Shri Ibrahim Rowther, CHENNAI V. ITO, CHENNAI

ITA 1924/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1117 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-03-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-03-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 29-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: R PADMANABHAN
• Keywords: Reopening of assessment; Bad and doubtful debts

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA NO.1923 & 1924/MDS/2012 ASST. YEARS : 2006-07 & 2007-08 SHRI IBRAHIM RAWTHAR, NO.149, JAWAHARLAL NEHRU SALAI, ARUMBAKKAM, CHENNAI-600 106. PAN : AAAPI4192B. (APPELLANT) V. THE INCOME TAX OFFICER, MEDIA WARD III, CHENNAI. (RESPONDENT) APPELLANT BY : MR. R. PADMANABHAN, C A RESPONDENT BY : MR. SHAJI P. JACOB, ADDL.CIT DATE OF HEARING : 07 MAR 2013 DATE OF PRONOUNCEMENT : 15 MAR 20 13 O R D E R PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAIN ST SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPE ALS)-VI, CHENNAI, DATED 25.6.2012 FOR THE ASST. YEARS 2006- 07 AND 2007-08. SINCE BOTH THESE APPEALS PERTAIN TO THE SAME ASSESS EE , THESE ITA 1923,1924/MDS/12 2 APPEALS ARE CLUBBED AND HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON CONSOLIDATED ORDER FOR THE SAKE OF CONVENIEN CE. 2. ITA NO.1923/MDS/2012, A.Y. 2006-07 : THE FIRST ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT THE R EOPENING OF ASSESSMENT UNDER SEC.147 OF THE I.T. ACT IS ERRONEO US AND THE ASSESSEE WAS NOT PROVIDED WITH REASONS FOR REOPENIN G OF THE ASSESSMENT. 3. THE COUNSEL FOR THE ASSESSEE SUBMITS THAT REOP ENING OF ASSESSMENT UNDER SEC.147 OF THE I.T. ACT IS ERRONEO US AND NO NOTICE AND REASONS RECORDED FOR REOPENING OF ASSESSMENT WA S PROVIDED TO THE ASSESSEE. 4. THE DEPARTMENTAL REPRESENTATIVE SUBMITS THAT TH E ASSESSEE NEVER REQUESTED FOR ANY REASONS FOR REOPEN ING OF THE ASSESSMENT NOR AGITATED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) THAT THE ASSESSMENT WAS ERRONEOUS AND BAD IN LAW. 5. ON A PERUSAL OF THE RECORDS WE FIND THAT THE A SSESSEE DID NOT CONTEND BEFORE THE COMMISSIONER OF INCOME TAX ( APPEALS) THAT THE ASSESSEE WAS NOT PROVIDED WITH REASONS RECORDED FOR REOPENING ITA 1923,1924/MDS/12 3 OF ASSESSMENT AND, THEREFORE, THE ASSESSMENT IS BAD IN LAW. NO SUCH ARGUMENTS WERE ADVANCED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). IT WAS ALSO NOT THE CASE OF THE ASSESSE E THAT THE ASSESSMENT WAS COMPLETED ORIGINALLY UNDER SEC.143(3 ) OF THE ACT AND THE ASSESSMENT WAS REOPENED BEYOND FOUR YEARS AND, THEREFORE, IS BAD IN LAW. IN THE CIRCUMSTANCES, WE REJECT THE GR OUNDS RAISED BY THE ASSESSEE ON REOPENING OF ASSESSMENT UNDER SEC.1 47 OF THE I.T. ACT. 6. THE NEXT ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS THAT THE ASSESSING OFFICER ERRED IN REJECTING THE C LAIM OF ASSESSEE IN A SUM OF F.35,00,000/- ASSESSABLE OVER A PERIOD OF TE N YEARS ON THE BASIS OF AGREEMENT ENTERED INTO WITH M/S. MAVIS SAT COM LIMITEDBY THE ASSESSEE FOR 18 CINEMATOGRAPHY FILMS. 