VISHESH ENTERTAINMENT LTD, MUMBAI v. ACIT 11(1), MUMBAI

ITA 1590/MUM/2009 | 2005-2006
Pronouncement Date: 31-03-2011 | Result: Partly Allowed

Appeal Details

RSA Number 159019914 RSA 2009
Bench Mumbai
Appeal Number ITA 1590/MUM/2009
Duration Of Justice 2 year(s) 22 day(s)
Appellant VISHESH ENTERTAINMENT LTD, MUMBAI
Respondent ACIT 11(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-03-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted F
Tribunal Order Date 31-03-2011
Date Of Final Hearing 28-03-2011
Next Hearing Date 28-03-2011
Assessment Year 2005-2006
Appeal Filed On 09-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F MUMBAI BEFORE SHRI N.V.VASUDEVAN(J.M) & SHRI PRAMOD KUMAR (A.M) ITA NO.1590/MUM/2009(A.Y. 2005-06) VISHESH ENTERTAINMENT LTD. 36 SHUBH JIVAN APARTMENTS GULMOHAR ROAD JVPD SCHEME JUHU MUMBAI 400 049. PAN:AABCV 0631Q (APPELLANT) VS. THE ACIT 11(1) 4 TH FLOOR AAYKAR BHAVAN MK ROAD MUMBAI 20. (RESPONDENT) ITA NO.1754/MUM/2009(A.Y.2005-06) THE ACIT 11(1) 4 TH FLOOR AAYKAR BHAVAN MK ROAD MUMBAI 20. (APPELLANT) VS. VISHESH ENTERTAINMENT LTD. 36 SHUBH JIVAN APARTMENTS GULMOHAR ROAD JVPD SCHEME JUHU MUMBAI 400 049. PAN:AABCV 0631Q (RESPONDENT) ASSESSEE BY : SHRI K.SHIVRAM REVENUE BY : SHRI L.CHAND ORDER PER N.V.VASUDEVAN J.M ITA NO.1590/MUM/09 IS AN APPEAL BY THE ASSESSEE WH ILE ITA NO.1754/MUM/09 IS AN APPEAL BY THE REVENUE. BOTH T HESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 4/12/2008 OF CIT(A ) 11 MUMBAI RELATING TO ASSESSMENT YEAR 2005-06. ITA NO.1590/MUM/09:- 2. GROUND NO.1 RAISED BY THE ASSESSEE READS AS FOLL OWS: ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 2 1.(A) ON THE FACTS AND CIRCUMSTANCES OF THE CASE A S WELL IN LAW THE LEARNED CIT(A)XI ERRED IN CONFIRMING THE DISALLOWAN CE MADE BY THE LEARNED AO ON ACCOUNT OF TRAINING EXPENSES RS. 11 2 5 545/- OF A DIRECTOR MR. VISHESH BHATT IN THE USA FOR THE COU RSE OF CINEMATOGRAPHY WITHOUT APPRECIATING THE FULL FACTS INCLUDING A BINDING MEMORANDUM OF UNDERSTANDING ENTERED WITH THE DIRECT OR BY STATING THAT IN ASSESSMENT YEAR 2004-05 IT IS HELD AGAINST THE APPELLANT. (B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL IN LAW THE LEARNED CIT(A) XI ERRED IN CONFIRMING THE DISALLOWA NCE MADE BY THE LEARNED AO ON ACCOUNT OF TRAINING EXPENSES RS. 1 67 500/- ON AN EMPLOYEE MR. RAHUL BHATT PAID TO ANUPAM KHER INST ITUTE OF TRAINING BY STATING THAT MR. RAHUL BHATT IS RELATIVE OF MR.M UKESH BHATT. 3. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF FILM PRODUCTION. THE ASSESSEE CLAIMED AS DEDUCTION A SUM OF RS. 11 2 5 545/- AND ANOTHER SUM OF RS. 1 67 500/- BEING EXPENSES INCURRED IN CO NNECTION WITH THE TRAINING/EDUCATION EXPENSES OF MR. VISHESH BHATT AND MR. RAHUL BHATT. MR. VISHESH BHATT IS DIRECTOR EMPLOYEE OF THE ASSES SEE. SIMILARLY MR. RAHUL BHATT IS ALSO RELATIVE OF MR. MUKESH BHATT DIRECTO R OF THE ASSESSEE. IN THESE CIRCUMSTANCES THE AO DISALLOWED THE EXPENSES CLAIMED BY THE ASSESSEE ON THE GROUND THAT THEY WERE PERSONAL EXPENSES AND NOT EXPENSES INCURRED IN CONNECTION WITH BUSINESS OF THE ASSESSEE. IT IS NOT IN DISPUTE BEFORE US THAT IDENTICAL ISSUE HAD COME UP FOR CONSIDERATION IN ASSESSEES OWN CASE IN A.Y 2004-05 AND THIS TRIBUNAL UPHELD SIMILAR DISALL OWANCE MADE BY THE AO IN RESPECT OF EXPENSES INCURRED IN CONNECTION WITH TRAINING OF MR. VISHESH BHATT. A COPY OF THE ORDER OF THE ITAT IN ITA NO.3 05/M/09 FOR A.Y. 2004-05 WAS ALSO FILED BEFORE US. THE REASON GIVEN IN THE ORDER OF THE TRIBUNAL WILL EQUALLY APPLY TO THE TRAINING EXPENSES INCURRED IN THE CASE OF MR. RAHUL BHATT. RESPECTFULLY FOLLOWING THE ORDER OF THE TRI BUNAL WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND DISMISS GROUND NO.1 RAISED BY THE ASSESSEE. ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 3 4. GROUND NO.2 RAISED BY THE ASSESSEE AND GROUND NO .1 RAISED BY THE REVENUE CAN BE CONVENIENTLY DECIDED TOGETHER. THEY READ AS UNDER:- GROUND NO.2: ASSESSEES APPEAL: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL IN LAW THE LEARNED CIT(A)XI ERRED IN DISALLOWING INTEREST PAID RS.5 99 745/- TO SUPPLIERS OF RAW STOCK(M/S. PATEL DISTRIBUTORS P. LTD. RS.4 7 4 730/-) AND PRINTING & PROCESSOR (M/S. FILMLAB INDIA P. LTD. RS . 1 25 015/-) FOR LATE PAYMENTS TREATING THE SAME AS PENAL IN NATURE . GROUND NO.1: REVENUES APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE FOLL OWING DISALLOWANCE 1. CAR LOAN RS. 1 50 215/- 2. INT. ON TERM LOAN RS. 1 62 144/- 3. INT. ON BORROWINGS RS. 1 66 000/- WITHOUT CONSIDERING THE FACT THAT THE ASSESEE HAS A DVANCED INTEREST FREE LOAN AMOUNTING TO RS. 4 13 12 856/- WHEREAS T HE ASSESSEE HAS PAID INTEREST TO THESE ABOVE HEADS 5. IN THE COURSE OF ASSESSMENT PROCEEDINGS AO NOTIC ED THAT THE ASSESSEE HAD BORROWED SECURED LOANS TO THE TUNE OF RS. 21 41 116/- AND UNSECURED LOAN OF RS. 5 91 700/-. THE ASSESSEE HAD GIVEN LOA NS TO THE TUNE OF RS. 4 13 12 853/- TO OTHERS. IN THE P&L ACCOUNT THE AO NOTICED THAT THE ASSESSEE HAD DEBITED INTEREST EXPENSES AS FOLLOWS: (A) INTEREST ON CAR LOANS : RS. 1 50 215/- (B) INTEREST ON TERM LOAN : RS. 1 62 144/- (C) INTEREST ON BORROWINGS : RS. 1 66 000/- (D) INTEREST PAID TO SUPPLIERS OF RAW FILMS : RS. 5 99 745/- ---------------------- TOTAL : RS. 10 78 104/- =============== 6. THE A.O NOTICED THAT IN THE CREDIT SIDE OF THE P &L ACCOUNT THERE WAS NO INTEREST INCOME. IN THESE CIRCUMSTANCES THE AO CONCLUDED THAT THE LOANS ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 4 ADVANCED BY THE ASSESSEE TO THE TUNE OF RS. 4 13 12 853/- WERE INTEREST FREE LOANS. THE A.O THEREFORE PRESUMED THAT THE INTER EST EXPENSES DEBITED IN THE P&L ACCOUNT OF RS. 10 78 104/- WAS INTEREST PAI D ON LOANS WHICH HAD BEEN UTILIZED NOT FOR THE PURPOSE OF BUSINESS OF TH E ASSESSEE. THE AO ACCORDINGLY ADDED A SUM OF RS. 10 78 104/-. 7. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT INTERE ST EXPENSES DEBITED IN THE P&L ACCOUNT WERE BORROWINGS FOR SPECIFIC PURPOS ES AND SUCH BORROWINGS HAD ALSO BEEN USED FOR THE SPECIFIC PURPOSES FOR WH ICH IT WAS BORROWED. IT WAS ALSO POINTED OUT THAT THESE EXPENSES WERE INCUR RED IN CONNECTION WITH THE BUSINESS OF THE ASSESSEE AND THEREFORE NO DIS ALLOWANCE COULD BE MADE. THE CIT(A) HELD AS FOLLOWS: 4.2 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND T HE MATERIAL ON RECORD. THE AO HAS STARTED WITH NON-CHARGING OF IN TEREST ON ADVANCES MADE BUT HAS ENDED UP DISALLOWING THE INTEREST PAI D. THE INTEREST WAS PAID ON FOUR HEADS SUCH AS CAR LOAN TERM LOAN BORROWING AND LATE PAYMENT TO SUPPLIERS. OUT OF SUCH FOUR HEADS AT LEAST ON THE FIRST THREE HEADS THERE IS NO DOUBT UNLESS THE VERY LOANS TAKEN WERE DISPUTED. BUT THAT IS NOT THE CASE OF THE AO. AND HENCE DISALLOWANCE MADE IN RESPECT OF CAR LOAN (RS.1 50 215/-) INTER EST ON TERM LOAN (RS.1 62 144/-) AND INTEREST ON BORROWINGS (RS.1 66 000/-) STAND DELETED. THE FOURTH ITEM IS EXPLAINED AS INTEREST ON LATE PAYMENTS TO SUPPLIERS OF RAW STOCKS PRINTING AND PROCESSING A MOUNTING TO RS.5 99 745/- IN THE WRITTEN SUBMISSION AT PARA (A ) PAGE 1. THIS IS PENAL IN NATURE AND DISALLOWANCE TO THIS EXTENT STA NDS CONFIRMED. 8. AGGRIEVED BY THE RELIEF GRANTED BY THE CIT(A) T HE REVENUE HAS RAISED GROUND NO.1 IN ITS APPEAL BEFORE THE TRIBUNAL. AGG RIEVED BY THE ORDER OF THE CIT(A) CONFIRMING DISALLOWANCE ON INTEREST TO THE E XTENT OF RS. 5 99 745/- THE ASSESSEE HAS PREFERRED GROUND NO.2 BEFORE THE TRIBU NAL. ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 5 9. WE SHALL FIRST TAKE UP FOR CONSIDERATION GRIEVAN CE OF THE ASSESSEE. IT IS SEEN FROM THE DETAILS OF THE INTEREST EXPENSES TO T HE TUNE OF RS.5 99 745/- ARE AS FOLLOWS: (A) THE ASSESSEE HAD TO PAY PATEL INDIA DISTRIBUTO RS PVT. LTD. A SUM OF RS. 17 50 262/- TOWARDS STOCK SUPPLY ACCOUNT. INTEREST AT 36% PER ANNUM HAD TO BE PAID BY THE ASSESSEE AS PER TERMS OF THE SUPP LY. SUCH INTEREST FOR THE PERIOD 1/4/2004 TO 31/12/2004 WAS RS. 4 74 730/-. (B) THE ASSESSEE HAD PURCHASED STOCK FROM FILM LAB INDIA PVT. LTD. TOTALING RS. 4 60 908/-. SIMILAR RATE OF INTEREST AT 36% FR OM 1/4/2004 TO 31/12/2004 AMOUNTING TO RS. 1 25 015/- WAS PAYABLE. 10. IT IS CLEAR THAT THE AMOUNT PAID AS INTEREST WA S IN RESPECT OF PURCHASE OF STOCK OF FILMS WHICH IS CONNECTED WITH THE BUSIN ESS OF THE ASSESSEE. PAYMENT HAD BEEN MADE AS PER THE TERMS OF SUPPLY. THE CIT(A) HAS UPHELD THE DISALLOWANCE MADE BY THE AO FOR THE REASON THAT THE PAYMENT OF INTEREST WAS PENAL IN NATURE. WE ARE OF THE VIEW THAT THE P AYMENT IN QUESTION IS PURELY CONTRACTUAL AND COMPENSATORY IN NATURE. THE DISALLOWANCE MADE IS THEREFORE DIRECTED TO BE DELETED. GROUND