M/S TIPS INDUSTRIES LTD, MUMBAI V. DY CIT CIRCLE 30, MUMBAI

ITA 4182/MUM/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7209 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 11-12-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 01-06-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HEMANT J LAL
• Assessee Lawyers: DEEPAL TRALSHAWALA
• Keywords: Capital asset; Business income; Bad and doubtful debts; Revenue expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE P.M. JAGTAP (A.M.) AND SHRI N.V. VASUDEVAN ( J.M.) ITA NO.4182/MUM/2007 ASSESSMENT YEAR : 2003-2004 TIPS INDUSTRIES LTD. 601, DURGA CHAMBERS, 6 TH FLR., LINKING RD., KHAR(W), MUMBAI 400 054. PAN : AAACT5284A VS. DY CIT CIRCLE 30 ROOM NO.408, AAYAKAR BHAVAN, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPAL TRALSHAWALA RESPONDENT BY : SHRI HEMANT J. LAL O R D E R PER P.M. JAGTAP, A.M. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LEARNED CIT(A) V, MUMBAI DATED 16.01.2007 AND THE SOLITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) ON ACCOUNT OF A SSESSEES CLAIM FOR BUSINESS LOSS OF RS.5,16,00,000/- ON ACCOUNT OF IRR ECOVERABLE ADVANCES. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE OF AUDIO CASSETT ES AND COMPACT DISCS. IT MANUFACTURES BLANK CASSETTES AS WELL AS PRERECOR DED CASSETTES BY REPRODUCING AUDIO SONGS AND FILM MUSIC. THE RETU RN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY THE ASSESSEE COMPA NY ON 1.12.2003 DECLARING A LOSS OF RS.37,34,55,604/-. IN THE P & L A/C. FILED ALONG WITH THE SAID RETURN, A SUM OF RS.5,16,00,000/- INTER-AL IA WAS DEBITED BY THE ASSESSEE COMPANY ON ACCOUNT OF SUNDRY ADVANCES WRIT TEN OFF. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CLAIM OF THE ASSESSEE FOR DEDUCTION FOR THE SAID AMOUNT WAS EXAMINED BY THE ASSESSING O FFICER. WHILE JUSTIFYING ITS CLAIM FOR THE SAID DEDUCTION, IT WAS SUBMITTED BY THE ASSESSEE THAT ADVANCES WERE PAID BY IT TO VARIOUS FILM PRODU CERS FOR ACQUISITION OF ITA NO.4182/MUM/2007 A.Y.: 2003-2004 2 AUDIO RIGHTS OF VARIOUS FEATURE FILMS IN THE F.Y.19 96-97 TO 2000-01. THE COPIES OF RELEVANT AGREEMENTS WITH THE CONCERNED PR ODUCERS AS WELL AS THEIR LEDGER ACCOUNTS WERE ALSO FURNISHED BY THE ASSESSEE . IT WAS SUBMITTED THAT SINCE THE SAID PRODUCERS COULD NOT COMMENCE THE PRO DUCTIONS OF THE FEATURE FILMS FOR WHICH THE AGREEMENTS HAD BEEN ENTERED INT O AND ALSO COULD NOT COMMENCE PRODUCTION OF ANY OTHER FEATURE FILM SO AS TO ADJUST THE ADVANCES GIVEN TO THEM THE SAID ADVANCES BECAME IRRECOVERABL E. IT WAS ALSO SUBMITTED THAT THE SAID PRODUCERS DID NOT EVEN ACCE PT ANY OF THE PROPOSALS GIVEN BY THE ASSESSEE TO THEM FROM TIME TO TIME SO AS TO ADJUST OR REPAY THE ADVANCES. IT WAS CONTENDED THAT ASSESSEE COMPANY THUS HAD NO OTHER ALTERNATIVE BUT TO CLAIM SUCH ADVANCES AS BAD DEBT