ASSISTANT COMMISSIONER OF INCOME TAX-16(1), MUMBAI V. VIACOM18 MEDIA PRIVATE LIMITED, MUMBAI

ITA 5670/MUM/2024

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The case involves Viacom18 Media Private Limited, which was accused of receiving a non-genuine transaction of Rs. 1,10,00,000 from M/s. MEC Tech, a company not engaged in any genuine business. The Assessing Officer reopened the assessment under section 147 of the Income Tax Act based on this allegation. However, the first appellate authority found that the amount was actually received from M/s. UVI Films Productions Pvt. Ltd. for legitimate business purposes and deleted the addition. The Revenue appealed against this decision, but the Tribunal upheld the first appellate authority's decision, dismissing the appeal and the cross objection.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473761 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Other Referred Cases: Hexaware Technologies Ltd. vs. ACIT [2024] 464 ITR 430 (Bom)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH HELIWAL
• Assessee Lawyers: NIMESH VORA
• Keywords: Reasonable cause; Unexplained cash credit; Reopening of assessment; Search and seizure; Bogus
• Section: 147; 148; 143(3); 132; 139(1); 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “F” BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, VP AND SHRI PRABHASH SHANKAR, AM ITA No. 5670/Mum/2024 (Assessment Year: 2015-16) Asst. CIT-16(1) Room No. 439, Aaykar Bhavan, M. K. Road, Marine Lines, Mumbai-400 020 Vs. Viacom18 Media Private Limited 6th Floor, Zion Biz World, Subash Road A, Vile Parle (E), S.O., Mumbai – 400 057 PAN/GIR No. AAACM 9164 E (Revenue) : (Assessee) Cross Objection No. 8/Mum/2025 (Arising out of ITA No. 5670/Mum/2024) (Assessment Year: 2015-16) Viacom18 Media Private Limited 6th Floor, Zion Biz World, Subash Road A, Vile Parle (E), S.O., Mumbai – 400 057 Vs. Asst. CIT-16(1) Room No. 439, Aaykar Bhavan, M. K. Road, Marine Lines, Mumbai-400 020 PAN/GIR No. AAACM 9164 E (Assessee) : (Revenue) Assessee by : Shri Nimesh Vora/ Ms. Moksha Mehta Revenue by : Shri Ashish Heliwal Date of Hearing : 18.03.2025 Date of Pronouncement : 25.03.2025 O R D E R Per Saktijit Dey, VP: The captioned appeal and the cross objection by the Revenue and assessee respectively arise out of order dated 28.08.2024 passed by National Faceless Appeal Centre (NFAC for short), Delhi for the assessment year (A.Y.) 2015-16. 2 ITA No. 5670/Mum/2024 & CO No. 8/Mum/2025 (A.Y. 2015-16) Viacom18 Media Private Limited 2. The Registry has notified delay of two days in filing the appeal. The Revenue has filed an application, seeking condonation of delay, which is kept on record. After considering the reason shown for delay in filing the appeal, we are satisfied that the delay was due to reasonable cause. Hence, delay is condoned and the appeal is admitted for adjudication on merits. ITA No. 5670/Mum/2024 (Appeal by the Revenue) 3. The grounds of appeal read as under: 1. Whether on the facts and circumstances of the cases and in law the Ld. CIT(A) is justified in stating the order passed u/s 148A(d) by the Jurisdictional Officer (JAO) and the notices issues under section 148 by the JAO given that the Finance Act 2021 introduced provisions for faceless assessment and the automated allocation of cases and does not explicitly prohibit the JAO from issuing such notices? 2. Whether on the facts and circumstances of the case the Ld. CIT(A) is justified in allowing the bogus transaction of the assessee without considering the facts unearthed during the search and seizure and during the assessment proceedings? 3. Whether on the facts and circumstances of the case the Ld. CIT(A) is justified in directing the Ao to delete the addition made u/s 69A of the Act of Rs. 1,10,00,000/- ignoring the fact that the amount has been routed through a bogus entity viz MEC Tech who is not engaged in the any genuine business. 4. As could be seen from the grounds raised, ground no. 1 is in relation to the decision of first appellate authority in holding the reopening of assessment u/s. 147 of the Act as invalid. Whereas, ground nos. 2 & 3 are challenging the deletion of addition made of Rs.1,10,00,000/- u/s. 69A of the Income Tax Act, 1961 (‘the Act’ for short). 