M/s. AMITABH BACHAN CORPORATION LTD. (NOW AB CORP. LTD.), MUMBAI V. DCIT CEN. CIR. 13, MUMBAI

ITA 7256/MUM/2004

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8074 (ITAT-MUMBAI)
• Duration Of Justice: 10 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 30-09-2014
• Assessment Year: 1997-1998
• Appeal Filed On: 08-10-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK A PERAMPURNA
• Assessee Lawyers: HIRO RAI SHRI DILIP J THAKKAR
• Keywords: Unexplained cash credit; Bogus Share capital; Depreciation; Commercial expediency
• Section: 80G; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 7256/MUM/2004 ASSESSMENT YEAR: 1997-98 M/S. AMITABH BACHCHAN CORPORATION LTD. NOW KNOWN AS AB CORP. LTD. JANAK 13 TH N.S. ROAD JUHU, MUMBAI- 400 049 VS. DY. CIT, CENTRAL CIR.-13 MUMBAI (APPELLANT) (RESPONDENT) ITA NO. 7270/MUM/2004 ASSESSMENT YEAR: 1997-98 DY. CIT, CENTRAL CIR.-13 MUMBAI VS. M/S. AMITABH BACHCHAN CORPORATION LTD. NOW KNOWN AS AB CORP. LTD. JANAK 13 TH N.S. ROAD JUHU, MUMBAI- 400 049 (APPELLANT) (RESPONDENT) ITA NO. 5597/MUM/2004 ASSESSMENT YEAR: 1998-99 M/S. AMITABH BACHCHAN CORPORATION LTD. NOW KNOWN AS AB CORP. LTD. JANAK 13 TH N.S. ROAD JUHU, MUMBAI- 400 049 VS. DY. CIT, CENTRAL CIR.-13 MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HIRO RAI, SHRI DILIP J. THAKKAR & SHRI RAJESH P. SHAH REVENUE BY : SHRI VIVEK A. PERAMPURNA DATE OF HEARING : 30.09.2014 DATE OF PRONOUNCEMENT : 17.10.2014 ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 2 O R D E R PER N.K. BILLAIYA, AM: ASSESSEES APPEAL ITA NO. 7256/M/2004 A.Y.1997-98 THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD.CIT(A) CENTRAL-7, MUMBAI DATED 26.07.2004 . THE ASSESSEE HAS RAISED SEVEN SUBSTANTIVE GROUNDS OF APPEAL. GROUND NO. 1 R EAD AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3.28 CRORES ON ACCOUNT OF ALLEGED SALE OF TICKETS FROM MISS WORLD PAGEANT AT BANGALORE WITHOUT ANY EVIDENCE. HE ERRED IN RELYING UPON NEWSPAPER REPORT S AND BUDGETED FIGURES, WHICH CANNOT BE CONSTRUED OR TAKEN AS A BASE FOR AD DITION & MOREOVER IN CONSIDERING THE FAX MESSAGE AS PART OF BOOKS OF ACC OUNT. IN LAW AND ON FACTS THE REASONS ASSIGNED BY HIM FOR DOING SO ARE WRONG AND CONTRARY TO THE FACTS OF THE CASE AND PROVISIONS OF INCOME TAX ACT, 1961, AND RULES MADE THERE UNDER. 2. THE FACTS RELATING TO THIS GROUND IS THAT THE AS SESSEE COMPANY IS ENGAGED IN PRODUCING FILMS, SERIALS AND OTHER ENTERTAINMENT PR OGRAMS. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS ALSO ORGANIZED MISS WORLD PAGEANT AT BANGALORE. THE ASSESSEE HAS SHOWN INCOME FROM SALE OF TICKETS OF R S.2.72 CRORES. THIS EVENT WAS STAGED AT KARNATAKA STATE CRICKET ASSOCIATION STADI UM HAVING A SITTING CAPACITY OF 25 THOUSANDS. ACCORDINGLY THE ASSESSEE GOT PRINTED 25 THOUSANDS TICKETS IN THE FOLLOWING CATEGORY. CATEGORY NO. OF TICKETS 1. DIAMOND 2,250 2. GOLD 2,250 3. SILVER 2,500 4. ECO-A&B 18,000 AS PER THE DETAILS GIVEN BY THE COMPANY IT HAS SOLD THE TICKETS AS FOLLOWS: CLASS RATE NO. OF TICKETS SOLD 1. DIAMOND RS.25,000 429 2. GOLD RS.14,900 190 3. SILVER RS.9,900 419 4. ECONOMIC-A RS.2,900 577 5. ECONOMIC-B RS.1,900 3,092 6. ECONOMIC-KSCA RS.1,500 1,353 6,060 ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 3 IT WAS OBSERVED BY THE AO THAT AS PER MEDIA REPORTS ABOUT 18 THOUSANDS TO 20 THOUSANDS PERSONS ATTENDED THE MAIN FUNCTION. THE A O FURTHER NOTICED THAT AS PER THE NEWS ITEM PUBLISHED IN TIMES OF INDIA ON 11.11. 