Per Shri V. S. Gaitonde, Accountant Member - ITA No. 770 is filed against the order of CIT, Pune, under section 263 of Income-tax Act for assessment year 79-80, dated 16-8-1984. The only point in dispute is regarding the character of tax-in-aid receipts. ITA No. 1527 is against the order of CIT (A), Pune dated 3-7-85 for assessment year 1981-82 involving the same point. ITA No. 745 is against the order of CIT (A), Pune dated 23-3-85 for assessment year 1982-83. The point in appeal is the same apart from the point regarding amortization. As we have decided the question regarding amortization in assessees own case in ITA No. 1526/PN/85 dated 12-3-86 (assessment year 79-80), for reasons given therein we set aside the order of CIT (A) and ITO on this point for assessment year 1982-83 with a direction to readjudicate on the issue in terms of Rule 9A (9), after hearing the assessee. - (1.)
(2.) On the main question, Sri Joglekar explained the basic facts. The assessee is a film producer of Marathi pictures. Such producers facts considerable hardships compared to producers of Hindi, Tamil or Telugu films. To mitigate the hardships the Govt. of Maharashtra sanctioned a scheme for granting of assistance, out of the entertainment tax collected from the picture of the producer from the earlier films. The objective was to promote production of better films in Marathi generally as also to help production of Marathi coloured film in preference to black and white films. Rules provided for grant of certificate of eligibility for assistance under the scheme, to the extent of entertainment tax actually collected and credited to Govt. on the exhibition of a Marathi film produced by the same producer and exhibited in Maharashtra, during the immediately preceding financial year less service and collection charges. Another condition was that the producer would produce a new film against the production cost of which alone the assistance would be released in four instalments. Certain ceilings were also prescribed. In accordance with the above scheme, the assessee received amounts as below : judgement_9064_tlit0_19870.htm For the earlier years and for 1979-80 ITO had accepted the contentions but for assessment year 1979-80 CIT revised the order under section 263. A technical objection was raised that the action of CIT was not in terms of his initial notice. We do not however find any merit in this objection as it is accepted that the assessee was fully apprised of all the facts likely to be used in the proceedings and that the assessee was not disabled in any manner in presenting his case.
(3.) SRI Joglekar contended that these are not supplementary trading receipts as alleged by CIT relying on Agra Chain Mfg. Co. v. CIT [1978] 114 ITR 840 (All.) and Jeewanlal [1929] Ltd. v. CIT [1982] 10 Taxman 180 (Cal.) SRI Joglekar submitted that this assistance is on par with Central subsidy given to industries in backward areas and held to be capital receipts vide CBDT Circular No. 142 dated 1-8-1974. He further pointed out that on an earlier occasion, that Govt. had exempted grants-in-aid of a similar nature (page 50 of compilation). SRI Joglekar was however good enough to admit that a representation made to CIT, Bombay City III having jurisdiction over film circle Bombay was turned down (pages 32-49 of compilation). SRI Joglekar conceded that the issue has been decided against the assessee by the Tribunal in Sadichha Chitra {IT Appeal Nos. 1065 and 1226 (Bom.) of 1981, dated 24-3-1981} (pages 62, 68 of compilation). He however contended that the matter requires review in the light of certain aspects of facts and law not considered by the Tribunal.;