ACIT CC 38, MUMBAI V. RISK DESIGN AND ADVERTISING LTD, MUMBAI

ITA 3804/MUM/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9964 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 09-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 27-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Business expenditure; Search and seizure; Opportunity of being heard; Proportionate interest; Retrospective amendment; Initiation of penalty proceedings; Difference of opinion; Revenue expenditure; Capital expenditure
• Section: 143(3); 68; 37; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NO.3804/M/2014 ASSESSMENT YEAR: 2007-08 ACIT, CENT. CIR. 38, R.NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. RISK DESIGN AND ADVERTISING LTD., PLOT NO.8, SHAH INDUSTRIAL ESTATE, OFF VEERA DESAI ROAD, ANDHERI (W), MUMBAI 400 053 PAN: AACCD0946R (APPELLANT) (RESPONDENT) ITA NO.2891/M/2014 ASSESSMENT YEAR: 2007-08 M/S. RISK DESIGN AND ADVERTISING LTD., PLOT NO.8, SHAH INDUSTRIAL ESTATE, OFF, VEERA DESAI ROAD, ANDHERI (W), MUMBAI 400 053 PAN: AACCD0946R VS. ACIT, CENT. CIR. 38, AAYAKAR BHAVAN, MAHARISHI KARVE ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : NONE REVENUE BY : PURUSHOTTAM KUMAR, D.R. DATE OF HEARING : 02.05.2017 DATE OF PRONOUNCEMENT : 06.07.2017 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE ABOVE TITLED APPEALS ONE BY THE REVENUE AND TH E OTHER BY THE ASSESSEE HAVE BEEN PREFERRED AGAINST THE ORDER DATE D 28.02.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER R EFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2007-08. ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 2 ITA NO.3804/M/2014 (REVENUES APPEAL) 2. THE BRIEF FACTS OF THE CASE ARE AS UNDER: ASSESSEE IS ENGAGED IN THE BUSINESS OF PRINTING AN D DESIGNING PROMOTIONAL MATERIAL FOR FILM INDUSTRY AND ALSO PRO DUCTION AND DISTRIBUTION OF FILM. THE COMPANY IS OWNED AND CONTROLLED BY SHRI AZAM KHAN AND HIS WIFE SMT. NAZREEN KHAN. A SEARCH AND SEIZURE UNDER SECT ION 132 WAS CARRIED OUT AT A BUSINESS AND RESIDENTIAL PREMISES OF SHRI AZAM KH AN AND HIS ASSOCIATE BUSINESS CONCERN. THE ASSESSMENT WAS MADE UNDER SE CTION 143(3) DETERMINING TOTAL INCOME OF RS.2,99,56,425/- AFTER MAKING CERTA IN ADDITIONS AND DISALLOWANCE. AGAINST THIS ASSESSMENT ORDER, THE A SSESSEE HAS FILED THE APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION OF RS.1,65,00,000/- MADE UNDER SECTION 68 OF THE ACT BUT CONFIRMED THE DISAL LOWANCE OF RS.44,55,464/- UNDER SECTION 36(1)(III) AND PART OF PRODUCTION EXP ENSES. THE AO FOUND THAT LD. CIT(A) HAS CONFIRMED THE INTEREST EXPENDITURE A ND DISALLOWED PRODUCTION EXPENSES. THEREFORE, AO HAS INITIATED THE PENALTY AND ISSUED A NOTICE. THE ASSESSEE REPLIED TO SHOW CAUSE NOTICE WHICH READ AS UNDER: THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANC E OF RS.44,55,464/- BEING PROPORTIONATE INTEREST PAID ON LOANS TAKEN FOR BUSI NESS PURPOSE. THE LD. CIT(A) ERRED IN FAILING TO APPRECIATE THAT DURING THE RELE VANT YEAR THE APPELLANT HAD PAID INTEREST OF RS.51,48,258/- ON LOANS RECEIVED OF RS. 8,50,26,829/- (AVERAGE RATE 6%) AND HAD EARNED INTEREST OF RS.35,90,691/- ON AD VANCES GIVEN OF RS.7,35,84,897/- (AVERAGE RATE 5%). THE CIT(A) ERR ED IN CONCLUDING THAT THE APPELLANT HAS GIVEN ADVANCES OF RS.7,35,84,897/- AS INTEREST FREE LOANS WHEN IN FACT APPELLANT HAD EARNED INTEREST OF RS.35,90,691/- ON THE SAID ADVANCE GIVEN AND OFFERED THE SAME TO TAX. THE LD. CIT(A) ERRED IN CO NFIRMING THE DISALLOWANCE OF RS.94,74,916/- BEING PART OF PRODUCTION EXPENSES IN CURRED DURING THE RELEVANT PREVIOUS YEAR AND CLAIMED IN THE COMPUTATION OF INC OME ALTHOUGH TREATED AS DEFERRED REVENUE EXPENDITURE IN BOOKS OF ACCOUNTS. THE LD. CIT(A) ERRED IN FAILING TO APPRECIATE THAT THE SAID PRODUCTION EXPENSES INC URRED WERE IN THE NATURE OF REVENUE EXPENSES AND HENCE ALLOWABLE UNDER SECTION 37 OF