ACIT, CHENNAI V. Sun TV Net Work Ltd., CHENNAI

ITA 1578/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7921 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTHI KRISHNAN
• Assessee Lawyers: N DEVANATHAN SH K RAMKRISHNAN
• Keywords: Capital asset; Depreciation; Commercial expediency; Revenue expenditure; Capital expenditure
• Section: 14A; 37

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.1340 & 1341/MDS/2015 ( )( / ASSESSMENT YEARS : 2010-11 & 2011-12 M/S SUN TV NETWORK LIMITED, MURASOLI MARAN TOWERS, 73, MRC NAGAR MAIN ROAD, MRC NAGAR, CHENNAI - 600 028. PAN : AADCS 4885 K V. THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 20(1) (PREVIOUSLY MEDIA CIRCLE II), CHENNAI - 600 034. (+,/ APPELLANT) (-.+,/ RESPONDENT) ./ ITA NOS. 1577, 1578 & 1579/MDS/2015 ( )( / ASSESSMENT YEARS : 2005-06, 2010-11 & 2011-12 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 20, CHENNAI - 600 034. V. M/S SUN TV NETWORK LTD., (FORMERLY GEMINI TV PVT. LTD.), MURASOLI MARAN TOWERS, 73, MRC NAGAR MAIN ROAD, MANDAVELI, CHENNAI - 600 028. PAN : AADCS 4885 K (+,/ APPELLANT) (-.+,/ RESPONDENT) (/0 1 2 /ASSESSEE BY : SH. N. DEVANATHAN, ADVOCATE SH. K. RAMKRISHNAN, CA 3 1 2 /REVENUE BY : MS. JAYANTHI KRISHNAN, CIT 4 1 0% / DATE OF HEARING : 20.01.2016 5') 1 0% / DATE OF PRONOUNCEMENT : 19.02.2016 2 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THE ASSESSEE AND THE REVENUE HAVE FILED APPEALS AGAINST THE COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)- 14, CHENNAI, DATED 27.03.2015 PERTAINING TO ASSESSM ENT YEARS 2010-11 AND 2011-12. THE REVENUE HAS ALSO FILED AP PEAL FOR THE ASSESSMENT YEAR 2005-06. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN THESE APPEALS, WE HEARD ALL THESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. FIRST, LETS TAKE REVENUES APPEALS. THE ONLY I SSUE ARISES FOR CONSIDERATION IS WITH REGARD TO TREATMENT OF EX PENDITURE ON THE COST OF TELEVISION SERIAL RIGHTS AND FEATURE FILM R IGHTS. THE ASSESSEE CLAIMED THE EXPENDITURE ON TELEVISION SERIAL RIGHTS AND FEATURE FILM RIGHTS AS REVENUE EXPENDITURE. HOWEVER, THE ASSESS ING OFFICER TREATED THE SAME AS INTANGIBLE ASSET AND ALLOWED DE PRECIATION AT THE RATE OF 25%. HOWEVER, ON APPEAL BY THE ASSESSEE, T HE CIT(APPEALS), BY FOLLOWING THE ORDER OF THIS TRIBUN AL IN THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEARS 2004-0 5 TO 2009-10 3 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 IN I.T.A. NOS.1515 TO 1520/MDS/2013 DATED 31.10.201 3, ALLOWED THE CLAIM OF THE ASSESSEE AS REVENUE EXPENDITURE. 3. MS. JAYANTHI KRISHNAN, THE LD. DEPARTMENTAL REPR ESENTATIVE, SUBMITTED THAT THE ASSESSEE-COMPANY IS ENGAGED IN T HE BUSINESS OF SATELLITE TELEVISION BROADCASTING. THE ASSESSEE EA RNS INCOME FROM BROADCAST FEES ON SALE OF TIME SLOTS TO THE PRODUCE RS WHO AIR THEIR OWN PROGRAMMES. THE PRODUCERS EARN INCOME FROM ADV ERTISING. ACCORDING TO THE LD. D.R., APART FROM THE TIME SLOT ALLOTTED TO THE PRODUCERS WHO AIR THEIR PROGRAMMES, THE REMAINING T IME SLOT AVAILABLE FOR BROADCASTING WAS EXPLOITED BY THE ASS ESSEE-COMPANY. THE ASSESSEE EARNS INCOME FROM PAY CHANNELS WHICH I S SUBSCRIPTION FEES PAID BY CABLE OPERATORS. THE ASS ESSEE CLAIMED THE EXPENDITURE ON RIGHTS TO TELECAST THE FILMS AND SERIALS AS REVENUE EXPENDITURE. REFERRING TO THE ASSESSMENT ORDER, TH E LD. D.R. POINTED OUT THAT THE ASSESSEE-COMPANY HAS RIGHTS IN THE FILMS/SERIALS BROADCAST THROUGH SATELLITE. ACCORDI NG TO THE LD. D.R., THESE RIGHTS ARE PERPETUAL IN NATURE, THEREFORE, TH E EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING THE RIGHTS IN THE FILMS/SERIALS CANNOT BE IN THE NATURE OF ONE REFERRED IN SECTIONS 30 TO 36 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 4 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 4. REFERRING TO SECTION 37 OF THE ACT, THE LD. DEPA RTMENTAL REPRESENTATIVE POINTED OUT THAT THE ASSESSEE IS ELI GIBLE TO CLAIM THE EXPENDITURE WHICH WAS WHOLLY INCURRED FOR THE PURPO SE OF BUSINESS OR PROFESSION. ACCORDING TO THE LD. D.R., THE RIGH TS ACQUIRED BY THE ASSESSEE IN THE FILMS/SERIALS HAVE THE ENDURING BEN EFIT, WHICH DO NOT EXPIRE ON THE DATE OF TELECAST. REFERRING TO THE C ONTENTION OF THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT THE EXPE NDITURE HAS TO BE AMORTIZED IN TOTO, THE LD. D.R. SUBMITTED THAT T HE CLAIM OF THE ASSESSEE TO AMORTISE THE EXPENDITURE CANNOT BE ALLO WED SINCE THE RIGHT IN FILMS/SERIALS IS ENDURING BENEFIT. ACCORD ING TO THE LD. D.R., EVEN AFTER TELECASTING FILMS/SERIALS ACQUIRED BY TH E ASSESSEE, THE RIGHTS OF THE ASSESSEE OVER SUCH FILMS/SERIALS CONT INUE. THE ASSESSEE ITSELF TREATS THE RIGHTS IN THE FILMS/SERI ALS AS INTANGIBLE RIGHTS IN THE BOOKS OF ACCOUNT FOR THE PURPOSE OF C OMPANIES ACT. ONCE THE ASSET WAS SHOWN AS CAPITAL ASSET IN THE BO OKS OF ACCOUNT FOR THE PURPOSE OF COMPANIES ACT, IT IS OBVIOUS THA T THE ASSESSEE IS TREATING THE RIGHTS ON THE FILMS/SERIALS AS CAPITAL ASSET. THEREFORE, ACCORDING TO THE LD. D.R., THE RIGHT ON THE FILMS A ND SERIALS HAS TO BE TREATED AS CAPITAL IN NATURE. 5 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 5. REFERRING TO THE ORDER OF THIS TRIBUNAL FOR THE EARLIER ASSESSMENT YEARS, WHICH WAS REFERRED BY THE CIT(APP EALS), THE LD. D.R. SUBMITTED THAT NO DOUBT, THIS TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE AS REVENUE EXPENDITURE IN THE EARLIER ASSE SSMENT YEARS. HOWEVER, AN APPEAL WAS ALREADY FILED IN THE HIGH CO URT AGAINST THE ORDER OF THIS TRIBUNAL AND THE SAME IS PENDING. TH E LD. D.R. FURTHER SUBMITTED THAT THE ASSESSEES RIGHT OVER THE FILMS/ SERIALS IS PERPETUAL IN NATURE. THE ASSESSEE HAS CONVENIENTLY CHOSEN TO CLAIM THE ENTIRE EXPENDITURE IN THE FIRST YEAR OF T HE TELECAST ITSELF AND THEREBY CREATING A DISPARITY BETWEEN THE INCOME AND EXPENDITURE WHICH IS AGAINST THE CONCEPT OF MERCANTILE SYSTEM O F ACCOUNTING. REFERRING TO ACCOUNTING STANDARD 26, THE LD. D.R. P OINTED OUT THAT AS 26 SPECIFICALLY TREATS A PARTICULAR ASSET AS AN INTANGIBLE ASSET, THEN WRITING OFF THE ENTIRE COST OF THE ASSET AT TH E FIRST TELECAST ITSELF ON THE GROUND THAT THE FUTURE REVENUE ARE NOT ASCER TAINABLE WITH REASONABLE ACCURACY CANNOT BE ACCEPTED. THEREFORE, THE LD. D.R. SUBMITTED THAT THE EXPENDITURE INCURRED BY THE ASSE SSEE