AND WRITE OFF THE SAME IN ITS BOOK OF ACCOUNT AS IRRECOVERABLE. THE ASSESS ING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS MADE ON BEHALF OF THE ASSE SSEE COMPANY. ACCORDING TO HIM, THE WRITE OFF MADE BY THE ASSESSE E WAS NOT ON ACCOUNT OF BAD DEBT FOR SALES ETC. EFFECTED IN THE EARLIER YEA RS AND THE AMOUNT OF SUCH BAD DEBT HAVING NOT BEEN CONSIDERED AS INCOME OF TH E ASSESSEE IN THE EARLIER YEARS, THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUC TION ON ACCOUNT OF BAD DEBT U/S.36(1)(VII) R.W.S. 36(2). AS REGARDS THE ALTERNATIVE CLAIM OF THE ASSESSEE TO ALLOW THE IRRECOVERABLE ADVANCES WRITTE N OFF AS BUSINESS LOSS, THE ASSESSING OFFICER HELD THAT THE AUDIO RIGHTS SOUGHT TO BE ACQUIRED BY THE ASSESSEE BY PAYING THE SAID ADVANCES CONSTITUTED CA PITAL ASSET IN ITS HANDS AND THEREFORE, LOSS AS A RESULT OF NON-RECOVERY OF ADVANCES PAID WAS CAPITAL LOSS WHICH COULD NOT BE ALLOWED AS REVENUE EXPENDIT URE. HE, THEREFORE, DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF SUNDRY ADVANCES WRITTEN OFF IN THE ASSESSMENT COMPLETED U/ S.143(3) VIDE AN ORDER DATED 28.02.2006. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R U/S.143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LEA RNED CIT(A) CHALLENGING INTER-ALIA THE DISALLOWANCE OF RS.5,16,00,000/- MAD E BY THE ASSESSING OFFICER ON ACCOUNT OF ITS CLAIM FOR DEDUCTION ON AC COUNT OF SUNDRY ADVANCES WRITTEN OFF. AFTER CONSIDERING THE SUBMISSIONS MA DE ON BEHALF OF THE ASSESSEE COMPANY BEFORE HIM AND PERUSING THE RELEVA NT MATERIAL ON RECORD, ITA NO.4182/MUM/2007 A.Y.: 2003-2004 3 THE LEARNED CIT(A) AGREED WITH THE ASSESSING OFFICE R THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF SUNDRY ADVANCE S WRITTEN OFF COULD NOT BE ALLOWED AS BAD DEBT U/S.36(1)(VII) R.W.S. 36(2) AS THE AMOUNT WRITTEN OFF WAS MERELY AN ADVANCE AND WAS NOT TAKEN INTO ACCOUN T FOR DETERMINING INCOME OF THE ASSESSEE IN ANY EARLIER YEAR. HE, H OWEVER, DID NOT AGREE WITH THE ASSESSING OFFICER THAT AUDIO RIGHTS CONSTITUTED CAPITAL ASSET IN THE HANDS OF THE ASSESSEE COMPANY. HE HELD THAT THE EXPENDI TURE INCURRED BY THE ASSESSEE FOR ACQUISITION OF AUDIO RIGHT WAS IN THE NATURE OF REVENUE EXPENDITURE IN THE HANDS OF THE ASSESSEE. HE HOWE VER, HELD THAT FOR CLAIMING LOSS ON ACCOUNT OF IRRECOVERABLE ADVANCE P AID FOR ACQUISITION OF AUDIO RIGHTS, UNILATERAL WRITE OFF OF SUCH ADVANCES ALONE BY THE ASSESSEE COMPANY WAS NOT SUFFICIENT. HE HELD THAT THE ONUS IN THIS REGARD WAS ON THE ASSESSEE TO ESTABLISH THAT SUCH LOSS WAS ACTUAL LY INCURRED IN THE YEAR UNDER CONSIDERATION. HE NOTED FROM THE RELEVANT A GREEMENT ENTERED IN TO BY ASSESSEE COMPANY WITH THE CONCERNED PRODUCERS TH AT THERE WAS A SPECIFIC PROVISION FOR REFUND OF ADVANCE WITH INTEREST IN TH E EVENT OF CONTRACT NOT BEING FULFILLED BY THE PRODUCERS. ACCORDING