TIMES INFOTAINMENT MEDIA LTD., MUMBAI V. DY.CIT (OSD)-1(1), MUMBAI

ITA 3475/MUM/2011

• Counselvise Citation: 347519914 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 15-07-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Opportunity of being heard
• Section: 43B; 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , ! . . '#$ , & '() '! '! '! '! BEFORE SHRI H.L. KARWA, PRESIDENT, AND SHRI P.M.JAG TAP, AM ' ./ I.T.A. NO. 3475/MUM/2011 ( *+ *+ *+ *+ , , , , / ASSESSMENT YEAR: 2007-08) TIMES INFOTAINMENT MEDIA LIMITED, 4 TH FLOOR, A WING, MATULYA CENTRE, SENAPATI BAPAT MARG, LOWER PAREL (WEST), MUMBAI-400013 + + + + / VS. DY, CIT(OSD) - 1(1), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 )- & ' ./ PAN : AABCT5397H ( -. / APPELLANT ) .. ( /0-. / RESPONDENT ) -. 1 2 ' / ASSESSEE BY: SHRI M.SUBRAMANIAN ') 1 2 ' / REVENUE BY : SHRI PITAMBAR DAS ' + 1 $& / DATE OF HEARING : 15/07/2014 34, 1 $& / DATE OF PRONOUNCEMENT : 30/07/2014 (5 / O R D E R PER P.M.JAGTAP, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-2, MUMBAI DATED 27/01/2011. 2. AS NOTED AT THE OUTSET, THERE IS A DELAY OF TEN DAYS ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL BEFORE THE TR IBUNAL. IN THIS REGARD, ASSESSEE HAS FILED AN APPLICATION SEEKING C ONDONATION OF SAID DELAY ALONGWITH AN AFFIDAVIT BY ITS DIRECTOR. KEEP ING IN VIEW THE REASONS GIVEN IN THE SAID APPLICATION, WE ARE SATIS FIED THAT THE DELAY ON THE PART OF THE ASSESSEE IN FILING THIS APPEAL I S FOR GOOD AND SUFFICIENT CAUSE. THE SAID DELAY IS ACCORDINGLY CO NDONED AND THIS APPEAL OF THE ASSESSEE IS BEING DISPOSED OFF ON MER IT. ITA NO.3475/MUM/2011 TIMES INFOTAINMENT MEDIA LTD. 2 3. THE FIRST ISSUE RAISED BY THE ASSESSEE IN THIS A PPEAL RELATES TO THE DISALLOWANCE OF RS.55,39,019/- MADE BY THE AO A ND CONFIRMED BY THE CIT(A) U/S 14A OF THE ACT R.W.R. 8D OF THE I NCOME-TAX RULE 1962. 4. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF FILMS/ENTERTAINMENT. TH E RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED B Y IT ON 31/10/2007 DECLARING LOSS OF RS.52,32,280/-. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO TH AT ASSESSEE HAS MADE SUBSTANTIAL INVESTMENT IN MUTUAL FUNDS AND EQU ITY SHARES, THE INCOME ON WHICH IS EXEMPT FROM TAX. THE DISALLOWAN CE ON ACCOUNT OF EXPENDITURE INCURRED IN THE RELATION TO THE MAKING OF THE SAID INVESTMENT HOWEVER WAS NOT OFFERED BY THE ASSESSEE AS REQUIRED BY THE PROVISION OF SECTION 14A. THE AO THEREFORE WOR KED OUT SUCH EXPENSES BY APPLYING RULE 8D AT RS.55,39,019/-, AND DISALLOWANCE TO THAT EXTENT WAS MADE BY HIM U/S 14A. ON APPEAL, THE LD. CIT(A) CONFIRMED THE SAID DISALLOWANCE MADE BY THE AO. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS HELD B Y THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & BOYCE MFG. CO. LTD V/S DCIT, (2010), 328 ITR 081 (BOM.). RULE 8D IS APPLICABLE ONLY PROSPECTIVELY FROM A.Y.2008-09 AND THE DISALLOWANCE U/S 14A FOR THE YEARS PRIOR TO A.Y. 2008-09 IS REQUIRED TO BE MADE BY THE AO ON SOME REASONABLE BASIS. KEEPING IN VIEW, THE SAID D ECISION OF HONBLE JURISDICTIONAL HIGH COURT, WE SET-ASIDE THE IMPUGNE D ORDER OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO FOR QUANTIFYING THE DISALLOWANCE U/S 14A BY ADOPTING SO ME REASONABLE ITA NO.3475/MUM/2011 TIMES INFOTAINMENT MEDIA LTD. 3 BASIS. NEEDLESS TO OBSERVE THAT THE AO SHALL AFFORD PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. THE GROUND OF THE ASSESSEES APPEAL ON THIS ISSUE IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 6. THE NEXT ISSUE RAISED BY THE ASSESSEE RELATES T O THE DISALLOWANCE OF RS.63,985/- MADE BY THE AO AND CONF IRMED BY THE CIT(A) U/S 43B ON ACCOUNT OF DELAYED PAYMENT OF EMP LOYEES CONTRIBUTION TOWARDS PROVIDENT FUND. 7. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE AO THAT THE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND FOR THE MONTH OF APRIL 2006 AND MAY 2 006 AGGREGATING TO RS.63,985/- HAS BEEN MADE BY THE ASS ESSEE ON 01/08/2006 I.E. BEYOND THE RELEVANT DUE DATES PRESC RIBED IN THE EMPLOYEES PROVIDENT FUND ACT. HE THEREFORE INVOKED THE PROVISIONS OF SECTION 43B AND MADE DISALLOWANCE ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDEN T FUND. ON APPEAL, THE LD. CIT(A) CONFIRMED THE DISALLOWANCE M ADE BY THE AO ON THIS ISSUE. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE RELEVANT MATERIAL ON RECORD. AS AGGRIEVED BY THE L D. REPRESENTATIVES OF BOTH THE SIDES, THIS ISSUE IS SQUARELY COVERED I N THE FAVOUR OF THE ASSESSEE INTER-ALIA BY THE LATEST DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HINDUSTAN ORGANIC CHEMICAL LTD. (INCOME-TAX APPEAL NO.399 OF 2012 DATED 11 TH JULY 2014), WHEREIN IT IS HELD THAT THE PAYMENT MADE ON ACCOUN T OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND BEFO RE THE DUE DATE OF FILING OF THE RETURN OF INCOME OF THE RELEVANT Y EAR CANNOT BE ITA NO.3475/MUM/2011 TIMES INFOTAINMENT MEDIA LTD. 4 DISALLOWED U/S 43B. IN THE PRESENT CASE, THE PAYME NT OF EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND IN QUESTION WAS MADE BY THE ASSESSEE ON 01/08/2006 I.E. WELL WITHIN THE DUE DAT E OF FILING OF THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION A ND THIS BEING SO, WE RESPECTFULLY FOLLOW THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF HINDUSTAN ORGANIC CHEMICAL LTD .(SUPRA) AND DELETE THE DISALLOWANCE MADE BY THE AO AND CONFIRME D BY THE CIT(A) U/S 43B. THE GROUND OF ASSESSEES APPEAL ON THIS I SSUE IS ACCORDINGLY ALLOWED. 9. THE NEXT ISSUE RELATES TO THE DISALLOWANCE OF RS .1,65,300/- MADE BY THE AO AND CONFIRMED BY THE CIT(A) ON ACCOU NT OF EXPENSES INCURRED FOR VALUATION OF ASSETS AND LIABILITIES OF DELHI METRO BUSINESS. 10. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE H AD PAID A SUM OF RS.1,65,300/- IN CONNECTION WITH THE VALUATION O F ASSETS AND LIABILITIES OF DELHI METRO BUSINESS WHICH WAS TRANS FERRED IN THE EARLIER YEAR. ACCORDING TO THE AO, THE SAID EXPEND ITURE WAS CAPITAL IN NATURE AND ACCORDINGLY THE SAME WAS DISALLOWED B Y HIM. ON APPEAL, THE LD. CIT(A) CONFIRMED THE SAID DISALLOWA NCE MADE BY THE AO HOLDING THE THAT THE IMPUGNED EXPENDITURE INCURR ED BY THE ASSESSEE WAS NOT RELATED TO THE YEAR UNDER CONSIDER ATION. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND PERUSED THE RELEVANT MATERIAL ON RECORD. THE LD. COUNSEL F OR THE ASSESSEE HAS SUBMITTED THAT THE DISALLOWANCE ON ACCOUNT OF EXPEN DITURE INCURRED IN CONNECTION WITH VALUATION OF ASSETS AND LIABILIT IES OF DELHI METRO BUSINESS HAS BEEN MADE BY THE AO AND CONFIRMED BY T HE LD. CIT(A) WITHOUT GIVING A PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD. ITA NO.3475/MUM/2011 TIMES INFOTAINMENT MEDIA LTD. 5 HE HAS URGED THAT THIS ISSUE MAY THEREFORE BE RESTO RED TO THE FILE OF THE AO FOR DECIDING THE SAME AFRESH AFTER GIVING SU FFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. SINCE THE LD. DR HAS NOT RAISED ANY OBJECTION IN THIS REGARD, THE IMPUGNED O RDER OF THE LD. CIT(A) ON THIS ISSUE IS SET-ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE AO WITH A DIRECTION TO DECIDE THE SAME AFRES H AFTER GIVING THE ASSESSEE A PROPER AND SUFFICIENT OPPORTUNITY OF BEI NG HEARD. THE RELEVANT GROUND ON THIS ISSUE IS ACCORDINGLY TREATE D AS ALLOWED FOR STATISTICAL PURPOSE. 12 IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 30/07/20 14 (5 1 34, & 6(+ 30/07/2014 , 4 1 # SD/- (H.L.KARWA) SD/- (P.M.JAGTAP) HONBLE PRESIDENT ACCOUNTANT MEMBER MUMBAI; 6(+ /DATED : 30 TH JULY, 2014. F{X~{TA F{X~{TA F{X~{TA F{X~{TA P.S. P.S. P.S. P.S. (5 (5 (5 (5 1 11 1 /*$78 /*$78 /*$78 /*$78 98,$ 98,$ 98,$ 98,$ / COPY OF THE ORDER FORWARDED TO : 1. -. / THE APPELLANT 2. /0-. / THE RESPONDENT. 3. : ( ) / THE CIT- , MUMBAI. 4. : / CIT(A)- , MUMBAI 5. 8;# / *$*+ , , / DR, ITAT, MUMBAI 6. #< = / GUARD FILE. (5+ ' (5+ ' (5+ ' (5+ ' / BY ORDER, '08$ /*$ //TRUE COPY// > >> > / '? '? '? '? ' ' ' ' (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI