ITO 11(1)(3), MUMBAI V. RAJIV A TOLANI, MUMBAI

ITA 2522/MUM/2010

• Counselvise Citation: 252219914 RSA 2010
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 31-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI P.M. JAGTAP AND SHRI R.S. PADVEKAR, JM I.T.A.NO.2522/MUM/2010 ASSESSMENT YEAR: 2007-08 THE INCOME-TAX OFFICER-11(1)(3), R.NO.438, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI 400 001 VS. SHRI RAJIV A TOLANI, 9-B, CENSED APARTMENT, UNION PARK, AMBEDKAR ROAD, PALI HILL, BANDRA (W), MUMBAI 400 050. PAN : AABPT 0375 J (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUMEET KUMAR RESPONDENT BY : SHRI DEEPAK TRALSHAWALA O R D E R PER P.M. JAGTAP, AM: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS)-3, MUMBAI, DATE D 02.02.2010 FOR THE ASSESSMENT YEAR 2007-08, AND THE SOLITARY ISSUE ARI SING OUT OF THE SAME IS WHETHER THE LEANED CIT(A) WAS JUSTIFIED IN DIRECTING THE AS SESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF W RITE OFF EXPENDITURE INCURRED ON THE ABANDONED FILM. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. THE LEARNED COUNSEL F OR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS SQ UARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN THE CAS E OF ACIT VS. M/S. DREAM MERCHANTS ENTERPRISES, RENDERED VIDE ITS ORDER DAT ED 9.2.2010 PASSED IN I.T.A. NO. 32433 AND 3245/M/2009. HE HAS ALSO PLACED ON RECORD A COPY OF THE SAID ORDER AND A PERUSAL OF THE SAME SHOWS THAT SIMILAR ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE FOR THE REASONS GIVEN IN PARA NOS. 3 TO 5 OF THE SAID ORDER: 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD C LAIMED ITA NO.2522/M/2010 RAJIV A. TOLANI 2 RS.1,33,66,151/- FOR AY 2006-07 AND RS. 9,10,984/- FOR AY 2004-05 AS A COST OF ABANDONED FILM PRODUCTION NO. 3 AND FILM PR ODUCTION NOS. 5 & 6 RESPECTIVELY. BEFORE THE AO THE ASSESSEE RELIED UP ON THE DECISION OS OF I.T.A.T IN THE CASE OF RAJESH KHANNA IN ITA NO. 480 4/BOM/2000 FOR AY 1992-93 ORDER DATED 17 TH JANUAR4Y, 2003 AND IN THE CASE OF M/S. J. RADICAL ENTERTAINMENT (I) PVT. LTD. FOR AY 1998-99 IN ITA N O. 45550/M2004 ORDER DATED 31 ST JANUARY, 2007. THE AO MADE THE ADDITION ON THE GRO UND THAT THE DEPARTMENT HAD NOT ACCEPTED THE ORDER OF I.T.A. T AND AN APPEAL HAD BEEN FILED AGAINST THAT ORDER OF I.T.A.T U/S.260A O F THE ACT. THE CIT(A) FOLLOWED THE ORDERS OF THE I.T.A.T AND DELETED THE DISALLOWANCE BY OBSERVING AS UNDER (FROM THE ORDER OF CIT(A) FOR AY 2006-07: 3. DURING APPEAL HEARING, THE APPELLANT FILED COPY OF THE DECISION IN RAJESH KHANNA CASE BEING ITA NO. 4804/BOM/2000. ASST. YR. 2002-03, DATED 17.01.2003. THE JURISDICTIONAL TRIBUNAL SUBSEQUENTL Y IN THE CASE OF M/S. J.RADICAL ENTERTAINMENT (I) P. LTD. (ITA NO. 4550/M /2004, ASST.YR. 1998- 99, DATED 31.01.07, FOLLOWED THE DECISION OF THE RA JESH KHANNA CASE AS ABOVE. THE APPELLANT HAS ALSO FILED COPY OF THE DEC ISION OF THE JURISDICTIONAL TRIBUNAL IN C BENCH IN THE CASE OF ITO-13(8) VS. B.K.SOOD, BEING ITA NO.1463/BOM/90, DATED 30.10.1995, IN WHICH, FOLLOWI NG BOARDS CIRCULAR NO. 178/IT/37, DATED 13/5/1937 IT WAS STATED THAT T HE FILM IN THE HANDS OF A FILM PRODUCER BE TREATED AS STOCK IN TRADE. THE A PPELLANT THROUGH THE LEARNED AR ARGUED THAT THE ONLY CONTENTION OF THE A O FOR MAKING THE DISALLOWANCE WAS THAT THE DEPARTMENT HAS NOT ACCEPT ED THE DECISION OF THE TRIBUNAL IN THE CASE OF RAJESH KHANNA SUPRA. 3.1 I HAVE CONSIDERED THE RIVAL SUBMISSION AND THE MATERIALS ON RECORD. IT IS SEEN THAT THE ONLY BASIS FOR DISALLOWANCE IS THA T THE DEPARTMENT IS IN APPEAL BEFORE HIGH COURT IN THE RAJESH KHANNA CASE SUPRA. THERE IS NO OTHER FINDING OF FACT ON RECORD. THE AO HAS NOT ST ATED AS TO WHETHER THERE IS ANY ORDER FROM THE HONBLE HIGH COURT, INTERIM O R FINAL, IN THIS CASE. WE HAVE NOTED ABOVE THAT THE JURISDICTIONAL TRIBUNAL H AS FOLLOWED THE RATIO OF THE RAJESH KHANNA DECISION IN THE CASE OF M/S. J.RA DICAL ENTERTAINMENT (I) P. LTD. ALSO. IN THE B.K. SOOD CASE SUPRA, THE TRI BUNAL HELD THAT IN CASE OF FILM PRODUCERS, FILMS ARE STOCK-IN-TRADE. IN THE FA CE OF SUCH CONSISTENT DECISION BY THE JURISDICTIONAL TRIBUNAL IN DIFFEREN T CASES, ONLY BECAUSE THE DEPARTMENT IS IN APPEAL IN ONE CASE, CANNOT BE A GR OUND FOR DISALLOWANCE SUSTAINABLE IN APPEAL. THE DISALLOWANCE DESERVES TO BE DELETED. 4. THE LEARNED DR HAS RELIED UPON THE ORDERS OF THE AO WHEREAS THE LEARNED AR HAS RELIED UPON THE ORDERS OF THE CIT(A) . 5. WE HAVE HEARD THE LEARNED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. WE FIND THAT THE CIT(A) DELETED THE DISALLOWANCE MADE BY THE AO FOLLOWING THE ORDERS OF I.T.A.T. THEREFOR E, WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE CIT(A). THUS, THE G ROUNDS RAISED BY THE REVENUE IN BOTH THE ASSESSMENT YEARS UNDER CONSIDER ATION ARE DISMISSED. AS THE ISSUE INVOLVED IN THE PRESENT CASE AS WELL A S ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THAT OF THE CASE F M/S. DREA M MERCHANTS ENTERPRISES (SUPRA), WE RESPECTFULLY FOLLOW THE DECISION OF THE TRIBUNAL RENDERED IN THE SAID CASE AND UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) GIV ING RELIEF TO THE ASSESSEE ON THIS ISSUE. ITA NO.2522/M/2010 RAJIV A. TOLANI 3 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF APRIL, 2011. SD. SD. (R.S. PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED THE 27 TH APRIL, 2011. KN COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT-11, MUMBAI. 4. THE CIT(A)-3, MUMBAI 5. THE DR D BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI