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TMI Blog2016 (12) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest from RCA and charging interest from the other subsidiaries. It has to explain as to why different treatment was given with regarding charging of interest.In our opinion, the FAA was justify in holding that making a bald statement of commercial expediency for an expenditure is not enough, that the assessee has to establish the fact. In the case under consideration, the assessee had not proved the said basic fact.Therefore, we hold that there is no need to interfere with the order of the FAA. Confirming his order, we decide the second ground against the assessee. Disallowance of professional fees paid - Held that:- We find that the assessee had paid and amount of the 50 lakhs to JA, that it had detected tax at source as per the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer (A.O.) have filed present appeals for the above mentioned assessment year (AY).Assessee-company,engaged in the production of add films, 2D animation and computer graphics, software for television serials etc.,filed its return of income on 28/10/2004, declaring total Loss at ₹ 9,56,10,090/-.The Assessing Officer(AO)completed the assessment u/s.143(3) of the Act,on 13.12.2006, determining its income at (-) ₹ 5,26,61,000/-. ITA/2237/Mum/2011 2. First ground of appeal is about disallowing the claim of depreciation of ₹ 45.76 lakhs,being depreciation on the capitalise WDV of ₹ 1.83 Crores on account of unpaid customs duty.During the assessment proceedings,the AO found that the assessee had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Animation Inc.(RCA).During the assessment proceedings, the AO found that the assessee had advanced a loan of ₹ 28.68 lakhs to RCA on which no interest was charged, that it had charged interest at the rate of 8% on advances made to other subsidiaries. Following the order for the AY.2003-04,the AO added and amount of ₹ 2,29,475/- to the total income of the assessee (interest at the rate of 8%). 7. During the appellate proceedings before the FAA,the assessee made submissions. After considering the same and following the order of his predecessor for the earlier AY.,he held that none of the reasons given by the assessee for not charging interest on advances had been established, that assessee had not furnished any evidence,that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee contended that JA had written a script for a film, that the script was not in the storyline conceptualised by the parties involved in the filmmaking, that the project was shelved, that as per the agreement JA was to refund the money in case of non-acceptance of script, that JA did not refund the money, that assessee initiated arbitration proceedings,that the project was scrapped and the assessee made necessary entries about payment made to JA as provision expenditure. The AO held that procedure adopted by the assessee in claiming the expenditure was not as per the provisions of the Act, that the expenditure should not have been debited to the AY. Under reference,that it did not pertain to the year under consideration, that proper an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o claim of write off had to be substantiated by actual writing off of the claim in the regular books of accounts, that the assessee had included the disputed amount is asset under the head loans and advances, that arbitration proceedings were going on, that the claim of the assessee was premature and did not pertain to the AY. under consideration. Finally, he upheld the order of the AO. 12. We find that the assessee had paid and amount of the 50 lakhs to JA, that it had detected tax at source as per the provisions of the act, it had claimed that project was abandoned, that JA did not return the money, that arbitration proceedings were going on at the time of assessment proceedings, that it had shown the amount in question in the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim, that during the assessment proceedings details of bad debts written off were filed before AO vide letter dt.13/12/06. 15. After considering the submission of the assessee and the assessment order, the FAA held that provision of doubtful debts were added back to total income in the earlier years, that same were written off and claimed by the assessee in the impugned years, the amounts in question were written off as bad debts which were earlier considered as doubtful debts, that the entire break-up of the written off amount was submitted, that Schedule-F of the Balance sheet gave the details of the disputed amount, that instead of cumulative provision for doubtful debts from the earlier years the assessee had only shown the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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