Proportionate business expenses of office cum residence of Choreographer Farah Khan are allowable U/S 37: ITAT Mumbai

 

 Farah Khan vs ACIT (I.T.A. No.4428/Mum/2019) (ITAT Mumbai)

Facts:

 Residence cum office was acquired by the assessee in AY 2012-13. 

The assessment for that year was framed by Ld. AO in scrutiny assessment u/s 143(3). 

All the requisite details as to acquisition of units as well as expenditure incurred therein were called from the assessee which were supplied as well as verified by Ld. AO. 

The units were split into two parts viz. units which were used as residence and units which were used for the purpose of profession. 

So expenses were also split in the area of the premises. 

 For AY 2013-14, the AO maintained that the information was not submitted in the required format and so disallowed the proportionate expenses incurred in relation to the office U/S 37. 

A video recording of the office and residence to prove that a clearly demarcated part is used as office, was also furnished during the course of hearing but was not considered by the AO. 

The ITAT held as below:

 The assessee is a choreographer and film producer. 

The assessee would require creative space from where she could carry out professional engagements.

The assessee has proved that a clearly demarcated part of the premise was used by her as the office which is duly supported by various documents on record. 

There is nothing on record to disprove this claim. 

With this, the court held that proportionate expenses are to be allowed