ON ACQUISITION OF RIGHTS IN THE FILMS AND SERIALS HAS TO BE CAPITALIZED AND THE ASSESSEE AT THE BEST CAN CLAIM ONLY DEPRECIATIO N. 6 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 6. ON THE CONTRARY, SH. N. DEVANATHAN, THE LD.COUNS EL FOR THE ASSESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO CLASSIFICATION OF EXPENDITURE INCURR ED BY THE ASSESSEE FOR ACQUIRING RIGHT ON THE FILMS/SERIALS. NO DOUBT , THE ASSESSING OFFICER FOUND THAT THE EXPENDITURE IS IN THE CAPITA L FIELD, AS INTANGIBLE ASSET AND ALLOWED DEPRECIATION AT THE RATE OF 25%. HOWEVER, THE CIT(APPEALS), AFTER REFERRING TO THE DECISION OF TH IS BENCH OF THE TRIBUNAL IN THE ASSESSEE'S OWN CASE IN I.T.A. NOS.1 515 TO 1520/MDS/2013 DATED 31.10.2013, FOUND THAT THE TREA TMENT OF THE EXPENDITURE BY THE ASSESSING OFFICER IS NOT CORRECT . THE CIT(APPEALS) BY FOLLOWING THE ORDER OF THIS TRIBUNA L FOUND THAT THE TREATMENT OF EXPENDITURE BY THE ASSESSING OFFICER I S ERRONEOUS AND INCORRECT. THE ONLY CONTENTION OF THE LD. D.R. IS THAT AN APPEAL IS PENDING BEFORE THE HIGH COURT. ACCORDING TO THE LD . D.R., MERE PENDENCY OF APPEAL BEFORE HIGH COURT CANNOT BE A RE ASON FOR NOT FOLLOWING THE DECISION OF THIS TRIBUNAL. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE ASSESSEE ENGAGED IN THE BUSINESS OF BROADCASTING TH ROUGH SATELLITE. IN THE COURSE OF ITS BUSINESS ACTIVITY, THE ASSESSE E ACQUIRED RIGHTS 7 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 OVER THE FILMS AND SERIALS. THE ASSESSEE CLAIMS TH E EXPENDITURE AS REVENUE IN NATURE. HOWEVER, THE ASSESSING OFFICER FOUND THAT WHAT WAS ACQUIRED BY THE ASSESSEE IS AN INTANGIBLE ASSET WHICH HAS AN ENDURING BENEFIT TO THE ASSESSEE, THEREFORE, THE EX PENDITURE CANNOT BE ALLOWED AS REVENUE EXPENDITURE. ACCORDINGLY, TH E ASSESSING OFFICER TREATED THE EXPENDITURE AS CAPITAL IN NATUR E. HOWEVER, HE ALLOWED DEPRECIATION AT 25%. THE QUESTION ARISES F OR CONSIDERATION IS WHETHER THE EXPENDITURE INCURRED BY THE ASSESSEE FOR ACQUIRING RIGHTS ON THE FILMS/SERIALS IS REVENUE EXPENDITURE OR CAPITAL EXPENDITURE? THIS TRIBUNAL IN THE ASSESSEE'S OWN C ASE FOR THE EARLIER ASSESSMENT YEARS EXAMINED THIS ISSUE ELABOR ATELY AND FOUND THAT THE EXPENDITURE OF SIMILAR NATURE HAS TO BE AL LOWED AS REVENUE EXPENDITURE. THE CIT(APPEALS), IN FACT, FOLLOWED T HE ORDER OF THIS TRIBUNAL. THE ONLY CONTENTION OF THE LD. D.R. IS T HAT AN APPEAL WAS ALREADY FILED BEFORE HIGH COURT AGAINST THE ORDER O F THIS TRIBUNAL AND THE MATTER IS PENDING ADJUDICATION BEFORE THE HIGHE R FORUM. IT IS NOT THE CASE OF THE REVENUE THAT THE HIGH COURT STAYED THE OPERATION OF THE ORDER OF THIS TRIBUNAL. MERELY BECAUSE AN APPE AL IS SAID TO BE PENDING BEFORE THE HIGH COURT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THIS TRIBUNAL CANNOT TAKE A DIFFERENT VIEW. WHEN THE CIT(APPEALS) FOLLOWED THE ORDER OF THIS TRIBUNAL, W E DO NOT HAVE ANY 8 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AU THORITY. MERELY BECAUSE AN APPEAL IS SAID TO BE PENDING BEFORE THE HIGH COURT, IN THE ABSENCE OF ANY CHANGE OF MATERIAL FACTS DURING THE YEARS UNDER CONSIDERATION, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITY. ACCORDINGLY, TH E ORDERS OF THE CIT(APPEALS) ARE CONFIRMED. THUS, THE APPEALS OF T HE REVENUE STAND DISMISSED. 