DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-03, NEW DELHI, DELHI vs. LUV RANJAN, GHAZIABAD

ITA 1845/DEL/2024Status: DisposedITAT Delhi25 September 2025AY 2019-20309 pages
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What did the Tribunal hold?

The Tribunal held that the transaction with Shri Sanjay Singhal concerning the remake rights of the movie 'Tum Bin 2' was a sham transaction. The reasoning was that the story was written by Shri Anubhav Sinha and could not have been sold by the appellant to Shri Sanjay Singhal. The Tribunal found the deal between the two individuals to be a sham transaction designed to inflate the film's price. Furthermore, the appellant failed to furnish any supporting evidence for their claim. Consequently, the expenses claimed on account of this impugned transaction were not allowable as a deduction. The Assessing Officer was deemed correct in making an addition. However, the Tribunal adjusted the addition, allowing a relief of Rs. 25,00,000, restricting the addition on account of the sham transaction to Rs. 2,39,60,000 (Rs. 2,64,60,000 - Rs. 25,00,000). The ratio decidendi is that transactions designed to artificially inflate prices or conceal income, lacking genuine commercial substance and supporting evidence, will be treated as sham and expenses disallowed. The operative direction is to restrict the addition as specified.

What were the facts?

The appeals involve Super Cassettes Industries Pvt. Ltd. (SCIPL), Luv Ranjan, and Bhushan Dua, along with the Revenue, challenging orders of the CIT(Appeals). These stem from a search action under Section 132 of the Income Tax Act, 1961, conducted on the SCIPL group on November 29, 2018. Assessments were made under Section 153A for AY 2013-14 to 2018-19 and under Section 143(3) for AY 2019-20. For AY 2013-14 to 2015-16, assessments were unabated, while AY 2016-17 to 2019-20 were abated. The Revenue appeals for AY 2013-14 to 2019-20, and SCIPL appeals for AY 2015-16 to 2019-20. Common issues include additions on account of income retained in BDML UAE, unaccounted cash transactions, diversion of income in Dubai, and disallowances for consultancy, printing, legal, advertisement, and commission expenses, as well as unaccounted cash received from singers and cash income/expenditure noted in a diary.

What were the issues?

1. Whether the transaction with Shri Sanjay Singhal for the procurement of remake rights for the movie 'Tum Bin 2' was a sham transaction, making the claimed expenses not allowable as a deduction (Question of law and fact turning on Section 37 of the Income Tax Act, 1961). Assessee's contentions: The assessee argued that the initial sale of rights to Shri Sanjay Singhal for Rs. 25,00,000 was a business transaction. SCIPL later bought back the rights for Rs. 2,64,60,000 after recognizing commercial potential in independent production, which was a well-considered business move. The expenditure was incurred by T-Series (UK) Films Ltd. and not debited in SCIPL's books. Shri Sanjay Singhal's assessment for AY 2017-18 under Section 153A had no additions related to this transaction. The assessee relied on the argument that the buyback was an innocuous business transaction due to the personal significance of the film 'Tum Bin' to Shri Bhushan Kumar. Revenue's contentions: The Revenue, through the Assessing Officer and CIT(A), contended that the story of the film was written by Shri Anubhav Sinha and could not have been sold by the appellant to Sanjay Singhal. The deal was considered a sham transaction aimed at inflating the film's price. The CIT(A) found it unreasonable that a story sold for Rs. 25,00,000 was purchased for Rs. 2,64,60,000 within two months. The Assessing Officer alleged that Shri Sanjay Singhal lacked domain expertise in film production and his modus operandi involved adjusting unaccounted cash.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 143(3),Section 37

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Cases cited in this judgment(8)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Heard together (13 matters)

ITA No. 2713/Del/2023
ITA No. 2714/Del/2023
ITA No. 7/Del/2024
ITA No. 51/Del/2024
ITA No. 271/Del/2024
ITA No. 2511/Del/2023
ITA No. 2512/Del/2023
ITA No. 2702/Del/2023
ITA No. 2756/Del/2023
ITA No. 272/Del/2024
ITA No. 273/Del/2024
ITA No. 326/Del/2024
ITA No. 1845/Del/2023

Read from the judgment's own cause title. This page is filed under one of them.

Super Cassettes Industries Pvt. Ltd.

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”: NEW DELHI BEFORE Ms. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER

ITA No. 2713/Del/2023 A.Y. 2015-16 ITA No. 2714/Del/2023 A.Y. 2016-17 ITA No. 7/Del/2024 A.Y. 2017-18 ITA No. 51/Del/2024 A.Y. 2018-19 ITA No. 271/Del/2024 A.Y. 2019-20

Super Cassettes Industries Pvt. Ltd., E-2/16 White House, Ansari Road, Daryaganj, New Delhi-110002. PAN: AABCS 4712 P APPELLANT

Vs DCIT Central Circle-03, Delhi. RESPONDENT

ITA No. 2511/Del/2023 A.Y. 2013-14 ITA No. 2512/Del/2023 A.Y. 2014-15 ITA No. 2702/Del/2023 A.Y. 2015-16 ITA No. 2756/Del/2023 A.Y. 2016-17 ITA No. 272/Del/2024 A.Y. 2017-18 ITA No. 273/Del/2024 A.Y. 2018-19 ITA No. 326/Del/2024 A.Y. 2019-20

DCIT Central Circle-03, E-2/16 White House, Ansari Road, Daryaganj, New Delhi-110002. PAN: AABCS 4712 P APPELLANT RESPONDENT

AND Super Cassettes Industries Pvt. Ltd.

ITA No. 1845/Del/2023 A.Y. 2019-20 R-1

The order continues below.

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