1996 THE COMPANY HAS STATED THAT THE TICKETS WORTH RS.5 CRORES WERE SOLD. THE A O FURTHER DREW SUPPORT FROM A FAX MESSAGE SENT TO BANGALORE FORM ABCL MUMBAI OFFICE W HICH INDICATES SALE OF TICKETS TILL 20.11.1669 AT RS. 6 CRORES. THE AO HAS ANNEXED THIS FAX MESSAGE AS PART OF THE ASSESSMENT ORDER. THE ASSESSEE WAS ASKED TO EXPLAIN THE SALE. ON RECEIVING NO REPLY THE AO PROCEEDED BY TAKING INCOME FROM SALE OF TICK ET AS SIX CRORES. AS THE ASSESSEE HAS ALREADY DISCLOSED 2.72 CRORES THE AO MADE AN AD DITION OF RS.3.28 CRORES. THE ASSESSEE STRONGLY AGITATED THIS ISSUE BEFORE THE LD .CIT(A) AND THE LD.CIT(A) HAS CONSIDERED THE GRIEVANCE OF THE ASSESSEE VIDE PARA 13 OF HIS ORDER. IT WAS SUBMITTED BEFORE THE LD.CIT(A) THAT THERE WAS NO CONCLUSIVE E VIDENCE BROUGHT ON RECORD TO PROVE THE SUPPRESSION OF SALE OF TICKETS. IT WAS FU RTHER ARGUED THAT THE AMOUNT CANNOT BE ADDED ON THE BASIS OF A PRESS RELEASE. IT WAS EXPLAINED THAT THE FAX MESSAGE RELIED UPON BY THE AO CONTAINS ONLY BUDGET FIGURE OF INCOME AND EXPENDITURE. 3. AFTER CONSIDERING THE FACTS AND SUBMISSIONS THE LD.CIT(A) CONFIRMED THE ADDITION MADE ON THE BASIS OF MEDIA REPORT, NEWS RE LEASE GIVEN BY THE ASSESSEE AND THE FAX MESSAGE. 4. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. COU NSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE FIRST APPELLATE AUTHORITY. THE DR STRONGLY SUPPORTED THE FINDINGS OF THE AO AS WELL A S LD.CIT(A). 5. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND ALSO THE FAX MESSAGE RELIED UPON BY THE REVENUE AUTHORITIES. THE FAX MESSAGE CONTAINS CERTAIN FIGURES WHICH ARE ROUND FIGURES IN TWO DIGI TS. THEREFORE, IT CANNOT BE SAID THAT THE FIGURES ARE IN LACS OR CRORES OR IN THOUSA NDS. THE REVENUE AUTHORITIES HAVE PICKUP ONE FIGURE WHICH IS 600.00 AND ASSUME IT TO BE IN LACS AND ASSUMING THE SAME AS 600 LACS OR SIX CRORES. IN THE SAME FAX MES SAGE INCOME FIGURE IS SHOWN AT 1120.00 AND EXPENDITURE AS 937.32 HOWEVER, NO ADVE RSE INFERENCE HAS BEEN DRAWN SO FAR AS EXPENDITURE FIGURES ARE CONCERNED. THE EN TIRE ADDITION HAS BEEN MADE ON THE BASIS OF PRESUMPTION AND CONJECTURES. FURTHER T HE ADDITION IS SUPPORTED BY ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 4 SOME MEDIA REPORTS, THERE IS NOTHING ON RECORD TO S UBSTANTIATE THE ADDITION BY ANY INDEPENDENT ENQUIRY. THERE IS NOTHING ON RECORD TO SHOW THAT THE AO HAS MADE DIRECT ENQUIRY FROM THE TICKET SELLING AGENCIES, TH E NAMES OF WHOM ARE ALSO MENTIONED IN THE FAX MESSAGE. THE ENTIRE ADDITION B EING MADE ON PRESUMPTION AND SURMISES WITHOUT ANY EVIDENCE TO DEMONSTRATE THE IM PUGNED ADDITION, SUCH ADDITIONS CANNOT BE SUSTAINED WE THEREFORE, SET ASI DE THE FINDINGS OF THE LD.CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION OF RS.3.28 CRORES. GROUND NO. 1 IS ALLOWED . 6. GROUND NO. 2 IS AS FOLLOWS:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED- IN REMANDING BACK TO THE A.O., ON HIS SPECIFIC REQUEST, THE ADDITION OF RS.20,16,0001-, AS ALLEGED RECEIPT FROM ADVERTISEMENT WITH DIRECTIONS TO VERIFY (I) THE EXISTENCE OF A BILATER AL AGREEMENT &(II) TO VERIFY INDEPENDENTLY WITH STAR T.V. THE ISSUE OF SHARING O F ADVERTISEMENT PROCEEDS RELATING TO MISS WORLD SHOW OF 1996, ALBEIT THE A.O . HAD NO EVIDENCE TO SUPPORT THE ADDITION AT THE ASSESSMENT STAGE, NOR E VEN AT THE TIME WHEN THE MATTER WAS REFERRED BACK TO HIM ON REMAND DURING AP PELLATE PROCEEDINGS, NOR WAS HE ABLE TO RELATE THIS ADDITION TO THE EVIDENCE COLLECTED DURING ACTION U/S.133A(5), THUS GIVING A FRESH OPPORTUNITY TO THE A.O. TO LEAD EVIDENCE TO SUBSTANTIATE THIS ADDITION, WHICH IS BEYOND JURISDI CTION AND AGAINST THE PROVISIONS OF LAW. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH STAR TV FOR BOOK ING OF ADVERTISEMENT AND COMMERCIAL SPOTS ON THE STAR TV NETWORK. THE AO FUR THER OBSERVED THAT THE TOTAL BOOKING OF THE COMMERCIAL SPOTS WAS US$ 56 THOUSAND S OUT OF WHICH ABCL HAS BOOKED ADVERTISEMENT OF US$ 16971 WHILE STAR TV BOO KED US$ 38609. THE TOTAL COMMERCIAL SPOT BOOKING WAS AT RS.20,16,000/-. ACCO RDING TO THE AO THIS WAS NOT DISCLOSED BY THE ASSESSEE, HE THEREFORE, ADDED 20,1 6,000/- AS INCOME OF THE ASSESSEE. 