ASSISTANT COMMISSIONER OF INCOME TAX -16(1), MUMBAI vs. EAGLE FIMS, MUMBAI

ITA 3204/MUM/2025Status: DisposedITAT Mumbai24 September 2025AY 2017-18Bench: SHRI PAWAN SINGH, JUDICIAL MEMBER& SMT.RENU JAUHRI (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the sale of film rights, including present and future rights, intellectual property, and goodwill, constituted the sale of capital assets. Therefore, the income arising from such sale should be treated as capital gains, not business income.

What were the facts?

The assessee, a firm engaged in film production and distribution, sold rights of 31 feature films to Red Chillies Entertainment Pvt. Ltd. for Rs. 14.11 crores. The revenue treated this as business income, while the assessee and the CIT(A) considered it as capital gains.

What were the issues?

Whether the income from the sale of film rights should be treated as business income or capital gains, considering the nature of the rights transferred and the assessee's business activities.

Which sections of the Income-tax Act were involved?

Section 2(14),Section 55(2)(a),Section 254(1)

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IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER& SMT.RENU JAUHRI, ACCOUNTANT MEMBER (Physical hearing)

Assistant Commissioner of Eagle Films, 220 Famous Cine Income-tax-16(1) Vs Building, Dr. E Moses Road, Room No. 439, 4th Floor, Mahalaxmi, Mumbai-400 011 Aayakar Bhavan, M.K. Road, PAN: AAAFE3147N Mumbai – 400020] Appellant / Revenue Respondent / Assessee

Assessee by Shri Prakash Jotwani, Advocate Revenue by Shri Ritesh Mishra, CIT-DR Date of Institution 06.05.2025 Date of hearing 25.08.2025 Date of pronouncement 24.09.2025

Order under section 254(1) of Income Tax Act

PER PAWAN SINGH, JUDICIAL MEMBER;

1.

This appeal by revenue is directed against the order of ld. CIT(A) / NFAC

dated 05.02.2025 for A.Y. 2017-18. The revenue in its appeal has raised

following grounds of appeal:

“1. Whether on facts and Circumstances of the case and in law, the Hon'ble CIT(A) is right in ignoring the fact that assessee is in the business of producing and distributing film and therefore sum so received from selling films rights shall be treated as 'Business Income'?

2.

Whether on facts and circumstances of the case and in law, the Hon'ble CIT(A)

The order continues below.

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