7. AT THE TIME OF HEARING THE DEPARTMENTAL REPRES ENTATIVE SUBMITS THAT ON IDENTICAL FACTS, THIS TRIBUNAL CONS IDERED THE ISSUE IN ASSESSEES OWN CASE IN ITA NO.2067/MDS/2008 FOR THE ASST. YEAR 2005-06. HE SUBMITS THAT THIS TRIBUNAL UPHELD THE DECISION OF COMMISSIONER OF INCOME TAX (APPEALS) IN HOLDING THA T THE AMOUNTS ITA 1923,1924/MDS/12 4 RECEIVED BY THE ASSESSEE FROM M/S. MAVIS SATCOM LIM ITED FOR ASSIGNMENT OF COPY RIGHTS OF TRANSMISSION INCLUDING SATELLITE TELECAST OF 18 FILMS FOR A PERIOD OF TEN YEARS FROM THE DATE OF AGREEMENT HAS TO BE ASSESSED ONLY AFTER RENDERING SPECIFIC PERFOR MANCE OF THE AGREEMENT BY THE ASSESSEE IE., HANDING OVER CONFIRM ED LABORATORY LETTERS AND THE COPY OF NEGATIVE/POSITIVE PRINTS OF THE FILMS. THE DEPARTMENTAL REPRESENTATIVE, FURTHER, SUBMITS THAT THE ADDITION OF F.35 LAKHS MADE IN THE ASSESSMENT REPRESENTS PART O F CONSIDERATION RECEIVED IN PURSUANT TO THE CONTRACT ENTERED INTO B Y THE ASSESSEE WITH M/S. MAVIS SATCOM LIMITED IN EARLIER ASST. YEA R 2005-06 WHERE THE ISSUE WAS DECIDED BY THE ITAT. 8. WE HAVE HEARD BOTH SIDES. PERUSED THE MATERIAL S ON RECORD AND THE ORDERS OF AUTHORITIES BELOW. THE COM MISSIONER OF INCOME TAX (APPEALS), WHILE CONFIRMING THE ADDITION OBSERVED AS UNDER :- 4. GROUND NOS. 1 TO 4 DEAL WITH ADDITION OF F.35,0 0,000/-. THE APPELLANT ENTERED INTO AN AGREEMENT ON 01.10.20 04 WITH M/S. MAVIS SATCOM LTD. FOR ASSIGNMENT OF COPYRIGHT OF 18 ITA 1923,1924/MDS/12 5 CINEMATOGRAPH FILMS PRODUC E D BY THE APP E LL A N T UND E R T HR EE D I FFE R E N T BA N NE RS ( OF WHI C H H E WAS T H E PR OP RI ET OR) FO R T R A N S M I S S ION T HRO U GH IND I AN S ATE LLI TE S YST E M F OR A P E R I O D OF 10 Y EARS F ROM TH E DAT E O F AGREE M EN T F OR CON S ID E RATI O N O F RS . 1 . 20 C R ORE S . TH E A PP E L L A N T RE CEI V E D R S .20,OO,OOOJ- DU R IN G F Y 2 0 0 4 -0 5 A N D O F F E R ED TH E S A M E IN T H E RE TURN O F I NCO M E FO R A Y 200 6 -07 . A PA R T P A YM E NT WAS R E C E I V E D DUR IN G TH E FY 2 0 05 -0 6 OF R S . 3 5,O O , O OO J - . E ARLIER THE AO T A X E D T H E E N TI R E CONS I DE R A TIO N OF RS .1 . 2 0 CROR ES IN TH E A Y 200 5 -0 6 ON THE G R O UN D T H AT A G RE E MEN T W AS SIG N ED DURING F Y 200 4 -05 A ND H E N C E T HE WHO L E AMOUNT I S T AXABLE IN T H E Y E A R . TH E OR DE R W AS R EVE R S E D BY CI T ( A ) AND CON F IRM E D BY ITAT VI DE O RD E R D AT E D 1 6 . 0 9.2 009 . CON SEQ U E NTLY THE AO BROU G HT TO T AX RS . 