TO HI M, THE QUESTION OF LOSS WOULD ARISE ONLY IF THE PRODUCERS EITHER REFUSE TO HONOUR THE COMMITMENT AS PER THE AGREEMENT OR ARE IN SUCH FINANCIAL DISTRESS THAT THEY COULD NOT BE REASONABLY BE EXPECTED TO REFUND THE ADVANCE. HE HELD THAT NOTHING HOWEVER WAS BROUGHT ON RECORD BY THE ASSESSEE TO SH OW THAT IT HAS NOT BEEN ABLE TO RECOVER THE ADVANCE PAID TO THE PRODUCERS E VEN AFTER MAKING ALL THE POSSIBLE EFFORTS. HE HELD THAT THE ONUS THAT LAY ON THE ASSESSEE TO CLAIM THE AMOUNT IN QUESTION AS BUSINESS LOSS THUS WAS NOT DI SCHARGED AND RELYING ON VARIOUS JUDICIAL PRONOUNCEMENT ON THIS ISSUE AS DIS CUSSED IN HIS IMPUGNED ORDER, THE LEARNED CIT(A) CONFIRMED THE DISALLOWANC E OF RS.5,16,00,000/- MADE BY THE ASSESSING OFFICER. AGGRIEVED BY THE O RDER OF THE LEARNED CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE T RIBUNAL. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE AMOUNT OF RS.5,16,00,000/- WAS PAID BY THE ASSESSEE TO DIFFER ENT PRODUCERS AS ADVANCE FOR MUSIC RIGHT IN THE FILM YET TO BE PRODU CED. HE SUBMITTED THAT SINCE THE SAID AMOUNT WAS PAID BY THE ASSESSEE IN T HE NORMAL COURSE OF ITS ITA NO.4182/MUM/2007 A.Y.: 2003-2004 4 BUSINESS AS ADVANCE, THE LOSS AS A RESULT OF NON RE COVERY OF SAID AMOUNT WAS PURELY THE BUSINESS LOSS. HE SUBMITTED THAT E VEN THE LEARNED CIT(A) HAS NOT DISPUTED THIS POSITION, BUT THE DISALLOWANC E MADE BY THE ASSESSING OFFICER ON THIS ISSUE HAS BEEN CONFIRMED BY HIM DOU BTING THE INTENTION OF THE ASSESSEE TO WRITE OFF THE SAID AMOUNT AS IRRECO VERABLE. HE CONTENDED THAT IF AT ALL THE SAID AMOUNT WAS ACTUALLY RECEIVA BLE BY THE ASSESSEE COMPANY, THERE WAS NO REASON WHATSOEVER FOR IT TO F ORGO THE SAID AMOUNT BY WRITING IT OFF AS IRRECOVERABLE IN HIS BOOKS OF ACC OUNT. HE ALSO CONTENDED THAT THE VERY FACT THAT ASSESSEE COMPANY KEPT ON WA ITING FOR MORE THAN 4 YEARS TO RECOVER THE SAID AMOUNT AND FINALLY WRITE OFF THE SAME ONLY AFTER 4 YEARS AS IRRECOVERABLE SHOWS ITS BONA-FIDE. HE SU BMITTED THAT FILM INDUSTRY IS FULL ON UNCERTAINTY AND IF THE FILM IS NOT FINAL LY PRODUCED, NO PRODUCER WILL EITHER RETURN THE ADVANCE OR GIVE A CONFIRMATION TH AT HE WOULD NOT DO SO. HE SUBMITTED THAT FULL DETAILS OF THE CONCERNED PRO DUCERS WERE PLACED ON RECORD BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND THE GENUINENESS OF THE CLAIM OF THE ASSESSEE OF HAVING BECOME THE ADVA NCE PAID TO THEM AS IRRECOVERABLE COULD HAVE BEEN VERIFIED BY THE ASSES SING OFFICER BY MAKING ENQUIRIES WITH THE SAID PARTIES. HE CONTENDED THA T NO SUCH EFFORTS HOWEVER WERE MADE BY THE ASSESSING OFFICER. HE CONTENTED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF IRRECOVERABLE ADVANCE WRITTEN OFF THUS SHOULD BE ALLOWED EITHER AS BAD DEBTS WRITTEN OFF O R ALTERNATIVELY AS A BUSINESS LOSS. IN SUPPORT OF HIS CONTENTIONS THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECISIONS IN THE CASES OF B. D. BHARUCH VS. CIT (65 ITR 403) (SC), CIT VS. F.M. CHINOY & CO. PVT. LTD. (74 ITR 780) (BOM.) AND ACIT VS. WHIRLPOOL OF INDIA LTD.