NO.2 RAI SED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 11. AS FAR AS GROUND NO.1 RAISED BY THE REVENUE IS CONCERNED THE CIT(A) HAS FOUND THAT THE PAYMENT OF INTEREST BY THE ASSES SEE RELATED TO BORROWINGS FOR A SPECIFIC PURPOSE AND SUCH PURPOSE WAS CONNECTED WITH THE BUSINESS OF THE ASSESSEE. THE DETAILS OF THE CAR L OANS TERM LOANS AND OTHER BORROWINGS ARE AT PAGE NO.56 TO 85 OF THE ASSESSEE S PAPER BOOK. IT IS CLEAR FROM THESE DOCUMENTS THAT THE INTEREST WAS PAID ON LOANS WHICH WERE BORROWED FOR A SPECIFIC PURPOSE AND UTILIZED FOR TH AT PURPOSE. IT IS NOT THE CASE OF THE AO THAT THE BORROWING IS NOT FOR THE PU RPOSE OF BUSINESS OF THE ASSESSEE. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ACTION OF THE CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO IS JUST AND PROPER AND ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 6 CALLS FOR NO INTERFERENCE. GROUND NO.1 OF THE REVE NUE IS ACCORDINGLY DISMISSED. 12. GROUND NO.3 RAISED BY THE ASSESSEE CAN BE CONVE NIENTLY DECIDED ALONGWITH GROUND NO.3 RAISED BY THE REVENUE. THESE GROUNDS READ AS FOLLOWS: ASSESSEES GROUND NO.3:- 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL IN LAW THE LEARNED CIT(A)XI ERRED IN DIRECTING ON ESTIMATE BAS IS THE DISALLOWANCE OF 5.6% OF AMOUNT APPEARING IN SCHEDULE P OF COST O F PRODUCTION I.E. INVENTORY OF MOVIEW SAAYA RS. 75 00 000/- AND MURDE R RS. 4 25 00 000/- IGNORING THE FACT THAT THESE ARE BROU GHT FORWARD BALANCES FROM THE PREVIOUS YEAR SIMILARLY SELLING ADMINISTRATION AND OTHER EXPENSES APPEARING IN SCHEDULE Q IGNORING THE FACT THAT THESE EXPENSES ARE INCURRED WHOLLY EXCLUSIVELY AND NECESS ARILY FOR BUSINESS PURPOSES. REVENUES GROUND NO.3:- 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE AO TO RESTRICT TH E DISALLOWANCE TO 5.6 OF TOTAL CASH EXPENSES OF RS. 1 04 10 642/- IGNORIN G THE FACT THAT THE ASSESSEE HAS NOT FILED ANY DETAILS OF CASH EXPENSES DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE EXPENSES ARE OF H IGHER SIDE. 13. THE FACTS IN THIS REGARD ARE AS FOLLOWS. THE A SSESSEE IS IN THE BUSINESS OF PRODUCTION OF FILMS. AS PER SCHEDULE P OF THE AUDIT REPORT IT WAS NOTICED BY THE AO THAT THE ASSESSEE HAS INCURRED TOTAL EXPE NSES OF RS.5 00 00 000/- AS COST OF PRODUCTION. APART FROM THE ABOVE THE A SSESSEE HAS ALSO INCURRED INDIRECT EXPENSES OF RS.1 50 66 514/-. THE ASSESSE E WAS ASKED TO PROVIDE DETAILS W.R.T. CASH EXPENSES INCURRED. THE ASSESSE E DID NOT SUBMIT ANY DETAILS. SINCE NO DETAILS WERE EVER FURNISHED BY T HE ASSESSEE THE AO ESTIMATED 20% I.E. RS. 1 30 13 303/- OF THE TOTAL E XPENSES OF RS.6 50 66 514/-(RS.5 00 00 000/- + RS. 1 50 66 5 14/-) AS CASH EXPENSES. THE AO WAS OF THE VIEW THAT INCURRING OF EXPENSES I N CASH WAS INHERENT IN ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 7 THE NATURE OF BUSINESS OF THE ASSESSEE AND THEREFOR E HE HELD THAT 20% OF RS.1 30 13 303 I.E. RS.26 02 661 SHOULD BE ALLOWED AS DEDUCTION AND THE REMAINING SUM OF RS.1 04 10 642 (1 30 13 303 26 0 2 661) WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 14. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT SCHED ULE P ATTACHED TO THE FINAL AUDITED ACCOUNTS GIVING IS THE CARRIED FORWAR D INVENTORY OF THE EARLIER ACCOUNT YEAR RELEVANT TO AY 05-06 AND THAT DURING T HE PREVIOUS YEAR NO PRODUCTION OF NEW FILM WAS UNDERTAKEN. THIS WAS TH E EXPLANATION WITH REGARD TO THE EXPENSES OF RS.5 00 00 000 IN CONNECT ION WITH THE MOVIE SAAYA RS.75 00 000/- AND MURDER RS. 4 25 00 000 /-. IT WAS THE PLEA OF THE ASSESSEE THAT SINCE NO EXPENSES(RS.5 00 00 000) WERE INCURRED DURING THE ACCOUNTING YEAR RELEVANT TO ASSESSMENT YEAR 200 5-06 THE QUESTION OF DISALLOWANCE DOES NOT ARISE. 15. THE CIT(A) HOWEVER HELD AS FOLLOWS :- 6.2 I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND T HE MATERIALS ON RECORD. SCHEDULE P AND SCHEDULE Q ARE BOTH CLAIMED AS EXPENDITURE IN THE PROFIT AND LOSS ACCOUNT OF THE APPELLANT. T HE AO HAS ALSO NOTED THAT DETAILS REGARDING CASH EXPENSES CALLED FOR WER E NOT FILED BY THE APPELLANT. THE AO WAS THEREFORE JUSTIFIED IN TAK ING THE SAID TWO FIGURES TOGETHER. HOWEVER THE DISALLOWANCE IS ON THE HIGHER SIDE. IN A SOMEWHAT SIMILAR ISSUE FOR A.Y 2004-05 FOLLOW ING PRECEDENCE OF EARLIER YEARS THE DISALLOWANCE WAS HELD REASONABLE AT 5.6%. FOLLOWING SUCH DECISION IN THE PRESENT CASE ALSO THE ADDITIO N IS ORDERED TO BE RESTRICTED TO 5.6% . THE AO MAY RECALCULATE THE DI SALLOWANCE. 16. BEFORE US LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE STAND AS WAS TAKEN BEFORE THE CIT(A). IT WAS HOWEVER CONCEDED THAT IN A.Y 2004-05 ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 8 NEITHER THE REVENUE NOR THE ASSESSEE PREFERRED AP PEAL BEFORE THE CIT(A) ON THIS ISSUE. THE LD. D.R RELIED ON THE ORDER OF THE AO. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. ON S IMILAR ISSUE THE DISALLOWANCE HAD BEEN MADE OF 10% OF THE PRODUCTION EXPENSES IN A.Y 2004- 05 FOR THE REASON THAT BILLS AND VOUCHERS COULD NOT BE PRODUCED. IN THAT YEAR THE CIT(A) FOLLOWING THE DECISION OF THE CIT( A) IN A.Y 2003-04 ON THE SAME ISSUE REDUCED THE DISALLOWANCE TO 5.6%. IN TH E COURSE OF HEARING WE ASKED THE LD. COUNSEL FOR THE ASSESSEE AS TO WHETHE R THE EXPENSES TO THE TUNE OF RS. 5.00 CRORES AS PER SCHEDULE-P AND IN DI RECT EXPENSES OF RS.1 50 66 514/- HAD BEEN DEBITED IN THE P&L ACCOUN T OF THIS YEAR. THE LD. COUNSEL FOR THE ASSESSEE WAS NOT IN A POSITION TO E STABLISH THAT THESE EXPENSES WERE NOT DEBITED IN THE P&L ACCOUNT OF THI S YEAR. IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT IT WOULD BE J UST AND PROPER THAT THE DISALLOWANCE SUSTAINED BY THE CIT(A) SHOULD BE UPHE LD. THE DISALLOWANCE IS IN TUNE WITH SIMILAR DISALLOWANCE IN THE CASE OF TH E ASSESSEE IN THE PAST. WE THEREFORE UPHOLD THE ORDER OF THE CIT(A) AND DISMI SS GROUND NO.3 RAISED BY THE ASSESSEE AS WELL AS REVENUE. 