3 5,OO,OOOJ- RE CE IV E D DURIN G T H E Y E AR A S INCOME OF TH E A PP E LLANT FOR TH E R E L E VANT AY ON REC E IP T B AS I S W HI CH WA S PROPO SE D TO B E OFF E R E D TO TAX ON DEFERRED BASI S OV E R A PE R IOD O F S E V ERA L Y E ARS BY TH E APP EL LANT. TH E AO JUSTIFIED T AX IN G RS . 35 ,OO, O O O / - DURIN G THE YEAR ON THE GROUND THAT THE APP E LLANT HAS REND ERE D SP E CIF I C PER F O R MANCE OF THE A GRE E MENT (NAM E LY T HE H A NDING OVER TO TH E A SS I G NE E THE DULY C O NFIRMED LABO R ATORY LETT E R S FROM THE CONCERN E D L ABO R ATO R I ES) AND P A YMENTS HAVE B E EN R E CEIVED, THE APPELLANT FA I L E D TO FU R N ISH THE DAT ES ON WHICH LET TE RS FROM LABORATORIES WERE HANDED OV E R. TH E AO A L S O CITED FROM THE ORD E R O F HON'BJE ITAT DA T ED 28.0 8 .2009 WH E R EI N TH E A R ARGU E D FOR TAXING TH E R E C E IPTS IN THE SUBS E QUENT YEAR TO JU S TIFY B R INGIN G T O TA X TH E SAID RECEIPT IN FY 2005-06. TH E AO ALSO H E LD THAT TH E ST A ND O F T H E APP E LLANT TO SPR E ADING TH E REC E IPTS OV E R A P E RIOD OF SEVERAL Y EA R S IN FU TU R E TILL AY 2016-17 I S ONLY AN AFTE R THOUGHT T O DEFER THE T AX LI AB IL IT Y A N D TH E R E FORE BROUGHT TO T AX TH E S A ID AMOUNT ON BOTH THE PRINCIPL ES O F AC C R U AL AND R ECE IPT. 4.1 TH E APPE L LANT OBJECTED TO TAX I NG RS.35,OO,OOOJ- WHICH H AS B E EN REPRODUCED IN PARA 3.6 OF THE - AS SE S S MENT ORDER. I H A V E ITA 1923,1924/MDS/12 6 CARE FU LLY CON SI DE R ED TH E BA SI S ADOP T ED BY T HE AO (PARA 3.7 O F T H E AS SE S S M ENT O R D ER ) TO BRING TO TAX R S .35,OO,OOO/-. THE APPELLANT HAS RE C E I V E D T H E SAID AMOUNT C : JRING THE REL E VANT FY A S P A RT CONSIDE RA TION FOR A SSI GN M E N T OF COPYRIGHT OF 18 CINEMA TO GRAPH FILMS. IN VI EW OF TH E JU DGE M EN T O F HON'BL E ITAT IN THE APPE L LANT'S CASE ON THIS ISSUE THE SA ID AMOUNT WHICH WAS T A XED IN AY 2005-06 BEING THE . DATE OF SIGNING THE AGREE ME N T BECOMES TAXABLE IN THE YE A R IN WHICH THE APPELLANT HANDED OV E R TO M /S . MAVIS SATCOM LTD. DULY CON F I R M E D LABORATORY LETT E RS RELATING TO TH E F ILMS. THEREFORE BO T H FROM THE PRINCIP L E OF ACCRUAL A ND RECE I PT THE S A I D A MO UN T IS REQUIRED TO BE TAX E D IN TH E RELEVANT FY AND THE AO HAS RECENTLY BRO UG H T TO TA X THE SAID AMOUNT. H E NCE THESE GROUNDS OF APPEAL ARE D I SM ISS E D AS NOT MA I N T AINABLE. ON GOING THROUGH THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS), WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS), FOLLOWING THE ORDER OF THIS TRIBUNAL, SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. WE HAVE ALSO PERUSED THE OR DER OF THIS TRIBUNAL DATED 28.8.2009 IN ITA NO.2067/MDS/2008, W HEREIN THIS TRIBUNAL HELD AS UNDER :- 