November 2010
Business expenditure : S. 37(1) of Income-tax Act, 1961 : A.Y. 2004-05 : Assessee a cine artist : Expenditure relating to fans association is deductible business expenditure.
By K. B. Bhujle | Advocate
Reading Time 2 mins
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Reported :
16. Business expenditure :
S. 37(1) of Income-tax Act, 1961 : A.Y. 2004-05 : Assessee a cine artist :
Expenditure relating to fans association is deductible business expenditure.
[CIT v. A. Vijayakant,
234 CTR 103 (Mad.)]
The assessee is a popular
cine actor. For the A.Y. 2004-05, the assessee had claimed a deduction of
Rs.20,19,000 towards Rasigar Manrams (fans associations) expenses. The Assessing
Officer rejected the claim. The CIT(A) noticed that for the A.Ys. 2001-02 to
2003-04, 80% of the claim was allowed. The CIT(A) therefore restricted the
disallowance to 20%. The Tribunal upheld the order of the CIT(A).
On appeal by the Revenue,
the Madras High Court upheld the decision of the Tribunal and held as under :
“(i) It is a well-known
fact that popular cine artists promote their Rasigar Manrams for the purpose
of promoting their films among the public at large. For that purpose when it
is claimed that substantial amount was spent towards dress, food, etc., at the
time of release of new films as well as for regular maintenance of the Rasigar
Manram activities, it cannot be held that it was not part of their
professional activities, namely, acting in cine field.
(ii) Therefore, the
perception of the CIT(A), which found favour with the Tribunal, cannot be
faulted.
(iii) The appeal fails and
the same is dismissed.”
