Delhi High Court
The Commissioner Of Income Tax vs Shri Bhushan Dua Legal Heir Of Late ... on 5 May, 2005
Equivalent citations: (2005) 196 CTR Del 609
Author: M B Lokur
Bench: S Kumar, M B Lokur
JUDGMENT
Madan B. Lokur, J.
1. The Revenue is aggrieved by an order dated 10th November, 2003 passed by the Income-tax Appellate Tribunal, Delhi Bench "F", New Delhi (the Tribunal) in ITA No.4916/DEL/1998 in the case of the Respondent-assessed for the Assessment Year 1995-96.
2. The assessed acquired two semi-finished films from M/s. Super Cassette Industries. These semi-finished films, namely, Shabnam and Jai Maa Vaishno Devi were purchased for a consideration of Rs.74,23,715/- and Rs.21,27,352/- respectively.
3. After incurring further expenditure, the said films were completed by the assessed at a total cost of Rs.86,42,798/- for Shabnam and Rs.50,44,435/- for Jai Maa Vaishno Devi respectively. The films were released in time for the assessed to claim deduction in terms of Rule 9A (2) of the Income-tax Rules.
4. However, while finalising the assessment, the Assessing Officer found that the cost of the films was unreasonably high and, therefore, the Assessing Officer disallowed 50% of the claim amounting to about Rs.68.38 lakhs.
5. On appeal, the Commissioner of Income-tax (Appeals) deleted the addition on the ground that the purchase of semi-finished films was purely a business decision governed by commercial considerations. It was held that it is not possible to say, before a film is released, whether it will earn profits or incur losses. Since the books of the assessed including the general ledger, raw stock and processing account, vouchers, etc. were neither defective nor deficient, the assessed was entitled to the deduction claimed.
6. Feeling aggrieved, the Revenue preferred an appeal before the Tribunal but by the impugned order dated 10th November, 2003, the appeal was dismissed.
7. The only contention urged by learned counsel for the Appellant before us is that none of these films were commercially successful and, therefore, the assessed had paid a very high price for purchase of the semi-finished product. As such, the assessed was not entitled to claim deduction and the Assessing Officer had rightly granted only 50% of the cost of the said films as a deduction.
8. We are not at all impressed by the contention urged by learned counsel. It is impossible for anybody to say whether a film is likely to be commercially successful in the box office or not. The assessed apparently bona fide believed that the semi-finished films were purchased at an appropriate commercial price. The assessed thereafter put in some more money to complete the films but unfortunately both of them did not do well in the box office. This does not mean that considerations other than commercial considerations impelled the assessed to purchase the semi-finished films.
9. The Tribunal has found, as a matter of fact, that there were no defects or any infirmity pointed out in the books of account of the assessed nor is there anything to question the expenditure incurred. The Assessing Officer having verified the general ledger, raw stock and processing account, vouchers, etc. and no deficiency having been found therein, it cannot be said that the assessed had paid too high a price for the purchase of the semi-finished films.
10. On the facts of the case, we do not find any question of law much less any substantial question of law that arises for our consideration. Consequently, we find no merit in this appeal. It is, accordingly, dismissed.