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND TH E RELEVANT RECORDS. IT IS AN UNDISPUTED FACT THAT THE ASSESSE E RECEIVED ONLY F.20,00,000/- AS TOKEN AMOUNT DURING THE PERIOD RE LEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE BALANCE AMOUNT WAS PAYABLE ONLY AFTER FULFILMENT OF THE CONDITIONS AS PRESCRIBED IN THE ITA 1923,1924/MDS/12 7 AGREEMENT ENTERED INTO BY THE PARTIES. WHEN THE TR ANSACTIONS OF THE ASSIGNMENT OF TELECAST RIGHTS OF THE FILMS WAS SUBJECT TO THE TERMS AND CONDITIONS OF THE AGREEMENT AND THE ASSES SEE WAS ENTITLED TO RECEIVE THE AMOUNT, ONLY AFTER THE PERF ORMANCE OF HIS PART OF THE AGREEMENT. IT IS ALSO AN UNDISPUTED FA CT THAT THE ASSESSEE RECEIVED THE BALANCE AMOUNT ONLY AFTER HAN DING OVER THE CONFIRMED LABORATORY LETTERS AND THE COPY OF THE NE GATIVE / POSITIVE PRINTS OF THE FILMS AND THE SAME WAS ONLY IN THE SU BSEQUENT YEARS. DURING THE COURSE OF THE ARGUMENTS, THE LEARNED AUT HORIZED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT T HE ASSESSEE IS READY TO OFFER THE ENTIRE CONSIDERATION OF F. 1,20, 00,000/- FOR TAX IN THE ASSESSMENT YEAR 2007 2008 BECAUSE THE ASSESSE E RECEIVED THE BALANCE AMOUNT OF F.35,00,000/- IN THE YEAR 200 5 AND F. 65,00,000/- IN THE YEAR 2006. IN VIEW OF THE ABOVE , WE FIND THAT THE SAID AMOUNT DID NOT ACCRUE TO THE ASSESSEE DURI NG THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND THE SAME WILL ACCRUE ONLY WHEN THE ASSESSEE COMPLETED THE CO NDITIONS AS PER THE AGREEMENT AND BECAME ENTITLED TO RECEIVE THE BA LANCE AMOUNT. ACCORDINGLY, WE FIND NO ERROR OR ILLEGALITY IN THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS), QUA THIS ISSUE AND THE SAME IS UPHELD. 9. IN VIEW OF THE ORDER OF THIS TRIBUNAL HOLDING T HAT WHEN THE TRANSACTION OF THE ASSIGNMENT OF TELECAST RIGHT S OF THE FILMS WAS SUBJECT TO TERMS AND CONDITIONS OF THE AGREEMENT AN D THE ASSESSEE WAS ENTITLED TO RECEIVE THE AMOUNT ONLY AFTER THE P ERFORMANCE OF HIS ITA 1923,1924/MDS/12 8 PART OF THE AGREEMENT, THE DECISION OF THE COMMISSI ONER OF INCOME TAX (APPEALS) IN HOLDING THAT THE ASSESSEE RECEIVED THE SAID AMOUNT OF F.35 LAKHS DURING THE FINANCIAL YEAR 2005-06 REL EVANT TO ASST. YEAR 2006-07 AS PART CONSIDERATION FOR ASSIGNMENT OF COP Y RIGHT OF 18 CINEMATOGRAPHY FILMS SHALL HAVE TO BE TAXED IN THE YEAR IN WHICH THE ASSESSEE HANDED OVER LABORATORY LETTERS AND COPY OF NEGATIVE/POSITIVE PRINTS TO M/S. MALVIS SATCOM LIMITED, IS IN CONFOR MITY WITH THE DECISION OF THIS TRIBUNAL. THEREFORE, WE FIND NO GOOD REASON TO INTERFERE WITH THE DECISION OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND WE UP HOLD THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) ON THIS ISSUE. 10. THE NEXT ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE IS WITH REGARD TO ADDITION MADE TOWARDS IMPROVEMENT CH ARGES. 