THE ACT AS BUSINESS EXPENSES ALTHOUGH TREATED AS DEFERRED REVENUE EXPEN DITURE IN THE BOOKS BY THE APPELLANT. THE CIT(A) ERRED IN CONDUCTING THAT THE APPELLANT HAS CLAIMED THE SAID EXPENDITURE AS CAPITAL EXPENDITURE IN THE BOOKS OF ACCOUNTS WITHOUT APPRECIATING THE SUBMISSION OF THE APPELLANT THAT 15% OF THE MOV IE COST WILL BE WRITTEN OFF EACH YEAR IN THE BOOKS AS PER THE POLICY OF THE APPELLAN T.' 3. AFTER CONSIDERING THE REPLY, THE AO HAS LEVIED T HE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 3 4. MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CIT (A) HAS PARTLY ALLOWED THE CLAIM BY OBSERVING AS UNDER: 4.3.1 I HAVE CONSIDERED THE SUBMISSIONS OF THE APP ELLANT AND PERUSED THE MATERIALS ON RECORD INCLUDING COPIES OF THE JUD ICIAL DECISIONS RELIED UPON BY THE APPELLANT. I DO NOT FIND MERIT IN THE PRELIM INARY OBJECTION RAISED BY THE AR OF THE APPELLANT THAT THE A.O. HAD NOT INITIATED PENAL TY PROCEEDINGS U/S.271(1)(C) IN RESPECT OF THE DISALLOWANCES OF IN TEREST EXPENSES U/S.36(1)(III) AND PRODUCTION EXPENSES U/S.37(1), B ECAUSE THE A.O. HAS VERY CLEARLY AND CATEGORICALLY STATED TO HAVE 'INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) FOR CONCEALING/ FURNISHING INACCURATE PARTICULARS OF INCOME' IN THE CONCLUDING PARA OF THE ASSESSMENT ORDER. IN THI S CONNECTION, IT ALSO DESERVES TO BE NOTED THAT THE ACT DOES NOT PRESCRIBE ANY FOR MAT IN WHICH SATISFACTION OF THE A.O. MAY BE RECORDED. SECTION 2 71(L) CONTEMPLATES A FINDING AS REGARDS SATISFACTION OF AVAILABILITY OF GROUNDS UNDER CLAUSE (C) BEING RECORDED BY THE ASSESSING OFFICER DURING ASSE SSMENT PROCEEDINGS. IN THE CONTEXT OF THE PRESENT CASE, THE EXISTENCE OF THE S AID OBSERVATION MADE BY THE A.O. IN THE BODY OF THE ORDER MEETS THE REQUIREMENT S OF THE LAW FOR LEVYING PENALTY U/S.271(1)(C) IN AS MUCH AS PRIMA FACIE SATISFACTIO N HAS BEEN RECORDED BY THE A.O. AT THIS JUNCTURE, IT WOULD ALSO BE PERTINENT T O TAKE NOTE OF INSERTION OF SUB-SECTION (1B) IN SECTION 271 BY THE FINANCE ACT, 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.1989 WHICH READS AS UNDER:- 'WHERE ANY AMOUNT IS ADDED OR DISALLOWED IN COMPUTI NG THE TOTAL INCOME OR LOSS OF AN ASSESSEE IN ANY ORDER OF ASSESSMENT OR REASSESSMENT AND THE SAID ORDER CONTA INS A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS UND ER CLAUSE (C) OF SUB- SECTION (1), SUCH AN ORDER OF ASSESSMENT OR REASSES SMENT SHALL BE DEEMED TO CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER FOR INITIATION OF THE PENALTY PROCEEDINGS UNDER THE SAI D CLAUSE (C)'. IN VIEW OF THE ABOVE DISCUSSION, THE PRELIMINARY OB JECTION RAISED BY THE APPELLANT IS FOUND TO BE DEVOID OF MERIT AND IS ACCORDINGLY REJE CTED. 4.3.2 IT IS NOW PROPOSED TO CONSIDER THE SETTLED LE GAL POSITION ON THE ISSUE OF LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. IT DESERV ES TO BE NOTED THAT MENS REA IS NO LONGER AN ESSENTIAL INGREDIENT FOR THE LEVY OF P ENALTY U/S.271(1)(C) AS HELD BY THE HONBLE APEX COURT IN DHARAMENDRA TEXTILE PROCESSORS (SUPRA). ONCE IT IS HELD THAT PENALTY U/S 271(1)(C) IS A CIVIL RATHER T HAN A QUASI-CRIMINAL LIABILITY, IT LOGICALLY FOLLOWS THAT NO BURDEN LIES ON THE A.O. A NY LONGER TO PROVE THAT THE ASSESSEE HAD DELIBERATELY, CONSCIOUSLY OR INTENTION ALLY CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT HAS BEEN HELD IN A SERIES OF DECISIONS THAT THE EVIDENCE GATHERED AT THE STAGE O F ASSESSMENT PROCEEDINGS IS PRIMA FACIE MATERIAL IN PENALTY PROCEEDINGS AND THAT SO LONG AS THE ASSESSEE HAS NOT ADDUCED ANY EVIDENCE TO DISPROVE OR REBUT T HE SAID PRIMA FACIE MATERIALS AT THE STAGE OF PENALTY PROCEEDINGS, THOS E CAN BE ACTED UPON AND A FINDING OF CONCEALMENT CAN BE BASED THEREON. LIKEWI SE, WHERE NO FRESH MATERIAL IS PLACED BEFORE THE A.O. IN PENALTY PROCE EDINGS, FINDINGS RECORDED IN QUANTUM APPEAL CANNOT BE BRUSHED ASIDE BUT THESE AR E RELEVANT TO LEVY OF ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 4 PENALTY BY RELYING ON FINDINGS RECORDED IN ASSESSME NT/ APPELLATE PROCEEDINGS [RAJ KUMAR CHAURASIA V. CIT 288 ITR 329 (ALL.) AND CIT V. RATTAN SINGH GREWAL 304 ITR 75 (P&H)]. 4.3.3 IT IS NOW WELL-SETTLED THAT AN ADDITION MADE TO INCOME RAISES A PRESUMPTION AGAINST THE ASSESSEE BY VIRTUE OF EXPLANATION 1 BUT SUCH PRESUMPTION IS AN ENTIRELY REBUTTABLE ONE AND THE SCHEME OF REBUTTAL IS PROVID ED IN THE EXPLANATION ITSELF. THE QUESTION OF LIABILITY TO PENALTY U/S.271(1)(C) HAS THUS TO BE DETERMINED ON THE TOUCHSTONE OF EXPLANATION 1 THERETO. IT IS ALSO WEL L-SETTLED THAT THE INITIAL ONUS LIES ON THE ASSESSEE TO PROVE THAT HIS CASE DOES NOT FAL L WITHIN THE PURVIEW OF EXPLANATION 1. IN THE PRESENT CASE, EXPLANATION 1(A) TO SECTION 271(1)(C) IS NOT ATTRACTED, BECAUSE THE APPELLANT HAS OFFERED AN EXPLANATION IN THE MATTER WHICH HAS NOT BEEN FOUND TO BE FALSE. IN ORDER TO ESCAPE PENAL CONSEQUENCES U/S.271(1)(C) READ WITH CLAUSE (B) OF EXPLANATION 1 , THE APPELLANT HAS TO DISCHARGE THE ONUS IN TERMS OF THE FOLLOWING REQUIREMENTS:- A) THE APPELLANT OFFERS AN EXPLANATION AND IS ALSO ABL E TO SUBSTANTIATE THE SAME. B) THE APPELLANT IS ABLE TO PROVE THAT SUCH EXPLANATIO N IS BONA FIDE AND THAT ALL FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF ITS TOTAL INCOME HAVE BEEN DISCLOSED BY IT. 4.3.4 LET US NOW EXAMINE THE CORRECTNESS OF THE A.O .'S ACTION IN LEVYING PENALTY ON THE APPELLANT IN RESPECT OF THE AFORESAID CLAIMS OF EXPENSES IN LIGHT OF THE ABOVE LEGAL POSITION. AS REGARDS THE DISALLOWANCE OF INTEREST OF RS.44,55,464/- MADE BY THE A.O. U/S.36(1)(III) OF THE ACT, IT WAS NOTICED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE APPELLANT HAD DEBIT ED TO ITS P & L ACCOUNT INTEREST AMOUNTING TO RS.51,48,258/- PAYABLE ON UNS ECURED LOANS OF RS.8.50 CRORES. IT WAS ALSO NOTICED THAT THE APPELLANT HAD MADE ADVANCES TO OTHERS AMOUNTING TO RS.3,02,84,897/-AND INVESTED FUNDS IN OTHER COMPANIES INCLUDING AN ASSOCIATE COMPANY BY WAY OF SHARE APPLICATION MONEY OF RS.4,33,00,000/-. THE APPELLANT COULD NOT PROVE THAT THE AMOUNT OF 'OTHER ADVANCES' AND 'SHARE APPLICATION MONEY' HAD BEEN GIVEN OUT OF APPELLANT' S OWN INTEREST FREE FUNDS. AS THE NEXUS COULD NOT BE ESTABLISHED, THE A.O. INFERR ED THAT THE SAID AMOUNTS HAD BEEN ADVANCED OUT OF INTEREST BEARING FUNDS ONLY. T HUS, THE A.O. DISALLOWED THE PROPORTIONATE INTEREST LIABILITY OF RS.44,55,464/- U/S.36(1)(III) OF THE ACT, HOLDING THAT THE SAID INTEREST EXPENSES HAD NOT BEEN INCURR ED WHOLLY FOR THE PURPOSE OF BUSINESS OF THE APPELLANT. THE SAID DISALLOWANCE WAS CONFIRMED IN APPEAL BY MY PREDECESSOR VIDE HIS ORDER DATED 03.12.2010, HOLDIN G THAT NO NEXUS HAD BEEN ESTABLISHED EVEN AT THE APPELLATE STAGE TO PROVE TH AT THESE ADVANCES AS WELL AS SHARE APPLICATION MONEY WERE GIVEN OUT OF OWN FUNDS OF THE APPELLANT. IN THE COURSE OF PRESENT PROCEEDINGS, IT IS SUBMITTED THAT A PERUSAL OF BALANCE SHEET OF THE APPELLANT AS ON 3 1.03.2007 SHOWS THE AVAILABIL ITY OF INTEREST- FREE FUNDS AS UNDER:- RS. (IN CRORES) SHARE CAPITAL (INCLUDING SHARE APPLICATION MONEY) 7.14 RESERVES AND SURPLUS 0.75 DEPRECIATION RESERVES 0.47 ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 5 TOTAL 8.36 IT IS FURTHER SUBMITTED THAT THE APPELLANT HAD RECE IVED INTEREST OF RS.35,90,691/- ON 'OTHER ADVANCES' GIVEN TO OTHER PARTIES WHICH FACT HAS NOT BEEN APPRECIATED BY THE A.O. AS WELL AS THE CIT(A) IN QUANTUM APPEAL. IN OT HER WORDS, IT IS STRONGLY ASSERTED THAT THE 'OTHER ADVANCES' OF RS.3,02,84,897/- GIVEN TO VARIOUS PARTIES WERE NOT INTEREST-FREE BUT INTEREST BEARING ADVANCES. 