8. NOW COMING TO THE ASSESSEES APPEALS, THE ONLY I SSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DISALLOWANCE MA DE BY THE ASSESSING OFFICER UNDER SECTION 14A OF THE ACT. 9. SH. N. DEVANATHAN, THE LD.COUNSEL FOR THE ASSESS EE, SUBMITTED THAT THE ASSESSEE-COMPANY INVESTED IN SUB SIDIARY COMPANIES, NAMELY, KAL RADIO LIMITED, SOUTH ASIA FM LIMITED AND SUN TV NETWORK EUROPE LIMITED. IN ADDITION TO THAT , THE ASSESSEE HAS ALSO INVESTED IN MUTUAL FUNDS DURING THE YEARS UNDER CONSIDERATION. ACCORDING TO THE LD. COUNSEL, THE S TRATEGIC INVESTMENTS IN THE SUBSIDIARY COMPANIES CONSTITUTE MAJOR PORTION OF INVESTMENTS OF THE COMPANY. REFERRING TO ANNUAL RE PORT, MORE PARTICULARLY PAGE 41 OF THE REPORT, THE LD.COUNSEL SUBMITTED THAT THE AVAILABLE SHARE CAPITAL WITH THE ASSESSEE WAS ` 2385.7 CRORES. 9 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 WHAT WAS INVESTED BY THE ASSESSEE IN THE SUBSIDIARY COMPANIES AND IN MUTUAL FUNDS WAS ONLY TO THE EXTENT OF ` 541.11 CRORES. THEREFORE, THE ASSESSEE HAS NOT INVESTED THE BORROW ED FUNDS EITHER IN THE SUBSIDIARY COMPANIES OR IN THE MUTUAL FUNDS. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE UNDER SECTION 14A READ WITH RULE 8D OF THE INCOME-TAX RULES, 1962 WIT HOUT SATISFYING HIMSELF THAT THE ASSESSEE HAS INCURRED ANY EXPENDIT URE. REFERRING TO SECTION 14A OF THE ACT AND RULE 8D OF INCOME-TAX RULES, 1962, THE LD.COUNSEL SUBMITTED THAT UNLESS AND UNTIL THE ASSESSING OFFICER SATISFIES HIMSELF THAT THE ASSESSEE INCURRED THE EX PENDITURE FOR EARNING INCOME WHICH DOES NOT FORM PART OF TOTAL IN COME, THERE CANNOT BE ANY DISALLOWANCE UNDER SECTION 14A OF THE ACT. 10. ON THE CONTRARY, MS. JAYANTHI KRISHNAN, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT FOR MAK ING INVESTMENT, THE ASSESSEE HAS TO NECESSARILY INCUR EXPENDITURE O N OVERHEADS. THE ASSESSEE HAS TO INCUR SUBSTANTIAL EXPENDITURE F OR TAKING A MANAGERIAL DECISION FOR MAKING INVESTMENTS IN MUTUA L FUNDS AND THE SHARES OF THE SUBSIDIARY COMPANIES. THEREFORE, THE CIT(APPEALS) FOUND THAT SECTION 14A READ WITH RULE 8D IS MANDATO RY. THE ASSESSEE HAS GENERATED INCOME BY MAKING VARIOUS INV ESTMENTS, 10 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 INCLUDING THE INVESTMENTS IN SISTER CONCERNS. THER EFORE, THE ADMINISTRATIVE EXPENSES INCURRED BY THE ASSESSEE HA S TO BE DISALLOWED AS PER THE PROCEDURE PRESCRIBED IN RULE 8D(III). THE ASSESSING OFFICER SIMILARLY DISALLOWED PROPORTIONAT E INTEREST EXPENSES BY FOLLOWING THE PROCEDURE PRESCRIBED IN R ULE 8D(II) OF THE INCOME-TAX RULES, 1962. PLACING HER RELIANCE ON TH E JUDGMENT OF KERALA HIGH COURT IN CIT V. SMT. LEENA RAMACHANDRAN (2011) 339 ITR 296, THE LD. D.R. SUBMITTED THAT ANY EXPENDITUR E INCURRED FOR EARNING INCOME WHICH WAS NOT TAXABLE UNDER THE ACT CANNOT BE ALLOWED WHILE COMPUTING THE TAXABLE INCOME. REFERR ING TO SECTION 10(33) OF THE ACT, THE LD. D.R. POINTED OUT THAT DI VIDEND INCOME WAS EXEMPT FROM TAXATION. THE DIVIDEND EARNED BY THE A SSESSEE ON THE SHARES ACQUIRED BY IT WITH BORROWED FUNDS DID NOT C ONSTITUTE PART OF THE TOTAL INCOME. THEREFORE, THE ASSESSEE HAS TO N ECESSARILY DISALLOW THE EXPENDITURE INCURRED FOR EARNING THE I NCOME WHICH DOES NOT FORM PART OF TOTAL INCOME. 