SS THEATRES LLP,CHENNAI vs. DCIT, NCC-11(1), CHENNAI
आयकर अपीलीय अिधकरण, ‘बी’ ायपीठ, चेई।
IN THE INCOME TAX APPELLATE TRIBUNAL
‘B’ BENCH: CHENNAI
ी एबी टी. वक , ाियक सद! एवं ी जगदीश, लेखा सद! के सम(
BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.1038/Chny/2025
िनधा:रण वष: /Assessment Year: 2021-22
SS theatres LLP,
No.3, 2nd Street Subba Rao Avenue
Greams Road S.O.,
Nungambakkam,
Chennai – 600 006. Vs.
The Dy.
Commissioner of Income Tax,
Non Corporate Circle-11(1),
Chennai.
[PAN: AADFS 5384D]
(अपीलाथ/Appellant)
( यथ/Respondent)
अपीलाथ की ओर से/ Appellant by :
Shri N.V.Balaji, Advocate
GHथ की ओर से /Respondent by :
Ms. Gouthami Manivasagam,JCIT
सुनवाई की तारीख/Date of Hearing
:
18.06.2025
घोषणा की तारीख /Date of Pronouncement
:
31.07.2025
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2021-22 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 14.02.2025. 2. The CPC, Bengaluru, in the order passed u/s. 154 r.w.s. 143(1) of the Income-tax Act, 1961 (hereinafter “the Act”), made an adjustment of Rs. 3,06,57,361/- on account of a mismatch between the SS Theatres LLP
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gains reported in the financial statements and the gains reported in the return of income. This difference arose due to the accounting treatment adopted for the computation of capital gains. Aggrieved by the adjustment, the assessee preferred an appeal before the Ld.
CIT(A), who upheld the addition, observing that the assessee had shown Rs. 25,99,90,694/- as income from the sale of investment in a subsidiary under Note-11, titled “Other Income”. However, this income was reduced in Schedule-BP and offered under Schedule-CG. The receipts disclosed under Schedule-CG were found to be less than the amount shown in Schedule-BP, resulting in a variation of Rs.3,06,57,361/-, which was brought to tax u/s. 154 of the Act. The Ld.
CIT(A) concluded that no interference was required in the adjustment made by the A.O.
3. The Ld. Authorized Representative (A.R) of the assessee has submitted that the assessee held 89.96% of the share capital of SPI
Cinemas Pvt. Ltd. and sold 61.65% of its equity stake through a Share
Purchase Agreement (SPA) dated 12.08.2018 to PVT Ltd. As per the SPA, the sale consideration was Rs. 460.61 crores, with an additional amount of Rs. 86 Crores payable to the assessee contingent upon the occurrence of certain future events within four years from the date of SS Theatres LLP
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transfer. The Ld. A.R further submitted that the additional contingent consideration of Rs. 86 crores was offered to tax from A.Y. 2019-20 to A.Y. 2023-24 as and when it became due, in accordance with the terms of the SPA. He also submitted that in A.Y. 2020-21, an estimated debt adjustment of Rs. 2,66,75,972/- was reduced from the deferred consideration of Rs.28,66,66,666/- relating to the current year. The Ld. A.R has argued that the alleged difference of Rs.3,06,57,361/- neither accrued to the assessee nor was received in the relevant year, and hence, is not taxable in view of the provisions of Section 5 of the Act.
4. On the other hand, the Ld. Departmental Representative (D.R) submitted that the assessee had allocated the contingent compensation of Rs. 86 crores equally over three years, at Rs.28,66,66,666/- per year, but has offered income of only
Rs.22,93,33,333/-. Ld DR submitted that assessee in financial statement has shown income of Rs 25,99,90,695/- but offered only
Rs.22,93,33,333 in income tax return under capital gain in schedule-
CG, therefore, the CPC has rightly made the adjustment for the difference.
SS Theatres LLP
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We have heard the rival submissions and perused the material available on record. The CPC, in the order passed u/s. 154 r.w.s. 143(1) of the Act, made an adjustment of Rs.3,06,57,361/- as the assessee had reduced income of Rs.25,99,90,694/- from business or profession in Schedule-BP in respect of income from sale of investment, but has offered only Rs.22,93,33,333/- as capital gain in Schedule-CG. The assessee explained that the contingent consideration of Rs. 68.80 crores, has been offered one-third each of Rs. 22,93,33,333/- from A.Y 2021-22 to A.Y 2022-23 as against Rs.25,99,90,695/-, Rs.22,93,33,333/- and Rs 28,66,66,666/- shown respectively in financial statement. The Ld AR has submitted that total income returned against the transaction of sale of investment from A.Y 2018-19 to 2022-23 is Rs 543.94 crore as per financial statement as well as per income tax return, therefore entire gain has been offered to tax. The Ld. A.R submitted that the difference has arisen due to accounting treatment in accordance with applicable standards, and the income has been correctly reported as per the provisions of the Act. After having considered the arguments and paperbook filled by Ld. AR, we are of the view that the matter requires verification of facts at the level of A.O. Accordingly, we remit the issue back to the file of the SS Theatres LLP
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A.O for fresh consideration after affording proper opportunity to assessee. The assessee is also directed to furnish all necessary documents before the A.O.
6. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on 31st day of July, 2025 at Chennai. (एबी टी. वक )
(ABY. T. Varkey)
ाियक सद! / Judicial Member
(जगदीश)
(Jagadish)
लेखा सद! /Accountant Member
चेनई/Chennai, दनांक/Dated: 31st July, 2025. EDN/-
आदेश क ितिलप अेषत/Copy to:
1. अपीलाथ/Appellant
2. थ/Respondent
3. आयकर आयु/CIT, Chennai
4. िवभागीय ितिनिध/DR
5. गाड फाईल/GF