9911796707
TMI Blog2011 (12) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... e therefore, disposing them off by this consolidated order for the sake of convenience. Assessment Year 1998-99 2. The only issue raised in the assessee s appeal is against the confirmation of disallowance of ₹ 37,47,495 out of balance written off including advances given for development of music albums abandoned. Briefly stated the facts of this ground are that the assessee claimed deduction of bad debts towards the following amounts in the original assessment order passed u/s 143(3) on 05.02.2001:- (i) Album Mohini Singh Project ₹ 1,37,515 (ii) Album Pushpanjali Project ₹ 18,587 (iii) Aabha Film Production No.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a capital loss. 4. After considering the rival submissions and perusing the relevant material on record it is seen that the Hon ble jurisdictional High Court in CIT Vs. Mukta Arts Pvt. Ltd. vide its judgment dated 25th August, 2008 in Income Tax Appeal No.584 of 2001 considered a question whether the Tribunal was justified in holding that the cost of production of the abandoned film Devaa was trading loss. The learned Counsel on behalf of the Revenue conceded before the Hon ble High Court that no question of law was involved and the appeal itself was misconceived in view of the fact that the film in question was admittedly not released and hence it was stock-in-trade and there was no question of the same being capital asset. The lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and the same has not be reduced from profits and gains of business for the purpose of deduction u/s 80HHC? 2. Whether on the facts and in the circumstances of the case and in law the CIT(A) was justified in holding that 90% of the net commission and not 90% of the gross commission as held by the Assessing Officer is to be reduced from business income for computing the profit of business u/s 80HHC of the Income-tax Act. 7. Both the sides are in agreement that the facts and circumstances of these grounds are similar to those considered and decided by the Tribunal in assessee s own case in the immediately succeeding year i.e. assessment year 1999-2000. Copy of the said order dated 23.03.2011 in ITA No.2234/Mum/2010 has been pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en no disallowance can be made. Respectfully following the precedent, we order for the deletion of this disallowance upheld in the first appeal. This ground is allowed. 12. Ground no.2(i) is against the computation of deduction u/s 80HHF. The only issue is as to whether interest income earned by the assessee should be considered as falling under the head Profits and gains of business or profession or Income from other sources and the resulting consequence being 90% of such interest income should be deducted or not. From the ground it is apparent that the learned CIT(A) refused to adjudicate on the issue on the ground that the CIT had already passed order u/s 263 by directing the A.O. to assess the interest income under the head Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be deducted from the profits of the business or not. Under such circumstances we set aside the impugned order and restore the matter to the file of A.O. for passing a speaking order on this issue as per law after allowing a reasonable opportunity of being heard to the assessee. 15. The Revenue has filed the following revised ground in its appeal:- On the facts and in the circumstances of the case and in law, the CIT(A) was not justified in holding that 90% of interest should have been reduced from the profits of business for the purpose of computation of deduction u/s 80HHF of the I.T.Act, 1961 as against the order u/s 263 of the I.T.Act wherein it is held that 100% of the gross interest should have been reduced from the profits o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion of allowing any deduction on this issue, as such allowability will amount to violation of section 40A(3). This ground is, therefore, dismissed. 20. Ground no.2 is against confirmation of disallowance of ₹ 56,09,117 being irrecoverable business advance written off and claimed u/s 37 of the Act. Both the sides are in agreement that the facts and circumstances of this ground are similar to those for assessment year 1998-99. While disposing of the appeal of the assessee for assessment year 1998-99 above, we have decided this issue in assessee s favour. In view of the admitted similarity of the facts, we allow this ground of appeal. 21. Ground no.3(i) is against the computation of deduction u/s 80HHF on the interest income wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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