The Commissioner of Income Tax-I, V. M/s. Prasad Film Laboratories Ltd.,

ITTA/534/2012

AI Insights

The case involves the Commissioner of Income Tax-I Hyderabad as the appellant and M/s. Prasad Film Laboratories Ltd. as the respondent. The appeal was against the judgment and order of the learned Tribunal dated 15.09.2006 concerning the assessment year 1998-1999. The main legal issues pertained to the classification of electrical fittings and installations for depreciation, the deduction of bad debts, and the recognition of business losses not directly related to the business activities of the assessee. The Tribunal had previously ruled in favor of the assessee, which the High Court upheld, referencing earlier decisions and legal standards.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 719112 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 10-07-2013
• Assessment Year: misc
• Other Referred Cases: CIT Vs. Pure Beverages Limited, Oman International Bank
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Bad debt; Business loss; Depreciation; Assessment year 1998-1999
• Section: 100 ITD 285; 209 ITR 131

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD WEDNESDAY, THE TENTH DAY OF JULY TWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE MS. JUSTICE G.ROHINI I.T.T.A. No. 534 OF 2012 Between: Commissioner of Income Tax-I Hyderabad ..... Appellant AND M/s. Prasad Film Laboratories Ltd., LV Prasad Marg, Banjara Hills, Hyderabad. .....Respondent The Court made the following : JUDGMENT: (per the Hon’ble the Chief Justice Sri K.J. Sengupta) This appeal is sought to be preferred against the judgment and order of the learned Tribunal dated 15.09.2006 in relation to the assessment year 1998-1999, on the following suggested questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the electrical fittings, A/c. plant and acoustics forming part of the theatre building are to be treated as plant enabling a higher rate of depreciation and not as building? 2. Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee was entitled for deduction of Rs.18,13,953/- written off as bad debt, on the face of the categorical findings of the Assessing Officer that they did not become bad debts or irrecoverable? 3. Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in allowing the deduction of Rs.46,21,216/- treated as business loss by the assessee, even though the same is neither directly or incidentally relatable to the business of the assessee? 4. Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee was entitled to treat the un-recovered dues towards cost of films supplied to producers as business loss though the assessee is not involved in business of purchase and sale of films? We have heard the learned counsel for the appellant and we have gone through the impugned judgment and order of the learned Tribunal. It appears that three points are involved in this matter. Firstly, relating to disallowance of depreciation. The learned Tribunal while rendering decision, has followed its earlier order in the assessee’s own case for the assessment year 1997-1998 and allowed depreciation at the rate of 25%, following the said decision. The next point is regarding bad debt. The learned Tribunal relying upon the Special Bench decision of Tribunal (Bombay) in the case of Oman International Bank reported in 100 ITD 285 has held that when the assessee asserted that the debt has become bad, then such statement has to be accepted and in the event such a statement is not accepted, then the onus lies upon the Assessing Officer to prove otherwise. The third ground relates to the writing off the bad debt by the assessee. The learned Tribunal has followed the decision of Gujarat High Court in the case of CIT Vs. Pure Beverages Limited reported in 209 ITR 131 and allowed the claim made by the assessee. We do not see any error or illegality in the impugned judgment and order of the learned Tribunal. Consequently, we dismiss the appeal. No order as to costs ______________________ Kalyan Jyoti Sengupta, CJ. __________ G.Rohini, J. July 10, 2013 MAS "