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IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH “E”, MUMBAI BEFORE SHRI R. C. SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER (Assessment Year- 2009-10) M/s Twenty Twenty Television ACIT Central Circle -38 Co. Ltd, Mumbai Stany Saldanha & Associates , 1, Anup, SunBeam Co-op. Vs. Housing Society, Juhu Varsova Link Road, Addheri (W) Mumbai-53 PAN:AAGCS7809C (Appellant) (Respondent) Assessee represented by – None Revenue Represented by-- Sh. V. Justine –DR Date of hearing: 18.10.2017 Date of Order: 18.10.2017 Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee under section 253 of income tax act is directed against the order of Commissioner (Appeals) - 41, Mumbai dated 28.02.2013 for assessment year 2009-10. The assessee has raised following grounds of appeal; (i) The ld. CIT(A) erred in confirming the action of assessing officer assessing the total income of appellant for assessment year 2009-10 at Rs. 3,57,06,540/- (ii) The ld CIT(A) appeal erred in confirming in facts and circumstances of the case in making an addition of a sum of Rs.59,11,102/- by ld assessing officer on account of profit on sale of 1 WIP of Movies/ Serials (Inventory) on adhoc basis. The appellant respectfully submits that the addition of this sum may kindly be deleted. (iii) The ld CIT(A) erred in confirming in facts and circumstances of the case in making an addition of a sum of Rs.2,97,95,440/-by the landed assessing officer by treating the loan as business income of the assessee under the provision of section 25(iv). The appellant respectfully submits that the additions of this may kindly be deleted.
Brief facts of the case are that Assessee Company had not filed the return of income for the relevant assessment year. Notice under section 142 (1) was issued to the assessee for filing the return of income for the relevant assessment year. However, the assessee made no compliance of the notice nor any reply was received by assessing officer. The assessing officer also issued notice under section 144 which was served on the assessee on 7th December 2011. Again no reply was received by assessing officer. The assessing officer issued summons under section 131 of the Act to the Directors of the assessee for their personal appearance. In response to the summons none of the Directors either appeared or send their reply. From the record available with assessing officer the cost of work in progress was of Movies/ Serial of Rs,2,36,44,408/- was shown. The assessing officer was of the view that the average profit in the film industry which is around 20-30%. The assessing officer estimated the profit the rate of 25% of cost of work in progress and made addition of Rs. 59,11,102/- on account of average profit. The assessing officer further noticed that assessee has taken 2 unsecured loan of Rs.2,97,95,440/- in the normal course of its business for making film from another company K Sera Sere Production Ltd. Such loan was taken for business in the previous year. During the period for assessment year 2009-10, K Sera Sera Production Ltd written off of the amount of Rs.2,97,95,440/- in their books of account. Thus, the benefit arrived to the assessee in the current year. Thus the amount of Rs.2,97,95,440/- was treated as business income of the assessee under the provisions of section 28(iv) of the Act. On appeal before Commissioner (Appeals) both the addition was sustained. Hence, further aggrieved by the order of Commissioner (Appeals) the assessee has filed present appeal before this Tribunal.
None appeared on behalf of assessee despite repeated calls. Perusal of record reveals that none appeared on behalf of assessee throughout the proceedings. Notice of hearing of appeal was served on the assessee on 03.07.2014 and again for the hearing 20.07.2016 through Registered Post with Acknowledgment. The notice for the hearing of appeal for this day was also sent to the assessee on 19 September 2017 by Registered Post. All the notices from this Tribunal were sent at the address of assessee given under para 10 of appeal Form No.
Under these circumstances we left no option except to hear the learned DR for the revenue and to decide the appeal on the basis of material available on record. The learned DR for the revenue argued that the officials of Assessee Company and its representative are habitual in not attending the proceeding before the lower authorities as well. The assessment was completed under section 144 of the Act. During the first appellate stage the representatives of assessee has not appeared despite a number of opportunities given to them. It was argued that the assessee is most habitual and negligent in attending the proceeding. The assessing officer on the basis of material available before him passed the assessment order making the addition. The assessee has not provided any information and document necessary for assessment of the income. During the first appellate stage the assessee not provided any information on documentary evidence to substantiate their contention. The learned CIT (A) has no option except to decide the case on the basis of material available before him. The assessee’s representative are not appearing before this Tribunal despite repeated notices served upon them.
The additions made by assessing officer are based on the evidences available before him. The assessee has not substantiated the grounds of appeal raised by them and the appeal filed by assessee is liable to be rejected.
4. We have considered the submission of learned DR for the revenue and perused the material available before us. The perusal of the record reveals that the present appeal was filed one day after the prescribed period of limitation. The Registry of Tribunal issued the defect memo to the assessee for removal the defect. The assessee has not removed the defect despite giving the opportunity. Though the appeal is liable to be dismissed on this ground alone. Since, none has appeared on behalf of assessee, hence, we are also considering the merit of the case. The assessee has shown the work in progress for movies and serials amounting to Rs. 2,36,44,408/-.
The assessing officer estimated the profit of the business on the basis of average profit in the film industry. The assessing officer estimated the profit at the rate of 25% of the cost of work in progress. The ld CIT(A) confirmed the action of assessing officer in absence of any other material before him. We have noted that the assessee has not filed any evidence either before the assessing officer or before learned Commissioner (Appeals) to substantiate the contention that estimation of profit is at higher side. Hence, we do not find any merit in the grounds of appeal raised by assessee. Thus, the addition made by assessing officer and confirmed by Commissioner (Appeals), on account of business profit at the rate of 25% of the cost of Work in Progress is sustained.
5. The second addition relates to the benefits arise to the assessee on account of unsecured loan of Rs.2,97,95,440/-written off by lenders i.e. K Sera Sera Production Ltd. The assessee has not filed any documentary evidence with regard to this ground of appeal either before assessing officer or before Commissioner (Appeals) or before us. Thus, we do not find any illegality or infirmity in the order passed by lower authorities about the addition made by Assessing officer and sustained by ld. Commissioner (Appeals). Hence all the grounds of appeal raised by assessee are dismissed.
In the result appeal filed by assessee is dismissed.