11. THE LD. DEPARTMENTAL REPRESENTATIVE HAS ALSO PL ACED HER RELIANCE ON THE DECISION OF MUMBAI BENCH OF THE TRI BUNAL IN LLOYDS STEEL INDUSTRIES LTD. V. ACIT (2008) 20 SOT 40 AND SUBMITTED THAT ACQUIRING CONTROLLING INTEREST IN SUBSIDIARY COMPAN IES IS NOT PART OF 11 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 THE BUSINESS OF THE ASSESSEE. THEREFORE, THE INTER EST INCOME EARNED BY THE ASSESSEE CANNOT BE ALLOWED AS BUSINES S EXPENDITURE. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE MAIN CONTENTION OF THE ASSESSEE IS THAT THE AVAILABLE SH ARE CAPITAL INCLUDING RESERVES AND SURPLUS WAS ` 2385.7 CRORES AS ON 31.03.2010. THE AVAILABLE SHARE CAPITAL IS ` 1970.4 CRORES AND RESERVES AND SURPLUS IS ` 21,886.7 CRORES. THE INVESTMENTS MADE IN MUTUAL FUNDS INCLUDING SUBSIDIARY COMPANIES ARE ONLY ` 541.11 CRORES. THEREFORE, IT CANNOT BE SAID THAT THE ASSE SSEE HAS DIVERTED THE BORROWED FUNDS FOR MAKING ANY INVESTMENT EITHER IN THE SISTER CONCERNS OR IN THE MUTUAL FUNDS. WHEN THE ASSESSEE HAS SUFFICIENT SHARE CAPITAL, RESERVES AND SURPLUS, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE CANNOT BE ANY DISALLO WANCE TOWARDS THE INTEREST PAID ON THE BORROWED FUNDS UNDER SECTI ON 14A OF THE ACT. FOR THE PURPOSE OF DISALLOWING INTEREST INCOM E UNDER SECTION 14A READ WITH RULE 8D, THERE SHOULD BE NEXUS BETWEE N THE BORROWED FUNDS AND INVESTMENT MADE BY THE ASSESSEE IN THE SHARE CAPITAL AND MUTUAL FUNDS. IN THE ABSENCE OF ANY NE XUS, THE 12 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 PRESUMPTION IS THAT THE ASSESSEE HAS INVESTED THE A VAILABLE INTEREST-FREE FUNDS IN SHARE CAPITAL AND MUTUAL FUN DS. FURTHERMORE, MAKING INVESTMENT IN SISTER CONCERNS IS FOR COMMERC IAL EXPEDIENCY IN VIEW OF THE JUDGMENT OF APEX COURT IN S.A. BUILD ERS LTD. V. CIT (2007) 288 ITR 1. IT IS NOT THE CASE OF THE REVENU E THAT THE SISTER CONCERN OR ANY OF THE DIRECTORS HAS MISUSED THE FUN DS INVESTED BY THE ASSESSEE. WHEN THE SISTER CONCERN USES THE FUN DS ONLY FOR BUSINESS PURPOSE, THERE WAS COMMERCIAL EXPEDIENCY F OR MAKING INVESTMENT. THEREFORE, THIS TRIBUNAL IS OF THE CON SIDERED OPINION THAT THERE CANNOT BE ANY DISALLOWANCE UNDER SECTION 14A OF THE ACT READ WITH RULE 8D OF THE INCOME-TAX RULES, 1962. 13. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS UNABLE T O UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE. THE ENTIRE ADDITION MAD E BY THE ASSESSING OFFICER IS DELETED. 14. IN THE RESULT, ALL THE THREE APPEALS OF THE REV ENUE ARE DISMISSED. HOWEVER, BOTH THE APPEALS OF THE ASSESS EE ARE ALLOWED. 13 I.T.A. NOS.1340 & 1341/MDS/15 I.T.A. NOS.1577 TO 1579/MDS/15 ORDER PRONOUNCED ON 19 TH FEBRUARY, 2016 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 19 TH FEBRUARY, 2016. KRI. 1 -089 :9)0 /COPY TO: 1. (/0 /ASSESSEE 2. ASSESSING OFFICER 3. 4 ;0 () /CIT(A)-14, CHENNAI 4. 4 ;0 /CIT-10, CHENNAI 5. 9< -0 /DR 6. ( = /GF.