Itxa/329/2009 Of The Commissioner Of Income-Tax,Central-I,Mum v. Amitab Bachchan Corporation Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.329 OF 2009 The Commissioner of Income Tax ..Appellant. V/s. Amitabh Bachchan..Respondent. Mr. Yogesh Patki for appellant. Mr.S.E.Dastur, senior Advocate with Nilesh Joshi i/b. A.K.Jasani for respondent. CORAM : V.C.DAGA AND J.P.DEVADHAR, JJ. DATED : 11TH SEPTEMBER, 2009. P.C. :- 1.Heard learned counsel for the revenue and learned senior counsel appearing for the respondent-assessee. Perused the appeal. 2. The following four substantial questions are sought to be raised in the appeal. A. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in concluding that section 68 of the Act is not applicable to the credit entries relying on the additional evidence filed before CIT(A) without dealing with the findings of the CIT(A) that additional evidence in the form of confirmations cannot be accepted since the conditions precedent in Rule 46A of the Income Tax Rules, 1962 have not been complied with ?the Tribunal was right in concluding that section 68 of the Act is not applicable to the credit entries relying on the additional evidence filed before CIT(A) without dealing with the findings of the CIT(A) that additional evidence in the form of confirmations cannot be accepted since the conditions precedent in Rule 46A of the Income Tax Rules, 1962 have not been complied with ? B. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that section 68 of the Act is not applicable to the credit entries when the Tribunal itself has not come to a conclusion in this respect but has merely observed that addition under section 68 is in serious doubt ? the Tribunal was right in holding that section 68 of the Act is not applicable to the credit entries when the Tribunal itself has not come to a conclusion in this respect but has merely observed that addition under section 68 is in serious doubt ? C. Whether in the facts and in the circumstances of the case and in law, the Tribunal is right in holding that the expenses under the head "business promotion expenses" amounting to Rs.15,02,542/- incurred by the assessee have been incurred for business purpose even though no bills or vouchers supporting the same were produced before the assessing officer or the Appellate authority ?the Tribunal is right in holding that the expenses under the head "business promotion expenses" amounting to Rs.15,02,542/- incurred by the assessee have been incurred for business purpose even though no bills or vouchers supporting the same were produced before the assessing officer or the Appellate authority ? D. Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in confirming the CIT(A)'s decision of deleting the addition of Rs.18,08,000/- (club membership fees) thereby allowing it as a deduction under section 37 of the Act relying on the decision of the Bombay High Court in the case of Otis Elevator reported in 195 ITR 682 even though in the case of the present assessee there is no finding of fact that the membership is for the purpose of improving the business relationship and prospects ?the Tribunal is right in confirming the CIT(A)'s decision of deleting the addition of Rs.18,08,000/- (club membership fees) thereby allowing it as a deduction under section 37 of the Act relying on the decision of the Bombay High Court in the case of Otis Elevator reported in 195 ITR 682 even though in the case of the present assessee there is no finding of fact that the membership is for the purpose of improving the business relationship and prospects ? 3.So far as question (A) & (B) are concerned, both are nothing but different shades of the same question, as such both are dealt with together. So far as these questions are concerned, the Tribunal has recorded findings reading as under:- 3.So far as question (A) & (B) are concerned, both are nothing but different shades of the same question, as such both are dealt with together. So far as these questions are concerned, the Tribunal has recorded findings reading as under:- “...All these should have led to the acceptance of the cash credits. The CIT(A), in our view, is totally unjustified in not even entertaining certain confirmation letters filed before him in support of these transactions. The principles of natural justice should have prevailed upon the CIT(A) to accept such confirmation letters in support in support of the transaction which the assessee has entered into. Moreover, whether an addition at all is possible u/s.68 of the Act itself is in serious doubt because they are all part of the balances in the debtors account arising due to genuine business transactions. A balance in sundry creditors account or a credit balance in debtors account is not in the nature of a cash credit in the strict sense of its meaning. In any event, the assessee has produced voluminous evidence to support the genuineness of the transactions. The detailed addresses of the creditors and also the way the credits have flown are on record. Theyhave come through regular banking channel and all these credits havebeen squared up in the regular business transactions whichthemselves have been accepted by the department in subsequentyears. We, therefore, do not agree with the stand of the Assessing Officer or the CIT(A) that an addition in respect of these credits is required to be made or sustained. We, therefore, in the light of the voluminous evidence, which is discussed above, delete the addition. “ 4.Reading of the aforesaid extracted portion would show that the documentary evidence as produced in the regular business transaction themselves were accepted by the department in subsequent years. Their genuineness were never disputed by the revenue. The question sought to be argued revolves around the technical compliance of Rule 46A of the I.T. Rules. Since there is a substantial compliance, the Tribunal has taken into account the material placed on record. We find no fault with the said part of the order. The Tribunal has also appreciated the evidence on record and recorded the findings of fact. In this view of the matter, no substantial question of law is involved so far as these two questions are concerned. 5.So far as the question (C) is concerned, it relates to the business promotion expenses amounting to Rs.15,02,542/-, the details thereof were produced before the assessing officer. It was incumbent upon the assessing officer to verify the nature of these expenses. There is nothing to show that the expenses were not for business purpose. Under these circumstances, looking to the findings of fact recorded by the Tribunal, no fault can be found with the view taken. Thus, this issue does not raise substantial question of law. 6.So far as the last question (D) is concerned, the Tribunal has relied upon the judgment of this Court in the case of Otis Elevator Co.(India)Ltd. reported in 195 ITR 682. A letter from Khar Gymkhana dated 19/3/1999 was produced by the assessee to demonstrate that the membership fee paid was non refundable. The genuineness of this letter was never disputed by the revenue. Under these circumstances, we do not see any merit in the question sought to be raised so as to entertain appeal treating it as a substantial question of law. 7.In the result, the appeal is dismissed in limini for want of substantial question of law with no order as to costs. (J.P.DEVADHAR, J.) (V.C.DAGA, J.)