(22 SOT 103). 5. THE LEARNED D.R. ON THE OTHER HAND, SUBMITTED TH AT THE DEDUCTION CLAIMED BY THE ASSESSEE ON ACCOUNT OF IRRECOVERABLE ADVANCE WRITTEN OFF CAN NOT BE ALLOWED AS BAD DEBT WRITTEN OFF U/S.36(1)(VI I) R.W.S. 36(2) AS THE CONDITIONS STIPULATED IN THE SAID PROVISION ARE NOT SATISFIED IN THE CASE OF THE ASSESSEE AS RIGHTLY HELD BY THE ASSESSING OFFICER A S WELL AS BY THE LEARNED CIT(A). AS REGARDS THE ALTERNATIVE CLAIM OF TH E ASSESSEE FOR THE SAID AMOUNT BEING ALLOWED AS BUSINESS LOSS, HE CONTENDED THAT MERE WRITE OFF OF ITA NO.4182/MUM/2007 A.Y.: 2003-2004 5 THE AMOUNT IN QUESTION AS IRRECOVERABLE ADVANCE IS NOT SUFFICIENT TO ALLOW THE SAME AS BUSINESS LOSS. HE CONTENDED THAT ONUS IN THIS REGARD WAS ON THE ASSESSEE TO ESTABLISH THAT THE SAID LOSS HAD AC TUALLY BEEN INCURRED AND IT WAS INCURRED IN THE YEAR UNDER CONSIDERATION. HE CONTENDED THAT THIS ONUS WHICH LIES ON THE ASSESSEE CANNOT BE SHIFTED TO THE DEPARTMENT. HE SUBMITTED THAT NOTHING HAS BEEN BROUGHT ON RECORD B Y THE ASSESSEE TO SHOW THE EFFORTS MADE BY IT TO RECOVER SUCH HUGE AMOUNT AND THE ASSESSEE THUS HAS FAILED TO SUPPORT AND SUBSTANTIATE ITS CLAIM TH AT THE AMOUNT OF ADVANCE IN QUESTION IS IRRECOVERABLE. HE CONTENDED THAT AS PER THE RELEVANT AGREEMENTS WITH THE CONCERNED PRODUCERS, THE AMOUNT OF ADVANCE WAS REFUNDABLE TO THE ASSESSEE ALONG WITH INTEREST IN C ASE OF FAILURE OF THE PRODUCER TO GIVE THE MUSIC RIGHT OF THE FILM TO BE PRODUCED AND IT WAS THEREFORE, FOR THE ASSESSEE TO SHOW THAT SUCH RECOV ERY AS PER THE AGREEMENT WAS NOT POSSIBLE. REFERRING TO THE LIST OF THE FI LMS AND PRODUCERS GIVEN IN THE ASSESSMENT ORDER TO WHICH ADVANCES IN QUESTION WERE PAID BY THE ASSESSEE, THE LEARNED D.R. SUBMITTED THAT MOST OF T HE SAID FILMS HAVE BEEN RELEASED SUBSEQUENTLY. HE ALSO POINTED OUT THAT SOME OF THESE PRODUCERS ARE RENOWNED PRODUCTION HOUSES AND THERE IS NOTHING BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THEY HAVE BECOME BANKRUPT . HE, THEREFORE, STRONGLY SUPPORTED THE IMPUGNED ORDER OF THE LEARNE D CIT(A) AND URGED THAT THE SAME ON THIS ISSUE MAY BE UPHELD. AS REGARDS THE CASE LAWS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE LEARNED D .R. SUBMITTED THAT THE SAME ARE DISTINGUISHABLE ON FACTS AND NONE OF THEM IS APPLICABLE TO THE FACTS OF THE ASSESSEES CASE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE AMOUNT IN QUESTION WRITTEN OFF BY THE ASSESSEE AS IRRECOVERABLE ADVANC E HAS BEEN CLAIMED AS DEDUCTION U/S.36(1)(VII) AS BAD DEBT OR ALTERNATIVE LY U/S.28 AS BUSINESS LOSS. SECTION 36(1)(VII) PROVIDES FOR DEDUCTION IN COMPUT ING THE BUSINESS INCOME