AMEESHA A. PATEL, MUMBAI v. ACIT CIR 11(1), MUMBAI

ITA 5883/MUM/2009 | 2004-2005
Pronouncement Date: 28-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 588319914 RSA 2009
Assessee PAN AABPP5243M
Bench Mumbai
Appeal Number ITA 5883/MUM/2009
Duration Of Justice 1 year(s) 2 month(s) 23 day(s)
Appellant AMEESHA A. PATEL, MUMBAI
Respondent ACIT CIR 11(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 28-01-2011
Assessment Year 2004-2005
Appeal Filed On 05-11-2009
Judgment Text
I.T.A NO.5883/MUM/2009 ASSESSMENT YEAR: 2004-05 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH MUMBAI [CORAM: D.MANMOHAN V.P AND PRAMOD KUMAR AM] I.T.A NO.5883/MUM/2009 ASSESSMENT YEAR: 2004-05 AMEESHA A PATEL .. APPELLANT 502 BHANU JUKAR MARG JUHU MUMBAI. PA NO.AABPP 5243 M VS ASST.COMMISSIONER OF INCOME TAX 11(1) . RESPON DEN T MUMBAI. APPEARANCES : H.S.RAHEJA FOR THE APPELLANT JITENDRA YADAV FOR THE RESPONDENT O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL THE ASSESSEE APPELLANT HAS CHAL LENGED CORRECTNESS OF CIT(A)S ORDER DATED 26 TH AUGUST 2009 FOR THE ASSESSMENT YEAR 2004-05. 2. IN THE FIRST GROUND OF APPEAL THE ASSESSEE HAS RAISED A GRIEVANCE AGAINST PARTIAL DISALLOWANCE OF COSTUME AND MAKE UP EXPENSES. 3. THE ASSESSEE IS A FILM ACTRESS AND MODEL. SHE HAS CLAIM ED A TAX DEDUCTION OF ` .8 15 328 ON ACCOUNT OF EXPENDITURE INCURRED ON COST UME AND MAKE UP. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER DISAL LOWED 15% OF THESE EXPENSES ON THE GROUND THAT PERSONAL ELEMENT IN THIS K IND OF EXPENDITURE CANNOT BE RULED OUT. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) BUT I.T.A NO.5883/MUM/2009 ASSESSMENT YEAR: 2004-05 2 WITHOUT ANY SUCCESS. LEARNED CIT (A) TOOK NOTE OF ASSESSE ES ARGUMENT THAT COSTUME AND MAKE UP EXPENSES ARE FULLY FOR PROFESSION AL PURPOSES AS THE ASSESSEE WHO IS A FILM ACTRESS HAS TO BE SEEN IN PUBLIC SUITABLY DRESSED AND MADE UP AS A FILM ACTRESS BUT REJECTED THE SAME BY INTER ALIA OBSERVI NG AS FOLLOWS:- SO FAR AS THE COSTUME & MAKE UP EXPENSES ARE CONCERNED IT IS NOT POSSIBLE THAT THESE EXPENSES DO NOT HAVE ANY PERSONAL ELE MENT AT ALL. THE APPELLANTS PROFESSION IS THAT OF ACTING AND MODEL ING BUT THERE WOULD BE INSTANCES IN DAY TO DAY LIFE WHERE CLOTHES AN D MAKE UP EXPENSES ARE INCURRED FOR PERSONAL PURPOSES WHICH ARE OT HER THAN PROFESSIONAL COMMITMENTS. THE APPELLANT HAS NOT IDENTIF IED ANY EXPENSES ON COSTUME AND MAKE UP AS COVERED IN THE WITHD RAWALS FOR PERSONAL PURPOSES BY THE ASSESSEE. THERE ARE THEREFORE REASONABLE GROUNDS FOR DISALLOWANCE IN THE MATTER. 4. THE ASSESSEE IS NOT SATISFIED BY THE STAND SO TAKEN BY T HE CIT (A) AS WELL AND IS IN FURTHER APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLI CABLE LEGAL POSITIONS. 