ACIT, Circle-3, Kolkata, Kolkata V. M/s. ABP TV (P)Ltd, Kolkata

ITA 1313/KOL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70461 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2013
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 11-09-2012
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA
• Assessee Lawyers: S P CHOUDHURY
• Keywords: Bad and doubtful debts
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C, KOLKATA [BEFORE HONBLE SRI SHAMIM YAHYA, AM & HONBLE SR I GEORGE MATHAN, JM] ITA NOS.1313&1314/KOL/2012 ASSESSMENT YEARS : 2007-08 & 2009-2010 ( APPELLANT ) (RESPONDENT) A.C.I.T., CIRCLE-3, . M/S. ABP TV PVT. LTD. KOLKATA KOLKATA (PAN AADCA 7296 A) FOR THE APPELLANT: SHRI P.DAM KANUNJNA, JCIT, SR.DR FOR THE RESPONDENT: SHRI S.P.CHOUDHURY, ADVOCATE DATE OF HEARING : 17.12.2013 DATE OF PRONOUNCEMENT : 17. 12.2013. ORDER PER SHRI GEORGE MATHAN, JM ITA NO.1313/KOL/2012 IS AN APPEAL FILED BY THE REV ENUE AGAINST ORDER OF LD. C.I.T.(A)- I, KOLKATA IN APPEAL NO.583/CIT(A)-I/CIR -3/09-10 DATED 26.06.2012 FOR ASSESSMENT YEAR 2007-08. ITA NO.1314/KOL/2012 IS A N APPEAL FILED BY THE REVENUE AGAINST ORDER OF LD. C.I.T.(A)- I, KOLKATA IN APPEA L NO.766/CIT(A)-I/CIR-3/11-12 DATED 26.06.2012 FOR ASSESSMENT YEAR 2009-10. 2. SHRI P.DAM KANUNJNA, JCIT, SR.DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI S.P.CHOUDHURY, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE. ITA NO.1313/KOL/2012 (A.YR.2007-08): 3. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED LD.CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.46,07,000/- MADE U/ S 14A R.W.R. 8D WITHOUT APPRECIATING THE FACT THAT IT WAS FOR THE ASSESSEE TO PROVE BY PRODUCING MATERIAL ON RECORD THAT NO INTEREST BEARING FUND WAS UTILIZED F OR INVESTMENTS. 2. THAT THE ORDER OF THE A.O. BE UPHELD IN VIEW OF THE JUDGEMENT OF JURISDICTIONAL TRIBUNAL IN THE CASE OF DHANUKA & SONS VS CIT (CENT RAL)-I, KOLKATA [12 TAXMAN.COM 227 (CAL)2011]. ITA NOS.1 313&1314/KOL/2012 ACIT.KOL VS M/S.ABP TV PVT. LIMITED A. YRS.2007-08 & 2009-10 2 3. THAT THE LD. CIT(A) ERRED IN DELETING THE DISALL OWANCE OF RS.46,07,000/- WITHOUT APPRECIATING THE FACT THAT DISALLOWANCE WAS MADE AS PER RULE 8D (2)(III) AND NOT AS PER RULE 8D(2)(II) OF THE I.T.RULE, 1962. 4. THAT THE DEPARTMENT CRAVES LEAVE TO ADD, ALTER O R MODIFY ANY GROUND OF APPEAL DURING THE HEARING. 4. AT THE TIME OF HEARING IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUE INVOLVED IN THE REVENUES APPEAL WAS IN RESPECT OF DELETION OF DISALLOWANCE MADE BY INVOKING PROVISION OF SECTION 14A R.W.S. 8D OF IT R ULE, 1962. IT WAS FURTHER SUBMITTED BY THE LD. AR THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF RE I AGRO LTD. VS DCIT IN ITA NO.1331/KOL/2011 AND ITA NO.1423/KOL/2011 DATED 19. 06.2013 WHEREIN THE COORDINATE BENCH OF THIS TRIBUNAL HAS CATEGORICALLY HELD THAT IT IS FOR THE AO TO SHOW THAT THE PROVISION OF SECTION 14A OF THE ACT WAS AP PLICABLE IN ASSESSEES CASE AND WHEN COMPUTING THE DISALLOWANCE U/S 14A OF THE ACT READ WITH RULE 8D IT IS TO BE IN RELATION TO THE INVESTMENT WHICH GENERATED THE INCO ME WHICH DOES NOT FORM PART OF THE TOTAL INCOME. 5. IN REPLY THE LD. DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE LD. AR VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. A PERUSAL O F ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSEE HAS NOT DERIVED ANY DIVIDEN D INCOME. FURTHER A PERUSAL OF THE INCOME EXPENDITURE ACCOUNT OF THE ASSESSEE CLEARLY SHOWS THAT THE ASSESSEE DOES NOT HAVE ANY INCOME WHICH DOES NOT FORM PART OF THE TOT AL INCOME. FURTHER IT IS ALSO NOTICED THAT THE LD. CIT(A) HAS TAKEN INTO CONSIDER ATION THE FACT THAT THE INVESTMENT IN THE SHARES OF SUBSIDIARY COMPANY WAS ONLY FOR THE P URPOSE OF HAVING CONTROL OVER THE BUSINESS AFFAIRS OF THE SUBSIDIARY COMPANY WHICH WA S BEING MAINTAINED AS SUBSIDIARY COMPANY FOR SPECIFIC BUSINESS PURPOSES OF THE ASSES EE. FURTHER THE ASSESSEE HAS ALSO NOT INCURRED ANY INTEREST EXPENDITURE ATTRIBUTABLE TO THE SAID INVESTMENT IN THE SHARES. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT PROVIS ION OF SECTION 14A READ WITH RULE 8D DOES NOT APPLY TO THE ASSESSEES CASE. HOWEVER, AS THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE ORDER OF THE LD. CIT(A) THE DISA LLOWANCE AS CONFIRMED BY THE LD. CIT(A) STANDS. ITA NOS.1 313&1314/KOL/2012 ACIT.KOL VS M/S.ABP TV PVT. LIMITED A. YRS.2007-08 & 2009-10 3 7. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMI SSED. ITA NO.1314/KOL/2012 (A.YR.2009-10): 8. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLO WING GROUNDS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED LD.CIT(A) ERRED IN DELETING THE DISALLOWANCEOF BAD DEBT OF RS.10,33,52 1/- WITHOUT CONSIDERING THE PECULIARITY OF THE CASE THAT IT WAS ASSESSEES OWN SUBSIDIARY COMPANY IN WHICH THE ASSESSEE HAVING SUBSTANTIAL SHARES AND CONTROLLING THE AFFAIRS OF IT. 2. THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF THE A.O. WITHOUT CONSIDERING THE PECULIARITY OF THE CASE OF ASSESSEE AS EXPLAINED IN ASSESSMENT ORDER. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED LD.CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS.85,81,632/- MADE U/ S 14A R.W.R. 8D WITHOUT APPRECIATING THE FACT THAT IT WAS FOR THE ASSESSEE TO PROVE BY PRODUCING MATERIAL ON RECORD THAT NO INTEREST BEARING FUND WAS UTILIZED F OR INVESTMENTS. 4. THAT THE LD. CIT(A) ERRED IN DELETING THE DISALL OWANCE OF RS.85,81,632/- WITHOUT APPRECIATING THE FACT THAT DISALLOWANCE WAS MADE AS PER RULE 8D (2)(III) AND NOT AS PER RULE 8D(2)(II)(INTEREST) OF THE I.T.RULE, 1962. 5. THAT THE ORDER OF THE A.O. BE UPHELD IN VIEW OF THE JUDGEMENT OF JURISDICTIONAL TRIBUNAL IN THE CASE OF DHANUKA & SONS VS CIT (CENT RAL)-I, KOLKATA [12 TAXMAN.COM 227 (CAL)2011]. 4. THAT THE DEPARTMENT CRAVES LEAVE TO ADD, ALTER O R MODIFY ANY GROUND OF APPEAL DURING THE HEARING. 9. IN RESPECT OF GROUND NOS.1 AND 2 OF THE REVENUE S APPEAL THE LD. AR DREW OUR ATTENTION TO PAGE 19 OF THE PAPER BOOK WHICH SHOWS BAD DEBT WRITTEN OFF UNDER THE HEAD ADMINISTRATIVE EXPENSES SCHEDULE TO ACCOUNTS . IT WAS SUBMITTED BY THE LD. AR THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LIMITED VS CIT REPORTED IN 323 ITR 397 (SC) THE BAD DEBTS A S DELETED BY THE LD. CIT(A) WAS LIABLE TO BE SUSTAINED. 10. IN REPLY THE LD. DR VEHEMENTLY SUPPORTED THE OR DER OF THE AO. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE ISSUE OF BAD DEBT IS NOW SQUARELY COVERED BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TRF LIMITED VS CIT REFERRED TO SUPRA THE FI NDINGS OF THE LD. CIT(A) ON THIS ISSUE IS CONFIRMED. ITA NOS.1 313&1314/KOL/2012 ACIT.KOL VS M/S.ABP TV PVT. LIMITED A. YRS.2007-08 & 2009-10 4 12. IN RESPECT OF GROUND NOS. 3 TO 5 IN THIS APPEAL IT WAS FAIRLY AGREED BY BOTH THE SIDES THAT THE ISSUE IN RESPECT OF DELETION OF DISA LLOWANCE MADE BY INVOKING PROVISION OF SECTION 14A R.W.RULE 8D OF IT RULES, 1962 WAS ID ENTICAL TO THE ISSUE IN ITA NO.1313/KOL/2012. 13. WE HAVE CONSIDERED THE SUBMISSIONS. AS WE HAVE HELD IN ITA NO.1313/KOL/2012 ABOVE THAT NO DISALLOWANCE U/S 14A WAS CALLED FOR THE FINDING `OF THE LD. CIT(A) IS CONFIRMED FOR THIS YEAR ALSO. IT WAS NOTICED THAT THE LD. CIT(A) HAS RESTRICTED THE DISALLOWANCE TO RS.1,00,000/- WHICH HAS NOT BEEN APPEALED AGAINST BY THE ASSESSEE. CONSEQUENTLY THE DISALLOWANCE SUSTAIN ED BY THE LD. CIT(A) WILL REMAIN. 14. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. 15. IN THE RESULT THE APPEALS OF THE REVENUE ARE DI SMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 17.12.2013. SD/- SD/- [SHAMIM YAHYA] [ GEORGE MATHAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 17.12.2013. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. M/S. ABP TV PVT. LTD., 6, PRAFULLA SARKAR STREET, K OLKATA-700001. 2 A.C.I.T., CIRCLE-3, KOLKATA 3 . CIT(A)-I, KOLKATA 4. CIT - KOLKATA. 5. CIT(A)DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES ITA NOS.1 313&1314/KOL/2012 ACIT.KOL VS M/S.ABP TV PVT. LIMITED A. YRS.2007-08 & 2009-10 5