4.3.5 UNDER THESE CIRCUMSTANCES, IT EMERGES THAT TH E APPELLANT HAD SUFFICIENT INTEREST FREE FUNDS OF RS.8.36 CRORES AND BASED OR THE RATIO IN THE CASE OF RELIANCE UTILITIES AND POWER LTD. (SUPRA), A PRESUMPTION COULD REASONABLY BE DRAWN THAT THE INVESTMENT IN ASSOCIATE CONCERN ETC. BY WAY OF SHAR E APPLICATION MONEY OF RS.4.33 CRORES WAS MADE BY THE APPELLANT OUT OF INTEREST-FR EE FUNDS AVAILABLE WITH IT EVEN AFTER CONSIDERING THAT FUNDS TO THE TUNE OF RS.2.55 CRORES HAD BEEN USED IN THE PURCHASE OF FIXED ASSETS. IF THESE FACTS HAD BEEN P ROPERLY BROUGHT OUT BY THE APPELLANT AT THE TIME OF ASSESSMENT OR BEFORE THE C IT(A) IN QUANTUM APPEAL, THE RESULT IN ALL PROBABILITY MIGHT HAVE BEEN TOTALLY D IFFERENT. FOR THE LIMITED PURPOSE OF THIS APPEAL, HOWEVER, IT CANNOT BE SAID THAT THE CL AIM OF INTEREST EXPENSES MADE BY THE APPELLANT IN ITS RETURN WAS NOT BONA FIDE OR THAT T HE APPELLANT HAD NOT DISCLOSED ALL THE FACTS RELATING TO SUCH CLAIM AND MATERIAL TO THE CO MPUTATION OF ITS INCOME IN THE COURSE OF VARIOUS PROCEEDINGS. IN THE COURSE OF PRE SENT PROCEEDINGS, THE APPELLANT HAS NOT ONLY EXPLAINED THAT THE INTEREST BEARING FUNDS WERE NOT DIVERTED FOR THE PURPOSE OF MAKING INVESTMENTS IN ASSOCIATE CONCERNS BUT HAS ALSO BEEN ABLE TO SUBSTANTIATE SUCH EXPLANATION. IN VIEW OF THIS POSI TION, THE APPELLANT CAN BE SAID TO HAVE DISCHARGED ITS ONUS UNDER EXPLANATION 1(B) TO SECTION 271(1)(C) AND, THEREFORE, THE ACTION OF THE A.O. IN LEVYING PENALT Y IN RESPECT OF DISALLOWANCE OF INTEREST OF RS.44,55,464/- CANNOT BE SAID TO BE JUS TIFIED. IN THE PRESENT CASE, NO INFORMATION GIVEN BY THE APPELLANT IN THE RETURN HA S BEEN FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR A NY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. THE A.O. HAS NOT FOUND SUCH CL AIM OF THE APPELLANT TO BE FACTUALLY INCORRECT NOR HAS HE FOUND SUCH CLAIM TO BE NOT BONA FIDE. THE EXPLANATION OF THE APPELLANT HAS ALSO NOT BEEN FOUND TO BE FALSE. IN MY OPINION, THIS IS A CASE WHERE THE APPELLANT MADE A CLAIM WHICH HAS NOT BEEN FOUND TO BE ACCEPTABLE BY THE A.O. HENCE, IN VIEW OF THE JUDGMENT OF THE HON'BLE SUPRE ME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA), THIS WOULD NOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. THEREFORE, PENALTY U/S.271(1)(C) OF THE ACT WOULD NOT BE LEVIABLE IN T HE FACTS AND THE CIRCUMSTANCES OF THE CASE. HENCE, THE ACTION OF THE A.O. IN LEVYING PENA LTY IN REGARD TO DISALLOWANCE OF INTEREST OF RS.44,55,464/- CANNOT BE UPHELD AND THE PENALTY LEVIED ON THIS AMOUNT IS ACCORDINGLY DELETED. 5. THE ASSESSEE DID NOT REMAIN PRESENT. WE HAVE HE ARD THE LD. D.R. THE LD. D.R. SUBMITTED THAT THE INTEREST EXPENSES CLAIM ED BY THE ASSESSEE IS INACCURATE SINCE THE SAME WAS NOT ALLOWED TO THE EX TENT OF RS.44,55,464/-. IN RESPECT OF PRODUCTION EXPENSES, THE EXPENSES ARE CA PITAL IN NATURE. THEREFORE, ASSESSEE HAS SUBMITTED INACCURATE PARTICULARS OF IN COME LEADING TO CONCEALMENT ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 6 OF INCOME. THE ISSUE IN CONTROVERSY IS COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOOM COMMUN ICATION (P) LTD. (2010) 191 TAXMAN 179 (DELHI). 6. WE HAVE GONE THROUGH THE ORDER OF LD. CIT(A). W E HAVE OBSERVED THAT IN QUANTUM PROCEEDING THE MATTER HAS COME BEFORE TH E ITAT WHEREIN THE TRIBUNAL, IN ITA NO.1031/M/2011 FOR A.Y. 2007-08 VI DE ORDER DATED 09.02.17, HAS SET ASIDE THE MATTER TO THE FILE OF LD. CIT(A) FOR RE-ADJUDICATION OF THE ISSUE ON MERITS BY HOLDING AS UNDER: 8. WE SHALL NOW TAKE UP THE APPEAL FILED FOR A.Y. 2007-08, WHEREIN THE ASSESSEE IS CONTESTING THE DECISION OF THE LEARNED CIT(A) IN CO NFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE AND DISALLOWANCE OF PRODUCTION EXPENSES. 9. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E AND PERUSED THE RECORD. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS BORROWED MONEY FROM TWO PERSONS AND HAS PAID INTEREST OF RS.51.48 LAKHS TO THEM. THE ASSESSING OFFICER FURTHER NOTICED THAT THE ASSESSEE HAS GIVEN SHARE A PPLICATION MONEY OF RS.4.33 CRORES TO ITS ASSOCIATE CONCERNS AND INTEREST FREE ADVANCE OF RS.3.02 CRORES. HENCE, THE ASSESSING OFFICER DISALLOWED THE PROPORTIONATE AMOUNT OF INTEREST EXPENDITURE, WHICH WORKED OUT TO RS.44.55 LAKHS. THE ASSESSING O FFICER FURTHER NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.94.74 LAKHS AS PRODUCTION EXPENSES. HOWEVER, IN THE BOOKS OF ACCOUNT, THE ASSESSEE HAD CAPITALIZED THE SAME. HENCE, THE ASSESSING OFFICER DISALLOWED THE ABOVE CLAIM UN DER THE HEAD PRODUCTION EXPENSES. THE LEARNED CIT(A) CONFIRMED BOTH THE AD DITIONS AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 10. WE NOTICED FROM THE SUBMISSIONS MADE BY THE ASS ESSEE BEFORE THE LEARNED CIT(A) THAT THE ASSESSEE HAS RECEIVED INTEREST INCO ME OF RS.35.90 LAKHS FROM VARIOUS PARTIES. FURTHER THE ASSESSEE HAS ALSO TAKEN A STAN D THAT INTEREST FREE ADVANCE HAVE BEEN GIVEN FOR BUSINESS PURPOSES ONLY. WE NOTICED T HAT BOTH THE CONTENTIONS OF THE ASSESSEE HAVE NOT BEEN CONSIDERED BY THE LEARNED CI T(A). WITH REGARD TO THE DISALLOWANCE OF PRODUCTION EXPENSES, THE ASSESSEE H AS SUBMITTED THAT IT HAS BEEN CONSISTENTLY FOLLOWING THE SAME METHOD FOR CLAIMING EXPENSES AND THIS FACT HAS ALSO BEEN OVERLOOKED BY THE LEARNED CIT(A). IT IS WELL S ETTLED PROPOSITION OF LAW THAT THE ENTRIES MADE IN THE BOOKS OF ACCOUNT CANNOT BE CONS IDERED AS DETERMINATIVE FACTOR AND DEDUCTION CLAIMED BY THE ASSESSEE SHOULD BE EXA MINED IN ACCORDANCE WITH INCOME TAX PROVISIONS. 11. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT BOTH THE ISSUES REQUIRE FRESH CONSIDERATION AT THE END OF THE LEARNED CIT(A ). ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON BOTH THE ISSU ES AND RESTORE THE SAME TO HIS FILE WITH THE DIRECTION TO EXAMINE THEM AFRESH AFTE R AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 7 12. IN THE RESULT, BOTH THE APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 7. THUS, WE HAVE OBSERVED THAT THE TRIBUNAL IN QUAN TUM PROCEEDING FOR A.Y. 2007-08 HAS SET ASIDE AND RESTORE THE MATTER B ACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION. HENCE, WE ARE ALSO RESTORING THIS ISSUE BACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION. HEN CE, THE DEPARTMENTAL APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.2891/M/2014 (ASSESSEES APPEAL) 8. THE ASSESSEE HAS COME UP IN APPEAL AGAINST CONFI RMING THE PENALTY ON ACCOUNT OF CLAIM OF DEDUCTION OF PRODUCTION EXPENSE S OF RS.94,74,916/-. THE LD. CIT(A) CONSIDERING THE VARIOUS JUDGMENTS HAS CO ME TO A CONCLUSION IN RESPECT OF RS.94,74,916/- WHICH HE DISCUSSED IN DET AIL IN PARA 4.3.6, 4.3.7, 4.3.8, 4.3.9 & 4.3.10 WHICH READ AS UNDER: WITH REGARD TO DISALLOWANCE OF RS.94,74,916/- MADE BY THE A.O. OUT OF PRODUCTION EXPENSES U/S.37(1) OF THE ACT, IT IS OBS ERVED THAT THE APPELLANT HAD SHOWN PRODUCTION EXPENSES OF RS.94,74,916/- AS CAPITAL EXPENDITURE IN ITS BOOKS OF ACCOUNTS BUT IN THE COMPUTATION OF INCOME, THE SAID EXPENDITURE WAS CLAIMED AS REVENUE EXPENDITURE. THE A.O. ASKED THE APPELLANT TO EXPLAIN THE NATURE AND JUSTIFICATION FOR THIS CLAIM OF DEDUCTION. IN REPLY, THE APPELLANT SUBMITTED THAT IT IS THE NORMAL PRACTICE IN THE ENTERTAINMENT INDUSTRY TO APPORTION CERTAIN PART OF THE MOVIE COS T AS INTELLECTUAL PROPERTY RIGHTS (IPRS) IN ANTICIPATION OF FUTURE REVENUE. T HE PERCENTAGE IS SAID TO VARY FROM COMPANY TO COMPANY AS PER THEIR INTERNAL POLICY. I T WAS SUBMITTED THAT THE APPELLANT HAD CAPITALIZED THE IPRS AT 15% OF THE MO VIE COST TO BE WRITTEN OFF EACH YEAR AS PER THE ACCOUNTING POLICY. HOWEVER, THE A.O . WAS NOT SATISFIED WITH THE EXPLANATION FURNISHED BY THE APPELLANT AND ACCORDIN GLY HE DISALLOWED THE SAID AMOUNT OF RS.94,74,916/- U/S.37 OF THE ACT. THE DIS ALLOWANCE MADE BY THE A.O. WAS UPHELD IN APPEAL BY MY PREDECESSOR VIDE HIS ORDER D ATED 03.12.2010. IT WAS HELD BY THE CIT(A) IN QUANTUM APPEAL THAT NO EVIDENCE TO SU BSTANTIATE ITS CLAIM HAD BEEN SUBMITTED BY THE APPELLANT BEFORE