18 IN THE RESULT THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ITA NO.1754/M/09: 19. THE ONLY GROUND THAT REMAINS FOR CONSIDERATION IN THIS APPEAL BY THE REVENUE IS GROUND NO.2 WHICH READS AS FOLLOWS: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD. CIT(A) ERRED IN DIRECTING THE AO TO ALLOW BAD D EBTS WRITTEN OFF BY THE ASSESSEE EVEN THOUGH THE ASSESSEE HAS NOT PROVE D THE YEAR IN WHICH THE PAYMENT REFLECTED IN THE BOOKS 20. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF BAD DEBTS WRITTEN OFF OF A SUM OF RS. 3 22 053/ - FOR THE REASON THAT THE ASSESSEE DID NOT CLEARLY MENTION THE YEAR IN WHICH THE AMOUNT WRITTEN OFF AS ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 9 BAD DEBTS HAD BEEN OFFERED TO TAX AS INCOME. THE C IT(A) HOWEVER DELETED THE ADDITION MADE BY THE AO. IT IS THE GRIEVANCE O F THE REVENUE THAT THE CIT(A) HAS NOT GIVEN A FINDING AS TO THE YEAR IN WH ICH THE DEBTS WRITTEN OFF AS BAD WERE OFFERED AS INCOME TO TAX BY THE ASSESSEE. IN THIS REGARD WE FIND THAT THE ASSESSEE HAS GIVEN REQUIRED DETAILS WHICH ARE AS FOLLOWS: BAD DEBTS WRITTEN OFF MUKTASHAKTI COMBINE DELHI U.P.; FILM COLONY BHAGIRATH PLACE CHANDINI CHOWK DELHI -6 FILM: KASSOR PENDING SINCE 2002 56 270.24 VIJAY LAXMI PICTURES- BIHAR 158 LENIN SARANI 2 ND FLOOR CALCUTTA 700 013 FILM: ZAKHAM PENDING SINCE 2002 1 600.00 ABHA FILMS- DELHI U.P FILM COLONY BHAGIRATH PLACE CHANDINI CHOWK DELHI -6 FILM ZAKHM PENDING SINCE 2002 40 026.24 R.K. AGENCIES FILM YEH ZINDAGI KA SAFAR PENDING SINCE 2003 17 240.00 VANDANA FILMS DISTRIBUTORS ANDHRA 1 ST FLOOR HAPPY TRADE CENTER SAROJINI DEVI ROAD SEC UNDERABAD FILM: KASOOR PENDING SINCE 2003 2 06 916.35 TOTAL RS. 3 22 052.83 21. THE CIT(A) HAS CONSIDERED THE ABOVE DETAILS ON RECORD BEFORE DELETING THE ADDITION MADE BY THE AO. WE ARE THEREFORE OF THE VIEW THAT THE GRIEVANCE PROJECTED BY THE REVENUE IN GROUND NO.2 I S WITHOUT ANY MERIT. CONSEQUENTLY GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 22. IN THE RESULT THE APPEAL OF THE REVENUE IS DIS MISSED. ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 10 23. IN THE RESULT THE APPEAL BY THE ASSESSEE IS PA RTLY ALLOWED WHILE APPEAL BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31 ST DAY OF MARCH 2011. SD/- SD/- (PRAMOD KUMAR) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED. 31 ST MARCH 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RF BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR I TAT MUMBAI BENCHES MUMBAI. VM. ITA NO. 1590&1754/MUM/2009(A.Y. 2005-06) 11 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 28/3/2011 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 29/3/2011 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER