COMMISSIONER OF INCOME TAX v. SUPER CASSETTES INDUSTRIES LTD
[Citation -2015-LL-1005-27]

Citation 2015-LL-1005-27
Appellant Name COMMISSIONER OF INCOME TAX
Respondent Name SUPER CASSETTES INDUSTRIES LTD
Court HIGH COURT OF DELHI AT NEW DELHI
Relevant Act Income-tax
Date of Order 05/10/2015
Assessment Year 1997-98
Judgment View Judgment
Keyword Tags feature film • royalty expenses • undisclosed investment • unexplained investment • work in progress
Bot Summary: Question is covered in favour of the Assessee against the Revenue by the decisions in CIT v. Krishan Kumar 228 Taxman 264, CIT v. Tony Electronics Ltd. 375 ITR and the decision dated 3rd August 2015 in ITR 142/2010 5. Since the question concerning the additions was decided on ad-hoc basis, no substantial question of law arises. The findings as regards question by the CIT by the ITAT again turned on facts. Turning to question, following the order for AY 1996-97, depreciation on dies and moulds was restricted to 25 as against 40. The Revenue having accepted the orders relating to earlier AYs, no substantial question of law arises. Question in respect of Namoli Unit stands covered in favour of Assessee and against the Revenue by the order passed by the Court today in ITA 625 of 2010 11. Turning to question the CIT on the basis of the documentary evidence concluded that the name of Mrs. Anuradha Paudwal was used for publicity and that the expenditure was incurred by the Assessee.


$ 22 * IN HIGH COURT OF DELHI AT NEW DELHI + ITA 628/2010 COMMISSIONER OF INCOME TAX ..... Appellant Through: Mr.Rohit Madan, Advocate versus SUPER CASSETTES INDUSTRIES LTD ..... Respondent Through: Mr.Satyen Sethi, Advocate. CORAM: HON'BLE DR. JUSTICE S.MURALIDHAR HON'BLE MR. JUSTICE VIBHU BAKHRU ORDER % 05.10.2015 1. This is appeal by Revenue is directed against order dated 31st July 2009 passed by Income Tax Appellate Tribunal (ITAT) in ITA No.2346/2012 for Assessment Year (AY) 1997-98. 2. In present appeal, Revenue urges following questions for consideration: (a) Whether on facts and in circumstances of case, ITAT erred in law and on merits and on account of understatement of production and sales of AMT cuts amounting to Rs.25,06,80,615/-? (b) Whether on facts and in circumstances of case, ITAT erred in law and on merits in directing AO to treat ITA 628/2010 Page 1 of 8 royalty expenses of Rs.4,08,91,932/-, video shooting expenses of Rs.1,60,72,909/-, recording expenses of Rs.4,09,12,489/- and cost of spool Rs.53,84,238/- as revenue expenditure? (c) Whether on facts and in circumstances of case, ITAT erred in law and on merits in disallowance of Rs.1,21,16,126/- by treating expenditure claimed on stamper as capital in nature? (d) Whether on facts and in circumstances of case, ITAT erred in law and on merits in addition on account of work in progress amounting to Rs.50,06,776/- in respect of C- 25, C-26 and Namoli Unit? (e) Whether on facts and in circumstances of case, ITAT erred in law and on merits in addition of Rs. 5,02,268 on account of understatement value of Polyester film on closing stock? (f) Whether on facts and in circumstances of case, ITAT erred in law and on merits in substantial addition of Rs.11, 33, 623/- relating to M/s. Gee Vee Electronics made in hands of assessee company? (g) Whether on facts and in circumstances of case, ITA 628/2010 Page 2 of 8 ITAT erred in law and on merits in granting depreciation of Rs.41,83,871/- @40% instead of 25% on moulds? (h) Whether on facts and in circumstances of case, ITAT erred in law and on merits in allowing depreciation of Rs.2,70,813/- in respect of Namoli Unit? (i) Whether on facts and in circumstances of case, ITAT erred in law and on merits in deleting addition of Rs.1,23,00,000/- made on account of cost of ten episodes of "Shiv Mahapuran" and Rs.23,22,000/- made in respect of feature film "Chal Kaveria Shiv Ke Dham" by ignoring Rules of Income Tax Rules? (j) Whether on facts and in circumstances of case, ITAT erred in law and on merits in addition of Rs.45,36,075/- made on account of 10 episodes of "Char Dham" by ignoring Rule 9A of Income Tax Rules? (k) Whether on facts and in circumstances of case, ITAT erred in law and on merits in deleting addition/disallowance of loss of Rs.63,62,197/- in respect of film "Jai Dakshineshwar Kali" even though as per censor certificate producer of film was someone else? (l) Whether on facts and in circumstances of case, ITA 628/2010 Page 3 of 8 ITAT erred in law and on merits in deleting addition of Rs.8,11,848/- relating to understatement of sale price of blank such cassettes by Namoli Unit and Rs.5,20,91,653/- in respect of other than Namoli Unit? (m) Whether on facts and in circumstances of case, ITAT erred in law and on merits in deleting addition of Rs.26,44,88,609/- on account of understatement of sales price of blank audio cassettes? (n) Whether on facts and in circumstances of case, ITAT erred in law and on merits in allowing deduction u/s 80HH of Income Tax Act, 1961 amounting to Rs.1,31,71,610/- and u/s 80-I of Income Tax Act, 1961 and amounting to Rs.1,64,64,513/- in respect of Namoli Unit? (o) Whether on facts and in