What did the Tribunal hold?

The Tribunal noted that the assessee company was undergoing liquidation proceedings. Therefore, the appeal filed by the Revenue was dismissed.

The assessee company, a digital animation studio, filed a return declaring nil income. The Assessing Officer made various additions/disallowances, which were challenged by the assessee before the CIT(A). The CIT(A) deleted these additions.

What were the issues?

The primary issue was the Revenue's appeal against the deletion of additions by the CIT(A). The crucial factor leading to dismissal was the assessee's liquidation status.

ACIT vs Crest Animation Studios Ltd | ITAT Mumbai 2023

Income Tax Appellate Tribunal, “K” BENCH, MUMBAI

Before: SHRI PRASHANT MAHARISHI, AM & MS. KAVITHA RAJAGOPAL, JM

For Respondent: Shri Samruddhi Dhananjay Hande

Hearing: 05.01.2023

O R D E R Per Kavitha Rajagopal, J M:

This appeal has been filed by the Revenue, challenging the order of the learned Commissioner of Income Tax (Appeals)-15, Mumbai (‘ld.CIT(A) for short), passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2007-08.

The Revenue has challenged the order of the ld. CIT(A) who has deleted the various additions made by the Assessing Officer (A.O. for short) on various grounds.

As there was no representation on behalf of the assessee inspite of several opportunities, we hereby proceed to decide the appeal by hearing the ld. Departmental Representative (ld. DR for short) and on perusal of the material available on record.

(A.Y. 2007-08) ACIT vs. M/s. Crest Animation Studios Ltd. 4. The brief facts of the case are that the assessee company is a full service studio specializing in the development and production of digital animated properties for theatrical, television, home entertainment and interactive distribution for the global entertainment industry. The assessee filed its return of income dated 25.10.2007, declaring nil income after set off of losses of earlier years. The assessee’s case was selected for scrutiny and the assessment dated 24.12.2009 was passed u/s. 143(3) by making the various additions/disallowances.

The assessee was in appeal before the ld. CIT(A) challenging the order of the assessment order. The ld. CIT(A) deleted the impugned additions on various grounds.

The Revenue is in appeal before us.

During the appellate proceedings, the ld. DR for the Revenue submitted that the assessee’s case was before the Hon’ble National Company Law Tribunal for liquidation.

From the above submission made by the ld. DR, we are of the considered opinion that the assessee company is going through the liquidation process as per the provision of section 14 of Insolvency and Bankruptcy Code, 2016, we deem it fit and proper to dismiss this appeal with the liberty given to the Revenue to restore the same if and when required.

In the result, the appeal filed by the Revenue is dismissed.

Order pronounced in the open court on 09.01.2023

ACIT 11(1), MUMBAI vs. CREST ANIMATION STUDIOS LTD, MUMBAI

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