2013 (6) TMI 673

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....nbsp;   "1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals)-3, Mumbai erred in deleting addition of Rs. 60 lakhs without appreciating the fact that the expenditure incurred on an abandoned film is in the nature of a capital loss and not a loss which is revenue in nature as an incomplete film is in the nature of capital work in progress.             2. The appellant prays that the order of the Commissioner of Income-tax (Appeals) on the above grounds to be set aside and that of the Assessing Officer be restored." 2. The assessee is engaged in the business of hiring of cine equipments, distribution of films and....

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....ity. Instead of increasing further loss, they decided to shelve the project and write off the amounts advanced/incurred. As on the date of scrap, i.e., February 17, 2006 the producer had incurred cost of Rs. 1.06 crores out of which the appellant's share was Rs. 60 lakhs." 3. On these facts, the learned Commissioner of Income-tax (Appeals) relying upon several decisions, which, inter alia, includes decisions rendered by the Mumbai Income-tax Appellate Tribunal has held that the expenditure incurred by the assessee in respect of abandoned film is allowable. The Revenue is aggrieved, hence, filed aforementioned appeal. 4. At the outset it was submitted by the learned authorised representative that this issue is no more res integra a....

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....the situation, after hearing both parties we find that the learned Commissioner of Income-tax (Appeals) did not commit any error in allowing proper relief to the assessee. For the sake of completeness we may reproduce the relevant observation of the hon'ble Bombay High Court from the decision in the case of CIT v. Mukta Arts P. Ltd.               "1. Heard the learned counsel appearing for the appellant and learned counsel appearing for the respondent.             2. We have perused the order of the Income-tax Appellate Tribunal dated May 2, 2001 and also the question of law sought to be raised in the above appea....