THE A.O. AND EVEN AT THE APPELLATE STAGE. FROM PERUSAL OF 'SIGNIFICANT ACCOUNTING POLICIES' MENTIO NED IN 'SCHEDULE-M' FORMING PART OF ACCOUNTS OF APPELLANT FOR THE YEAR ENDED 31.03.2 007, IT IS OBSERVED THAT CONSIDERING THE FACT THAT THE FUTURE ECONOMIC BENEF ITS OF THE FILMS ARE AVAILABLE, THE APPELLANT COMPANY RECOGNIZES/ CREATES DISTRIBUTION RIGHTS IN MOTION PICTURES AS INTANGIBLE ASSETS IN THE FORM OF INTELLECTUAL PROPE RTY RIGHTS (IPRS). THE CREATION/RECOGNITION OF IPRS IS MADE AT A FIXED PRO PORTION OF ITS PRODUCTION COST DEPENDING ON THE DATE OF RELEASE OF THE MOTION PICT URE ON THE FOLLOWING BASIS:- A) AT 15% OF THE PRODUCTION COST OF THE MOTION PICTURE IN CASE THE FILM IS RELEASED WITHIN 90 DAYS OF THE YEAR END . ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 8 B) AT 7.5% OF THE PRODUCTION COST OF THE MOTION PICTUR E IN CASE THE FILM IS RELEASED BEFORE 90 DAYS OF THE YEAR END . IT IS OBSERVED FROM THE RECORD THAT THE TOTAL PRODU CTION COST REFLECTED IN THE P & L ACCOUNT IS RS.6,31,66,106/- OUT OF WHICH 15% OF THE SAID COST AMOUNTING TO RS.94,74,916/- HAS BEEN CAPITALIZED AND THE NET COS T OF RS.5,36,91,190/- HAS BEEN CLAIMED IN THE P & L ACCOUNT. 4.3.7 IN THIS CONNECTION, IT DESERVES TO BE NOTED T HAT THE DEDUCTION IN RESPECT OF EXPENDITURE ON PRODUCTION OF FEATURE FILMS IS GOVER NED BY RULE 9A OF THE INCOME TAX RULES, 1962 WHICH IS A MANDATORY PROVISION. THE DEDUCTION IN RESPECT OF PRODUCTION EXPENSES OF A FEATURE FILM CANNOT BE CLA IMED IN ANY MANNER OTHER THAN WHAT IS PRESCRIBED IN RULE 9A. IT IS RULE 9A WHICH IS APPLICABLE AS FAR AS ALLOWING THE COST OF PRODUCTION OF FILMS UNDER THE ACT IS CONCER NED, IRRESPECTIVE OF THE ACCOUNTING METHOD FOLLOWED BY THE APPELLANT. IT IS OBSERVED FROM THE RECORD THAT THE APPELLANT HAS NOWHERE FURNISHED THE WORKING OF DEDUCTION IN RESPECT OF PRODUCTION EXPENSES ALLOWABLE AS PER RULE 9A. THERE IS NOTHING ON RECORD TO SHOW THAT THE DEDUCTION OF RS.94,74,916/- CAPITALIZED IN THE ACCOUNTS BUT CLAIMED AS A REVENUE EXPENDITURE BY THE APPELLANT IN THE COMPUTA TION OF INCOME IS IN ACCORDANCE WITH THE PROVISION CONTAINED IN THE SAID RULE 9A. THE REAL QUESTION IS NOT WHETHER THE EXPENDITURE OF RS.94,74,916/- IS IN THE NATURE OF REVENUE OR CAPITAL EXPENDITURE BUT WHETHER THE SAID EXPENDITUR E INCURRED ON PRODUCTION OF FILM IS DEDUCTIBLE IN TERMS OF THE PROVISIONS OF RU LE 9A. I AM UNABLE TO ACCEPT THE PLEA OF THE APPELLANT THAT SINCE NO DEDUCTION O F SAID EXPENDITURE HAS BEEN CLAIMED IN SUBSEQUENT YEARS, THE SAME IS ALLOWABLE IN THE A.Y. UNDER CONSIDERATION, BECAUSE THE ALLOWABILITY OF THE PROD UCTION EXPENSES AMOUNTING TO RS.94,74,916/- HAS TO BE DETERMINED IN LIGHT OF PRO VISIONS OF RULE 9A. FOR THIS PURPOSE, NOT TO SPEAK OF FURNISHING THE WORKING OF COST OF PRODUCTION ALLOWABLE AS PER RULE 9A, THE APPELLANT HAS NOT PLA CED ON RECORD EVEN BASIC FACTS SUCH AS PARTICULARS OF THE FILM, DATE OF ITS RELEASE AS CERTIFIED BY THE BOARD OF FILM CENSORS, DETAILS AS WELL AS NATURE OF EXPENSES INCURRED AND CLAIMED AS PART OF COST OF PRODUCTION, DETAILS OF ANY SUBSIDY RECEIVED BY THE FILM PRODUCER UNDER ANY SCHEME FRAMED BY THE GOVERNMENT, DETAILS OF SALE OF EXHIBITION RIGHTS OF THE FILM, WHETHER THE FILM PRODUCER HIMSELF UNDERTOOK EXHIBIT ION OF THE FILM ON A COMMERCIAL BASIS IN ALL OR SOME AREAS, DETAILS OF T HE AMOUNTS REALIZED BY EXHIBITING THE FILM OR BY SALE OF EXHIBITION RIGHTS OR BOTH, EXPENDITURE ON PREPARATION OF POSITIVE PRINTS OF THE FILM, ADVE RTISEMENT EXPENDITURE INCURRED AFTER THE FILM IS CERTIFIED FOR RELEASE ET C. 4.3.8 THUS, IT EMERGES THAT THERE WAS FAILURE ON PA RT OF THE APPELLANT TO DISCLOSE ALL THE FACTS RELEVANT TO THE CLAIM OF DEDUCTION OF PRODUCTION EXPENSES OF RS.94,74,916/- WHICH WERE MATERIAL TO T HE COMPUTATION OF ITS TOTAL INCOME. THE APPELLANT HAS ALSO FAILED TO PROVE THAT ITS CLAIM FOR DEDUCTION OF PRODUCTION