11. THE ASSESSING OFFICER, WHILE COMPLETING THE AS SESSMENT REJECTED THE CLAIM OF THE ASSESSEE TO CONSIDER F.11 ,35,830/- AS COST OF IMPROVEMENT FOR THE LANDS PURCHASED BY THE ASSES SEE AT PARUTHIPATTU VILLAGE AND KATTUPAKKAM VILLAGE ON THE GROUND THAT THE ASSESSEE COULD NOT SUBSTANTIATE WITH DOCUMENTARY EV IDENCE THAT HE ITA 1923,1924/MDS/12 9 HAS INCURRED COST OF IMPROVEMENT FOR THE SAID LANDS . ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE SAID REJECTION OF ASSESSEES CLAIM MADE BY THE ASSESSING OFFICER. 12. THE COUNSEL FOR THE ASSESSEE SUBMITS THAT THE ASSESSEE HAD INCURRED F.4,77,830/- AND F.7,58,000/- TOWARDS COST OF IMPROVEMENT FOR THE LANDS SITUATED AT PARUTHIPATTU AND KATTUPAKKAM VILLAGES RESPECTIVELY AND, THEREFORE, THE SAID COST OF IMPROVEMENT HAS TO BE CONSIDERED AS SALE CONSIDERATION IN COMPUTING CAPITAL GAINS. 13. THE DEPARTMENTAL REPRESENTATIVE SUBMITS THAT N O DOCUMENTARY EVIDENCE IS FURNISHED BY THE ASSESSEE T O PROVE THAT THE SAID AMOUNTS WERE INCURRED TOWARDS COST OF IMPROVE MENT. 14. WE HAVE HEARD BOTH SIDES. PERUSED THE MATERIA LS ON RECORD AND THE ORDERS OF AUTHORITIES BELOW. THE ASS ESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE FOR WANT OF DOCU MENTARY EVIDENCE TO ESTABLISH THAT THE ASSESSEE HAD INCURRED THESE E XPENSES OF F.4,77,830/- AND F.7,58,000/- AGGREGATING F.11,35,8 30/- TOWARDS COST OF IMPROVEMENT FOR THE LANDS SOLD BY THE ASSES SEE AT PARUTHIPATTU AND KATTUPAKKAM VILLAGES RESPECTIVELY. THE ITA 1923,1924/MDS/12 10 COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE SAID ACTION OF THE ASSESSING OFFICER HOLDING AS UNDER :- 5. GROUND NO.5 TO 7 D E ALS WITH DISALLOWANCE OF IMPROVEM E NT CH ARGES OF RS.L1,35,830/-. THE APPELLANT SOLD LANDS AT PARUTHIPATTU AND KATTUPAKKARN VILLAQE S AND CLAIMED COST OF IMPROVEMENT OF RS . 4,77, 8 30/- AND RS.7,5 8 ,000/- AGGREGATING TO RS.LL,35,830J-. THE AR VIDE L ETT ER 29.12.2009 SUBMITTED THE DETAILS . BEFORE THE AO WHICH ON EXAMINATION WAS FOUND TO BE VAGUE AND . GENERAL, NO DOCUMENTARY EVIDENCE FOR THE CLAIM WAS PRODUCED, VERIFICATION OF ASSET SIDE OF THE BALANCE SHEET FOR AY 2005-06 DID NOT SHOW ANY LAND DEVELOPMENT AN D HENCE THE AO DREW INFERENCE THAT THE LANDS SOLD WER E ONLY A VACANT LAND. THE APPELL ANT I N THE GROUNDS OF APPEAL OBJECTED TO THE DISALLOWANCE BY SUBMITTING T H A T THE ' AO HAS NOT GIVEN ANY VALID REASONS FOR THE DISALLOWANCE. HOWEVER, I F IND THAT THE AO HAS MADE THE SAID DISALLOWANCE AFTER CLEARLY RECORDING T H E FINDING THAT THE APPELLANT DID NOT SUBSTANTIATE THE CLAIM WITH VERI F I A BLE EVIDENCE AND HENCE I CONFIRM THE DIS- ALLOWANCE ON THESE GROUNDS. THE S E GROUNDS OF APPEAL ARE DISM I SSED. ON GOING