Income Tax Appellate Tribunal - Mumbai
Aishwarya K. Rai , Mumbai vs Department Of Income Tax on 7 September, 2009
IN THE INCOME TAX APPELLATE TRIBUNAL,
MUMBAI BENCH "A",MUMBAI
BEFORE SHRI R.K. GUPTA (JM) & SHRI A.L. GEHLOT (AM)
ITA NO.6079/Mum/2007
(A.Y. 2004-05 )
Dy.Commr. of Income-tax,
Cent.Cir-2,
Old CGO Bldg.Annexe,
9th floor, M.K.Rd.,
Mumbai-400 020.
Vs.
Ms.Aishwarya K.Rai,
12, Lamer Mistry Park, Khandeshwar,
Temple Rd., Bandra(W),
Mumbai-400 050.
ADLPR3537P.
Appellant
Respondent
C.O.No.55/Mum/2007
(Arising out of ITA No.6079/Mum/07)
(A.Y. 2004-05)
Ms. Aishwarya K.Rai,
12, Lamer Mistry Park, Khandeshwar,
Temple Rd., Bandra(W),
Mumbai-400 050.
ADLPR3537P.
Vs.
Dy.Commr. of Income-tax,
Cent.Cir-2,
Old CGO Bldg.Annexe,
9th floor, M.K.Rd.,
Mumbai-400 020.
Cross Objector
Respondent
Department by
Shri Kalika Singh.
Assessee by
Shri A.K. Ghosh.
ORDER
PER R.K. GUPTA, JM:
The appeal by the department and the cross objection by the assessee are against the order of CIT(A), Central-1, Mumbai, pertaining to asst. year 2004-05.
2. The department in its appeal is objecting in allowing deduction u/s.80RR for foreign remittances on account of stage shows amounting to Rs.44,42,269/-.
3. The assessee in her cross objection vide ground no. 1 is also objecting the Revenue's finding that the assessee is not entitled to get deduction u/s.80RR in respect of professional receipts of Rs.4,81,94,397/- brought into India in convertible foreign exchange which was derived by the assessee in exercise of her profession from Longines Watch Co. Francillon Ltd., Switzerland, L'Oreal/Mc Cann-Erickson, France, and from various other parties with respect to brand Ambassador fees.
4. The counsel of the assessee, who appeared before the Tribunal, submitted that identical additions were made for asst. year 2003-04. The CIT(A) allowed the issue in part following the decision of the Tribunal in the case Harsha Bhogle reported in 86 ITD 714. However, deduction was partly not allowed on account of receipts from Longines Watch Co. Francillon Ltd., Switzerland, and other receipts. The department and assessee filed appeals before the Tribunal and the Tribunal, after considering the submissions and taking into consideration the various decisions, dismissed the appeal of the department. However, the appeal of the assessee was allowed. While allowing the appeal of the assessee, the Tribunal has taken into consideration the decision of the Tribunal in the case of Shah Rukh Khan in which case the decision in the case of Shri Amitabh Bachchan was followed. Further, while allowing the claim of the assessee, the Tribunal has discussed all the aspects of the case along with the provisions of law. The appeals of the department and the assessee were disposed of in ITA Nos. 1062 & 816/Mum/2007 vide its order dated 07-09-2009. Copy of the order of the Tribunal is also filed.
5. On the other hand, the ld. D.R. submitted that though the facts are identical, however, the certificate on form 'H' was not attached along with the return of income as the same was filed during the assessment proceedings. The certificate filed during the assessment proceedings was a defective one as noted by the AO. Therefore, the facts of the case are different from the facts of the earlier years.
6. In reply, the counsel of the assessee stated that the facts are identical. The receipts more or less are from the same parties. It was further submitted that copy of certificate filed during the assessment proceedings is not defective at all. The CIT(A) has examined the certificate and then only, following the earlier year in which the facts were identical, allowed the appeal of the assessee.
