THE DCIT CEN CIR-24, MUMBAI v. SHRI SALMAN KHAN, MUMBAI

ITA 2836/MUM/2008 | 2003-2004
Pronouncement Date: 13-10-2010 | Result: Partly Allowed

Appeal Details

RSA Number 283619914 RSA 2008
Assessee PAN AACPK8429P
Bench Mumbai
Appeal Number ITA 2836/MUM/2008
Duration Of Justice 2 year(s) 5 month(s) 19 day(s)
Appellant THE DCIT CEN CIR-24, MUMBAI
Respondent SHRI SALMAN KHAN, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 13-10-2010
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted E
Tribunal Order Date 13-10-2010
Date Of Final Hearing 30-09-2010
Next Hearing Date 30-09-2010
Assessment Year 2003-2004
Appeal Filed On 24-04-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI BEFORE SHRI D.MANMOHAN VICE PRESIDENT AND SHRI T.R . SOOD AM I.T.A. NO.2836&2837/MUM/2008 ASSESSMENT YEAR : 2003-04 & 2004-05 DY. COMMISIONER OF INCOME TAX CENTRAL CIR-24 MUMBAI SALMAN KHAN 3 GALAXY APTS B.J. ROAD BAND STAND BANDRA (W) MUMBAI. PAN NO: AACPK8429P (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI HEMANTLAL RESPONDENT BY : SHRI PRAKASH K. JOTWANI ORDER PER T.R. SOOD (AM) : I.T.A. NO.2836/MUM/2008 1. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 18/02/2008 OF COMMISSIONER OF INCOME TAX (APPEALS) - IV MUMBAI. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS:- 1.A. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE CIT(A) ERRED IN LAW IN ALLOWING DEDUCTION U/S. 89RR WITHOUT 2 APPRECIATING THE FACT THAT THE INCOME DERIVED BY TH E ASSESSEE WAS NOT IN EXERCISE OF HIS PROFESSION AS AN ACTOR FROM FOREIGN SOURCES. B. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) FAILED TO TAKE INTO ACCOUNT THE DECISION OF ITAT MUMBAI IN HARSHA BHOGLE 86 INCOME TAX DIGEST 714 WHILE AL LOWING DEDUCTION U/S.80RR OF THE I.T.ACT 1961. C. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.11 70 000/- MADE BY THE A.O. ON ACCOUNT OF LEGAL EXPENSES AND PROFES SIONAL CHARGES WITHOUT APPRECIATING THE FACT THAT THE CRIMINAL OFF ENCE WAS COMMITTED BY ASSESSEE IN HIS PERSONAL CAPACITY AND NOT IN HIS PROFESSIONAL CAPACITY AS AN ACTOR. HENCE THE SAME BEING PERSONAL IN NATURE CANNOT BE ALLOWED UNDER SECTION 37(1) OF THE ACT. 3. GR.NO.1A AFTER HEARING BOTH THE PARTIES WE FIND THAT ASSES SEE IS A FILM ACTOR AND DURING THE YEAR ASSESSEE HAD CLAIMED DEDU CTION U/S.80RR AT THE RATE OF 30% ON PROFESSIONAL REMUNERATION OF RS.1 26 39 7 73/- FOR DOING SHOWS ABROAD. THE A.O. ASKED THE ASSESSEE TO SUBMIT THE C OPIES OF THE AGREEMENT PASSPORT AND OTHER DETAILS OF THE VISIT UNDERTAKEN TO PERFORM THE SITE SHOW. A LETTER DATED 25/04/2003 WRITTEN BY THE ASSESSEE TO SHRI VIJAY TANEJA WAS PRODUCED ONE MORE LETTER DATED 10/06/2003 FROM SHR I VIJAY TANEJA TO ASSESSEE WAS ALSO PRODUCED. FROM FORM-10H A.O. NOTICED THAT ALL THE PAYMENTS FOR SUCH SHOWS HAVE BEEN RECEIVED IN THE MONTH OF JUNE JULY AND AUGUST 2003. IT WAS ALSO NOTICED FROM THE LETTER DATED 25/04/2003 WRITT EN BY THE ASSESSEE THAT THE FEE FOR EACH SHOW WAS STATED TO BE US $ 28 000/- PER SH OW FOR 15 SHOWS WHEREAS THE LETTER FROM SHRI VIJAY TANEJA DEPICTED THAT BE CAUSE OF RECESSION ONLY 9 3 SHOWS WOULD TAKE PLACE BUT THE FEE WAS REMAINING SA ME. HOWEVER NONE OF THESE LETTERS SHOW THAT FEE WOULD BE PAID IN ADVANC E. A.O. FURTHER NOTED THAT NAME OF THE REMITTER FROM THE DUBAI IS NOT MENTIONE D IN THE FORM-10H AND THE ASSESSEE WAS CONFRONTED WITH THESE QUIRES. IN RESPO NSE TO THE QUERIES IT WAS STATED BY THE ASSESSEE THAT THE SUM OF RS.1 02 05 0 98/- WAS TOWARDS THE SHOW HELD FROM 21 ST MAY 2003 TO 6 TH JULY 2003. IT WAS FURTHER EXPLAINED THAT ASSESSEE WAS FOLLOWING CASH SYSTEM OF ACCOUNTING AND SINCE P AYMENTS HAVE BEEN RECEIVED IN ADVANCE THAT WERE BEING SHOWN AS RECEIP TS AND CLAIM FOR DEDUCTION U/S.80 RR WAS MADE ACCORDINGLY. HOWEVER A.O OBSERV ED THAT NO WHERE THE LETTERS WRITTEN BY THE ASSESSEE OR SHRI VIJAY TANEJ A SHOW THAT PAYMENTS TO BE MADE IN ADVANCE PAYMENTS WERE REQUIRED TO BE MADE ON EITHER DURING THE PERFORMANCE OF THE SHOW OR SOON THEREAFTER. HE ALSO OBSERVED THAT ASSESSEE HAD NOT FILED ALL THE AGREEMENTS IN RESPECT OF THE SHOW S. IT WAS ALSO OBSERVED THAT PLACE OF RESIDENCE OF THE REMITTERS WAS ALSO NOT IN CORPORATED IN FORM-10H. A.O. FURTHER OBSERVED THAT EXEMPTION PROVISION U/S.80RR NEEDS TO BE CONSTRUED STRICTLY AND FOR WHICH HE RELIED ON THE DECISION OF CIT VS. PURSHOTTAM DAS 247 ITR 516. HE ALSO MADE OBSERVATIONS TO THE FACT THAT ASSESSEE BEING AN ACTOR CANNOT BE CALLED STRICTLY STAGE ARTIST. IN THIS BAC KGROUND THE DEDUCTION U/S.80 RR WAS NOT ALLOWED. 