PRATIBHA A KOTHAVALE, MUMBAI V. DCIT 16(3), MUMBAI

ITA 3682/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92472 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: SANJEEV V JOSHI
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI I.P. BANSAL , JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 3682 /MUM./ 2012 ( ASSESSMENT YEAR : 200 8 - 09 ) MRS. PRATIBHA A. KOTHAVALE 3 RD FLOOR, PHOENIX 457, S.V. ROAD GIRGAUM M UMBAI 400 004 PAN AAHPK3771D .. / APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE - 16(3), MATRIMANDIR MUMBAI 400 007 .... / RESPONDENT ASSESSEE BY : SHRI SANJEEV V. JOSHI REVENUE BY : SHRI PREMANAND J. DATE OF HEARING 07.05.2015 DA TE OF ORDE R 07.05.2015 O R D E R PER I.P. BANSAL, J.M. TH IS APPEAL IS FILED BY THE ASSESSEE AND IS DIRECTED AGAINST THE ORDER DATED 28 TH FEBRUARY 2012, PASSED BY THE COMMISSIONER (APPEALS) - 27, MUMBAI, FOR THE ASSESSMENT YEAR 2008 - 09. FOLLOW ING GROUND S HAVE BEEN RAISED BY THE ASSESSEE: - 1. THE LD. CIT(A) ERRED IN HOLDING THAT THE APPELLANT IS NOT ENTITLED TO DEDUCTION OF ` 2,70,000/ - U/S 80QQB. 2. THE LD. CIT(A) ERRED IN HOLDING THAT THE ROYALTY INCOME IS NOT DERIVED BY THE APPELLANT IN THE EXERCISE OF PRO FESSION AND IS THEREFORE NOT ENTITLED TO DEDUCTION U/S 80QQB. MRS. PRATIBHA A. KOTHAVALE 2 3. THE LD. CIT(A) ERRED IN HOLDING THAT THE APPELLANT HAS NOT PARTED WITH / ASSIGNED NOR GRANTED ANY RIGHTS IN THE COPY RIGHT OF ANY BOOK. 4. THE LD. CIT(A) ERRED IN HOLDING THAT THE TRANSACTION OF APPELLANT RECEIVING ROYALTY OF ` 2,70,000 WITHOUT DEDUCTION OF TAX AT SOURCE FROM A FAMILY CONCERN (M/S. MAJESTIC PRAKASHAN) IS A QUESTIONABLE TRANSACTION WITH A VIEW TO AVOID PAYMENT OF TAX. 2. THE ASSESSEE HAS AUTHORED A BOOK PERFECT RECIPES AND SINCE AS SESSMENT YEAR 2002 - 03 THE ASSESSEE IS RECEIVING ROYALTY, WHICH FOR THE YEAR UNDER CONSIDERATION IS A SUM OF ` 2,70,000. ON THE SAID SUM, T HE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80QQB WHICH WAS DENIED BY THE ASSESSING OFFICER ON THE GROUND THAT THE ASSESSEE COULD NOT SUBMIT ANY EVIDENCE TO SHOW THAT IT WAS AN ART AND IT C AN BE TAKEN AS UNLIKE PAINTING SCULPTURE, ETC. ACCORDING TO THE ASSESSING OFFICER, COKING IS NOT AN ART AND IS A SKILL AND, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTI ON UNDER SECTION 80QQB. THE DISALLOWANCE HAS BEEN SUSTAINED BY THE LEARNED CIT(A) FOR THE REASONS THAT FIRSTLY, ACCORDING TO THE REQUIREMENT OF SECTION 80QQB, SUCH INCOME SHOULD HAVE BEEN EARNED IN THE EXERCISE OF THE PROFESSION AND SECONDLY; THE COOKERY D OES NOT COME IN THE DEFINITION OF ART . THE ASSESSEE IS AGGRIEVED AND HAS FILED THE AFOREMENTIONED GROUNDS. 3. AFTER NARRATING THE FACTS, IT WAS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS RECEIVING ROYALTY SINCE ASSESSMENT YEAR 2002 - 03 AND THE DETAILS OF THE RECEIPTS OF THE MRS. PRATIBHA A. KOTHAVALE 3 ASSESSEE AS ROYALTY FROM THE PUBLICATION OF AFOREMENTIONED BOOK IS LISTED AT PAGE - 3 OF THE PAPER BOOK. IT WAS SUBMITTED THAT THE WORD ART HAS BEEN DEFINED WHICH INCLUDES 64 ITEMS AND AT SERIAL NO.21, THE WOR D ART IS STATED AS UNDER: - 21. CULINARY ART, I.E., COOKING AND COOKERY 4. REFERENCE IN THIS REGARD WAS MADE TO THE DEFINITION DOWNLOADED FROM THE WEBSITE A COPY OF WHICH IS FILED IN THE PAPER BOOK PAGE - 4 AND 5. THUS, IT WAS PLEADED BY THE LEARNED COUNSE L THAT THE LEARNED CIT(A) HAS COMMITTED AN ERROR IN NOT ALLOWING THE RELIEF TO THE ASSESSEE. 