DCIT, New Delhi V. M/s. NE Television Network Pvt. Ltd., New Delhi

ITA 3311/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3594 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 25-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAURAV PUNDIR SENIOR
• Keywords: Depreciation; Opportunity of being heard; Corroborative evidences; Set aside
• Section: 44AB; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.3311/DEL./2017 (ASSESSMENT YEAR : 2012-13) DCIT, CIRCLE 18 (1), VS. M/S. N E TELEVISION NETWO RK PVT. LTD., NEW DELHI. 7C, DOCTORS LANE GOLE MARKET, NEW DELHI 110 001. (PAN : AACCN0567G) (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI GAURAV PUNDIR, SENIOR DR DATE OF HEARING : 22.09.2021 DATE OF ORDER : 13.10.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, DCIT, CIRCLE 18 (1), NEW DELHI (HEREINAF TER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 10.03.2017 PASSE D BY THE COMMISSIONER OF INCOME - TAX (APPEALS)-33, NEW DELH I QUA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA T HAT:- 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN DELETING ADD ITION OF RS.2,24,00,000/- ON ACCOUNT OF UNEXPLAINED TRADE ITA NO.3311/DEL./2017 2 RECEIVABLE FOR WANT OF PROPER ENQUIRY BY THE ASSESS ING OFFICER (THE AO) BUT WITHOUT MAKING ENQUIRY OR DIRE CTING FURTHER ENQUIRY U/S 250(4) OF THE INCOME TAX ACT, 1 961 (THE ACT) AS LAID DOWN BY HON'BLE DELHI HIGH COURT IN CASE OF CIT VS JANSAMPARK ADVERTISING AND MARKETING (P) LIMITED (2015) 375 ITR 373? 2. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN DELETING ADD ITION OF RS.2,24,00,000/- ON ACCOUNT OF UNEXPLAINED TRADE RECEIVABLE IN HIS ONE LINE ORDER BY SOLELY RELYING ON SELF- SERVING CLAIM OF THE ASSESSEE AND WITHOUT RECORDING REASONS FOR REACHING THE CONCLUSION? 3. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) IS LEGALLY JUSTIFIED IN DELETING DIS ALLOWANCE OF DEPRECIATION OF RS.28,76,386/- MADE BY THE ASSES SING OFFICER (THE AO) ON THE GROUND THAT THE ASSETS WERE NOT PUT TO USE DURING THE YEAR UNDER CONSIDERATION WITH OUT CONSIDERING FINDINGS OF FACTS AS RECORDED BY THE AO AND WITHOUT RECORDING HIS OWN FINDINGS ON USE OF THE AS SET? 4. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E, THE LD. CIT (A) IS LEGALLY JUSTIFIED IN DELETING AD DITION OF RS.2,24,00,000/- AND DISALLOWANCE OF DEPRECIATION O F RS.28,76,386/- BY ACCEPTING SELF-SERVING NEW CLAIMS AND DOCUMENTS FILED BY THE ASSESSEE EVEN WHEN THE ASSES SEE HAD NOT FULFILLED CONDITIONS AS LAID DOWN UNDER RUL E 46 A OF THE INCOME TAX RULE, 1962 (THE RULE) AND WITHOUT PROVIDING OPPORTUNITY OF BEING HEARD TO THE AO? 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE IS A SATELLITE O PERATING COMPANY RUNNING A SATELLITE TV CHANNEL IN THE NAME OF NE WI FI, FORMERLY CALLED NE TV. DURING THE SCRUTINY PROCEEDINGS, ASS ESSING OFFICER (AO) NOTICED FROM THE FINANCIALS OF THE ASSESSEE CO MPANY THAT SALE CONSIDERATION DURING THE YEAR UNDER ASSESSMENT WAS RS.96,62,257/- WHEREAS TRADE RECEIVABLES HAD INCREASED FROM RS.4.9 8 CRORES TO ITA NO.3311/DEL./2017 3 RS.7.22 CRORES. DECLINING THE CONTENTIONS RAISED B Y THE ASSESSEE THAT INCREASE IN DEBTORS WAS ABOUT RS.1 CRORE AND