4 4. BEFORE CIT(APPEALS) IT WAS MAINLY SUBMITTED THA T COPY OF THE AGREEMENT WERE FURNISHED BEFORE THE A.O. VIDE LETTE R DATED 11/03/2006 IT WAS FURTHER SUBMITTED THAT RELIANCE PLACED BEFORE A.O. IN THE CASE OF HARSHA BHOGLE (86 ITD 714) IS DISTINGUISHABLE AND RELIANCE WAS A LSO PLACED ON THE BOARD CIRCULAR NO. 22 DATED 17/07/69 NO.31 DATED 25/10/6 9 NO. 675 DATED 3/1/94. THE LEARNED CIT(APPEALS) AFTER EXAMINING THE SUBMIS SIONS ALLOWED THE DEDUCTION U/S. 80 RR VIDE PARA 19 OF HIS ORDER WHIC H IS AS UNDER : 19. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE LEARNED AR IN THIS REGARD AND FIND MERIT THEREIN. A DEDUCTI ON U/S.80 RR IN RESPECT OF PROFESSIONAL INCOME FROM FOREIGN SOURCES IS PERMITTED IF THE FOLLOWING CONDITIONS ARE SATISFIED :- 1. THE TAX PAYER IS A RESIDENT INDIVIDUAL. 2. HE IS AN AUTHOR PLAYWRIGHT ARTIST MUSICIAN ACTO R OR SPORTSMAN. 3. HIS INCOME INCLUDES INCOME FROM THE EXERCISE OF THE AFORESAID PROFESSION FROM A FOREIGN GOVERNMENT OR F ROM A PERSON NOT RESIDENT IN INDIA. 4. SUCH INCOME MAY BE DIRECTLY RECEIVED IN INDIA OR IT MAY BE RECEIVED OUTSIDE INDIA. 5. THE TAXPAYER FURNISHES A CERTIFICATE IN FORM NO.10H ALONGWITH HIS RETURN OF INCOME CERTIFYING THAT THE DEDUCTION HAS BEEN CORRECTLY CLAIMED IN ACCORDANCE WITH THE PROVISIONS OF THE SECTION. THE APPELLANT IS A WELL KNOWN HIM ARTIST AND HAS RE CEIVED INCOME FROM STAGE SHOWS ABROAD WHICH IS NOT DOUBTED BY TH E AO. ALL THE RELEVANT DETAILS IN THIS REGARD TOO HAVE BEEN FURNI SHED BY THE APPELLANT TO THE AO WHICH CLEARLY EVIDENCE THAT TH E APPELLANT HAS COMPLIED WITH THE AFORESAID CONDITIONS LAID DOWN IN SECTION 80 RR OF THE ACT. THE AO WAS GIVEN A COPY OF THE AGREEMEN T BETWEEN 5 VIJAY TANEJA THE SHOW ORGANISERS AND SALMAN KHAN S HOWING PLACE OF RESIDENCE OF REMITTER AND DATE OF PERFORMA NCE OF THE STAGE SHOW ALONG WITH XEROX COPY OF THE PASSPORT WHICH W AS EVIDENCE ENOUGH THAT SHRI SALMAN KHAN HAD PERFORMED. THE AO S CONTENTION THAT THERE WAS NO FORMAL AGREEMENT WITH THE REMITTERS AND THE COPY OF THE PASSPORT/VISA WERE NOT SUBMITTE D FALLS FLAT IN THE FACE OF OVERWHELMING EVIDENCE TO THE CONTRARY WHICH SUPPORT THE CLAIM OF THE APPELLANT IN THIS REGARD THAT HE W AS AN ARTIST PERFORMING STAGE SHOWS THEREBY COMPLYING WITH THE PROVISIONS OF SECTION 80 RR. ALSO VIDE CIRCULAR NO.22 DT.17.07.19 69 ISSUED BY CBDT THE APPELLANT IS AN ARTIST. THE ABOVE SAID CI RCULAR NO.22 DT.17.07.1969 IS REPRODUCED HEREUNDER:- 48. THE FINANCE ACT 1969 HAS INSERTED A NEW SEC TION 80 RR IN THE INCOME TAX ACT WITH EFFECT FROM 1 ST APRIL 1970 UNDER WHICH A RESIDENT INDIVIDUAL BEING AN AUTHOR PLAYWRIGHT ARTIST MUSICIAN OR ACTOR WHO DERIVES I NCOME IN THE EXERCISE OF HIS PROFESSION FROM FOREIGN SOURCES AND RECEIVES SUCH INCOME IN INDIA OR BRINGS IT INTO IND IA IN FOREIGN EXCHANGE WILL BE ENTITLED TO DEDUCT 25% OF INCOME SO RECEIVED OR BROUGHT IN COMPUTING THE TOTAL INCO ME. THIS PROVISION IS DESIGNED TO ENCOURAGE SUCCESSFUL AUTHO RS PLAYWRIGHTS ARTIST MUSICIANS AND ACTORS IN OUR CO UNTRY TO PROJECT THEIR ACTIVITIES OUTSIDE INDIA WITH A VIEW TO CONTRIBUTING TO GREATER UNDERSTANDING OF OUR COUNTR Y AND ITS CULTURE ABROAD AND ALSO AUGMENTING OUR FOREIGN EXCH ANGE RESOURCES. SOME OF THE PROFESSIONAL ACTIVITIES COMI NG WITHIN THE SCOPE OF THIS SECTION ARE : PUBLICATION OUTSIDE INDIA OF A BOOK PRODUCED BY THE AUTHOR CONTRIBUTION OF ARTICL ES TO FOREIGN JOURNALS AND MAGAZINES EXHIBITION OF PAINT INGS SCULPTURES AND OTHER WORKS OF ART IN FOREIGN COUNTR IES GIVING OF MUSIC CONCERTS TO FOREIGN AUDIENCE AND AC TING IN