the movie named Balupu for a period of 5 years for ₹ 1,73,50,000/- and another movie rights for the movie Appadalu for a period of 1 year for ₹ 20,00,000/- aggregating to ₹ 1,93,50,000/-. The Ld.AO opined that t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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