TaxTMI 
TaxTMI 
2010 (2) TMI 745
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....h Johar u/s. 37 of the Income-tax Act, 1961 (the Act). 3. Facts of the case, in brief, are that the assessee during the year has released the picture 'Kal Ho Na Ho' on 22.11.2003. The Assessing Officer during the course of assessment proceedings observed that the total business of the film during the year was shown at Rs.34,06,69,069 and the cost of production of the film was shown at Rs.29,17,21,887. From the various details furnished by the assessee during the course of assessment proceedings the Assessing Officer observed that the outdoor shooting expenses in USA shown at Rs.7,64,03,476 includes medical expenses of Rs.31,73,816 on account of Shri Yash Johar. On being questioned by the Assessing Officer as to why the medical treat....
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....ation for script writing and overall supervision of production. Shri Karan Johar has accompanied the unit and was managing the entire shooting process abroad. Therefore, the presence of the assessee as a producer was not very significant in carrying out the shooting schedule in USA. The claim of the assessee that the delay in providing medical assistance to Shri Yash Johar could have considerable loss to the assessee as the picturisation of the film might have come to standstill and there would have been increase in the cost of production was also rejected by the Assessing Officer. According to the Assessing Officer hospitalisation of the assessee has no way affected the shooting schedule. The medical report also establishes that the assess....
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.... 49, he submitted that medical expenditure incurred for the director was disallowed holding that such expenditure was not for legitimate business need. He accordingly submitted that this expenditure should be disallowed. 7. The learned counsel for the assessee, on the other hand, referring to the dictionary meaning of film producer submitted that a film producer initiates, co-ordinates, supervises and controls the matters such as fund raising, hiring key personnel and arranging for distributors. The producer is involved throughout all phases of the film making process from development to completion of a project. He accordingly submitted that the allegation of the Assessing Officer that the assessee being producer of the film, his ro....
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....ipur Mineral Development Syndicate (supra) and submitted that in that case no evidence was produced by the assessee that the expenditure has been incurred for the purpose of business whereas in the instant case the expenditure is not in dispute. The assessee has produced all relevant bills and vouchers and the expenditure was incurred when the assessee was in USA while shooting the film. As regards the decision of the Hon'ble Allahabad High Court in the case of Mentha and Allied Products Pvt. Ltd. (supra), he submitted that in that case the managing director of the company got his eye treatment done in the USA whereas facility was available in India itself. Accordingly it was held that the medical expenditure incurred could not be allowed u....
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....ent to USA for treatment from India whereas the said facility was available in India. Accordingly it was held that provisions of section 40(c)(ii) are applicable and the medical expenses could not be allowed u/s. 37(1) of the Act. Similarly, in the case of Udaipur Mineral Development Syndicate Pvt. Ltd. (supra) the expenditure was disallowed in absence of evidence that expenses have been incurred for the purpose of business whereas in the instant case the assessee fell ill when he was in USA for shooting of the film. Therefore, the above two decisions are not applicable. We also do not find any force in the submission of the learned DR that the assessee should not have gone abroad since he was very old and as per his medical history he shou....
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....e audited, ad-hoc disallowance is not feasible. The adhoc disallowance on the basis of conjectures and surmises cannot be upheld. Aggrieved with such order of the CIT(A), the Revenue is in appeal before us. 14. We have considered the rival submissions made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the decisions cited before us. There is no dispute to the fact that the accounts of the assessee are audited. We find the Assessing Officer has not pointed out any specific defect in any of the vouchers and has made a general remark that huge cash expenditure has been incurred and some vouchers are not fully supported by bills, e....