OF THE ASSESSEE FOR THE AMOUNT OF BAD DEBT OR PART THEREOF WHICH IS WRITTEN OFF AS IRRECOVERABLE IN THE ACCOUNT OF THE ASSESSEE FOR THE PREVIOUS YEAR SUBJECT TO THE PROVISIONS OF SECTION 36(2). AS PE R THE PROVISION OF SECTION ITA NO.4182/MUM/2007 A.Y.: 2003-2004 6 36(2), NO SUCH DEDUCTION FOR BAD DEBT OR PART THERE OF IS TO BE ALLOWED UNLESS SUCH BAD DEBT OR PART THEREOF HAS BEEN TAKEN INTO A CCOUNT IN COMPUTING THE INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR IN WHIC H THE AMOUNT OF SUCH BAD DEBT OR PART THEREOF IS WRITTEN OFF OR IN ANY E ARLIER PREVIOUS YEAR. IN THE PRESENT CASE, THE AMOUNT CLAIMED BY THE ASSESSEE AS BAD DEBT REPRESENTED ADVANCE PAID BY IT FOR ACQUIRING MUSIC RIGHT OF THE FEATURE FILMS TO BE PRODUCED BY THE CONCERNED PRODUCERS AND THE SAME AD MITTEDLY HAD NOT BEEN TAKEN INTO ACCOUNT IN COMPUTATION OF ITS INCOM E OF THE YEAR UNDER CONSIDERATION OR IN EARLIER PREVIOUS YEAR. THE CO NDITION STIPULATED IN SECTION 36(2) THUS WAS CLEARLY NOT SATISFIED IN THE CASE OF THE ASSESSEE AND AS RIGHTLY HELD BY THE ASSESSING OFFICER AS WELL AS BY THE LEARNED CIT(A), THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDUCTION FOR TH E SAID AMOUNT AS BAD DEBT U.S.36(1)(VII) R.W.S. 36(2). THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF B.D. BHARUCH(SUPRA) CITED BY THE LEARNE D COUNSEL OF THE ASSESSEE IN THIS CONTEXT WAS RENDERED IN THE CONTEXT OF SECT ION 10(2)(XI) OF THE 1922 ACT WHERE THERE WAS NO SUCH CONDITION AS IS NOW STI PULATED TO ALLOW THE DEDUCTION ON ACCOUNT OF BAD DEBT AS PER SECTION 36( 2) OF THE 1961 ACT. 7. AS REGARDS THE ALTERNATIVE CLAIM OF THE ASSESSEE FOR ALLOWING THE DEDUCTION ON ACCOUNT OF AMOUNT IN QUESTION AS A BUS INESS LOSS, WE FIND THAT THE SAID AMOUNT HAVING BEEN PAID BY THE ASSESSEE IN ADVANCE FOR ACQUIRING AUDIO RIGHTS OF THE FILMS WAS ON REVENUE ACCOUNT AS RIGHTLY HELD BY THE LEARNED CIT(A). WE ALSO AGREE WITH THE CONTENTION OF THE LEARNED COUNSEL OF THE ASSESSEE THAT THE SAID AMOUNT WAS PAID AS ADVAN CE BY THE ASSESSEE IN THE NORMAL COURSE OF HIS BUSINESS OF MANUFACTURING OF PRERECORDED CASSETTES BY REPRODUCING MUSIC OF FILMS. THE QUESTION HOWEV ER IS WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTION OF THE LOSS CLAI MED TO INCUR BY IT AS A RESULT OF NON RECOVERY OF THE SAID AMOUNT. IN THIS CONTEXT, WE AGREE WITH THE STAND OF THE REVENUE THAT SUCH DEDUCTION ON ACCOUNT OF BUSINESS LOSS CAN BE ALLOWED TO THE ASSESSEE ONLY IF IT IS ESTABLISHED O N EVIDENCE THAT SUCH LOSS HAS ACTUALLY BEEN INCURRED IN THE YEAR UNDER CONSID ERATION. THE ONUS IN THIS REGARD IS CLEARLY ON THE ASSESSEE AS HELD BY T HE HONBLE SUPREME COURT IN THE CASE OF GLASS MINIATURE INDUSTRIES LTD. VS. CIT (204 ITR 352) AND THE ITA NO.4182/MUM/2007 A.Y.: 2003-2004 7 SAME CANNOT BE SHIFTED TO THE DEPARTMENT. IT IS IM PORTANT