COMMISSIONER OF INCOME TAX Vs. ACHILA SABHARWAL

JUDGEMENT

(1.) The present appeal by the revenue pertains to assessment year 2010-11. The respondent assessee had filed return declaring income of Rs.44,65,471 on 14.10.2010 and subsequently the return was taken up for scrutiny assessment. The assessee has claimed depreciation of Rs.1.20 Crores on cinematographic films @ 100%. The assessment order records that the assessee was required to file evidence in the form of copies of agreement entered into with the parties. The Assessing Officer observed that the assessee did not purchase any cinematographic films for consumption but what was purchased were broadcasting/exhibition rights, satellite rights etc. and, therefore, in terms of Section 32 of the Income Tax Act, 1961, depreciation should be allowed @ 25% instead of 100% depreciation as claimed. There is no other discussion in the assessment order, though the assessee had relied upon Rule 9B of the Income Tax Rules, 1962 and had stated that the rights in the feature films were sold to different parties like National Film Development Corporation, Doordarshan at Mumbai, Srinagar, Shimla and Lucknow and the film rights were also sold to other distributors and parties. The Assessing Officer rejected the said contention by recording that the assessee had not fulfilled the necessary conditions of Rule 9B, which obviously had reference to the fact that the Assessing Officer observed that the assessee did not purchase cinematograph films for her own consumption but they were purchased for broadcasting/exhibition rights, satellite rights etc. As noticed below, this finding of the Assessing Officer for non-application of Rule 9B is wrong and erroneous.

(2.) The Commissioner of Income Tax (Appeals) accepted the assessee's plea, and after reference to the contention of the respondent assessee observed as under:-

(3.) The said finding has been affirmed by the Income Tax Appellate Tribunal by the impugned order dated 24.01.2014.