EXPENSES OF RS.94,74,916/- MADE IN TH E COMPUTATION OF INCOME WAS A BONA FIDE CLAIM. NO FRESH MATERIALS HA VE BEEN PLACED ON RECORD IN THE COURSE OF PENALTY PROCEEDINGS TO REBU T THE FINDINGS OF THE A.O. IN ASSESSMENT. THE APPELLANT HAS NOT BEEN ABLE TO SUBS TANTIATE ITS EXPLANATION IN RESPECT OF THE AFORESAID CLAIM. IT IS NOT A CASE WH ERE THE DISALLOWANCE HAS BEEN MADE BY THE A.O. DUE TO DIFFERENCE OF OPINION OR DI FFERENT LEGAL INTERPRETATION. ON THE CONTRARY, IT IS A CASE WHERE THE APPELLANT H AS NEITHER DISCLOSED ALL THE ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 9 FACTS RELATING TO THE SAID CLAIM AND MATERIAL TO TH E COMPUTATION OF ITS INCOME NOR BEEN ABLE TO SUBSTANTIATE ITS EXPLANATION AND TO PR OVE THAT SUCH EXPLANATION IS BONA FIDE. THE APPELLANT HAS THUS FAILED TO PROVE T HAT ITS CLAIM FOR DEDUCTION OF PRODUCTION EXPENSES AMOUNTING TO RS.94,74,916/- WAS A BONA FIDE CLAIM. IN VIEW OF THE FAILURE OF THE APPELLANT TO DISCHARGE THE ON US CAST UPON IT UNDER EXPLANATION 1(B), THE LEGAL FICTION ENACTED THEREIN GETS ATTRACTED AND THE APPELLANT IS DEEMED TO HAVE FURNISHED INACCURATE PARTICULARS OF ITS INCOME IN REGARD TO THE AFORESAID CLAIM OF PRODUCTION EXPENSES AMOUNTIN G TO RS.94,74,916/-. AS THE APPELLANT HAS NOT SHOWN AS TO HOW THE SAID C LAIM OF DEDUCTION IS A DEBATABLE ISSUE, ITS PLEA THAT NO PENALTY IS LEVIAB LE ON DEBATABLE ISSUES IS FOUND TO BE DEVOID OF MERIT. 4.3.9 FURTHER, IT IS FOUND THAT THE RELIANCE OF THE APPELLANT ON CERTAIN JUDICIAL DECISIONS WITHOUT BRINGING OUT ANY PARITY OF FACTS OR COMMONALTY OF ISSUES IS TOTALLY MISPLACED. THERE CANNOT BE ANY DISPUTE O N THE GENERAL PROPOSITION THAT IT IS NEITHER THE NOMENCLATURE OF AN ITEM OF EXPENDITU RE NOR ITS ACCOUNTING TREATMENT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE W HICH IS DECISIVE OF THE NATURE AND ALLOWABILITY OF THE SAID EXPENDITURE UND ER THE ACT, AS HELD IN THE CASES OF TUTICORIN ALKALI CHEMICALS & FERTILIZER LTD., KHODAY INDIA LTD., TRIVENI ENGINEERING AND INDUSTRIES LTD., CORE HEALTHCARE LT D. AND KOPRAN LIMITED CITED BY THE APPELLANT ABOVE IN SUPPORT OF ITS CLAIM OF D EDUCTION OF PRODUCTION EXPENSES OF RS.94,74,916/. SIMILARLY, RELIANCE OF THE APPELL ANT ON THE CASES OF NALIN P. SHAH (HUF) AND SHERVANI HOSPITALITIES LTD. (SUPRA) WHEREIN IT HAS BEEN HELD THAT MERELY MAKING A CLAIM WHICH IS HELD AS UNSUSTA INABLE IN LAW SHOULD NOT LEAD TO PENALTY U/S.271(L)(C) WHEN THE ASSESSEE HAS FURN ISHED FULL DETAILS IN THE RETURN ITSELF WILL BE OF NO HELP TO THE APPELLANT, BECAUSE THE APPELLANT IS FOUND TO HAVE NOT DISCLOSED THE COMPLETE DETAILS OF ITS CLAIM OF PRODUCTION EXPENSES EITHER IN THE RETURN OR IN COURSE OF ASSESSMENT/ APPELLATE PROCEEDINGS. NEITHER OF THESE DECISIONS IS AN AUTHORITY FOR THE PROPOSITION THAT PENALTY U/S.271(L)(C) WILL NOT BE LEVIABLE EVEN IF THE ASSESSEE IS UNABLE TO D ISCHARGE THE BURDEN CAST UPON HIM UNDER EXPLANATION 1 THERETO. IT IS NOT POSSIBLE TO ASCERTAIN WHETHER THE JUDGMENT IN CASE OF UPENDRA V. MITHANI (SUPRA) WILL BE APPLICABLE OR NOT IN THE PRESENT CASE FOR WANT OF COMPLETE FACTS OF THAT CAS E. HENCE, NONE OF THE JUDICIAL DECISIONS CITED BY THE APPELLANT ADVANCES ITS CASE SO FAR AS THE LEVY OF PENALTY U/S.271(L)(C) IN REGARD TO ITS CLAIM FOR DEDUCTION OF PRODUCTION EXPENSES OF RS.94,74,916/- IS CONCERNED. 4.3.10 IN LIGHT OF THE ABOVE DISCUSSION, I AM OF TH E CONSIDERED VIEW THAT THE A.O. WAS JUSTIFIED IN HOLDING THAT THE APPELLANT HA D FURNISHED INACCURATE PARTICULARS OF ITS INCOME BY WAY OF MAKING AFORESAI D CLAIM OF DEDUCTION OF PRODUCTION EXPENSES OF RS.94,74,916/-, THEREBY ATTR ACTING THE LEGAL FICTION CONTAINED IN EXPLANATION 1 TO SECTION 271(L)(C). UN DER THESE CIRCUMSTANCES, THE PENALTY LEVIED BY THE A.O. U/S.271(L)(C) ON THI S ACCOUNT CANNOT BE SAID TO BE INVALID OR UNJUSTIFIED. THEREFORE, THE ACTION OF THE A.O. IN LEVYING PENALTY UPON THE APPELLANT U/S.271(1)(C) OF THE ACT ON THE SAID AMOUNT OF RS 94,74,916/ IS UPHELD THE A.0. IS ACCORDINGLY DIRECTED TO RE-COMPU TE THE PENALTY LEVIABLE UPON THE APPELLANT ONLY IN RESPECT OF THE SAID AMOUNT OF RS.94,74,916/- @ 100% OF THE TAX SOUGHT TO BE EVADED AND DELETE THE BALANCE AMOU NT OF PENALTY. GROUND OF ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 10 APPEAL TAKEN UP BY THE APPELLANT IN THIS REGARD IS ALLOWED TO THE EXTENT INDICATED ABOVE. 9. WE HAVE GONE THROUGH THE ORDER OF LD. CIT(A). W E HAVE OBSERVED THAT IN QUANTUM PROCEEDING THE MATTER HAS COME BEFORE TH E ITAT WHEREIN THE TRIBUNAL, IN ITA NO.1031/M/2011 FOR A.Y. 2007-08 VI DE ORDER DATED 09.02.17, HAS SET ASIDE THE MATTER TO THE FILE OF LD. CIT(A) FOR RE-ADJUDICATION OF THE ISSUE ON MERITS BY HOLDING AS UNDER: 8. WE SHALL NOW TAKE UP THE APPEAL FILED FOR A.Y. 2007-08, WHEREIN THE ASSESSEE IS CONTESTING THE DECISION OF THE LEARNED CIT(A) IN CO NFIRMING THE DISALLOWANCE OF INTEREST EXPENDITURE AND DISALLOWANCE OF PRODUCTION EXPENSES. 9. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIV E AND PERUSED THE RECORD. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS BORROWED MONEY FROM TWO PERSONS AND HAS PAID INTEREST OF RS.51.48 LAKHS TO THEM. THE ASSESSING OFFICER FURTHER NOTICED THAT THE ASSESSEE HAS GIVEN SHARE A PPLICATION MONEY OF RS.4.33 CRORES TO ITS ASSOCIATE CONCERNS AND INTEREST FREE ADVANCE OF RS.3.02 CRORES. HENCE, THE ASSESSING OFFICER DISALLOWED THE PROPORTIONATE AMOUNT OF INTEREST EXPENDITURE, WHICH WORKED OUT TO RS.44.55 LAKHS. THE ASSESSING O FFICER FURTHER NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.94.74 LAKHS AS PRODUCTION EXPENSES. HOWEVER, IN THE BOOKS OF ACCOUNT, THE ASSESSEE HAD CAPITALIZED THE SAME. HENCE, THE ASSESSING OFFICER DISALLOWED THE ABOVE CLAIM UN DER THE HEAD PRODUCTION EXPENSES. THE LEARNED CIT(A) CONFIRMED BOTH THE AD DITIONS AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 10. WE NOTICED FROM THE SUBMISSIONS MADE BY THE ASS ESSEE BEFORE THE LEARNED CIT(A) THAT THE ASSESSEE HAS RECEIVED INTEREST INCO ME OF RS.35.90 LAKHS FROM VARIOUS PARTIES. FURTHER THE ASSESSEE HAS ALSO TAKEN A STAN D THAT INTEREST FREE ADVANCE HAVE BEEN GIVEN FOR BUSINESS PURPOSES ONLY. WE NOTICED T HAT BOTH THE CONTENTIONS OF THE ASSESSEE HAVE NOT BEEN CONSIDERED BY THE LEARNED CI T(A). WITH REGARD TO THE DISALLOWANCE OF PRODUCTION EXPENSES, THE ASSESSEE H AS SUBMITTED THAT IT HAS BEEN CONSISTENTLY FOLLOWING THE SAME METHOD FOR CLAIMING EXPENSES AND THIS FACT HAS ALSO BEEN OVERLOOKED BY THE LEARNED CIT(A). IT IS WELL S ETTLED PROPOSITION OF LAW THAT THE ENTRIES MADE IN THE BOOKS OF ACCOUNT CANNOT BE CONS IDERED AS DETERMINATIVE FACTOR AND DEDUCTION CLAIMED BY THE ASSESSEE SHOULD BE EXA MINED IN ACCORDANCE WITH INCOME TAX PROVISIONS. 11. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT BOTH THE ISSUES REQUIRE FRESH CONSIDERATION AT THE END OF THE LEARNED CIT(A ). ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(A) ON BOTH THE ISSU ES AND RESTORE THE SAME TO HIS FILE WITH THE DIRECTION TO EXAMINE THEM AFRESH AFTE R AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 12. IN THE RESULT, BOTH THE APPEALS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.3804/M/2014 ITA NO.2891/M/2014 M/S. RISK DESIGN AND ADVERTISING LTD. 11 10. THUS, WE HAVE OBSERVED THAT THE TRIBUNAL IN QUA NTUM PROCEEDING FOR A.Y. 2007-08 HAS SET ASIDE AND RESTORE THE MATTER B ACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION. HENCE, WE ARE ALSO RESTORING THIS ISSUE BACK TO THE FILE OF LD. CIT(A) FOR FRESH ADJUDICATION. HEN CE, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AND REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 06.07.2017. SD/- SD/- (RAMIT KOCHAR) (D.T. GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 06.07.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.