DRAMATIC PERFORMANCES CINEMATOGRAPH FILMS AND TELE VISION PROGRAMMES IN FOREIGN COUNTRIES. SINCE THE REQUIRED EVIDENCE HAS BEEN SUBMITTED TO T HE AO AND ALSO IN VIEW OF THE APPELLANTS COMPLIANCE WITH THE REQU IREMENTS OF SECTION 80RR I HOLD THAT THE APPELLANT IS ENTITLED TO CLAIM DEDUCTION OF U/S. 80RR OF THE ACT AND REJECT THE DI SALLOWANCE MADE 6 BY A.O. HOWEVER WHILE GIVING EFFECT TO THIS ORDER THE AO SHOULD VERIFY THE CORRECT FIGURE ALLOWABLE U/S. 80 RR. 5. BEFORE US THE LEARNED DR CARRIED US THROUGH THE ASSESSMENT ORDER AND POINTED OUT THAT SHOWS WERE STATED TO HAVE BEE N HELD FROM 21 ST MAY 2003 TO 6 TH JULY 2003. HE ARGUED THAT AS PER LETTER OF THE AS SESSEE DATED 25/04/2003 THE PAYMENTS WERE TO BE RECEIVED DURING THE SHOW. H E ALSO INVITED OUR ATTENTION TO THE LETTER WRITTEN BY SHRI VIJAY TANEJA ON 10/06 /2003 THAT PAYMENTS WOULD BE MADE DURING THE SHOW OR IF THE ENTIRE AMOUNT IS NOT CLEARED THEN SAME WOULD BE PAID WITHIN 3 DAYS FROM THE COMPLETION OF THE SHOW. HE SUBMITTED THAT ASSESSEE HAS CHANGED HIS STAND LATER ON AND CLAIMED THAT PAY MENTS HAD BEEN RECEIVED IN ADVANCE WHICH IS NOT CORRECT. IN ANY CASE DEDUCTION U/S.80 RR WOULD NOT BE ALLOWED MERELY ON THE BASIS OF ADVANCE BECAUSE AT T HE TIME OF ADVANCE IT IS NOT SURE WHETHER ASSESSEE WOULD DO ANY SHOWS OR NOT. TH EREFORE EVEN IF ASSESSEE IS FOLLOWING THE CASH BASIS OF ACCOUNTING THEN ADVANC E AMOUNT IS TO BE TREATED AS RECEIPT BECAUSE OF THE METHOD OF ACCOUNTING BUT DED UCTION U/S. 80 RR CANNOT BE ALLOWED UNLESS AND UNTIL SHOWS ARE PERFORMED. FURTH ER HE ALSO POINTED OUT THAT NO AGREEMENT WERE FILED BEFORE A.O. AND IN THIS REG ARD QUOTED THE FOLLOWING OBSERVATIONS FROM ASSESSMENT ORDER:- 7 IT CAN ALSO BE OBSERVED THAT ASSESSEE HAS SUBMITTE D A COPY OF LETTER PURPORTEDLY AN AGREEMENT WITH SHRI VIJAY TAN EJA ONLY FROM WHOM A REMITTANCE OF RS.66 01 740 10 HAS BEEN RECEI VED. THE ASSESSEE HAS NOT SUBMITTED ANY SUCH AGREEMENTS REGA RDING BALANCE REMITTANCE OF RS.60 36 782.59. EVEN FORM 10H SUBMIT TED DO NOT MENTION THE NAME OF THE REMITTER FOR RS.21 50 100/- . 6. HE ALSO REFERRED TO COPY OF THE FORM 10H WHI CH IS ANNEXED TO THE ASSESSMENT ORDER AND POINTED OUT THAT AGAINST T HE COLUMN OF PLACE OF RESIDENCE NO DETAILS HAVE BEEN FURNISHED. 7. ON THE OTHER HAND LEARNED COUNSEL OF THE ASSES SEE SUBMITTED THAT SINCE HE HAD APPLIED FOR ADJOURNMENT WHICH HAD BEEN REJECTED BY TRIBUNAL AND THEREFORE HE COULD NOT FILE THE PAPER BOOK. HE THEN REFEREED TO THE GROUND OF APPEAL AND SUBMITTED THAT ISSUE REGARDING ADVANCE P AYMENTS ETC. IS NOT RAISED IN THE GROUNDS AND ONLY OBJECTION RAISED TO THE ORDER OF CIT(APPEAL) IS THAT CIT (APPEAL) HAS FAILED TO TAKE INTO THE ACCOUNT THE DE CISION IN CASE OF HARSHA BHOGLE (SUPRA). 8. HE ALSO SUBMITTED THAT A.O. HAS ALREADY TAXED T HE RECEIPTS BECAUSE SAME WERE ACCOUNTED FOR ON CASH BASIS THEN A.O. CO ULD NOT HAVE DENIED TO ALLOW THE DEDUCTION WHICH IS A CONSEQUENCE. HE REFE REED TO PAGE 5 OF THE 8 ASSESSMENT ORDER WHERE IN THE REPLY OF THE ASSESSEE HAS BEEN EXTRACTED WHICH IS AS UNDER :- THE ASSESSEE WAS ASKED TO SUBSTANTIATE ITS CLAIM V IDE LETTER DATED 20.03.2006 TO WHICH IT HAS REPLIED VIDE LETTER DATE D 22.03.2006 AS UNDER : AS REGARDS DEDUCTION U/S.80 RR I WOULD LIKE TO INF ORM YOU THAT I HAVE RECEIVED ADVANCE OF RS.1 02 05 098/- TOWARDS T HE SHOW HELD FROM 21 ST MAY 2003 TO 6 TH JULY 2003 IN WHICH I HAVE PERFORMED AS AN ARTIST. AGREEMENTS HAVE ALREADY BEEN SUBMITTED T O YOU VIDE MY LETTER DATED 11.03.2006. SINCE I AM FOLLOWING CASH BASIS OF ACCOUNTING THIS HAS TO BE SHOWN AS AN INCOME IN TH E YEAR IN WHICH I HAVE RECEIVED. HAD I NOT FOLLOWED CASH BASIS OF A CCOUNTING THE SAID ADVANCE OF RS.1 02 05 098/- WOULD HAVE BEEN SH OWN AS ADVANCE RECEIVED IN THE LIABLILITES SIDE OF BALANCE SHEET AS ON 31.03.2003 AND NOT THE INCOME FROM OTHER SOURCES. S INCE I AM FOLLOWING CASH BASIS OF ACCOUNTING AND PERFORMED AS AN ARTIST NEXT YEAR DEDUCTION U/S.80 RR SHOULD BE ALLOWED. IT CAN ALSO BE OBSERVED THAT ASSESSEE HAS SUBMITTE D A COPY OF LETTER PURPORTEDLY AN AGREEMENT WITH SHRI VIJAY TAN EJA ONLY FROM WHOM A REMITTANCE OF RS.66 01 740 10 HAS BEEN RECEI VED. THE ASSESSEE HAS NOT SUBMITTED ANY SUCH AGREEMENTS REGA RDING BALANCE REMITTANCE OF RS.60 36 782.59. EVEN FORM 10H SUBMIT TED DO NOT MENTION THE NAME OF THE REMITTER FOR RS.21 50 100/- . 9. THE ABOVE REPLY CLEARLY SHOWS THAT ASSESSEE HAS NOT SHOWN THE RECEIPT AS LIABILITY IN THE BALANCE SHEET AND THERE FORE SAME HAVE TO BE TREATED AS ADVANCE FROM THE PERFORMANCE OF THE SHOWS AND ACCOR DINGLY DEDUCTION U/S.80 RR IS TO BE ALLOWED. THE LEARNED CIT(APPEAL) HAS CL EARLY OBSERVED THAT ASSESSEE HAS FILED ALL THE RELEVANT DETAILS. HE ALS O REITERATED THE RELIANCE ON VARIOUS CIRCULARS WHICH WERE RELIED BEFORE CIT(APPE AL). HE STRONGLY SUPPORTED THE ORDER OF CIT(APPEAL). 9 10. IN THE REJOINDER THE LEARNED DR SUBMITTED THA T GROUND NO. 1A WOULD COVERE THE ISSUE GENERALLY WHICH TALKS OF DED UCTION U/S.80 RR. 11. FIRST OF ALL LET US DEAL WITH THE ISSUE OF ADJ OURNMENT. AN ADJOURNMENT APPLICATION DATED 29/09/2010 WAS FILED WHICH READS AS UNDER : RE: SALMAN KHAN ASST. YEAR : 200304 & 2004-05 ITA NOS. 2836 & 2837/M/08 ----------------------------------------- THE ABOVE MENTIONED APPEALS ARE FIXED FOR HEARING B EFORE E BENCH ON 30/09/2010. SINCE THE PAPERS REQUIRED FOR FILING THE APPEALS ARE UNDER COMPILATION WE REQUEST YOU TO KINDLY GRANT A ND ADJOURNMENT FOR A MONTH AND OBLIGE. 12. IT WAS SEEN FROM THE RECORDS THAT THIS MATTER EARLIER ALSO CAME UP FOR HEARING ON FOLLOWING DATES:- 02/6/2009 23/7/2009 25/11/2009 12/05/2010 19/0 7/2010 AND 28/07/2010. 13. OUT OF THE ABOVE BENCH DID NOT FUNCTION ON 22 /2/2009 05/01/2010 AND 12/03/2010. OUT OF THE REST 5 DATES ON 4 DATES THE ADJOURNMENT WAS SOUGHT ON BEHALF OF THE ASSESSEE. IT IS SEEM THAT ON EARLI ER OCCASION THE ADJOURNMENT WAS SOUGHT ON VIDE LETTER DATED 2/06/2009 WITH THE SAME REASON THAT RELEVANT PAPERS ARE NOT READY. THE ADJOURNMENT CANNOT BE TRE ATED AS A MATTER OF RIGHT 10 WHEN THE ASSESSEE WAS AWARE OF THE HEARING OF APPEA L RIGHT FROM JANUARY 2009 AND WANTED TO FILE A PAPER BOOK A REASONABLE STEPS SHOULD HAVE BEEN TAKEN IN LAST ONE YEAR. THE ADJOURNMENT WAS REJECTED IN THIS BACKGROUND. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSION CAREFU LLY IN THE LIGHT OF MATERIAL ON RECORD AND WE FIND NO MERIT IN THE OBJE CTION OF THE LEARNED COUNSEL THAT THE REVENUE HAS NOT RAISED SPECIFIC GROUND REG ARDING ADVANCE PAYMENT ETC. WE ARE OF THE VIEW THAT PART OF THE GROUND 1(A) WOU LD DEFINITELY COVER THE ISSUE BECAUSE IN THAT GROUND THE DEDUCTION ALLOWED U/S.80 RR HAS BEEN CHALLENGED. IN ANY CASE RULE 11 OF APPELLATE TRIBUNAL RULES 1963 R EADS AS UNDER:- 11. THE APPELLANT SHALL NOT EXCEPT BY EAVE OF THE TRIBUNAL URGE OR BE HEARD IN SUPPORT OF ANY GROUND NOT SET FORTH IN THE MEMORANDUM OF APPEAL BUT THE TRIBUNAL IN DECIDING THE APPEAL SHALL NOT BE CONFINED TO THE GROUNDS SET FORTH IN T HE MEMORANDUM OF APPEAL OR TAKEN BY LEAVE OF THE TRIBUNAL UNDER T HIS RULE: PROVIDED THAT THE TRIBUNAL SHALL NOT REST ITS DECISION ON A NY OTHER GROUND UNLESS THE PARTY WHO MAY BE AFFECTED THEREBY HAS HAD A SUFFICIENT OPPORTUNITY OF BEING HEARD ON THAT GROUN D. 15. THE ABOVE RULE CLEARLY SHOWS THAT TRIBUNAL HAS POWER TO CONSIDER THE MATTERS WHICH ARISE OUT OF THE ORDERS OF THE LO WER AUTHORITIES AND IS NOT STRICTLY REQUIRED TO CONFINE ONLY TO THE GROUNDS OF APPEAL AS LONG THE OTHER PARTY IS GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD. SIN CE LEARNED COUNSEL OF THE ASSESSEE WAS GIVEN FULL OPPORTUNITY AND THEREFORE T HIS OBJECTION IS REJECTED. 