5. Briefly, the facts are, the assessee is a resident corporate entity. For the assessment year under dispute, the assessee filed its return of income u/s. 139(1) of the Act on 29.11.2015, declaring total loss of Rs.53,86,79,186/-. Assessee’s case was selected for scrutiny and assessment was completed u/s. 143(3) of the Act vide order dated 31.01.2019, determining the total income at Rs.91,25,78,810/-, after making various 3 ITA No. 5670/Mum/2024 & CO No. 8/Mum/2025 (A.Y. 2015-16) Viacom18 Media Private Limited additions/disallowances. Subsequently, in course of search and seizure operation carried out u/s. 132 of the Act in case of one Shri Vipul Ranchodbhai Patel and Shri Jayesh Bhai K Patel on 28.09.2020, it was found that M/s. MEC Tech, a proprietary concern of Smt. Neena Kamlesh Shah, though, was not doing any genuine business, but it is maintaining a bank account with HDFC Bank, Ahmadabad. It was further found that on 12.12.2014 and 16.12.2014, M/s. MEC Tech has paid Rs.55 lacs each to the assessee company. Being of the view that M/s. MEC Tech has no genuine business activity, hence, the transactions involving payment of Rs.1,10,00,000/- to the assessee is ‘non genuine transaction’, the Assessing Officer (AO) reopened the assessment u/s. 147 of the Act. 6. In course of assessment proceedings, the A.O. confronted the assessee, the information received in course of the alleged search and seizure operation carried out in case of Shri Vipul Ranchodbhai Patel and Shri Jayesh Bhai K Patel and also brought to its notice that the alleged payment of Rs.1,10,00,000/- by M/s. MEC Tech Proprietorship to the assessee is non genuine transaction. The A.O. further called upon the assessee to explain why the amount of Rs.1,10,00,000/- allegedly received from M/s. MEC Tech, being a non-genuine transaction should not be added to the income of the assessee. In response to the show cause notice, it was submitted by the assessee that it is engaged in the business of broadcasting, distributing, producing audio – visual program, marketing and selling commercial advertising on channels’ – Colors, Rishtey India, MTV, MTV Indies, Nickelodeon, Jr. Sonic, VH1 and Comedy Centre. It was further submitted that the assessee generates revenue from licensing and merchandising of products, brand solutions and marketing partnerships. The assessee is also in the business of production and distribution of films. It was submitted by the assessee that it had not entered into any transaction with 4 ITA No. 5670/Mum/2024 & CO No. 8/Mum/2025 (A.Y. 2015-16) Viacom18 Media Private Limited M/s. MEC Tech or its proprietor during the financial year relevant to assessment year under dispute. The assessee further submitted that it had entered into a film rights assignment agreement with M/s. UVI Films Productions Pvt. Ltd. for theatrical distribution of the film ‘Rahasya’. It was submitted as per the terms of the agreement, M/s. UVI Films Productions Pvt. Ltd. will pay certain amount to the assessee out of marketing and distribution budget for incurring various expenses towards marketing and distribution of movie. The assessee submitted that for meeting such expenses, M/s. UVI Films Productions Pvt. Ltd. paid an amount of Rs.1,10,00,000/- to the assessee through two demand drafts of Rs.55 lacs each on 12.12.2014 and 16.12.2014. Thus, it was submitted by the assessee that the amount of Rs.1,10,00,000/- was received from M/s. UVI Films Productions Pvt. Ltd. and duly recorded in the books of accounts. The assessee further submitted that it had not received any such amount from M/s. MEC Tech. The A.O. however, did not believe the contentions of the assessee and ultimately proceeded to complete the assessment by treating the amount of Rs.1,10,00,000/-, allegedly received from M/s. MEC Tech as unexplained cash credit and added back to the income of the assessee. 7. Contesting the aforesaid addition, the assessee preferred an appeal before the first appellate authority. 8. After considering the submissions of the assessee, in the context of the facts and materials available on record, the first appellate authority having found that the assessee had not in reality received any money from M/s. MEC Tech, but had actually received the amount of Rs.1,10,00,000/- from M/s. UVI Films Productions Pvt. Ltd., deleted the addition. Of-course, while deciding the legal issue raised by the assessee, challenging the 5 ITA No. 5670/Mum/2024 & CO No. 8/Mum/2025 (A.Y. 2015-16) Viacom18 Media Private Limited validity of the reopening of the assessment u/s. 147 of the Act, the first appellate authority held that in view of the decision of Hon'ble Jurisdictional High Court in the case of Hexaware Technologies Ltd. vs. ACIT [2024] 464 ITR 430 (Bom), the reassessment is invalid. 9. Being aggrieved with the aforesaid decision of first appellate authority, the Revenue is in appeal before us. 10. We have considered rival submissions and perused the materials on record. It is evident, the disputed addition was made by the A.O. primarily relying upon certain information received as a result of search and seizure operation conducted in case of third parties in no way connected to the assessee. Relying upon such information, the A.O. had concluded that the assessee had received an amount of Rs.1,10,00,000/- from an entity namely M/s. MEC Tech, a proprietary concern of Smt. Neena Kamlesh Shah. However, it is evident, in course of assessment proceeding itself, the assessee had emphatically denied of having entered into any transaction with M/s. MEC Tech Proprietorship or its proprietor Smt. Neena Kamlesh Shah, either in the assessment year under dispute or in any other assessment year. On the contrary, the assessee submitted that the amount of Rs.1,10,00,000/- was received through two demand drafts of Rs.55 lacs each from M/s. UVI Films Productions Pvt. Ltd. for marketing and distribution of a film named ‘Rahasya’, produced by M/s. UVI Films Productions Pvt. Ltd. In this context, the assessee had brought on record, the agreement entered with M/s. UVI Films Productions Pvt. Ltd. delineating the terms and conditions for marketing and distribution of the films as well as the sharing of cost and revenue towards marketing and distribution work. 6 ITA No. 5670/Mum/2024 & CO No. 8/Mum/2025 (A.Y. 2015-16) Viacom18 Media Private Limited 11. As per the terms of the agreement, the assessee was required to incur the cost of marketing and distribution which was to be reimbursed by M/s. UVI Films Productions Pvt. Ltd. So far as the collection from theatres towards the theatrical release of movie, both the parties had agreed to a revenue sharing model. It is observed, the assessee had received gross amount of Rs.5,08,99,000/- from M/s. UVI Films Productions Pvt. Ltd. including the amount of Rs.1,10,00,000/-. This is evident from the ledger of M/s. UVI Films Productions Pvt. Ltd. in the books of the assessee. After adjustment of cost of marketing and distribution as well as sharing of revenue, there was a credit balance of Rs.94,04,116/-. It is further evident, M/s. UVI Films Productions Pvt. Ltd. has forwarded the two demand drafts of Rs.55 lacs each dated 12.12.2014 and 16.12.2014 issued by HDFC Bank, through a covering letter to the assessee on 16.12.2014. The said demand drafts were deposited to assessee’s bank account on 01.01.2015. It is very much clear that demand draft number matches with the number mentioned in the bank statement of the assessee. Even, the bank receipt voucher placed in the paper book corroborates the fact that the amount of Rs.1,10,00,000/-, comprised of two demand drafts issued by M/s. UVI Films Productions Pvt. Ltd. in favour of the assessee. Relying upon some unsubstantiated information received in course of search conducted in case of some third parties, the A.O. has unilaterally concluded that the amount of Rs.1,10,00,000/- was received from M/s. MEC Tech, which has no business transaction. The A.O. has not brought on record any corroborative evidence to substantiate his allegation that the amount of Rs.1,10,00,000/-, in fact, was received from M/s. MEC Tech. There is nothing on record to suggest that any independent enquiry was taken up with M/s. MEC Tech or its proprietor, to ascertain whether in reality it has paid the amount of Rs.1,10,00,000/- to the assessee. From the stage 7 ITA No. 5670/Mum/2024 & CO No. 8/Mum/2025 (A.Y. 2015-16) Viacom18 Media Private Limited of assessment proceeding itself, the assessee has consistently taken the stand that it has received the amount of Rs.1,10,00,000/- from M/s. UVI Films Productions Pvt. Ltd. and the stand taken by the assessee was backed by corroborative evidence. The A.O. has not brought any cogent material/evidence to dislodge assessee’s claim or to discredit the evidences brought on record by the assessee. Merely on suspicion, conjuncture and surmises the A.O. has made the addition. On going through the observations of the first appellate authority, we are convinced that he has deleted the addition after carefully analyzing and appreciating the facts and evidences available on record. That being the case, we do not find any infirmity in the decision of first appellate authority. Accordingly, we uphold the same by dismissing the grounds raised. 12. In view of our decision on merits, the issue regarding the validity or otherwise of the reopening of assessment having become academic, does not require adjudication, hence, kept open. CO No. 8/Mum/2025 13. In view of our decision in ITA No.5670/Mum/2024 (supra), the grounds raised in cross objection, which are on validity of reopening of assessment having become infructuous, do not require adjudication. 13. In the result, the appeal and the cross objection are dismissed. Order pronounced in the open court on 25.03.2025 Sd/- Sd/- (Prabhash Shankar) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 25.03.2025 Roshani, Sr. PS 8 ITA No. 5670/Mum/2024 & CO No. 8/Mum/2025 (A.Y. 2015-16) Viacom18 Media Private Limited Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai "