OM SIDDIVINAYAK CREATIONS P.LTD,MUMBAI vs. ITO 8(2)(4), MUMBAI

The captioned appeal by the assessee for Assessment Year [AY] 2008-09 assails the order of the Ld. Commissioner of Income-Tax (Appeals)- 17 [CIT(A)], Mumbai dated 11/12/2014 qua confirmation of penalty u/s 271(1)(c) for Rs. 1,97,332/-.

Briefly stated, the assessee, being resident corporate assessee, was subjected to an assessment u/s 143(3) of the Income Tax Act, 1961 for impugned AY vide Assessing Officer [AO] order dated 10/12/2010, wherein the total income of the assessee was determined at Rs.61,29,100/- as against returned income of Rs.1,21,421/- e-filed by assessee on 03/10/2008 after making certain adjustments / disallowances. The assessee was engaged in the business of film making and film financing. During assessment proceedings, it was noticed that the assessee claimed an amount of Rs.6,65,305/- under the head administrative expenses towards certain loss on film financing The assessee contended that the same represented loss incurred by him on five films and submitted film wise statement of receipts and payments which were all in the form of cash. The AO noted that only one film was home production of the assessee whereas the other 3 films were produced by other houses as per certificates issued by The Censor Board of Film Certification [CBFC]. No certificate was produced for one film which led the AO to disallow business loss in respect of the 4 films which amounted to Rs.6,38,615/-, against which penalty proceedings were initiated. Consequently, the assessee was saddled with a penalty of Rs.1,97,332/- by invoking explanation 1 to Section 271(1)(c) vide AO penalty order dated 26/03/2013 on the premises that the assessee failed to adduce any documentary evidence to substantiate its claim regarding the loss. The stand of AO was contested without any success before Ld. CIT(A) vide order dated 11/12/2014 where the ITA No.986/M/2015 Om Siddivinayak Creations Private Limited Assessment Year 2008-09 Ld. CIT(A) confirmed the penalty after placing reliance on certain judicial pronouncements. Aggrieved, the assessee is in appeal before us.

The Ld. Counsel for Assessee [AR] while drawing our attention to details of film- wise receipts & payments and ledger accounts of each film as placed in the paper-book, contended that the assessee incurred losses in 5 films and film wise receipts & expenditure were submitted before the lower authorities. The lower authorities, finding the same not satisfactory made the said disallowance and imposed the penalty against the same which was not justified as mere making of claim do not entail penalty. Reliance has been placed on the judgment of Hon’ble Gujarat High Court in Nayan C.Shah Vs ITO [69 taxmann.com 256]. Per contra, Ld. DR, drew our attention to the quantum order passed by the Tribunal to contend that the assessee mere bald claim of loss in the business without even having any single documentary evidence in his possession. Whatever documents are being produced before the bench during proceedings, they are being produced for the very first time and hence, penalty has rightly been levied.

We have heard the rival contentions and perused the relevant material on record. So far as the reliance placed by the Ld. AR on the judgment of Hon’ble Gujrat High court is concerned, we find the same not applicable to the facts of the case of the assessee as in the cited order the assessee suffered disallowance u/s 40(a)(ia), which is not the case. In the present situation, the assessee is not able to produce any document to substantiate his claim and prima facie made the claim in a casual manner without adducing any cogent evidence. A perusal of the tribunal’s quantum order in order dated 20/01/2017 reveals that the assessee could not defend the quantum addition made by the lower authorities in any manner. The Tribunal noted that the assessee failed to adduce any documentary evidence to substantiate his claim and therefore, confirmed the addition. This being the factual position, we see no reason to deviate from the findings of the Tribunal in quantum order and therefore, finding no merits in assessee’s appeal, dismiss the same and confirm the order of Ld. CIT(A). Om Siddivinayak Creations Private Limited Assessment Year 2008-09

The assessee’s appeal stands dismissed.