11 16. WE FIND THAT IN RESPECT OF THE SHOWS IN RESPON SE TO THE REQUEST FOR FILLING OF THE AGREEMENT THE FOLLOWING 2 LETTERS HA VE BEEN FURNISHED BEFORE THE A.O.:- 1. FIRST LETTER DT.25.4.2003 WRITTEN BY SHRI SALMA N KHAN TO SHRI VIJAY TANEJA WHICH INTERALIA READS AS UNDER:- THIS IS TO CONFIRM THAT I HAVE AGREED TO PERFORM A S AN ARTISTE IN THE ABOVE-MENTIONED SHOWS TO BE HELD IN USA/CANA DA AND UK ON THE FOLLOWING TERMS AND CONDITIONS: I) YOU AGREE TO PAY ME A REMUNERATION OF USD TWENTY EI GHT THOUSAND (USD 28 000) PER SHOW FOR FIFTEEN (15) SH OWS PAYABLE DURING THE TENURE OF THE SHOWS. II) AIR TICKETS: ONE (1) FIRST CLASS ONE (1) BUSINESS CLASS AND ONE (1) ECONOMY TICKETS TO BE PROVIDED AND PAID B Y OU. III) YOU WILL PROVIDE ME AT YOUR OWN EXPENSE A SUITE WIT H ROOM SERVICE IN A FIVE STAR HOTEL AND TWIN SHARING ROOMS AND ALLOWANCE OR MEALS FOR MY STAFF. IV) YOU WILL PROVIDE ME WITH A CHAUFFER DRIVEN LUXURY C AR THE EXPENSES FOR WHICH WILL BE BORNE BY YOU FROM AIRPOR T TO HOTEL AND VENUE AND BACK TO AIRPORT. V) IT SHALL BE YOUR RESPONSIBILITY TO ARRANGE AND OBTA IN AND PROVIDE TO ME AT YOUR COST ALL VISAS REQUIRED FOR M Y ENTRY IN USA/CANADA AND UK AS ALSO WORK PERMITS AND OTHER NECESSARY PERMISSION FOR ENABLING ME TO PERFORM AND PARTICIPATE IN THE SAID SHOWS IN THE SAID COUNTRIES AND THE VENUE WHERE THE SAID SHOW IS TO BE PERFORMED. I AGR EE TO PROVIDE ALL INFORMATION REQUIRED BY YOU TO OBTAIN T HE VISAS AND WORK PERMITS. VI) IT IS AGREED THAT IF YOU COMMIT A MATERIAL BREACH O F ANY OF THIS OBLIGATIONS UNDER OR TERMS AND CONDITIONS OF THIS AGREEMENT TO INCLUDE ANY FAILURE TO MAKE PAYMENT OF THE FEE THE SAME WILL ENTITLE ME TO CANCEL THIS AGREEMENT I N WHICH EVEN (A) I SHALL NOT BE BOUND TO PERFORM IN THE SAI D SHOWS; (B) THE REMUNERATION ALREADY PAID TO ME BY YOU SHA LL NOT BE REFUNDABLE BY ME; (C) ALL YOUR RIGHTS UNDER THIS AG REEMENT SHALL COME TO AN END; AND (D) I ALONG WITH MY COMPA NION 12 AND STAFF SHALL BE ENTITLED TO FORTHWITH RETURN TO INDIA AT YOUR COST AND CONSEQUENCE. VII) IT IS ALSO AGREED THAT IF UNDER SOME CIRCUMSTANCES I AM NOT ABLE TO PERFORM IN THE SAID SHOW THEN I SHALL REFU ND THE FULL AMOUNT PAID TO ME. OR WE SHALL MUTUALLY AGREE UPON A CONVENIENT RESCHEDULED DATE FOR THE SAME. VIII) I WILL BEAR THE COST OF OUR OWN COSTUMES. IX) I WILL DO A MINIMUM OF THREE ENTRIES ALONG WITH THE FINALE. X) THE LAWS OF INDIA SHALL GOVERN THIS AGREEMENT AND I T IS AGREED THAT THE PROPER COURTS IN MUMBAI WILL HAVE JURISDICTION IN RESPECT OF ANY MATTERS ARISING UNDE R THIS AGREEMENT. 2. SECOND LETTER DATED. 10.06.2003 FROM SHRI VIJAY TAN EJA TO SHRI SALMAN KHAN AND IT READS AS UNDER :- THIS HAS REFERENCE TO THE ABOVE-MENTIONED SHOWS TH AT WERE TO TAKE PLACE IN USA CANADA AND UK FROM MAY 21 ST 2003 TO JULY 6 TH 2003. AS OUR MUTUAL TALK AND YOU SEEING THE CIRCUMSTANCES AND THE END RESULTS OF THE SHOWS DUE TO THE DECLINING ECONOMIC CONDITIONS IN US/CANADA AND UK OUR SCHEDULED PLANNING OF 15 SHOW S HAS NOT BEEN POSSIBLE. THEREFORE NOW ONLY 9 SHOWS WILL TAKE PLACE INSTEAD OF 15. HOWEVER YOUR REMUNERATION PER SHOW I.E. USD TWENTY EIGHT THOUSAND WILL REMAIN THE SAME. THESE PAYMENTS WILL BE PAID EITHER BY ME OR BY THE LOCAL PROMOTERS ON MY BEHALF BY WAY OF CASHIERS CHEQUE/DRAFTS OR WIRE TRANSFER INTO YOUR BANK ACCOU NT. HOWEVER IF THE ENTIRE AMOUNT IS NOT CLEARED DURING THE TENURE OF THE SHOWS THEN THE BALANCE WILL BE PAID WITHIN THREE DAYS OF THE COMPLETION OF THE SHOWS. ALL OTHER TERMS AND CONDITIONS WITH REGARDS TO THE AIR TICKETS/GROUND TRANSPORTATION /ACCOMMODATION ETC. W ILL REMAIN THE SAME. 17. FIRSTLY IT IS INTERESTING TO NOTE THAT ASSESSE E HAD AGREED TO PERFORM IN THE SHOW ON 25/04/2003 AND CLAUSES OF THIS LETTE R VERY CLEARLY STATES THAT PAYMENT AT THE RATE OF US $ 28 000/- PER SHOW IS PA YABLE DURING THE TENURE OF 13 THE SHOW. WHEN FIRST AGREEMENT ITSELF WAS REACHED O N 25/04/2003 AND PAYMENT IS TO BE RECEIVED DURING THE PERFORMANCE OF THE SHO WS THE QUESTION OF RECEIVING THE PAYMENT BEFORE THE DATE OF THIS LETTER THAT IS DURING FINANCIAL YEAR 01/04/2002 TO 31/03/2003 WOULD NOT ARISE. IT IS FUR THER INTERESTING TO NOTE THAT SHRI VIJAY TANEJA HAS ALSO WRITTEN LETTER ON 10/06/ 2003 WHICH WE HAVE REPRODUCED ABOVE AND IN THAT LETTER IN 2 ND PARA IT IS CLEARLY STATED THAT PAYMENTS WILL BE MADE EITHER DURING THE TENURE OF THE SHOW O R WITHIN 3 DAYS FROM THE COMPLETION OF THE SHOWS WHICH MEANS TILL THAT DATE THERE WAS NO TALK OF ADVANCE PAYMENT. STILL LATER ON ASSESSEE HAS PREFERRED TO M AKE THE CLAIM BY STATING THAT ASSESSEE HAD RECEIVED PAYMENTS IN ADVANCE. WE THERE FORE FIND THAT A.O. HAS CLEARLY NOTED THAT ASSESSEE HAS FILED A LETTER FROM SHRI VIJAY TANEJA AND HAS NOT SUBMITTED ANY SUCH AGREEMENTS. FURTHER IN THE FORM- 10H ANNEXED WITH THE ASSESSMENT ORDER IN THE COLUMN OF PLACE OF RESIDENC E IN RESPECT OF ALL ITEMS THE PARTICULAR FILLED ARE NOT AVAILABLE. 18. THIS CLEARLY SHOWS THAT ASSESSEE HAS NOT FURNI SHED PROPER CERTIFICATE. DESPITE OF THESE GLARING INCONSISTENCI ES THE LEARNED CIT(APPEAL) HAS OBSERVED THAT A.O. WAS GIVEN COPY OF THE AGREEMENT BETWEEN SHRI VIJAY TANEJA AND HAD ALSO SHOWN PLACE OF THE RESIDENCE OF THE RE MITTER WHICH SEEMS TO BE TOTALLY WRONG. 14 19. HOWEVER SINCE ASSESSEE HAS BEEN DEPRIVED FROM FILING OF THE PAPERS BEFORE US BECAUSE OF THE FAULT OF ON BEHALF OF ASSESSEE ONLY WE ARE OF THE VIEW THAT IN THE INTEREST OF JUSTICE THIS MATTER SH OULD GO BACK TO A.O. TO BE RE- EXAMINED IN THE LIGHT OF OBSERVATIONS MADE BY US. T HEREFORE WE SET ASIDE THE ORDER OF LEARNED CIT(APPEAL) AND REMIT THIS MATTER BACK TO THE FILE OF A.O. FOR RE-EXAMINATION OF THE ISSUE NEEDLESSNESS TO SAY THA T ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY TO EXPLAIN HIS CASE AT THE SA ME TIME ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE ASSESSMENTS PROCEED INGS AND FURNISH ALL PARTICULARS TO SUPPORT HIS CASE AT THE EARLIEST. 20. GR.NO.2 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS A.O. NOTICED THAT ASSESSEE HAS INCURRED A SUM OF RS.12 90 000/- TOWARDS LEGAL EXPENSES OUT OF WHICH SUM OF RS.1 20 000/- PAID TO M/S. S.G. KABRA AND CO. ALL OTHER EXPENSES HAVE BEEN PAID TO LAWYERS DEFENDING THE ASSESSEE IN VARIOUS CRIMINAL PROCEEDINGS PENDING IN THE COURTS. THIS WAS TREATED AS PERSONAL EXPENSES AND ACCORDINGLY SUM OF RS.11 7 0 000/- WAS DISALLOWED. BEFORE CIT(APPEAL) IT WAS MAINLY SUBMITTED THAT ASS ESSEE WAS SHOOTING FOR A FILM HUM SAATH SAATH HAI WHERE HE WAS IMPLICATED IN SOME CRIMINAL PROCEEDINGS EXPENSES WERE INCURRED FOR EXEMPTION F ROM THE PERSONAL APPEARANCE IN THE COURT AND ALSO TO DEFEND THE ASSE SSEE TO PROVE HIS INNOCENCE. 15 THEREFORE THE EXPENDITURE WAS INCURRED TO DEFEND A SSESSEE WHICH HAS ARISEN OUT OF PROFESSIONAL ACTIVITY AND ACCORDINGLY SAME SHOU LD BE ALLOWED. RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE FOLLOWING CASES : CIT VS. BIRLA COTTON SPINNING & WV. MILLS (82 ITR 1 66) CIT VS. DHARAJGIRI RAJA NARASINGIRJI (91 ITR 544 ) THE LEARNED CIT(APPEAL) AGREED WITH THE SUBMISSION. THE LEARNED CIT(APPEAL) OBSERVED THAT THESE EXPENDITURE CANNOT BE TREATED A S PERSONAL EXPENSES AND THEREFORE ALLOWED THE SAME. 21. BEFORE US LEARNED DR SUBMITTED THAT IT WAS ALL EGED THAT IN RAJASTHAN THAT ASSESSEE WAS SHOOTING A BLACK DUCK W HICH IS PROHIBITED UNDER THE LAW AND THE EXPENSES INCURRED IN THAT CONNECTION A RE PURELY OF PERSONAL NATURE. THIS HAS NOTHING TO DO WITH THE SHOOTING OF THE FIL M. HE ALSO SUBMITTED THAT LEARNED CIT(APPEAL) HAS WRONGLY RELIED ON THE DECIS ION OF THE CIT VS. BIRLA COTTON SPINNING & WV. MILLS IN THAT CASE CERTAIN EN QUIRES AND INVESTIGATIONS WERE BEING CONDUCTED BY INVESTIGATION WING AGAINST THE COMPANY IN RESPECT OF INCIDENCE OF TAXATION OF INCOME THAT MEANS THE LAW CHARGES WERE PAID BY DEFENDANT IN RESPECT OF ISSUES OF BUSINESS ALLEGATI ONS AND THEREFORE IT CAN BE SAID 16 THAT COMPANY ITSELF WAS BEING DEFENDED AND THUS THE DECISION IS TOTALLY DISTINGUISHABLE. SIMILARLY IN CASE OF CIT VS. DHAN RAJGIRJI RAJA NARASINGIRJI THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF BUSINES S AND THEREFORE THAT RATIO CANNOT BE COMPILED. 