7. BEFORE THE LD.CIT(A) IT WAS STRONGLY CONTENDED T HAT THE ASSESSEE NEVER ENTERED INTO AN AGREEMENT WITH STAR TV FOR BOOKING ADVERTISEMENT AND COMMERCIAL SPOT THEREFORE, THERE IS NO QUESTION OF EARNING ON THIS ACCOUNT. IT WAS FURTHER CLAIMED THAT IF THE AO WAS HAVING ANY SUCH AGREEMEN T WITH HIM THEN HE SHOULD HAVE PROVIDED COPY OF SUCH AGREEMENT. IT WAS EXPLAINED T HAT ABCL HAD ACQUIRED ONLY RIGHT FOR HOLDING MISS WORLD PAGEANT AND NO OTHER R IGHT. THE LD.CIT(A) CALLED FOR ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 5 REMAND REPORT FROM THE AO. THE AO REQUESTED THE LD. CIT(A) TO REMAND THE MATTER BACK TO HIM SO THAT HE CAN MAKE NECESSARY ENQUIRES. THE LD.CIT(A) CONSIDERED THE REQUEST OF THE AO AND REMANDED THE MATTER BACK TO H IM WITH THE DIRECTION (1) TO VERIFY THE EXISTENCE OF A BILATERAL AGREEMEN T (2) TO VERIFY INDEPENDENTLY WITH STAR TV THE ISSUE OF SHARING OF THE ADVERTISEMENT PROCEEDS RELATING TO MISS WORLD 1996. THE LD.CIT(A) FURTHER MENTIONED THAT IF THE AO IS N OT ABLE TO BRING ANY EVIDENCE ON RECORD WITHIN 12 WEEKS THE ADDITION WILL STAND DELE TED. 8. BEFORE US THE COUNSEL FOR THE ASSESSEE STATED TH AT EVEN AFTER A LAPSE OF 10 YEARS FROM THE DIRECTIONS OF THE LD.CIT(A) THE AO H AS NOT BROUGHT ANYTHING ON RECORD AND THEREFORE THE ADDITION SHOULD BE DELETED AS PER THE FINDINGS OF THE LD.CIT(A). 9. THE DR COULD NOT BRING ANY DEMONSTRATIVE EVIDENC E TO SHOW THAT ANY VERIFICATION WAS DONE BY THE AO, AS PER THE DIRECTI ON OF THE LD.CIT(A). IN OUR CONSIDERED OPINION THE ADDITION STOOD DELETED BY TH E DIRECTIONS OF THE LD.CIT(A) THEREFORE THE ASSESSEES GRIEVANCE BECOMES OTIOSE. 10. GROUND NO. 3 IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED IT(A) ERRED IN REMANDING BACK TO THE A.O., ON HIS S PECIFIC REQUEST, THE ADDITION OF RS.65 LAKHS MADE AS UNDISCLOSED INCOME FROM CHARITY BALL, WITH DIRECTION TO (I) TRACE THE STATEMENT OF SHRI MANJUN ATH HEGDE AND EXAMINE ITS CONTENTS & (II) TO EXAMINE ANY OTHER ADVERSE INFERE NCE, IF ANY, ON THIS ISSUE, E EN THOUGH THE ALLEGED STATEMENT OF SHRI MANJUNATH H EGDE, ON WHICH THE S ID ADDITION WAS BASED, COULD NOT BE PROVIDED BY THE LE ARNED A.O. TO THE APPELLANT EVEN AT REMAND REPORT STAGE, THUS GIVING A FRESH OPPORTUNITY TO THE AO TO LEAD EVIDENCE TO SUBSTANTIATE THIS DISALLOWAN CE, WHICH IS BEYOND JURISDICTION AND AGAINST THE PROVISIONS OF LAW. THE AO NOTICED THAT IN THE MISS WORLD PAGEANT THERE WAS AN EVENT CALLED CHARITY BALL WHICH WAS ARRANGED BY THE ASSESSEE. DRAWING S UPPORT FROM THE PRESS REPORT, THERE WERE 50 TABLES FOR THIS CHARITY DINNER AND EA CH TABLE WAS SOLD FOR 1,50,000/-. TOTAL RECEIPT FROM THE SALE OF 50 TABLES COMES TO R S.75 LACS. AFTER DEDUCTING THE CATERING EXPENDITURE OF RS.10 LACS, THE AO MADE AN ADDITION OF RS.65 LACS AS UNDISCLOSED RECEIPT. ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 6 11. BEFORE THE LD.CIT(A) IT WAS ARGUED THAT THE ADD ITION HAS BEEN MADE MERELY ON THE BASIS OF THE PRESS REPORT WITHOUT ANY CONCLU SIVE EVIDENCE. IT WAS FURTHER MENTIONED THAT THE AO HAS RELIED UPON THE STATEMENT OF MANJUNATH HEGDE COPY OF WHICH WAS NEVER PROVIDED TO THE ASSESSEE, NOR IT HA S BEEN ALLOWED TO CROSS EXAMINE. THE STATEMENT WAS RECORDED BEHIND THE BACK OF THE A SSESSEE. THE LD.CIT(A) CALLED FOR A REMAND REPORT. THE LD.CIT(A) OBSERVED THAT EV EN DURING THE REMAND PROCEEDINGS THE AO DID NOT PROVIDE THE STATEMENT OF MANJUNATH HEGDE. ON THE CONTRARY THE AO REQUESTED THAT THE MATTER MAY BE RE MANDED BACK TO HIM FOR VERIFICATION. ACCEPTING THE REQUEST OF THE AO, THE LD.CIT(A) REMANDED THE MATTER BACK TO THE FILE OF THE AO WITH THE DIRECTION:- (I) TO PRESS THE STATEMENT OF SHRI HEGDE AND EXAMIN E ITS CONTENTS (II) TO EXAMINE ANY OTHER ADVERSE INFERENCE ON THE ISSUE THE LD.CIT(A) FURTHER OBSERVED THAT IF THE AO DOES NOT COMPLY WITH THE DIRECTIONS WITHIN 12 WEEKS FROM THE RECEIPT OF HIS ORDER THE A DDITION WILL STAND DELETED. 12. BEFORE US THE COUNSEL FOR THE ASSESSEE ONCE AGA IN STATED THAT EVEN AFTER A GAP OF 10 YEARS THE AO HAS NOT BROUGHT ANYTHING ON RECORD TO SUBSTANTIATE THE ADDITION. THE DR FAIRLY CONCEDED TO THIS. 13. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUT HORITIES BELOW. THE DIRECTIONS OF THE LD.CIT(A) ARE VERY SPECIFIC AND THERE IS A S PECIFIC MENTION THAT IF THE DIRECTIONS ARE NOT COMPLIED WITH, THE ADDITION WOUL D STAND DELETED. THEREFORE, SINCE THE ADDITION HAS STOOD DELETED NOW, THE GRIEVANCE O F THE ASSESSEE BECOMES OTIOSE. 14. GROUND NO. 4 READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED IT(A) ERRED IN REMANDING BACK TO THE A.O., ON HIS S PECIFIC REQUEST, THE ADDITION OF RS.24,79,1401-, (HOWEVER THE ADDITION M ADE BY LEARNED A.O. WAS OF RS.99,16,5601- & GROUND OF APPEAL NO.9 IN FORN13 5 ALSO REFERRED TO THAT AMOUNT) AS ALLEGED SHARE OF RECEIPT FROM SALE OF T. V. RIGHTS OF MISS WORLD PAGEANT TO SOUTH AFRICAN T.V. AS PER AGREEMENT BETW EEN MISS WORLD JERSY LTD. & GGI, TO VERIFY (I) THE EXISTENCE OF A RELEVANT AGREEMENT, AND ALSO (II) TO VERIFY INDEPENDENTLY WITH THE CONCERNED AGE NCIES ON THE ISSUE & BRING ON RECORD ANY OTHER EVIDENCE ON THE POINT, WHEN THE AO COULD NOT SHOW ANYTHING ON RECORD, EVEN THOUGH SPECIFICALLY ASKED ON REMAND AT APPELLATE STAGE, TO SUGGEST THAT THE APPELLANT WAS A SIGNATOR Y TO SUCH AN AGREEMENT OR ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 7 THAT IT HAD AGREED TO RECEIVE THE AFORESAID AMOUNT, ESPECIALLY WHEN IT WAS DENIED BY THE APPELLANT, THUS GIVING A FRESH OPPORTUNITY TO THE AO TO LEAD EVIDENCE TO SUB STANTIATE THIS DISALLOWANCE WHICH IS BEYOND JURISDICTION AND AGAINST THE PROVIS IONS OF LAW. THE AO TAKING A LEAF OUT OF THE FAX MESSAGE FOUND D URING THE COURSE OF THE SURVEY OPERATIONS OBSERVED THAT THE ASSESSEE HAS SOLD TV R IGHTS OF MISS WORLD PAGEANT TO SOUTH AFRICAN TV FOR US$ 1,10,000 PLUS SERVICES REC EIVABLE IN KIND. THE FAX MESSAGE ALSO SHOW THAT TV RIGHTS WERE SOLD TO MAJOR COUNTRI ES LIKE EUROPE, NORTH AMERICA. COPY OF THIS FAX MESSAGE IS ANNEXED AS PART OF THE ASSESSMENT ORDER. THE SALE OF TV RIGHTS WERE SHARED BETWEEN GGI AND ABCL IN THE RATI ON OF 20:80. ACCORDING TO THE AO THE ASSESSEE HAS NOT DISCLOSED ITS SHARE WHICH C OMES TO RS.99,16,560/- AND MADE THE ADDITION AS UNDISCLOSED RECEIPT. THE LD.CI T(A) HAS CONSIDERED THIS GRIEVANCE OF THE ASSESSEE VIDE PARA 17 OF HIS ORDER THOUGH HE HAS WRONGLY CONSTRUED THAT THE ADDITION WAS OF RS.24,79,140/- INSTEAD OF 99,16,560/-. IT WAS EXPLAINED BEFORE THE LD.CIT(A) THAT THE AGREEMENT REFERRED BY THE AO WAS BETWEEN MISS WORLD JERSY LTD. AND GGI. ASSESSEE WAS NOT A PARTY TO THE SAID AGREEMENT THEREFORE THERE IS NO QUESTION OF RECEIVING ANY INCOME OUT OF SUCH AGREEMENT. THE LD.CIT(A) CALLED FOR EXPLANATION FROM THE AO, THE AO REQUESTE D THE LD.CIT(A) TO REMAND THE MATTER BACK TO HIM FOR VERIFICATION. THE LD.CIT(A) ACCORDINGLY REMANDED THE MATTER TO THE FILES OF THE AO WITH THE DIRECTION:- (I) TO VERIFY THE EXISTENCE OF RELEVANT AGREEMENT (II) TO VERIFY INDEPENDENTLY WITH THE CONCERNED AGENCIES ON THE ISSUE AND BRING ON RECORD ANY OTHER EVIDENCE. THE LD.CIT(A) FURTHER MENTIONED THAT IF THE AO IS N OT ABLE TO COMPLY WITH THE DIRECTIONS THE ADDITIONS WOULD STAND DELETED. 15. BEFORE US THE COUNSEL FOR THE ASSESSEE STATED T HAT THE AO HAS NOT BROUGHT ANY DEMONSTRATIVES MATERIAL EVIDENCE ON RECORD TO C OMPLY WITH THE DIRECTIONS OF THE LD.CIT(A). DR FAIRLY CONCEDED TO THIS. 16. WE HAVE CAREFULLY PERUSED THE ASSESSMENT ORDER AND THE DIRECTIONS OF THE LD.CIT(A). EVEN AFTER TEN YEARS FROM THE DATE OF TH E LD.CIT(A)S ORDER THERE IS NOTHING ON RECORD NOR ANY MATERIAL EVIDENCE HAS BEE N BROUGHT ON RECORD TO SUBSTANTIATE THE ADDITION. THE LD.CIT(A) HAS VERY S PECIFICALLY MENTIONED THAT THE ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 8 ADDITIONS WOULD STAND DELETED IF NO ENQUIRY IS MADE WITHIN 12 WEEKS OF HIS ORDER. THE ADDITION NOW STANDS DELETED, THE GRIEVANCE OF T HE ASSESSEE BECOMES OTIOSE. 