2011 (12) TMI 668 - AT - Income Tax

Summary

Issues involved:
The judgment involves issues related to disallowance of balance written off, deduction under section 36(1)(vii), disallowance under section 43B, computation of deduction under section 80HHF, disallowance under section 40A(3), and penalty imposed under section 271(1)(c).

Assessment Year 1998-99:
The only issue raised in the assessee's appeal is against the confirmation of disallowance of a specific amount out of balance written off including advances given for development of music albums abandoned. The Assessing Officer did not consider such debts as bad debts eligible for deduction under sections 36(1)(vii) due to no amount being treated as income in earlier years. The Tribunal, considering relevant judgments, allowed the deduction as revenue loss instead of capital loss, overturning the Assessing Officer's decision.

Assessment Year 2003-2004:
The first ground of the assessee's appeal is against the confirmation of disallowance under section 43B on account of delayed payment of ESIC. The Tribunal, following a precedent, ordered for the deletion of this disallowance. Another issue was the computation of deduction under section 80HHF, where interest income earned by the assessee was to be considered under the head "Profits and gains of business or profession," leading to a reduction of 90% of such interest income.

Assessment Year 2004-2005:
Ground no.1 of the assessee's appeal is against the confirmation of disallowance under section 40A(3) for urgent medical treatment expenses. The Tribunal dismissed this ground as the payment was not covered under Rule 6DD. Ground no.2, similar to a previous year, was allowed in favor of the assessee. Other grounds related to deduction under section 80HHF and disallowance of miscellaneous income were also decided in favor of the assessee.

ITA No.2236/Mum/2010:
This appeal by the Revenue against the deletion of penalty imposed under section 271(1)(c) for assessment year 2004-2005 was dismissed. The penalty was deleted as there was no willful concealment, and the addition made by the Assessing Officer was also deleted in quantum proceedings, leading to the dismissal of the appeal.