5. ON THE OTHER HAND, IT WAS SUBMITTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT COOKERY DOES NOT FALL WITHIN THE DEFINITION OF ART . HE SUBMITTED THAT IT H AS BEEN FOUND BY THE LEARNED CIT(A) THAT THE ASSESSEE IS HAVING BUSINESS INCOME FROM THE PROPRIETORSHIP CONCERN M/S. MAJESTIC BOOK DEPOT AND M/S. DEEPAWALI ANNUAL AND NO PROFESSIONAL INCOME FROM COOKERY HAS BEEN SHOWN BY THE ASSESSEE AT ANY POINT OF TIME. THUS, HE PLEADED THAT THE LEARNED CIT(A) HAS RIGHTLY HELD THAT DEDUCTION UNDER SECTION 80QQB, CANNOT BE ALLOWED TO THE ASSESSEE. 6. PER - CONTRA , IT WAS SUBMITTED BY THE LEARNED COUNSEL THAT AS PER THE DEFINITION OF BUSINESS GIVEN IN SECTION 2(13), IT INCLUD E ADVENTURE IN NATURE OF TRADE AND IN VIEW OF ONE TIME VENTURE OF THE ASSESSEE OF MRS. PRATIBHA A. KOTHAVALE 4 AUTHORING THE BOOK THE SAME SHOULD BE CONSIDERED AS PROFESSIONAL ACTIVITY. 7. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENTIONS HAVE BEEN CONSIDERED CAREFULLY. THE WORD PRO FESSION IS DEFINED IN SECTION 2(36) WHICH IS AS UNDER: - PROFESSION INCLUDES VOCATION 8. THE WORD PROFESSION WAS SUBJECT MATTER OF INTERPRETATION BEFORE THE HONBLE RAJASTHAN HIGH COURT IN CIT V/S BHAGWAN BROKER AGENC Y , [1995] 212 ITR 133 (RAJ.) . THEIR LORDSHIPS HAVE CONSIDERED VARIOUS DECISIONS AS WELL AS DEFINITION GIVEN IN THE DICTIONARY AND AFTER CONSIDERING ALL THESE DECISIONS AND DEFINITIONS, T HEIR LORDSHIPS HAVE ARRIVED AT A CONCLUSION THAT THERE SHOULD BE SOME SPECIAL QUALIFICATION OF A PERSON AP ART FROM SKILL AND ABILITY WHICH IS REQUIRED IN CARRYING ON ANY ACTIVITY WHICH COULD BE CONSIDERED AS PROFESSION . THIS COULD BE HAVING EDUCATION IN A PARTICULAR SYSTEM EITHER IN THE COLLEGE OR UNIVERSITY OR IT MAY BE BY EXPERIENCE. IN THE PRESENT CASE, W HEN THE LEARNED COUNSEL FOR THE ASSESSEE WAS REQUIRED TO EXPLAIN THAT WHETHER ANY OTHER BOOK IS WRITTEN BY THE ASSESSEE BEFORE OR AFTER THE BOOK WRITTEN BY THE ASSESSEE PRIOR TO THE ASSESSMENT YEAR 2002 - 03, IN REPLY, IT WAS SUBMITTED BY THE LEARNED COUNSEL THAT THE ASSESSEE DID NOT WRITE ANY OTHER BOOK. WE FOUND THAT NO PARTICULARS HAVE BEEN PLACED ON MRS. PRATIBHA A. KOTHAVALE 5 RECORD TO SHOW THAT THE ASSESSEE I S SPECIALLY QUALIFIED APART FROM THE SKILL AND ABILITY TO WRITE THE BOOK . THERE IS ALSO NO MATERIAL ON RECORD TO SAY THAT WH ETHER THE ASSESSEE IS HAVING EDUCATION IN THE FIELD OF COOKERY EITHER IN THE COLLEGE OR UNIVERSITY OR EVEN BY EXPERIENCE. THERE IS NO SUCH MATERIAL ON RECORD TO SUGGEST THAT THE ASSESSEE IS QUALIFYING FOR THE PARAMETERS LAID DOWN FOR CONSIDERING A PARTICUL AR ACTIVITY AS A PROFESSIONAL ACTIVITY. IN ANY CASE, THE INCOME EARNED BY THE ASSESSEE AS ROYALTY CANNOT BE SAID TO BE EARNED BY THE ASSESSEE IN THE EXERCISE OF HER PROFESSION WHICH IS THE MAIN REQUIREMENT OF THE SECTION ACCORDING TO WHICH DEDUCTION CAN BE ALLOWED UNDER SECTION 80QQB. THE NON - FULFILLMENT OF SUCH CONDITION WOULD DISENTITLE D THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80QQB. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) VIDE WHICH IT HAS BEEN HELD THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80QQB, WE DECLINE TO INTERFERE. THE GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 9. IN THE RESULT, ASSESSEES APPEAL IS DIMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N 07.05.2015 SD/ - RAJENDRA ACCOUNTANT MEMBER SD/ - I.P. BANSAL JUDICIAL MEMBER MUMBAI, DATED : 07.05.2015 MRS. PRATIBHA A. KOTHAVALE 6 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE ; (2) THE REVENUE; (3) THE CIT(A ) ; (4) THE CIT, MUMBAI CITY CONCERNED ; (5) THE DR, ITAT, MUMBAI ; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASS ISTANT REGISTRAR ITAT, MUMBAI