Goodnews Channels P Ltd., CHENNAI V. DCIT Non Corporate Circle 20(1), CHENNAI

ITA 2440/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5728 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 24-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SRIDHAR DORA IRS JCIT
• Keywords: TDS
• Section: 143(3); 40(a)(ia)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH : CHENNAI , . , [BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] !' ./I.T.A. NOS.2440 & 2441/CHNY/2018. #$% &$ / ASSESSMENT YEARS 2010-2011 & 2011-2012. M/S. GOODNEWS CHANNELS PVT. LIMITED, DHYRIAM TOWERS, NO.73, 6 TH AVENUE, II MAIN ROAD, M BLOCK, ANNA NAGAR EAST, CHENNAI 600 102. VS. THE DEPUTY COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE 20(1) CHENNAI. [PAN AACCG 6245L] ( / APPELLANT) ( /RESPONDENT) !' '( ) * / APPELLANT BY : NONE +,'( ) * /RESPONDENT BY : SHRI. SRIDHAR DORA, IRS, JCIT. # - ) . /DATE OF HEARING : 30.04.2019 /0&% ) . /DATE OF PRONOUNCEMENT : 06.05.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THESE TWO APPEALS HAVE BEEN FILED BY THE ASSESSE E DIRECTED AGAINST DIFFERENT ORDERS OF THE LD. COMMISSIONER O F INCOME TAX ITA NOS.2440 & 2441 /2018 :- 2 -: (APPEALS)-14, CHENNAI (HEREINAFTER CALLED AS CIT( A)) DATED 29.05.2018 FOR THE ASSESSMENT YEARS 2010-11 AND 201 1-12. 2. SINCE THE IDENTICAL FACTS AND ISSUES ARE INVO LVED IN THESE APPEALS, WE PROCEED TO DISPOSE THE SAME VIDE THIS C OMMON ORDER. 3. FOR THE SAKE OF CONVENIENCE AND CLARITY THE FA CTS RELEVANT IN ITA NO.2440/CHNY/2018 ARE STATED HEREIN. 4. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (A PPEALS)-14, CHENNAI IN ITA NO. 09/CIT(A)-14/2015-16 DATED 29.5. 2018 SERVED ON 25.6.2018 IS CONTRARY TO LAW, FACTS AND CIRCUMST ANCES OF THE CASE, IN RESPECT OF ADDITION TOWARDS AGRICULTURAL I NCOME AND DISALLOWANCE U/S 40(A)(IA) OF THE INCOME TAX ACT, 1 961. 2. THE COMMISSIONER OF INCOME TAX ( APPEALS) ERRED IN SUSTAINING/ENHANCING THE ADDITION TOWARDS AGRICULTU RAL INCOME FOR REASONS THAT ARE ERRONEOUS, UNJUSTIFIED AND SUPPORT ED BY INCORRECT ANALYSIS AND FACTS. 3. THE COMMISSIONER OF INCOME TAX ( APPEALS) OUGHT TO HAVE SEEN THAT THE ENTIRE EARNINGS OF THE APPELLANT FROM ITS AGRICULTURAL HOLDINGS ARE SUPPORTED BY DATA AS RELATABLE TO THE APPELLANT'S HOLDINGS. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE AGRICULTURAL EARNINGS OF THE AP PELLANT IS REAL AND SUPPORTED BY VOUCHERS AND RECORDS THAT WERE REC ORDED IN BOOKS OF ACCOUNTS AND AUDITED. 5. THE COMMISSIONER OF INCOME (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT AGRICULTURAL EARNINGS AR E NOT COMPARABLE FROM ONE HOLDING TO ANOTHER OR FROM ONE AREA TO ITA NOS.2440 & 2441 /2018 :- 3 -: ANOTHER SINCE IT IS DEPENDANT OF FACTORS THAT ARE N OT STANDARDISED, UNLIKE MANUFACTURING DATA. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) SHOU LD HAVE APPRECIATED THAT THE DATA OF THE GOVERNMENT AND AGR ICULTURAL MARKET COMMITTEE ON AGRICULTURAL YIELD AND EARNINGS ARE ONLY INDICATIVE AND NOT CONCLUSIVE. 7. THE COMMISSIONER OF INCOME TAX )APPEALS) ERRED IN DISALLOWING ANY PORTION OF THE PAYMENTS TO CABLE OP ERATORS-MSO CHARGES, ON TECHNICAL GROUNDS. 8. THE COMMISSIONER OF INCOME TAX ( APPEALS) FAI LED TO APPRECIATE THAT THE PAYMENTS THAT WERE SUSTAINED AS ADDITION WERE MADE TO MULTIPLE VENDORS WHO ARE SMALL OPERATO RS. 9. THE COMMISSIONER OF INCOME TAX (APPEALS) FAILE D TO APPRECIATE THAT THE PAYEES HAVE PAID APPROPRIATE IN COME TAX ON THE AMOUNTS PAID TO THEM. 10. THE APPELLANT CRAVES LEAVE TO FILE ADDITIONAL GROUNDS/ARGUMENTS AT THE TIME OF HEARING. 5. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSIN ESS OF PRODUCTION AND RELAY OF PROGRAMMES IN TELEVISION CHANNELS. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 WAS FILED ON 14.10. 