Jackie Shroff eligible for deduction towards writeoff Loans to Wife is Business Loss: Mumbai ITAT
‘Hero’ status remained that of ‘Hero’ only in income tax appeal before ITAT, Mumbai.
Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has given relief to Bollywood actor Jackie Shroff by treating the loan given to wife which was written off as a business loss under the provision of the Income Tax Act in a transaction which is dated way back for the financial year 2008-2009.
Jackie Shroff became a savior for wife Ayesha and Quest films with whom the actor had proprietorship and suffered losses from having stakes in films like ‘Boom’ and ‘Sandhya’ which were a huge flop at the box-office.
This did lead to a production house shut down and Ayesha left with loans to pay.
In FY 2008-09, Jackie sheriff claimed the amount given to his wife as Business loss on the ground that the same is not recoverable.
In his return, Jackie had declared it a business loss in his tax return. However, the IT Officer that had reviewed the loan as a personal expense has now written off the total amount as the loss incurred in the business.
CIT – Appeal confirmed the addition with a view that amount was drawn as the personal funs and cannot be included as a business loss.
Allowing the contentions of the actor, the ITAT held that as the loans were advanced to his wife or her proprietary concern cannot be the only criteria for holding it as personal in nature.
As there was no possibility of recovery of these loans in the future, the write-off should be treated as a business loss.
The Tribunal furthwr opined that the findings of the Ld.CIT (A) that the monies advanced by the assessee are in the nature of business advances have not been challenged by the Revenue.
“However, we find that Ld.CIT (A) sustained the disallowance only for the reason that the assessee has suo moto written off the advances and such suomoto write off is not allowable as deduction u/s. 36(1)(vii) / 37(1) of the Act,” the Tribunal said.
ITAT Concluded that –
“Once the advances are held to be business advances they are allowable as a deduction either u/s. 37(1) or u/s. 28 of the Act as a business loss. The deduction cannot be denied on the ground that the assessee had suomoto written off the advances”