17. GROUND NO. 5 READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.62 LA KHS AS ALLEGED INTEREST ACCRUED TO THE APPELLANT ON MERCANTILE BASIS ON LOA N OF RS.3.1 0 CRORES GIVEN TO M/S. FRIENDS INDIA, PROPRIETARY CONCERN OF SHRI JHAMU SUGANDH, NOT APPRECIATING THAT LETTER OF APPELLANT SHOWING INTEN TION TO CHARGE INTEREST WAS NOT BINDING .ON M/S. FRIENDS INDIA, WHO HAS NOT PAI D A SINGLE PAISA, AND THAT THERE WAS NO ENFORCEABLE BILATERAL AGREEMENT TO THA T EFFECT, AND REASONS ASSIGNED BY HIM FOR DOING SO ARE CONTRARY TO THE FA CTS OF THE CASE AND PROVISIONS OF INCOME TAX ACT, 1961, AND RULES MADE THERE UNDER. THE AO NOTICED THAT THE ASSESSEE HAS GIVEN A LOAN O F RS.3.10 CRORE TO M/S. FRIENDS INDIA WHICH IS A PROPRIETARY CONCERN OF SHRI JHAMU SUGANDH. THE AO FURTHER OBSERVED THAT JHAMU SUGANDH HAS CLAIMED AN INTEREST PAYMENT OF RS.62 LACS AS EXPENDITURE. IN THE CASE OF JHAMU SUGANDH HE PRODUC ED A LETTER WHEREIN IT WAS MENTIONED THAT THE LOAN WAS GIVEN @ 20% INTEREST. S INCE THE ASSESSEE HAS NOT SHOWN THIS INTEREST AS ITS INCOME THE AO ADDED RS.6 2 LACS AS INTEREST TO THE INCOME OF THE ASSESSEE. THE LD.CIT(A) HAS CONSIDERED THIS GRIEVANCE VIDE PARA 19 OF HIS ORDER AND AT PARA 19.2 OBSERVED THAT THAT JHAMU SUG ANDH WAS OBLIGED TO PAY THE SAID INTEREST WHICH IS SUPPORTED BY THE LETTER WHIC H WAS KIND OF AGREEMENT BETWEEN THE ASSESSEE AND JHAMU SUGANDH. THE LD.CIT(A) WAS C ONVINCED THAT THERE WAS A TACIT AGREEMENT AND THE ASSESSEE OUGHT TO HAVE SHOW N THE INTEREST INCOME AND CONFIRMED THE FINDINGS OF THE AO. AGGRIEVED BY THIS THE ASSESSEE IS BEFORE US. 18. BEFORE US THE COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE LETTER OF ABCL WRITTEN TO JHAMU SUGANDH WHICH HAS BEEN RELIED UPON BY THE REVENUE AUTHORITIES. IT IS THE SAY OF THE COUNSEL THAT A SU M OF RS.310 LACS WERE GIVEN FOR ACQUIRING RIGHTS FOR THE FORTHCOMING HINDI FEATURE FILMS. THE ENTIRE BUYING WAS TO BE COMPLETED BEFORE 31.03.1996 OTHERWISE JHAMU SUGANDH WOULD PAY INTEREST @ 20% BY 31.03.1996. THE COUNSEL STATED THAT THE THERE IS NO QUESTION OF TAXING INTEREST INCOME DURING THE YEAR UNDER CONSIDERATION. THE DR STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 9 19. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUT HORITIES BELOW AND THE RELEVANT LETTER WHICH IS PLACED AT PAGE 72 OF THE P APER BOOK. A PERUSAL OF THE SAID LETTER CLEARLY SHOW THAT RS.310 LACS WERE PAID ON V ARIOUS DATES FOR THE PURCHASE OF RIGHTS OF HINDI FEATURE FILMS. IT IS ALSO VERY SPEC IFICALLY MENTIONED THAT THE ENTIRE TRANSACTION HAS TO BE COMPLETED BEFORE 31.03.1996 O THERWISE INTEREST WOULD BE CHARGED @ 20% ON 31.03.1996. ASSUMING THAT THERE WA S SOME INTEREST ELEMENT INVOLVED EVEN THEN IT PERTAIN TO YEAR ENDING 31.03. 1996 RELEVANT TO ASSESSMENT YEAR 1996-97 HOWEVER, WE ARE CONSIDERING THE ASSESSMENT YEAR 1997-98. THEREFORE, WE DO NOT FIND ANY REASON/LOGIC IN MAKING IMPUGNED ADD ITION DURING THE YEAR UNDER CONSIDERATION. WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE AO TO DELETED THE ADDITION OF RS. 62 LACS. GROUND NO. 5 IS ALLOWED. 20. GROUND NOS. 6 & 7 READ AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED. IN CONFIRMING ADDITION AS PREVIOUS YE AR'S EXPENSES, OF RS. 54,64,372/-, THOUGH THE SAME GOT CRYSTALLIZED DURIN G THE YEAR UNDER CONSIDERATION AND THE REASONS ASSIGNED BY HIM FOR D OING SO ARE CONTRARY TO THE FACTS OF THE CASE AND PROVISIONS OF INCOME TAX ACT, 1961, AND RULES MADE THERE UNDER. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING ADDITION OF RS. 9,93,530 1- AS PREVIOUS YEAR'S MARKETING COMMISSION, THOUGH THE SAME GOT CRYSTALLI ZED DURING THE YEAR UNDER CONSIDERATION AND THE REASONS ASSIGNED BY HIM FOR DOING SO ARE CONTRARY TO THE FACTS OF THE CASE AND PROVISIONS OF INCOME TAX ACT, 1961, AND RULES MADE THERE UNDER. THE AO HAS DISALLOWED THESE EXPENDITURES TREATING T HEM AS PRIOR PERIOD EXPENDITURE. THE LD.CIT(A) CONFIRMED THESE ADDITIONS. 21. BEFORE US COUNSEL FOR THE ASSESSEE STATED THAT THE LIABILITY HAS CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION, THEREFORE, THE EXPENDITURE DESERVES TO BE ALLOWED. THE COUNSEL DREW OUR ATTENTION TO THE RELE VANT EVIDENCES PLACED IN THE PAPER BOOK. THE DR SUPPORTING FINDINGS OF THE LOWER AUTHORITIES STATED THAT THE EXPENDITURES PERTAIN TO EARLIER YEAR AS PER THE DOC UMENTARY EVIDENCES REFERRED TO BY THE COUNSEL, THEREFORE CANNOT BE ALLOWED DURING THE YEAR UNDER CONSIDERATION. ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 10 22. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUT HORITIES BELOW AND THE RELEVANT DOCUMENTARY EVIDENCES BROUGHT ON RECORD AN D PLACED AT PAGES 201 TO 219 AND PAGES 220 AND 221 OF THE PAPER BOOK. A PERUSAL OF THESE DOCUMENTARY EVIDENCES SHOW THAT THE LIABILITY HAS CRYSTALLIZED DURING THE YEAR UNDER CONSIDERATION, THEREFORE, DESERVE TO BE ALLOWED DURING THE YEAR IT SELF. 23. WE SET ASIDE THE FINDING OF THE LD.CIT(A) AND DIRECT THE AO TO DELETE THE ADDITION OF RS.54,61,372/- AND 9,93,530/-. GROUND NO. 6 AND 7 ARE ALLOWED . 24. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. REVENUES APPEAL ITA NO. 7270/M/2004 A.Y.1997-98 25. GROUND NO. 1 READ AS UNDER:- 'DELETING THE DISALLOWANCE OF RS 3,47,637/- OUT OF TOTAL CLAIM OF DEPRECIATION WITHOUT APPRECIATING THAT THE DISALLOWANCE WAS MADE FOR FAILURE OF THE ASSESSEE TO PRODUCE BILLS AND VOUCHERS FOR ACQUISIT ION OF THE ASSET AND THE EVIDENCE FOR ITS BUSINESS USE'. THE AO NOTICED THAT THE ASSESSEE HAS CLAIMED DEPREC IATION OF RS.3,47,634/- THE AO OBSERVED THAT DETAILS OF THE ASSETS WERE NOT GIVEN BY THE ASSESSEE, HE ACCORDINGLY DISALLOWED THE CLAIM OF DEPRECIATION ON THE ASSETS FOR WHICH COPIES OF BILLS WERE NOT GIVEN. BEFORE THE LD.CIT(A) THE ASSESSEE SUBMITTED COPIES OF ALL THE BILLS OF THE ASSETS PURCHASED DURING THE YEAR ON WHICH THE DEPRE CIATION WAS CLAIMED. THE LD.CIT(A) REFERRED THE MATTER TO THE AO. THE AO REF USED TO VERIFY THE GENUINENESS OF THE COPIES OF THE PURCHASE BILLS. THE AO FURTHER OBSERVED THAT ASSETS WERE HYPOTHECATED TO M/S. CEAT FINANCE SERVICES. ACCORDI NG TO THE AO THE EXPENDITURE SHOULD HAVE BEEN DEBITED AS RENT. SINCE THE ASSESSE E WAS NOT THE OWNER OF THE ASSETS, AO WAS OF THE OPINION THAT THE DEPRECIATION CANNOT BE ALLOWED. 26. AFTER CONSIDERING THE FACTS AND COPIES OF THE B ILLS AND ALSO THE REMAND REPORT OF THE AO THE LD.CIT(A) OBSERVED THAT THE ASSESSEE HAS PURCHASED THE ASSETS BY AVAILING OUTSIDE FINANCIAL ASSISTANCE AND THE ASSET S UNDER QUESTION WERE HYPOTHECATED TO THE FINANCERS. SINCE THE ASSESSEE C ONTINUES TO BE THE OWNER OF THE ASSETS HENCE ENTITLED FOR DEPRECIATION ON THE SAME. ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 11 27. SINCE THE LD.CIT(A) HAS APPRECIATED THE FACTS C ORRECTLY WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD.CIT (A). GROUND NO. 1 IS DISMISSED. 28. GROUND NO. 2 READ AS UNDER:- 'DELETING THE ADDITION OF RS 7,00,0001- ON ACCOUNT OF UNEXPLAINED SHARE CAPITAL WITHOUT APPRECIATING THAT THE ASSESSEE FAIL ED TO PROVE THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE SHARE HOLD ERS'. THE AO NOTICED THAT THE ASSESSEE HAS INTRODUCED SHA RE CAPITAL OF RS.5,56,00,000/-. ONE OF THE SHARE HOLDER WAS GLOBAL SHIPPING AGENCY. THE ASSESSEE WAS ASKED TO FILE THE DETAILS. ON RECEIVING NO DETAIL THE AO ADDED TH E SUM OF RS. 7 LAC SHOWN IN THE NAME OF GLOBAL SHIPPING AGENCY, AS UNEXPLAINED CASH CREDIT. 29. BEFORE THE LD.CIT(A) IT WAS EXPLAINED THAT THER E WAS AN APPLICATION OF ACQUISITION OF 70,000 EQUITY SHARES OF RS.10 EACH, THE SAME WAS RECEIVED BY CHEQUE NO. 178695 DATED 18.05.1996 DRAWN ON GRINDLAYS BANK . SHARES WERE SUBSEQUENTLY ALLOTTED TO MS. SURLI GOYAL. THE ASSESSEE FILED COP Y OF THE APPLICATION FORM ALONG WITH OTHER EVIDENCES. THE LD.CIT(A) REFERRED THE MATTER TO THE AO. THE LD.CIT(A) OBSERVED THAT THE AO WAS NOT INCLINED TO CONSIDER T HE MATTER AFRESH. THE AO HAVING REFUSED THE REQUEST OR AT LEAST NOT HAVING COMPLIED WITH THE REQUEST THE ASSESSEE CANNOT BE PENALIZED FOR THE SAME. LD.CIT(A) DELETED THE ADDITION. 30. WE FIND THAT LD.CIT(A) HAD GIVEN PROPER OPPORTU NITY TO THE AO TO CONSIDER AND VERIFY THE EVIDENCES FILED BY THE ASSESSEE. HAV ING FAILED TO DISCHARGE HIS DUTIES, THE AO GROSSLY ERRED IN NOT COMPLYING WITH THE DIRE CTIONS OF THE LD.CIT(A). THE LD.CIT(A) HAS RIGHTLY DELETED THE ADDITIONS AND NO INTERFERENCE IS CALLED FOR. GROUND NO. 2 IS DISMISSED. 31. GROUND NOS. 3, 5 & 6 READ AS UNDER:- 'REMANDING THE ISSUE AND DIRECTING THE AO TO ASCERT AIN THE FACTS WITHIN 12 WEEKS. REGARDING ADDITION OF RS 20,16,0001- ON ACCO UNT OF ADVERTISEMENT FAILING WHICH THE ADDITION WOULD STAND DELETED'. 'REMANDING THE MATTER TO BE DECIDED IN 12 WEEKS FAI LING WHICH THE ADDITION OF RS 65 LAKHS AS AN UNDISCLOSED INCOME FROM CHARITY B ALL WOULD STAND DELETED'. 'REMANDING THE MATTER TO BE DECIDED WITHIN 12 WEEKS FAILING WHICH THE ADDITION ON ACCOUNT OF SALE OF TV RIGHTS WOULD STAN D DELETED WITHOUT APPRECIATING THAT THE ADDITION WAS MADE ON THE BASI S OF MATERIAL AVAILABLE ON RECORD'. ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 12 THE FACTS INVOLVED IN THESE GROUNDS ARE IDENTICAL T O THE FACTS CONSIDERED BY US IN ASSESSEES APPEAL VIDE ITA NO. 7256/M/2004 QUA GROU ND NOS. 2,3 & 4 OF THAT APPEAL. AS NO NEW FACTS HAVE BEEN BROUGHT TO OUR NO TICE WE HAVE ALLOWED ASSESSEES APPEAL ACCORDINGLY THESE GROUND ARE DISMISSED . 32. GROUND NO. 4 READ AS UNDER:- 'DELETING ADDITION ON ACCOUNT OF UNDISCLOSED PAYMEN T OF RS 27,50,0001- TO MISS WORLD WITHOUT APPRECIATING THAT THERE WAS NO E VIDENCE WHATSOEVER FOR SUCH LIABILITY AND THERE WAS NO BUSINESS NEED FOR S UCH PAYMENT'. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDING S THE AO OBSERVED THAT AS PER AGREEMENT DATED 02.08.1996. THE ASSESSEE WAS TO PAY 50,000 STERLING POUND CONVERTED INTO INDIAN RUPEES TO MISS WORLD JERSY LT D. ACCORDING TO THE AO THE ASSESSEE HAS NOT RECORDED THIS PAYMENT IN INDIAN RU PEES AMOUNTING TO 27,50,000/- WHICH WAS PAID IN CASH. THE AO TREATED THE SAID PAY MENT AS UNDISCLOSED PAYMENT AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 33. BEFORE THE LD.CIT(A) IT WAS EXPLAINED THAT THE SAID AGREEMENT WAS ENTERED INTO BETWEEN MISS WORLD JERSY LTD. AND GGI AND THE ASSESSEE HAD NO ROLE TO PLAY IN THE SAME. THERE WAS NO CONTRACTUAL OBLIGATION ON TH E ISSUE AS THE ASSESSEE WAS NOT PARTY TO THE SAID AGREEMENT. LD.CIT(A) REFERRED THE MATTER TO THE AO. 34. AFTER RECEIVING THE COMMENTS OF THE AO AND CON SIDERING THE FACTS AND SUBMISSION OF THE ASSESSEE THE LD.CIT(A) OBSERVED T HAT ASSESSEE WAS NOT PARTY TO THE SAID AGREEMENT AND THERE IS NO OTHER EVIDENCE T O SHOW THAT THE ASSESSEE WAS LIABLE TO PAY ANY PAYMENT. THE LD.CIT(A) FURTHER OB SERVED THAT MERELY BECAUSE THE PAYMENT WAS MADE IN INDIAN CURRENCY DOES NOT MEAN T HAT THE ASSESSEE HAS MADE SUCH PAYMENT. THE LD.CIT(A) DELETED THE ADDITION. 35. BEFORE US THE DR STRONGLY SUPPORTED THE ASSESSM ENT ORDER, COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE WAS NOT A PARTY T O THE SAID AGREEMENT. THE LD.CIT(A) WAS CORRECT IN HOLDING THAT MERELY BECAUS E THE PAYMENT WAS MADE IN INDIAN CURRENCY IT CANNOT BE CONSTRUED THAT THE PAY MENT WAS MADE BY THE ASSESSEE. ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 13 WE THEREFORE, DO NOT FIND ANY REASON TO INTERFERE W ITH THE FINDINGS OF THE LD.CIT(A). GROUND NO. 4 IS DISMISSED . 36. GROUND NO. 7 READ AS UNDER:- 'DELETING THE ADDITION OF RS 16 LAKHS ON ACCOUNT OF SALE OF SCRAP MATERIAL WITHOUT ASSIGNING ANY REASON AND WITHOUT APPRECIATI NG THAT THE SCRAP GENERATED OUT OF MATERIALS USED FOR STAGE SHOW WERE VALUABLE AND HAD SCRAP VALUE'. DURING THE ASSESSMENT PROCEEDINGS THE AO WAS OF THE OPINION THAT THE ASSESSEE HAS USED DECORATION MATERIAL ON SETTING AND DESIGNING O F STAGE ON WHICH, IT HAS SPENT 41.56 LACS AND 24.58 LACS. THE AO WAS OF THE FIRM B ELIEF THAT SOME SALE OF SCRAP MUST HAVE BEEN OCCURRED AND ESTIMATED THE VALUE OF SCRAP AT RS.6 LAC AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE THE LD.CIT (A) IT WAS SUBMITTED THAT THE ENTIRE ADDITION HAS BEEN MADE ON ESTIMATE ON THE PR OPOSITION THAT ASSESSEE MUST HAVE GENERATED SALE OUT OF SCRAP. IT WAS FURTHER ST ATED THAT THERE IS NO BASIS TO ARRIVE AT SUCH A CONCLUSION. LD.CIT(A) CALLED FOR A REMAND REPORT THE AO REPEATED WHAT HAS BEEN STATED IN THE ASSESSMENT ORDER. 37. AFTER CONSIDERING THE FACTS AND SUBMISSIONS THE LD.CIT(A) OBSERVED THAT AO HAS MADE ADDITION ON ESTIMATE BASIS WITHOUT ANY MAT ERIAL EVIDENCE TO JUSTIFY THE ESTIMATE. THE LD.CIT(A) FURTHER OBSERVED THAT IT WA S ON THE AO TO BRING MATERIAL ON RECORD TO JUSTIFY THE ADDITION. THE LD.CIT(A) ACCOR DINGLY DELETED THE ADDITION. BEFORE US THE DR RELIED UPON THE ASSESSMENT ORDER, COUNSEL REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITY. IT IS NOT IN DIS PUTE THAT THE ENTIRE ADDITION HAS BEEN MADE ON ESTIMATE BASIS, WITHOUT BRINGING ON RE CORD ANY DEMONSTRATIVE EVIDENCE TO JUSTIFY THE ADDITION. WE THEREFORE, DO NOT FIND ANY INFIRMITY IN THE FINDINGS OF THE LD.CIT(A). GROUND NO. 7 IS ACCORDINGLY DISMISSED . 38. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ASSESSEES APPEAL ITA NO. 5597/M/2004 A.Y.1998-99 39. THIS APPEAL FILED BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE LD.CIT(A) CENTRAL.-7, MUMBAI DATED 16.04.2004. THE ASSESSEE HAS RAISED TWO SUBSTANTIVE GROUND. ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 14 40. GROUND NO. 1 RELATES TO THE ADDITION OF RS.75,1 1,150/- AS ALLEGED INTEREST ON ADVANCE OF RS.3,75,55,752/- JHAMU SUGANDH. AN IDENT ICAL ISSUE WAS CONSIDERED BY US IN ITA NO. 7256/M/2004 FOR A.Y. 1997-98 QUA GROU ND NO. 5 OF THAT APPEAL. SINCE FACTS AND ISSUES ARE IDENTICAL FOLLOWING ARE OWN FI NDINGS THIS ADDITION IS DELETED FOR SIMILAR REASONS GIVEN IN ITA NO. 7256/M/2004. GROUN D NO. IS ALLOWED. 41. GROUND NO.2 RELATES TO THE DISALLOWANCE OF CLAI M U/S 37 OF THE ACT AMOUNTING TO RS.20 LACS. THE ASSESSEE HAS CLAIMED OF HAVING P AID RS.20 LACS TO THE SPASTIC SOCIETY OF KARNATAKA MANAGED BY GOVERNMENT OF KARNA TAKA FOR ACCOMMODATING THE SHOW MISS WORLD PAGEANT AT BANGALORE AND THEREFORE, IT WAS CLAIMED AS INCURRED FOR BUSINESS PURPOSES. THE AO DISALLOWED THE SAME ON TH E GROUND THAT WHAT THE ASSESSEE HAS PAID IS ON ACCOUNT OF CHARITY AND DONA TION. THE ASSESSEE HAS NOT FILED ANY CERTIFICATE U/S 80G OF THE ACT. 42. BEFORE THE LD.CIT(A) THE ASSESSEE REITERATED IT S CLAIM THAT THE PAYMENT WAS MADE AT THE REQUEST OF THE GOVERNMENT OF KARNATAKA. THE LD.CIT(A) OBSERVED THAT NO INDEPENDENT EVIDENCE WAS PRODUCED. THEREFORE, TH E SAME CANNOT BE ALLOWED UNDER THE HEAD BUSINESS EXPEDIENCY. THE ADDITION WA S CONFIRMED. 43. BEFORE US THE COUNSEL FOR THE ASSESSEE COULD NO T ADDUCE ANY EVIDENCE IN SUPPORT OF THE CLAIM OF EXPENDITURE ON THE GROUND O F COMMERCIAL EXPEDIENCY. WE THEREFORE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDING OF THE LD.CIT(A). GROUND NO. 2 IS DISMISSED. 45. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 0 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF OCTOBER, 2014. SD/- SD/- (AMIT SHUKLA) (N.K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED:17.10.2014 *SRIVASTAVA ITA NO. 7256/MUM/2004 ITA NO. 7270/MUM/2004 ITA NO. 5597/MUM/2004 M/S. AMITABH BACHCHAN CORPORATION LTD ASSESSMENT YEAR: 1997-98&1998-99 15 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR H BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.