7. We have heard the rival submissions and considered them carefully. After considering the orders of the authorities below including the order of the Tribunal for asst. year 2003-04 in the case of the assessee herself, we find that identical disallowances were made by the AO while completing the assessment. The CIT(A) allowed the deduction u/s.80RR in part and part of the deduction was not allowed as it was not allowed in the immediately preceding year i.e. asst. year 2003-04. As stated above, the assessee and the department filed appeals before the Tribunal which, after taking into consideration all the facts and the provisions of sec. 80RR, held that the assessee's claim of deduction u/s.80RR is allowable in full. Accordingly, the appeal of the department was dismissed and the appeal of the assessee was allowed. While allowing the appeal of the assessee, the fact with regard to form 'H', which was filed before the CIT(A), was also taken into consideration by the Tribunal, as for asst. year 2003-04 also form 'H' could not be filed before the AO. In the present case, form 'H' was filed even before the AO, though in assessment proceedings. How the form is defective is not clear. It is to be seen whether form 'H', on which basis deduction is allowable, was filed or not. Copy of form 'H' filed before the AO is placed on record. From the contents of form 'H', it is seen that form 'H' is duly filled up and signed. Whatever amount received is clearly indicated/mentioned in the respective forms filed before the AO. The ld. CIT(A) has taken into consideration form 'H' which was filed before the AO during the assessment proceedings and then only the claim of the assessee was allowed in part following the decision of earlier year. Since the facts are similar and form 'H' had been filed during the assessment proceedings, we see no reason for not following the order of the Tribunal for the immediately preceding year, that too, in the case of the assessee herself. In view of the above facts and circumstances, we, following the order of the Tribunal for the immediately preceding year, allow the ground raised in the cross objection of the assessee and dismiss the ground in the appeal of the department.
8. There is no other ground in the appeal of the department.
9. Ground nos.3 to 8 in the assessee's cross objection relate to confirming disallowance out of car expenses, out of depreciation on motor car, out of telephone expenses, out of tour and travel expenses, out of business promotion expenses and out of dress apparels expenses to the extent of 10%.
10. Similar disallowances were made in the immediately preceding year. The AO has disallowed 20% on account of various expenses mentioned above. The CIT(A) restricted these expenses to the extent of 10%. The Tribunal, after taking into consideration the facts of the case, viewed "that such estimation cannot be made merely applying certain percentage because ultimately what should be the estimated amount which relates to personal expenditure. After considering totality of the facts of the case, nature of assessee's profession and surrounding circumstances we find that it will be fair and reasonable to both sides if disallowance is restricted to Rs.1,00,000/- which includes disallowance on account of telephone, motor car expenses and depreciation on motor car. The AO is directed accordingly". These findings have been recorded by the Tribunal in para 13 of its order. Since the disallowances made in the year under consideration are similar, therefore, following the decision of the Tribunal, we also direct the AO to restrict the disallowance to Rs.1,00,000/- for the year under consideration instead of the disallowances made on percentage basis as mentioned above.
10. In the result, the appeal of the department is dismissed, while the cross objection of the assessee is allowed in part.
Order pronounced on 8th day of Feb., 2010.
Sd/- Sd/-
(A.L. Gehlot) (R.K. Gupta)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Mumbai: 8th Feb., 2010.
Copy to :
1. Assessee.
2.Department.
3 CIT(A)Cent.I,Mumbai.
4 CIT,Central-1,Mumbai.
5.DR,"A" Bench,Mumbai.
(TRUE COPY)
BY ORDER,
NG:
Asst.Registrar, ITAT, Mumbai.
Details
Date
Initials
Designation
1
Draft dictated on
02-02-2010
Sr.PS/
2
Draft Placed before author
03-02-2010
Sr.PS/
3
Draft proposed & placed before the Second Member
JM/AM
4
Draft discussed/approved by Second Member
JM/AM
5.
Approved Draft comes to the Sr.PS/PS
Sr.PS/
6.
Kept for pronouncement on
Sr.PS/
7.
File sent to the Bench Clerk
Sr.PS/
8
Date on which the file goes to the Head clerk
9
Date of Dispatch of order
PAGE 6
ITA6079 & CO 55/M/07
Ms. Aishwarya K.Rai.