TV Today Network Ltd., New Delhi V. Addl. CIT, Special Range- 9, New Delhi

ITA 2738/DEL/2019

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 116452 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 06-12-2022
• Assessment Year: misc
• Appeal Filed On: 28-07-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’ NEW DLEHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA No. 2738/Del/2019 Assessment year :2014-15 TV Today Network Ltd., F-26, First Floor, Connought Circus, New Delhi. PAN: AABCT0424B Vs Addl. C.I.T., Spcl. Range-9, New Delhi. (Appellant) (Respondent) Appellant by : Shri Shailesh Gupta, C.A. Respondent by : Shri Abhishek Kumar, Sr. DR Date of hearing : 07.12.2022 Date of order : 13.12.2022 ORDER PER SHAMIM YAHYA, A.M. : This appeal by the assessee is directed against the order of ld. CIT(A) dated 31.01.2019 and pertains to assessment year 2014-15. Grounds of appeal read as under: “1. That the learned CIT(Appeals) has erred in law and on facts in disallowing a sum of Rs.1,43,57,823/- towards leave encashment in light of section 43B (f) of ITA No. 2738/Del/2019 2 the Act and the said disallowance has been made on misappreciation of the statutory provisions and thus, should be deleted as such. That the learned CIT (Appeals) has grossly erred in making the said disallowance by ignoring the replies evidences furnished by the assessee appellant and the learned AO has made the said disallowance on irrelevant and extraneous considerations without there being any adverse material and evidence and purely on surmises and conjectures as such disallowance made is wholly untenable on facts and in law. 1.1 That the learned CIT (Appeals) has grossly erred in making the said disallowance by ignoring the facts that provision for sick leave has already been disallowed by the assessee in its computation of taxable income. Further the learned CIT (Appeals) has grossly erred in not giving the benefit of payment of leave encashment made during the year. 2. That the learned CIT (Appeals) has erred in law and on facts in making a disallowance of a sum of Rs. 56, 20, 737/- under section 14A of the Act which disallowance is unjustified and untenable in law and thus should be deleted as such. 2.1 That the learned CIT (Appeals) has further failed to appreciate the fact that the investments were made in past and that too out of surplus funds and internal accruals and as such there was no requirement or occasion to have computed disallowance on account of interest paid on borrowings as no investment was made out of borrowed funds and thus the disallowance so made should be deleted on this ground alone. 2.2 That further the said disallowance made by learned CIT (Appeals) is against the statutory provisions and various judicial pronouncements of Honble High Court of Delhi i.e. jurisdictional high court, since there is no satisfaction recorded by learned AO and as such, disallowance so made is misconceived and misplaced in law and should be deleted. ITA No. 2738/Del/2019 3 3. That the appellant reserves the right to add, alter, amend, delete any / all grounds of appeal either before or at the hearing of the appeal.” 2. Apropos disallowance of a sum of Rs.1,43,57,823/-. At the outset, learned Counsel of the assessee stated that on this issue, learned CIT(A) has followed his order for the assessment year 2013-14. ITAT has remanded the issue for that year to the file of the Assessing Officer with certain directions. He pleaded that thus the issue stands covered and the decision of ITAT may be followed. Per contra, ld. DR did not dispute the proposition. 3. Upon careful consideration, we find that the issue relates to disallowance of a sum of Rs.1,43,57,823/- towards leave encashment in the light of section 43B(f). Learned CIT(A) has confirmed the same by following the CIT(A)’s order for the assessment year 2013-14. This order of learned CIT(A) was subject matter of appeal before the ITAT and ITAT in ITA No. 7277/Del/2018 and ITA No. 7287/Del/2018 has adjudicated this issue as under : “19. We have carefully perused the orders of this Tribunal in ITA No. 3356/DEL/2017 for A.Y 2012 –13. ITA No. 2738/Del/2019 4 The relevant findings of the co-ordinate bench read as under: “7. We have heard both the parties and perused the material available on record. As regards Ground No. 1, 1.1 & 1.2, the same is covered against the assessee, hence, dismissed. As regards Ground No.2, 2.1, 2.2 & 2.3 relating to disallowance towards leave encashment in lieu of provisions of Section 43B (f) of the Income Tax Act, 1961, the Hon’ble Apex Court in case of Exide Industries (Supra) held that the claim with regard to leave encashment has to be allowed on cash basis i.e. actual payment basis and not on accrual basis. It 6 ITA No. 3356/Del/2017 is pertinent to note that the payments with regards to the leave encashment have been made in subsequent assessment year i.e. 2013-14 and thus, we direct the Assessing Officer to verify and allow the deduction u/s 43B on actual payment basis as held in the decision of the Hon’ble Apex Court. Needless to say, the assessee be given opportunity of hearing by following principles of natural justice. Hence, Ground No. 2, 2.1 2.2 & 2.3 are partly allowed.” As agreed by both the counsels, since ITAT has adjudicated similar issue in assessee’s own case, we follow the same and remand the issue to the file of Assessing Officer with the same directions as above. 4. Apropos the issue of disallowance under section 14A. On this issue, learned counsel of the assessee submitted ITA No. 2738/Del/2019 5 that he shall not be pressing the same, as the assessee has already obtained relief in this regard. Hence, this issue is dismissed as not pressed. 5. In the result, appeal of the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 13/12/2022. Sd/- Sd/- (CHANDRA MOHAN GARG) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER *aks/-