D URING THE YEAR, THE DEBTORS OF THE ASSESSEE COMPANY HAD MADE PAYMEN T TO ONE OF THE ASSESSEES GROUP COMPANIES, AO MADE ADDITION OF RS.2,24,00,000/- ON THE GROUND THAT NO SUPPORTING E VIDENCE HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE COMPANY TO P ROVE ITS CASE. AO HAS ALSO MADE ADDITION OF RS.28,76,386/- BY WAY OF DISALLOWANCE OF CLAIM OF DEPRECIATION FOR WANT OF A NY EXPLANATION BY THE ASSESSEE COMPANY AND THEREBY ASSESSED THE TO TAL INCOME AT RS.3,03,48,812/-. 3. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING APPEAL WHO HAS DELETED THE ADDITION BY PARTL Y ALLOWING THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME U P BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 4. ASSESSEE HAS NOT PREFERRED TO PUT IN APPEARANCE DESPITE ISSUANCE OF THE NOTICE AND CONSEQUENTLY, WE PROCEED ED TO DECIDE THE PRESENT APPEAL WITH THE ASSISTANCE OF THE LD. D R AS WELL AS ON THE BASIS OF DOCUMENTS AVAILABLE ON THE FILE. 5. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIV E FOR THE REVENUE/APPELLANT TO THE APPEAL, GONE THROUGH THE D OCUMENTS RELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHOR ITIES BELOW IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CAS E. ITA NO.3311/DEL./2017 4 GROUNDS NO.1 & 2 6. UNDISPUTEDLY, ASSESSEE COMPANY HAS NOT BROUGHT O N RECORD ANY SUPPORTING EVIDENCE IN SUPPORT OF ITS EXPLANATI ON DURING THE ASSESSMENT PROCEEDINGS. IT IS ALSO NOT IN DISPUTE THAT BY EXAMINING THE EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE COMP ANY BEFORE THE LD. CIT (A), NO REMAND REPORT FROM THE AO HAS BEEN CALLED. 7. IN THE BACKDROP OF THE AFORESAID UNDISPUTED FACT S, WHEN WE EXAMINE THE IMPUGNED ORDER PASSED BY THE LD. CIT (A ) SO FAR AS ADDITION OF RS.2,24,00,000/- ON ACCOUNT OF UNEXPLAI NED TRADE RECEIVABLES IS CONCERNED, NO REASON FOR GRANTING RE LIEF TO THE ASSESSEE COMPANY HAS BEEN GIVEN BY THE LD. CIT (A) WHICH IS APPARENT FROM THE FINDINGS RETURNED BY THE LD. CIT( A) IN PARAS 6.2.2 & 6.3 OF THE IMPUGNED ORDER, WHICH ARE AS UND ER :- 6.2.2 THE APPELLANT HAS FURTHER EXPLAINED AS TO HO W THE TRADE RECEIVABLES CONSIDERED GOOD IN THE PREVIOUS Y EAR HAVE TURNED TO 'OTHER DEBTS' DURING THIS YEAR ON AC COUNT OF DIFFERENCE OF PERIOD OF STANDING. 6.3 I HAVE CONSIDERED THE ACTION OF THE ASSESSING OFFICER AND THE SUBMISSIONS OF THE APPELLANT. I AGR EE WITH THE SUBMISSION OF THE APPELLANT THAT THE A.O. HAS CONSIDERED ONLY ONE PART OF THE TOTAL DEBTORS I.E. MORE THAN SIX MONTHS. FROM THE ASSESSMENT ORDER IT IS APPARENT THAT THE ASSESSING OFFICER HAS NOT ADEQUAT ELY INVESTIGATED THE ISSUE BEFORE ARRIVING AT THE CONCL USION. IN THE LIGHT OF DETAILED EXPLANATIONS OFFERED BY THE A PPELLANT, THE ADDITION IS UNSUSTAINABLE AND IS HENCE DELETED. ITA NO.3311/DEL./2017 5 8. BARE PERUSAL OF THE AFORESAID FINDINGS GOES TO P ROVE THAT WHEN NO EVIDENCE HAS BEEN GIVEN BY THE ASSESSEE COM PANY DURING THE ASSESSMENT PROCEEDINGS AND NO REMAND REPORT HAS BEEN CALLED, AND ACCEPTING THE CONTENTIONS OF THE ASSESSEE AS A GOSPEL TRUTH WITHOUT CONDUCTING ANY ENQUIRY IS NOT SUSTAINABLE I N THE EYES OF LAW. FINDINGS RETURNED BY THE LD. CIT (A) ARE CRYP TIC AND WITHOUT ANY REASONS, HENCE SET ASIDE. SO, THIS ISSUE IS RE MITTED BACK TO THE LD. CIT (A) TO DECIDE AFRESH AFTER EXAMINING ALL TH E EVIDENCES BROUGHT ON RECORD BY THE ASSESSEE DURING THE FIRST APPELLATE PROCEEDINGS BY PASSING A REASONED ORDER. CONSEQUENT LY, GROUNDS NO.1 & 2 ARE DETERMINED IN FAVOUR OF THE REVENUE FO R STATISTICAL PURPOSES. GROUNDS NO.3 & 4 9. SO FAR AS DELETION OF DISALLOWANCE OF DEPRECIATI ON AMOUNTING TO RS.28,76,386/- IS CONCERNED, IT IS THE CASE OF T HE ASSESSEE COMPANY THAT NO NEW ADDITION TO THE FIXED ASSETS HA S BEEN MADE DURING THE YEAR UNDER CONSIDERATION. ON THE OTHER HAND, AO DISALLOWED THE DEPRECIATION ON THE GROUND THAT ASSE TS WERE NOT PUT TO USE DURING THE YEAR. 10. ASSESSEE HAS FILED THE DETAILS OF DATE OF PURCH ASE OF ASSETS BEFORE THE LD. CIT (A) WHICH IS AS UNDER :- ITA NO.3311/DEL./2017 6 PARTICULARS AMOUNT DATE OF PURCHASE REMARKS BUILDING 4,400,000 25.10.2004 PREMISES IS BEING USE D AS STUDIO SET UPS AND COLLECTION AND PRODUCTION OF MEDIA CONTENT FOR THE CHANNEL. COMPUTERS 29,885,834 15.04.2006 MEDIA EQUIPMENT COMPRISING OF SERVERS, DESKTOP AND OTHER STORAGE EQUIPMENT USED FOR THE BUSINESS OF THE ASSESSEE. FURNITURE & FIX. 102,890 25.01.2006 USED FOR THE BUSINESS OF THE ASSESSEE. OFFICE EQUIPMENTS 175,500 15.04.2007 USED FOR THE BUSINESS OF THE ASSESSEE. PLANT & MACHINERY 35,443,035 03.04.2005 SATELLITE EQUIPMENTS AND PLANT & MACHINERY FOR THE PRODUCTION OF CONTENT AND DISTRIBUTION OF NEWS FOR THE BUSINESS OF THE ASSESSEE. TOTAL 80,007,259 11. LD. CIT (A) DELETED THE ADDITION BY RETURNING F OLLOWING FINDINGS :- 7.4 I HAVE CONSIDERED THE ACTION OF THE ASSESSING OFFICER AND THE SUBMISSIONS OF THE APPELLANT. THE ASSESSING OFFICER HAS MADE THE ADDITION WITHOUT CONSIDERING ASSESSEES REPLY DATED 10.03.15. ON EXAMINATION OF THE DETAILS SUBMITTED BY THE APPELLA NT, I FIND THAT NO NEW ADDITION TO THE FIXED ASSETS IS MA DE DURING THE YEAR. THE FIXED ASSETS ON WHICH DEPRECI ATION HAS BEEN CLAIMED WERE PURCHASED BETWEEN 2004 AND 20 07 I.E. 5 TO 7 YEARS BACK. AS THE APPELLANT HAS A TUR NOVER OF 96.62 LAKHS DURING THE YEAR, THE CONCLUSION OF THE ASSESSING OFFICER THAT THE ASSETS WERE NOT PUT TO U SE HAS NO BASIS. THE SAME CANNOT BE UPHELD. THE ADDITION IS DELETED. ITA NO.3311/DEL./2017 7 12. WE ARE OF THE CONSIDERED VIEW THAT WHEN THE FIN ANCIALS OF THE ASSESSEE COMPANY ARE AUDITED ONE U/S 44AB OF THE AC T WHICH HAS NOT BEEN DISPUTED BY THE AO AND DATE OF PURCHASE OF THE ASSETS HAS BEEN BROUGHT ON RECORD WHICH HAVE NOT BEEN PURCHASE D DURING THE YEAR UNDER ASSESSMENT AS IS EVIDENT FROM THE TABLE EXTRACTED IN PRECEDING PARA NO.10, WE FIND NO ILLEGALITY OR INFI RMITY IN THE FINDINGS RETURNED BY THE DL. CIT (A). HOWEVER, DEL ETION OF ADDITION OF RS.28,76,386/- IS SUBJECT TO THE VERIFI CATION BY THE AO AS TO THE DATE OF PURCHASE OF THE ASSETS AS CLAIMED BY THE ASSESSEE. CONSEQUENTLY, GROUNDS NO.2 & 3 ARE DETERMINED AGAIN ST THE REVENUE. 13. RESULTANTLY, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 13 TH DAY OF OCTOBER, 2021. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 13 TH DAY OF OCTOBER, 2021 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-33, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.