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TMI Blog2010 (2) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... 74 -TMI - 39159 - BOMBAY High Court) which has been relied upon by the CIT(A). - Deduction allowed - decided in favor of assessee. Disallowance of expenses on Ad hoc basis - Assessing Officer disallowed an amount of Rs.5 lakhs on ad-hoc basis on the ground that the assessee has incurred huge expenses under various heads which includes cash expenses, some of which are supported by self made vouchers only which are not fully verifiable. Further there are huge cash expenses incurred during the foreign shooting. - held that: - Since the accounts of the assessee are audited and no specific instance has been brought on record by the Assessing Officer as to which is the expenditure which according to him is not fully supported with vouchers, therefore, we do not find any infirmity in the order of the CIT(A) deleting the ad hoc disallowance made on the basis of presumptions and guesswork. - Decided in favor of assessee. - ITA. No. 2612/Mum/2008 - - - Dated:- 5-2-2010 - D.K. Agarwal, R.K. Panda, JJ. Rajneesh Arvind for the Appellant Arvind Sonde for the Respondent ORDER R.K. Panda, Accountant Member 1. This appeal filed by the Revenue is directed against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fe of the assessee to whom a remuneration of Rs.10 lakhs is paid is a co-producer. An amount of Rs.35 lakhs has been paid to Mr. Karan Johar, son of the assessee towards remuneration for script writing and overall supervision of production. Shri Karan Johar has accompanied the unit and was managing the entire shooting process abroad. Therefore, the presence of the assessee as a producer was not very significant in carrying out the shooting schedule in USA. The claim of the assessee that the delay in providing medical assistance to Shri Yash Johar could have considerable loss to the assessee as the picturisation of the film might have come to standstill and there would have been increase in the cost of production was also rejected by the Assessing Officer. According to the Assessing Officer hospitalisation of the assessee has no way affected the shooting schedule. The medical report also establishes that the assessee suffered from cancer which is not a sudden development. Moreover, the entire shooting schedule in USA was insured and the assessee had paid the insurance premium of Rs.11,81,071 for the film which has been included in the cost of production. Therefore, this insurance sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that in the said case, M/s. Mehaboob Productions Pvt. Ltd. was doing business of production of film and during 1957 the company completed the production of the film "Mother India" which was awarded certificate of merit. The director of the film Shri Mehaboob Khan who went to USA to attend the function and to receive the award suffered a serious heart attack for which he was hospitalised. The expenditure amounting to Rs.33,667 incurred for his treatment was debited to its accounts on the basis of a board resolution. The Assessing Officer disallowed the said expenditure holding the same to be personal in nature. When the matter travelled up to the High Court, the Hon'ble jurisdictional High Court held that the entire amount of medical expenditure incurred for the treatment of Mr. Mehaboob Khan should be allowed as a deduction on the principle of commercial expediency. 8. Distinguishing the decisions relied on by the learned DR, the learned counsel for the assessee referred to the decision of Hon'ble Rajasthan High Court in the case of Udaipur Mineral Development Syndicate (supra) and submitted that in that case no evidence was produced by the assessee that the expenditure ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Pvt. Ltd. (supra) the expenditure was disallowed in absence of evidence that expenses have been incurred for the purpose of business whereas in the instant case the assessee fell ill when he was in USA for shooting of the film. Therefore, the above two decisions are not applicable. We also do not find any force in the submission of the learned DR that the assessee should not have gone abroad since he was very old and as per his medical history he should not have travelled. In this view of the matter, we uphold the order of the CIT(A) in deleting the disallowance and dismiss the grounds raised by the Revenue. 10. In grounds of appeal Nos. 1(d) and 1(e) the Revenue has challenged the order of the CIT(A) in deleting the disallowance of Rs.5 lakhs made by the Assessing Officer u/s. 37 of the Act out of expenditure during foreign shooting. 11. Facts of the case, in brief, are that the Assessing Officer disallowed an amount of Rs.5 lakhs on ad-hoc basis on the ground that the assessee has incurred huge expenses under various heads which includes cash expenses, some of which are supported by self made vouchers only which are not fully verifiable. Further there are huge cash expe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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