22. ON THE OTHER HAND LEARNED COUNSEL OF THE ASSES SEE STRONGLY SUPPORTED THE ORDER OF FIRST APPELLATE AUTHORITY AN D ALSO RELIED ON THE DECISION OF CIT VS. BIRLA COTTON SPINNING & WV. MILLS (SUPRA) A S WELL AS DHANRAJGIRJI RAJA NARASINGIRJI (SUPRA). HE FURTHER SUBMITTED THAT CER TAIN CRIMINAL COMPLAINTS WERE LODGED AGAINST THE ASSESSEE AND ASSESSEE HAS TO DEF END HIMSELF OTHERWISE ASSESSEE WAS REQUIRED TO ATTEND CRIMINAL PROCEEDING S PERSONALLY WHICH WOULD CAUSE THE BUSINESS LOSS BECAUSE ASSESSEE IS AN ACTO R AND IF HE IS AWAY FROM THE PROFESSION HE WOULD LOSE THE INCOME. THEREFORE BY ACTING IN THE PROFESSION HE COULD GENERATE INCOME AND PAY MORE TAX ALSO. HE ALS O RELIED ON THE DECISION OF MUMBAI BENCH OF TRIBUNAL INCASE OF AJAY SINGH DEOL VS. JCIT 91 ITD 196 WHERE EVEN EXPENDITURE INCURRED FOR THE TREATMENT O F THE WIFE OF A EMPLOYEE WAS HELD TO BE EXPENDITURE FOR THE PURPOSE OF BUSIN ESS. 23. WE HAVE CONSIDERED THE RIVAL SUBMISSION CAREFU LLY AND FIND THAT ADMITTEDLY THE EXPENDITURE ON LEGAL CHARGES WHICH H AS BEEN DISALLOWED BY A.O. 17 HAVE BEEN INCURRED FOR MAKING THE PAYMENTS TO EMINE NT CRIMINAL LAWYERS FOR DEFENDING THE ASSESSEE FROM CRIMINAL PROCEEDINGS. T HOUGH LEARNED DR HAS MENTIONED THAT IT WAS A BASICALLY CASE OF SHOOTING OF PROHIBITORY CATEGORY OF THE BIRD BUT THIS IS BASED ON THE MEDIA REPORTS. AT THE SAME TIME NO EVIDENCE HAVE BEEN FILED BEFORE A.O. OR EVEN CIT(APPEAL) TO SHOW THAT CRIMINAL COMPLAINT ARISE OUT OF THE FILM SHOOTING. BEFORE US THE LEARN ED COUNSEL SIMPLY GAVE EVASIVE REPLY WHEN CONFRONTED WITH THE QUESTION THA T WHETHER CRIMINAL PROCEEDINGS ARISE OUT OF ANY INCIDENT DURING THE SH OOTING OF FILM. THE CRIMINAL PROCEEDINGS ARE ALWAYS FILED AGAINST INDIVIDUAL. TH IS HAS GOT NOTHING TO DO WITH ASSESSEES PROFESSION. THEREFORE WE ARE OF THE HUM BLE VIEW THAT THE EXPENDITURE IS PURELY OF THE PERSONAL NATURE. 24. THE DECISION RELIED BY COUNSEL OF THE ASSESSEE ARE CLEARLY DISTINGUISHABLE BECAUSE INCASE OF CIT VS. BIRLA COT TON SPINNING & WV. MILLS THE INVESTIGATION PROCEEDINGS WERE BEING CONDUCTED BY THE INVESTIGATION COMMISSION AGAINST THE AFFAIRS OF THE COMPANY AND T HUS THE ASSESSEES COMPANY WAS TRYING TO DEFEND ITSELF OUT OF THE BUSINESS ISS UES. SIMILARLY IN CASE OF CIT VS. DHANRAJGIRJI RAJA NARASINGIRJI THE FOLLOWING FA CTS WERE INVOLVED:- THE ASSESSEE WAS THE MANAGING AGENT OF A PUBLIC CO MPANY PROMOTED BY HIM IN 1935 AND WAS ALSO THE CHAIRMAN O F ITS BOARD OF 18 DIRECTORS. IN 1937 THE COMPANY GOT INTO FINANCIAL DIFFICULTIES AND A TRIPARTITE AGREEMENT BETWEEN THE ASSESSEE THE COMP ANY AND ONE G WHO AGREED TO BRING THE NECESSARY FINANCE WAS ENTE RED INTO PURSUANT TO WHICH THE ASSESSEE GAVE UPT THE MANAGIN G AGENCY IN FAVOUR OF G. UNDER ANOTHER AGREEMENT G WAS ALSO GIV EN THE SELLING AGENCY. THE ASSESSEE WAS TO BE PAID AN OFFICE ALLOW ANCE AND A SHARE IN THE MANAGING AGENCY COMMISSION AND THE SEL LING AGENCY COMMISSION AND ON THE TERMINATION OF EITHER THE S ELLING AGENCY OR THE MANAGING AGENCY THE ASSESSEE WAS ENTITLED TO R SUM BOTH THE AGENCIES. IN 1943 THE SELLING AGENCY AND MANAGING AGENCY WERE ASSIGNED TO TWO PRIVATE COMPANIES. AT THE INSTANCE OF G. THE ASSESSEE WAS REMOVED FROM THE OFFICE AS CHAIRMAN IN 1946. THE SELLING AGENCY WAS SURRENDERED BY THE PRIVATE COMPA NY TO G IN 1947 BUT IT DID NOT REVERT TO THE ASSESSEE AS AGRE ED. THEREUPON THE ASSESSEE INSTITUTED A CIVIL SUIT SEEKING REINST ATEMENT AS CHAIRMAN AND ALSO TO ESTABLISH HIS RIGHT TO THE SEL LING AGENCY. PENDING THAT SUIT THE ASSESSEE LODGED A CRIMINAL CO MPLAINT AGAINST G ALLEGING MISAPPROPRIATION OF THE COMPANYS FUNDS AND OTHER FRAUDULENT ACTS. PURSUANT TO THAT COMPLAINT GOVERN MENT INSTITUTED A CRIMINAL CASE AGAINST G IN WHICH AFTER OBTAINING THE PERMISSION OF THE COURT AND WITH THE CONSENT OF THE GOVERNMENT THE ASSESSEE EMPLOYED HIS WON LAWYERS TO PROSECUTE THAT CRIMINAL CASE. THE PROSECUTION ENDED IN GS CONVICTION. PENDING THE CI VIL AND CRIMINAL CASES THE ASSESSEE AND G ARRIVED AT A SETT LEMENT WHEREBY G GAVE UP THE MANAGING AGENCY AND ALSO AFFIRMED THE ASSESSEES RIGHT TO THE SELLING AGENCY. THE QUESTION WAS WHETH ER THE AMOUNTS SPENT BY THE ASSESSEE FOR THE CRIMINAL LITIGATION W AS ALLOWABLE AS BUSINESS EXPENDITURE UNDER SECTION 10(2) (XV) OF TH E INDIAN INCOME TAX ACT 1922. THE APPELLATE TRIBUNAL FOUND THAT TH E CRIMINAL CASE WAS INSTRUMENTAL IN BRINGING ABOUT THE COMPROMISE A ND THAT THE EXPENDITURE WAS BONAFIDE INCURRED BY THE ASSESSEE F OR THE PURPOSE OF HIS BUSINESS. THE TRIBUNAL HOWEVER HELD ON AN ESTIMATE THAT ONLY ONE-THIRD OF THE AMOUNTS SPENT BY THE ASSESSEE HAD BEEN EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSINESS AND THE ASSESSEE DID NOT CHALLENGE THAT FINDING. ON A REFERENCE AT THE INSTANCE OF THE DEPARTMENT THE HIGH COURT WHI LE ACCEPTING THE CONCLUSION THAT THE EXPENDITURE WAS INCURRED FOR TH E PURPOSE OF THE BUSINESS AND HOLDING THAT THE ENTIRE EXPENDITURE WA S DEDUCTIBLE DIRECTED THE TRIBUNAL TO RE-EXAMINE THE EXACT AMOUN T EXPENDED IN 19 CONNECTION WITH THE CRIMINAL LITIGATION. ON APPEAL TO THE SUPREME COURT. 25. FROM THE ABOVE IT IS CLEAR THAT CRIMINAL ACT S RELATED TO THE BUSINESS TRANSACTIONS AND BUSINESS ISSUES AND THERE FORE THE PURPOSE WAS FOR CLEARLY BUSINESS AND THUS THESE BOTH DECISIONS ARE CLEARLY DISTINGUISHABLE. AS FAR AS THE DECISION IN CASE OF AJAY SINGH DEOL VS. JCIT (SUPRA) IS CONCERNED THE EXPENDITURE WAS INCURRED FOR THE PURPOSE OF TREATME NTS OF THE WIFE OF ONE OF THE EMPLOYEE SHRI RAVAT WHO FELL SERIOUSLY ILL. THEREFO RE JUST TO ENCOURAGE MORAL OF THE EMPLOYEES THIS KIND OF EXPENDITURE ARE GENER ALLY INCURRED BY THE EMPLOYERS WHICH IS A NORMAL PRACTICE WITH ALL GOOD EMPLOYERS AND THEREFORE THESE FACTS ARE ALSO QUITE DISTINGUISHABLE. IN THE CASE BEFORE US THE FACT REMAINS THAT SOME PERSONAL COMPLAINTS HAVE BEEN LODGED AGAI NST THE ASSESSEE WHICH HAS NOTHING TO DO WITH PROFESSIONAL ACTIVITIES AND THER EFORE EXPENDITURE INCURRED IN DEFENDING AGAINST THESES ALLEGATION IS DEFINITELY O F PERSONAL NATURE AND SUCH EXPENDITURE CANNOT BE ALLOWED AGAINST THE INCOME FR OM BUSINESS AND PROFESSION. THEREFORE WE SET ASIDE THE ORDER OF LE ARNED CIT(APPEAL) IN THIS RESPECT AND RESTORE THE ORDER OF A.O. 26. IN THE RESULT REVENUES APPEAL IS PARTLY ALLOWE D FOR STATISTICAL PURPOSE. 20 I.T.A. NO.2837/MUM/2008 27. IN THIS APPEAL THE FOLLOWING GROUNDS HAVE BEEN RAISED :- 1.A. ON THE FACTS AND CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A)) ERRED IN LAW IN ALLOWING DEDUCTION U/S.80RR WITHOUT APPRECIATING THE FACT THAT THE INCOME DERIVED B YTH E ASSESSEE WAS NOT IN EXERCISE OF HIS PROFESSION AS AN ACTOR FROM FOREIGN SOURCES. B. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) FAILED TO TAKE INTO ACCOUNT THE DECISION OF ITAT MUMBAI IN HARSHA BHOGLE 86 INCOME TAX DIGEST 714 W HILE ALLOWING DEDUCTION U/S.80RR OF THE I.T.ACT 1961. C. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE CIT(A) ERRED IN DELETING THE ADDITION OF RS.31 05 000/- MADE BY THE A.O. ON ACCOUNT OF LEGAL EXPENSES AND PROFES SIONAL CHARGES WITHOUT APPRECIATING THE FACT THAT THE CRIMINAL OFF ENCE WAS COMMITTED BY ASSESSEE IN THE PERSONAL CAPACITY AND NOT IN HIS PROFESSIONAL CAPACITY AS AN ACTOR. HENCE THE SAME BEING PERSONAL IN NATURE CANNOT BE ALLOWED UNDER SECTION 37(1) OF THE ACT. 28. BOTH THE PARTIES MADE IDENTICAL ARGUMENTS AS W ERE MADE IN CASE OF ITA 2836/M/2008 AND SUBMITTED THAT SINCE ISSUES ARE IDENTICAL THE SAME VIEW MAY BE TAKEN IN THIS CASE ALSO. 29. AFTER CONSIDERING THE RIVAL SUBMISSION CAREFUL LY WE FIND THAT IN THIS APPEAL ALSO ISSUES ARE IDENTICAL WHICH WE HAVE ADJ UDICATED IN ABOVE NOTED PARA WHILE ADJUDICATING ITA/2836/M/2008. FOLLOWING THESE ORDERS THE ISSUES RAISED IN GR.NO.1A & 1B ARE SET ASIDE TO THE FILE OF A.O. WITH THE SAME DIRECTIONS AS 21 CONTAINED IN PARA 19. AS FAR AS 2 ND ISSUE IS CONCERNED THIS WAS DECIDED IN FAVOUR OF THE REVENUE IN EARLIER ORDER IN ITA/2836/M/2008 AND THEREFORE FOLLOWING THAT ORDER APPEAL IS DECIDED IN FAVOUR OF THE REVENUE AN D AGAINST THE ASSESSEE. 30. IN THE RESULT THE APPEAL IS PARTLY ALLOWED FO R STATISTICAL PURPOSE. 31. THUS BOTH THE APPEALS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THIS 13 TH DAY OF OCTOBER. 2010. SD/- SD/- (D. MANMOHAN) (T. R. SOOD) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI DT: 13 TH OCTOBER 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T. 4. CIT (A) 5. THE DR E - BENCH ITAT MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI ROSHANI