circumstances of case, ITAT erred in law and on merits in allowing deduction u/s 80-IA of Income Tax Act,1961 amounting to Rs.1,24,45,397/- in respect of C-26 Namoli Unit? (p) Whether on facts and in circumstances of case, ITAT erred in law and on merits in granting deduction u/s 801 of Income Tax Act, 1961 without reducing amount of deduction granted u/s 80HH of Income Tax Act, 1961? ITA 628/2010 Page 4 of 8 (q) Whether on facts and in circumstances of case, ITAT erred in law and on merits in deleting addition of Rs.2,06,95,800/- on account of unexplained investment in production of audio cassettes at C-25? (r) Whether on facts and in circumstances of case, ITAT erred in law and on merits in deleting addition of Rs.4,59,700/- on account of undisclosed investment in production of audio cassettes at C-26 Noida? 3. Question (a) stands covered by order passed by this Court today i.e. 5th October 2015 in ITA 625/2010 (CIT v. Tony Electronics Ltd.) for assessment year (AY) 1997-98. 4. Question (b) is covered in favour of Assessee against Revenue by decisions in CIT v. Krishan Kumar (2015) 228 Taxman 264 (Del), CIT v. Tony Electronics Ltd. (2015) 375 ITR (Del) and decision dated 3rd August 2015 in ITR 142/2010 (CIT v. Super Cassettes Industries Ltd.) 5. As regards question (c), it is clarified that master copy is must for bulk production of audio cassettes CDs in bulk. master copy is known as stamper . It is not in dispute that this question is also covered in favour of Assessee against Revenue by decisions in Krishna Kumar (supra) followed by CIT v. Tony Electronics Ltd.(supra) and CIT v. Super Cassettes Industries Ltd. (supra). ITA 628/2010 Page 5 of 8 6. As regards question (d), it is stated that in making ad-hoc addition Assessing Officer (AO) followed order for AY 1995-96 in case of CIT v. Tony Electronics Ltd. This ad-hoc addition is reduced to 50 per cent and in second appeal, ITAT restricted addition to 20 per cent. Since question concerning additions was decided on ad-hoc basis, no substantial question of law arises. 7. findings as regards question (e) by CIT (A) by ITAT again turned on facts. No substantial question of law arises. 8. As regards question (f), it is not in dispute that income of firm M/s. Vee Gee Electronics Ltd. has been assessed in hands of firm with Revenue accepting that said firm has its own independent activity. question of adding income of firm in hands of assessee is not arise. Court, therefore declines to frame question on this issue. 9. Turning to question (g), following order for AY 1996-97, depreciation on dies and moulds was restricted to 25% as against 40%. In earlier AY 1996-97, CIT (A) followed its order for AY 1994-95 and held that dies and moulds used by Assessee are covered under Entry III (2) (iii) to Income Tax Rules 1962. Rubber and plastic goods factories are entitled to 100 per cent depreciation. Upholding order of CIT (A) it was pointed out by ITAT that in AY 1996-97 against order of CIT (A) Revenue filed appeal before ITAT raising this issue. In AY 1997-98, order restricting depreciation to 25 per cent has been passed. ITA 628/2010 Page 6 of 8 For AY 1996-97 although appeal was filed by Revenue before ITAT, no ground against this issue was raised. Revenue having accepted orders relating to earlier AYs, no substantial question of law arises. 10. Question (h) in respect of Namoli Unit stands covered in favour of Assessee and against Revenue by order passed by Court today in ITA 625 of 2010 (CIT v. Tony Electronics Ltd.) 11. Turning to question (i), as far as production of video film Shiv Mahapuran is concerned, it is covered by decision dated 3rd August 2010 in ITA 142 of 2010 for AY 1995-96 (CIT v. Super Cassettes Industries Ltd). As far as other film Chal Kaveria Shiv Ke Dham CIT (A) and ITAT returned factual finding that film was released on 28th September 1996. Since this turned puely on facts, no substantial question of law arises. 12. Question (j) is covered in favour of Assessee and against Revenue by decision dated 3rd August 2010 in ITA 142 of 2010 (CIT v. Super Cassettes Industries Ltd). 13. Turning to question (k) CIT (A) on basis of documentary evidence concluded that name of Mrs. Anuradha Paudwal was used for publicity and that expenditure was incurred by Assessee. Payments were realised by Assessee from distributor. This is again factual finding upheld by ITAT. No substantial question of law arises. ITA 628/2010 Page 7 of 8 14. Question (l) to (o) also stands answered in favour of Assessee and against Revenue by order in CIT v. Tony Electronics Pvt. Ltd. (2015) 375 ITR 431 and decision dated 3rd August 2010 in ITA 142 of 2010 (CIT v. Super Cassettes Industries Ltd). 15. Question (o) stands answered in favour of Assessee and against Revenue by decision in JCIT v. Mandideep Eng & Pkg. India P. Ltd. (2007) 292 ITR 1 (SC) and CIT v. S.K.G. Engineering Pvt. Ltd. (2006) 285 ITR 423 (Del). 16. appeal is accordingly dismissed. S.MURALIDHAR, J VIBHU BAKHRU, J OCTOBER 5, 2015 neelam ITA 628/2010 Page 8 of 8 COMMISSIONER OF INCOME TAX v. SUPER CASSETTES INDUSTRIES LTD
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