THROUGH THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS), WE FIND THAT NO GOOD REASON EXISTS TO I NTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) I N REJECTING THE CLAIM OF THE ASSESSEE, ESPECIALLY WHEN THERE IS NO DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE IN SUPPORT OF HIS CLAIM THAT HE ITA 1923,1924/MDS/12 11 HAS INCURRED SUCH EXPENDITURE TOWARDS COST OF IMPRO VEMENT OF LAND. HENCE THE ORDER OF THE COMMISSIONER OF INCOME TAX ( APPEALS) IS AFFIRMED. 15. THE LAST ISSUE IN THE GROUNDS OF APPEAL IS AGA INST CHARGING OF INTEREST UNDER SEC.234A,B&C OF THE I.T. ACT. SINCE CHARGING OF INTEREST UNDER SEC.234A,B&C ARE MANDATO RY AND ONLY CONSEQUENTIAL, WE REJECT THE GROUNDS OF APPEAL OF T HE ASSESSEE ON THIS ISSUE. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS D ISMISSED. ITA NO.1924/MDS/2012, A.Y. 2007-08 : THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS :- 1. ADDITION OF F.65,00,000/- THE LEARNED CIT(A) E RRED IN FOLLOWING THE VERY SAME REASONS EXISTED IN THE ASST . YEAR 2006-07 FOR DISALLOWANCE IS ERRONEOUS. THE LEARNED ASSESSING OFFICER HAS ERRED IN REJE CTING THE CLAIM OF APPELLANT THAT A SUM OF F.65,00,000/- IS ASSESSABLE OVER A PERIOD OF TEN YEARS ON THE BASIS OF THE AGREEMENT FOR 18 CINEMATOGRAPHY FILMS. ITA 1923,1924/MDS/12 12 2. BAD DEBTS OF F.17,77,261/-. : THE BAD DEBTS O F F.17,77,261/- IS RELATING TO BUSINESS AND AS SUCH ADMISSIBLE AS DEDUCTION WHILE COMPUTING THE TOTAL INCOME. 3. CLAIM OF DONATION OF F.5000/-. THE CLAIM IS L EGALLY ALLOWABLE. 4. ENHANCEMENT OF F.3889/- : ENHANCEMENT OF HOU SE PROPERTY F.3889/- IS NOT CORRECT AND PROPER. 5. CHARGING OF INTEREST U/S.234A,B AND C: THE CHARGING OF INTEREST U/S.234A,B AND C IS NOT CORREC T AND PROPER. 17. WITH REGARD TO GROUND NO.1 ABOVE, FOLLOWING OU R DETAILED DISCUSSIONS AND REASONS FOR DISMISSING SIMILAR GROU ND TAKEN BY THE ASSESSEE FOR THE ASST. YEAR 2006-07, WE DISMISS TH IS GROUND OF APPEAL FOR THIS ASST. YEAR ALSO IE., ASST. YEAR 200 7-08 AS THE FACTS BEING SAME FOR BOTH THE ASST. YEARS. 18. THE BRIEF FACTS CONCERNING GROUND NO.2 WITH RE GARD TO BAD DEBTS OF F.17,77,261/-, THE ASSESSING OFFICER D ISALLOWED THE CLAIM OF BAD DEBTS OF F.17,77,261/- MADE BY THE ASS ESSEE ON THE GROUND THAT THE ASSESSEE DID NOT OFFER THE SAID AMO UNT AS INCOME IN ITA 1923,1924/MDS/12 13 EARLIER YEARS AND, THEREFORE, THE ASSESSEE DID NOT COMPLY WITH THE PROVISIONS OF SEC.36(1)(VI) OF THE I.T. ACT. ON AP PEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) AFFIRMED THE O RDER OF ASSESSING OFFICER. 19. THE COUNSEL FOR THE ASSESSEE RELIED ON THE GR OUNDS OF APPEAL. 20. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS). 