TO NOTE HERE THAT AS PER THE AGREEMENTS ENTERED INTO WITH THE CONCERN ED PRODUCER, THE ASSESSEE WAS ENTITLED FOR REFUND OF ADVANCE WITH IN TEREST IN THE CASE OF CONTRACT NOT BEING FULFILLED BY THE PRODUCERS. THE ASSESSEE THUS WAS LEGALLY ENTITLED TO CLAIM THE AMOUNT OF ADVANCE IN QUESTION ALONG WITH INTEREST FROM THE CONCERNED PRODUCERS. IT WAS THUS FOR THE ASSES SEE TO ESTABLISH ON THE EVIDENCE THAT IT COULD NOT RECOVER THE SAID AMOUNT LEGALLY RECEIVABLE TO IT DISPITE ALL THE POSSIBLE EFFORTS MADE IN THIS REGAR D. IT WAS ALSO FOR THE ASSESSEE TO ESTABLISH THAT THE SAID AMOUNT HAD BECO ME IRRECOVERABLE IN THE YEAR UNDER CONSIDERATION SO AS TO CLAIM LOSS ON ACC OUNT OF SUCH NON- RECOVERY IN THAT YEAR. A PERUSAL OF THE RECORDS P LACED BEFORE US, HOWEVER, SHOWS THAT THERE IS NOTHING BROUGHT ON RECORD BY TH E ASSESSEE TO ESTABLISH THIS POSITION BESIDES MAKING ORAL ASSERTIONS AND WR ITING OFF THE AMOUNT IN QUESTION AS IRRECOVERABLE IN THE BOOKS OF ACCOUNTS. AS RIGHTLY HELD BY THE AUTHORITIES BELOW, THE SAME WAS NOT SUFFICIENT TO S UPPORT AND SUBSTANTIATE ITS CLAIM BY THE ASSESSEE FOR ALLOWING THE AMOUNT I N QUESTION AS A BUSINESS LOSS. THE ONUS THAT LAY ON THE ASSESSEE TO CLAIM T HE BUSINESS LOSS THUS WAS NOT SATISFACTORY DISCHARGED BY IT AND THIS BEING SO , WE ARE OF THE VIEW THAT THE CLAIM OF THE ASSESSEE FOR BUSINESS LOSS WAS RIG HTLY DISALLOWED BY THE ASSESSING OFFICER. AS REGARDS THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF F.M. CHINOY (SUPRA) CITED BY THE ASSESS EE, THE FACTS INVOLVED THEREIN WERE ALTOGETHER DIFFERENT IN AS MUCH AS THE ONUS THAT LAY ON THE ASSESSEE TO ESTABLISH THAT THE LOSS HAD ACTUALLY BE EN INCURRED IN THE YEAR UNDER CONSIDERATION WAS DULY DISCHARGED BY IT ON EV IDENCE. SIMILAR IS THE POSITION IN THE CASE OF WHIRLPOOL INDIA LTD.(SUPRA) CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE WHEREIN THE LOSS WAS FOUND TO BE INCURRED BY THE ASSESSEE IN THE COURSE OF HIS BUSINESS DURING THE Y EAR UNDER CONSIDERATION. WE, THEREFORE, FIND NO INFIRMITY IN THE IMPUGNED OR DER OF THE LEARNED CIT(A) CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING O FFICER ON THIS ISSUE AND UPHOLDING THE SAME, WE DISMISS THIS APPEAL FILED BY THE ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ITA NO.4182/MUM/2007 A.Y.: 2003-2004 8 ORDER PRONOUNCED ON THIS 30 TH DAY OF MARCH, 2010. SD/- (N.V. VASUDEVAN) (JUDICAIL MEMBER) SD/- (P.M. JAGTAP) (ACCOUNTANT MEMBER) MUMBAI, DATED 30 TH MARCH, 2010. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- VIII, MUM BAI 4. COMMISSIONER OF INCOME TAX, CITY- VIII, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI ITA NO.4182/MUM/2007 A.Y.: 2003-2004 9 DATE INITIALS 1. DRAFT DICTATED ON 23-03-10 PS 2. DRAFT PLACED BEFORE AUTHOR 24-03-10 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER