Relief to Sajid Nadiadwala: ITAT allows Claim of Amount paid for Sale of Remake Rights by 'Baaghi' Makers [Read Order]

In a major relief to Nadiadwala Grandson Entertainment Pvt. Ltd, owned by Sajid Nadiadwala, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has allowed a claim of consideration paid towards the sale remake rights of Telugu movie ‘Varsham’ remade as ‘Baaghi’ in Bollywood.

The income tax department was of the view that Viking Media had provided accommodation entry to the assessee on account of the sale of remake rights of Telugu Movie “Varsham” to the amount of Rs.3 crore. The assessee had entered into an agreement with Viking Media for purchase of movie remake rights of Telugu Movie “Varsham” for consideration of Rs.3 crore vide agreement dated 03.11.2015 which was titled as “Remake Right Agreement”. The A.O treated the transaction, as bogus stating that the assessee needed fake invoice and Viking Media generated a cash of Rs.3.42 crore through an Executive membership fee, which it needed to bring to accounts. The Assessing Officer has relied on the statement of the employees of the assessee Mr. Nusrat Javed Khan and Mr. Rakesh Madhotra.

A bench of Shri Amarjit Singh, Accountant Member & Ms.Kavitha Rajagopal, Judicial Member has observed that “without reiterating the facts the A.O has made the impugned additions solely on the basis of retracted statement of the employees of the assessee. During the course of assessment the assessee has submitted the entire document, agreement invoices, bank statement in support of genuineness of transactions. It is undisputed fact that assessee had made the film “Baaghi” on the basis of remake of the telgu film “Varsham”. The A.O has purely relied upon the retracted statement without disproving the correctness of the supporting documents furnished by the assessee. Considering the above facts the detailed findings of the ld. CIT(A) we do not find any merit in the appeal of the Revenue. Therefore, this ground of Revenue stand dismissed.”

Mr. Mani Jain & Mr. Prateek Jain appeared for the assessee.

To Read the full text of the Order CLICK HERE

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Nadiadwala Grandson Entertainment Pvt. Ltd vs DCIT , 2022 TAXSCAN (ITAT) 764 , Mani Jain & Prateek Jain , Dr. Mahesh Akhade