21. WE HAVE HEARD BOTH SIDES. PERUSED THE MATERIA LS ON RECORD AND THE ORDERS OF AUTHORITIES BELOW. THE CO MMISSIONER OF INCOME TAX (APPEALS), WHILE AFFIRMING THE ORDER OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM FOR BAD DEBTS HELD AS UNDER :- 5. GROUND NOS.5 TO 7 DEALS WITH DISALLOWANCE OF BA D DEBTS. THE APPELLANT PAID F.10 LAKHS TO TAMIL PONNI ARTS F OR PURCHASE OF RIGHT FOR FILM ORU NANBANIN KATHAI AS THE FILM W AS NOT CENSORED THE PROJECT WAS DROPPED AND THE PRODUCER BECAME BAN KRUPT AND THE APPELLANT COULD NOT RECOVER THE SAME AND HENCE THE SAME WAS CLAIMED AS BAD DEBT. THE A.O. DISALLOWED THE CLAIM ON THE GROUND THAT THE AMOUNT WAS NOT OFFERED AS INCOME IN THE EA RLIER YEARS U/S.36(1)(VI). SIMILARLY THE CLAIM OF BAD DEBT OF F.7 LAKHS PAID ITA 1923,1924/MDS/12 14 TOWARDS PURCHASE RIGHT FOR THE AREA OF KARNATAKA FO R THE FILM ANNAN ENNADA THAMBI ENNADA WHICH COULD NOT BE REC OVERED WAS ALSO DISALLOWED FOR THE SAME REASON. THE APPEL LANT CLAIMED THAT THE SAID CLAIM IS ADMISSIBLE ACCORDING TO LAW. I FIND THAT THE APPELLANT HAS NOT OFFERED THE SAID AMOUNT AS INCOM E IN THE EARLIER YEARS AND HENCE THE A.O HAS CORRECTLY DISAL LOWED THE CLAIM FOR NON-FULFILLING THE CONDITIONS LAID DOWN IN SECT ION 36(1)(VI) AND I CONFIRM THE DISALLOWANCE. THIS GROUND OF APPEAL IS DISMISSED. ON GOING THROUGH THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS), WE FIND THAT THERE IS NO GOOD REASON TO INTERFERE WITH THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) REJEC TING THE CLAIM OF THE ASSESSEE, ESPECIALLY WHEN THE ASSESSEE DID NOT COMPLY WITH THE PROVISIONS OF SEC.,36(1)(VI) OF THE ACT. EVEN AT T HIS STAGE, THE ASSESSEE DID NOT PROVE THAT THESE DEBTS HAVE BECOME BAD AND THE PROVISIONS OF SEC.36(1)(VI) WERE COMPLIED WITH BY T HE ASSESSEE. THEREFORE, WE CONFIRM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 22. WITH REGARD TO THE ISSUES IN GROUND NOS.3 & 4, WE FIND THAT THESE ISSUES WERE NOT RAISED BEFORE THE COMMIS SIONER OF INCOME TAX (APPEALS). THEREFORE, SINCE THESE ISSUES ARE N OT EMANATING FROM ITA 1923,1924/MDS/12 15 THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), WE REJECT THESE GROUNDS OF APPEAL AS NOT MAINTAINABLE. 23. THE LAST ISSUE IS WITH REGARD TO CHARGING OF I NTEREST U/S.234A,B AND C OF THE I.T. ACT. SINCE CHARGING OF INTEREST UNDER SEC.234A,B&C ARE MANDATORY AND ONLY CONSEQUENTIAL, WE REJECT THE GROUNDS OF APPEAL OF THE ASSESSEE ON THIS ISSUE. 24. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSE E ARE DISMISSED. 25. ORDER PRONOUNCED ON FRIDAY, THE 15 TH DAY OF MARCH 2013, AT CHENNAI. SD/- SD/- ( N.S. SAINI ) (CHALLA N AGENDRA PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED : 15 TH MARCH 2013. JLS. COPY TO:- (1) APPELLANT (2) RESPONDENT, (3) CIT(A), (4) CIT., (5) D.R., (6) G. FILE.