2010 DISCLOSING TOTAL INCOME OF RS.1,41,69,823/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY THE DEPUTY COMMISSI ONER OF ITA NOS.2440 & 2441 /2018 :- 4 -: INCOME TAX, MEDIA CIRCLE I, CHENNAI (HEREINAFTER C ALLED AO) VIDE ORDER DATED 31.03.2013 PASSED U/S. 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AT TOTAL INCOME OF RS. 3, 21,98,158/-. WHILE DOING SO, THE ASSESSING OFFICER MADE ADDITION DISBE LIEVING THE AGRICULTURAL INCOME TO THE EXTENT OF RS.4,37,114/- AND BROUGHT TO TAX THE SAME UNDER THE HEAD INCOME FROM OTHER SOURCES . LD. ASSESSING OFFICER DISALLOWED CLAIM FOR ALLOWANCE OF DEPRECIAT ION OF RS.52,71,091/- ON THE GROUND THAT APPELLANT HE H AD FAILED TO SUBSTANTIATE ACQUISITION OF FIXED ASSETS. LD. AS SESSING OFFICER DISALLOWED 20% OF THE FOLLOWING EXPENDITURE FOR WA NT OF BILLS AND VOUCHERS. (A) PRODUCTION CHARGES RS.15,02,141 (B) SCRIPT WRITING CHARGES RS.11,65,920 (C) SELLING EXPENSES RS.34,11,333 (D) BUSINESS PROMOTION EXP. RS.4,41,749 (E) CONVEYANCE EXPENSES RS.1,87,946 (F) INTERIOR REPAIRS RS.6,77,963 (G) TELEPHONE ETC RS.4,39,761 -------------------- RS.78,26,813 -------------------- ITA NOS.2440 & 2441 /2018 :- 5 -: LD. ASSESSING OFFICER ALSO DISALLOWED MSO CONNECTI ON CHARGES OF RS.1,04,14,423/- FOR NON DEDUCTION OF TAX AT SOURCE INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 6. BEING AGGRIEVED BY THE ABOVE DISALLOWANCES, AN APPEAL WAS PREFERRED BEFORE LD. CIT(A), WHO VIDE IMPUGNED ORDE R HAD CONFIRMED ADDITION ON ACCOUNT OF AGRICULTURAL INCOME, RESTRIC TED THE DISALLOWANCE OF EXPENDITURE TO THE EXTENT OF RS.9,15,521/- AS AG AINST ADDITION OF RS.15,62,362/- AND CONFIRMED THE ADDITION ON ACCOU NT OF PERSONAL EXPENDITURE. HOWEVER, RESTRICTED DISALLOWANCE U/S. 40(A)(IA) OF THE ACT TO THE EXTENT OF RS.48,45,570/- CONSIDERING THE FAC T THAT APPELLANT HAD FAILED TO EFFECT TDS. 7. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BE FORE US IN THE PRESENT APPEAL. WHEN THE APPEAL WAS CALLED FOR HEAR ING, NOBODY APPEARED ON BEHALF OF THE APPELLANT. 8. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 9. WE HEARD THE SR. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE MATERIAL ON RECORD. THE GROUNDS OF APPEAL NO.1 & 10 ARE GENERAL IN NATURE THEREFORE, DOES NOT REQUIRE ANY ADJUDICAT ION. ITA NOS.2440 & 2441 /2018 :- 6 -: 10. THE GROUNDS OF APPEAL NO. 2 TO 6 CHALLENGES D ECISION OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE ADDITION ON ACCOUNT OF DISBELIEVING AGRICULTURAL INCOME. THER E IS NO MATERIAL ON RECORD TO ESTABLISH ASSESSEE HAD CARRIED OUT ANY AG RICULTURAL ACTIVITIES AND THEREFORE WE CONFIRM THE ORDER OF THE LD. COMM ISSIONER OF INCOME TAX (APPEALS). GROUNDS OF APPEAL NOS.2 TO 6 OF AS SESSEE ARE DISMISSED. 11. FROM THE PERUSAL OF THE ORDER OF THE LD. COM MISSIONER OF INCOME TAX (APPEALS), WE FIND THAT NO EVIDENCE WA S FILED REGARDING DEDUCTION OF TAX ON THE PAYMENTS OF MSO CONNECTION CHARGES OF RS.48,45,570/- AND THEREFORE WE CONFIRM THE ORDER O F THE LD. COMMISSIONER OF INCOME TAX (APPEALS). GROUNDS OF A PPEAL NO. 7 TO 9 OF ASSESSEE ARE DISMISSED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.2440/CHNY/2018 FOR ASSESSMENT YEAR 2010-2011 IS DISMISSED. ITA NO.2441/CHNY/2018 FOR ASSESSMENT YEAR 2011-2012 . 13. THE ISSUE IN THIS APPEAL RELATES TO ADDITION O N ACCOUNT OF DISBELIEVING AGRICULTURAL INCOME. THERE IS NOTHING ON RECORD TO SHOW THAT ASSESSEE HAD CARRIED OUT ANY AGRICULTURAL ACTI VITIES AND THEREFORE ITA NOS.2440 & 2441 /2018 :- 7 -: WE CONFIRM THE ORDER OF THE LD. COMMISSIONER OF INC OME TAX (APPEALS). THE APPEAL OF THE ASSESSEE IS DISMISSED . 14. IN THE RESULT, THE APPEALS FILED BY THE ASSESS EE ARE DISMISSED. ORDER PRONOUNCED ON 6TH DAY OF MAY, 2019, AT CHENNAI. SD/- SD/- ( . ! ) (DUVVURU RL REDDY) ' #$ /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER 1 #- / CHENNAI 2# / DATED:6TH MAY, 2019. KV 3 ) +.4 5' !6 5&. / COPY TO: 1 . !' '( / APPELLANT 3. 7. (!' ) / CIT(A) 5. 5 :; +.#< / DR 2. +,'( / RESPONDENT 4. 7. / CIT 6. ;$ =- / GF