6. IT IS IMPORTANT TO BEAR IN MIND THE FACT THAT ISSU E BEFORE US IS NOT WHETHER COSTUME AND MAKE UP EXPENSES CONSTITUTE ADMISSIBLE DEDU CTION BECAUSE THE ASSESSING OFFICER HIMSELF HAS ALLOWED DEDUCTION IN RESP ECT OF THE SAME BUT THE QUESTION REQUIRING OUR ADJUDICATION REALLY IS WHETHER A PART OF SUCH EXPENSES INCURRED BY THE ASSESSEE COULD BE DISALLOWED ON THE GROU ND THAT THESE EXPENSES ARE PERSONAL IN NATURE. ONCE THE ASSESSING OFFICER ACCEPTS T HAT THE MAKE UP AND COSTUME EXPENSES ARE INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF ASSESSEES PROFESSION AND ARE NOT IN THE NATURE OF PERSONAL EXPEN SES OF THE ASSESSEE AS IS THE CONDITION PRECEDENT FOR ALLOWING THE EXPENSES UNDER SE CTION 37(1) IT CANNOT BE OPEN TO HIM TO TREAT THE SAME AS PERSONAL EXPENSES. THERE I S INHERENT CONTRACTION IN THE STAND SO TAKEN BY THE ASSESSING OFFICER WHICH HAS MET TH E APPROVAL OF THE CIT (A) AS WELL. THE COMPULSIONS OF PUBLIC GLARE AND VIRTUAL BL URRING OF THE LINE OF DEMARCATION BETWEEN PERSONAL LIFE AND PROFESSIONAL LIFE REQUIRES TH ESE GLAMOUR PROFESSIONALS TO BE ON THEIR BEST ALL THE TIME AND NO PART OF THE EX PENSES ON THEIR MAKE UP AND COSTUMES CAN FOR PUBLIC APPEARANCES THEREFORE BE DISA LLOWED AS PERSONAL EXPENSES I.T.A NO.5883/MUM/2009 ASSESSMENT YEAR: 2004-05 3 PARTICULARLY ON THE FACTS OF THIS CASE IN WHICH THE ASSE SSING OFFICER HIMSELF HAS ALLOWED MAJOR PART OF SUCH EXPENDITURE. WE HAVE ALSO NOTED THAT ALL THE BILLS VOUCHERS AND SUPPORTING EVIDENCES ARE DULY FURNISHED BE FORE THE AO AND INFIRMITY HAS BEEN FOUND IN THESE EVIDENCES. IT IS NOT EVEN REVE NUES CASE THAT THE ASSESSEE HAS NOT SHOWN ANY PERSONAL EXPENSES SUCH AS ON HER CLOTHES AT ALL. IN VIEW OF THESE DISCUSSIONS AND BEARING IN MIND ENTIRETY OF THE CASE W E UPHOLD THE GRIEVANCES OF THE ASSESSEE. WE THEREFORE DIRECT THE AO TO DELETE THE IM PUGNED DISALLOWANCE. 7. GROUND NO.1 IS THUS ALLOWED. 8. IN THE SECOND GROUND OF APPEAL THE ASSESSEE HAS RAISED GRIEVANCE AGAINST ADHOC DISALLOWANCE @ 20% ON CONVEYANCE EXPENSES TELE PHONE EXPENSES MOTOR CAR EXPENSES AND STAFF WELFARE EXPENSES. HOWEVER THIS GR IEVANCE IS PRESSED ONLY TO THE EXTENT OF DISALLOWANCE OF CONVEYANCE AND STAFF WELFAR E EXPENSES. 9. HAVING HEARD THE RIVAL CONTENTIONS AND HAVING PER USED THE MATERIAL ON RECORD WE FIND THAT THE DISALLOWANCE HAS BEEN MADE E VEN THOUGH EXPENSES ARE FULLY VOUCHED AND SUPPORTED BY EVIDENCES ONLY BECAUSE ACCO RDING TO THE AUTHORITIES BELOW ELEMENT OF PERSONAL EXPENSES CANNOT BE RULED O UT. IN OUR CONSIDERED VIEW THIS IS A WRONG APPROACH. WHEN EXPENSES ARE DULY SUPPORT ED BY EVIDENCE AND NO SPECIFIC INFIRMITY IS FOUND THESE EXPENSES OUGHT TO HA VE BEEN ALLOWED. WE DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE TO THIS EXTE NT. 10. GROUND NO.2 IS THUS PARTLY ALLOWED. 11 IN THE RESULT THE APPEAL IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY 2011 SD/- (D.MANMOHAN) (VICE PRESIDENT) SD/- (PRAMOD KUMAR) (ACCOUNTANT MEMBER) MUMBAI DATED 28 TH JANUARY 2011 I.T.A NO.5883/MUM/2009 ASSESSMENT YEAR: 2004-05 4 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS) XI MUMBAI 4. COMMISSIONER OF INCOME TAX XI MUMBAI 5. DEPARTMENTAL REPRESENTATIVE BENCH G MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR ITAT MUMBAI I.T.A NO.5883/MUM/2009 ASSESSMENT YEAR: 2004-05 5