DCIT 10(1), MUMBAI V. RELIANCE BROADCAST NETWORK LTD, MUMBAI

ITA 3531/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0649 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 02-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: IN CIRCUMSTANCES OF CA SE
• Section: 133(6); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D , MUMBAI BEFORE SHRI B.R. BASKARAN , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 353 1 /M/2013 ASSESSMENT YEAR: 2009 - 10 DCIT 10(1), MUMBAI , 455, AAYAKAR BHAVAN, 4 TH FLOOR, M.K. M ARG , MUMBAI - 400020 VS. M/S. RELIANCE BROADCAST NETWORK LTD., 401, 4 TH FLOOR, INFINITY, LINK ROAD, OSHIWAR ANDHERI(W), MUMBAI 400 053 PAN: AA DCR 1885L (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESS EE BY : SHRI JITENDRA SANGHAVI, A.R. REVENUE BY : SHRI HEMANT J. LAL , D.R. DATE OF HEARING : 11.03. 201 5 DATE OF PRONOUNCEMENT : 27.05. 2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAIN ST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A) ] DATED 06.02.13. 2. THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS: - 1(I). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A)'S ERRED IN DELETING THE ADDITION OF THE AO MADE ON ACCOUNT OF DISALLOWANCE OF RS. 16.61 CRORES U/S.40(A)(IA) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE MANDATORY AND REVERSALS OF THE PRO VI SIONS MADE IN SUBSEQUENT YEAR IS IMMATERIAL FOR INVOKING PROVISIONS OF SECTION 46(A)(IA) OF THE ACT. 1( II ) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 4.12 CRORES ON THE GROUND THAT THE AMENDMENT ITA NO.3531/M/2013 M/S. RELIANCE BROADCAST NETWORK LTD. 2 IN SECTION 40(A)(IA) BROUGHT W.E.F. 1.4. 2010 IS RETROSPECTIVE. 1(III). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A)'S ERRED NOT APPRECIATING THAT THE TDS WAS DEDUCTIBLE ON ACCOUNT OF PROVISIONS FOR EXPENSES MADE BY THE ASSESSEE FOR THE CURRENT YEAR. 1(IV). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A)'S ERRED HOLDING THAT TDS WAS NOT DEDUCTIBLE BY ASSESSEE COMPANY ON 'PROVISIONS FOR EXPENSES' MADE DURING CURRENT YEAR SINCE, THE SAME ARE REVERSED IN THE NEXT YEAR. 2.(I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A)'S ERRED IN DELETING THE ADDITION BY AO MADE ON ACCOUNT OF AIR MISMATCH OF RS .2,76,302/ - . 2. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A)'S ERRED IN NOT APPR ECIATING THE FACT THAT NO REPLY WAS RECEIVED TO NOTICE ISSUED U/S.133(6) FROM THE OTHER PARTY (M/S. RAM SILK) WITH WHOM THE ASSESSEE HAS STATED TO HAVE NOT CARRIED OUT ANY TRANSACTION. 2. (III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A)'S ERRED IN HOLDING THAT THE COULD NOT PROVIDE ANY FURTHER DETAILS W.R.TO. AIR MISMATCH AMOUNTING TO RS.2,76,302/ - IN SPITE OF THE FACT THAT THE AO HAS MENTIONED IN THE ORDER THAT THE MATTER WILL RECTIFIED IF THE SAID AMOUNT IS PROVED BY ASSESSEE COMPANY AS NOT ITS INCOME. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET - ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, VARY, OMIT OR SUBSTITUTE ANY OF THE AFORESAID GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF APPEAL.' GROUND NO.1(I) TO 1(IV) 3 . THE ISSUE TAKEN BY THE REVENUE IN GROUND S NO S .1(I) TO 1(IV) OF THE APPEAL IS RELATING TO THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION MADE BY THE ASSESS ING OFFICER (HEREINAFTER REFERRED TO AS THE AO) ON ACCOUNT OF DISALLOWANCE OF PROVISION OF EXPENSES UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT FOR NON DEDUCTION OF TDS. THE AO DISALLOWED THE PROVISION MADE FOR VARIOUS TYPES OF EXPENDITURE AMOUNTING TO RS.24 , 42 , 25 , 551/ - FOR NON DEDUCTION OF TDS. ITA NO.3531/M/2013 M/S. RELIANCE BROADCAST NETWORK LTD. 3 4 . IN APPEAL BEFORE THE LD. CIT(A), IT WAS SUBMITTED BY THE ASSESSEE THAT IN CASE OF SOME ITEMS OF EXPENDITURE, THE TDS PROVISIONS OF SECTION 40(A)(IA) WERE NOT ATTRACTED. IN SOME CASES, THE TDS WAS DEPOSITED BE FORE THE DUE DATE OF FILING OF RETURN AND THAT REST OF THE AMOUNT HAD BEEN REVERSED IN THE SUBSEQUENT YEAR AND AS SUCH THE TDS WAS NOT PAYABLE. THE LD. CIT(A), WITHOUT VERIFICATION OF THE CLAIM OF THE ASSESSEE, DELETED THE IMPUGNED DISALLOWANCE. THE REVE NUE IS THUS IN APPEAL BEFORE US. 5 . WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND HAVE ALSO GONE THROUGH THE RECORD. WE FIND THAT THE LD. A.O. HAS NOT EXAMINED THE ITEM WISE DETAILS OF THE EXPENDITURE FOR WHICH THE PROVISION WAS MADE BY THE ASSESSEE. HE SIMPLY DISALLOWED THE ENTIRE EXPENDITURE FOR WHICH THE PROVISION AS MADE WITHOUT EXAMINING AS TO WHETHER THE TDS PROVISIONS WERE ATTRACTED TO EACH OF THE EXPENDITURE FOR WHICH THE PROVISION WAS MADE OR THAT WHETH ER THE TDS WAS DEPOSITED IN RELATION TO SOME ITEMS BEFORE DUE DATE OF FILING OF RETURN AND IF THE SAME WOULD BE ALLOWABLE EXPENDITURE IN THE LIGHT OF THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NARESH KUMAR (2013) 262 CTR (DEL) 389 WHEREIN THE HON'BLE DELHI HIGH COURT HAS HELD THAT THE AMENDMENT MADE TO SECTION 40(A)(IA) OF THE ACT VIDE FINANCE ACT, 2010 WHICH STATES THAT THE DUE DATE OF DEPOSIT OF TDS WILL BE THE DATE OF FILING OF RETURN U/S 139(1) IS APPLICABLE RETROSPECTIVELY AND F URTHER THAT OF T HE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT V. VIRGIN CREATIONS WHEREIN IT HAS BEEN HELD THAT THE AMENDMENT TO SECTION 40(A)(IA) BY THE FINANCE ACT, 2010 IS TO BE CONSIDERED AS R ETROSPECTIVE IN AS MUCH AS IT IS ONLY TOWARD MITIGATING A HARDSHIP AND, THUS, IS TO BE CONSIDERED AS CURATIVE IN NATURE. 6. THE LD. A.R. OF THE ASSESSEE HAS BEEN FAIR ENOUGH TO ADMIT THAT EVEN THE LD. CIT(A) HAS PASSED THE IMPUGNED ORDER WITHOUT VERIFI CATION OF THE DETAILS ITA NO.3531/M/2013 M/S. RELIANCE BROADCAST NETWORK LTD. 4 SUBMITTED BY THE ASSESSEE. EVEN THERE IS NO FINDING THAT WHETHER THE LIABILITY WAS ASCERTAINED FOR WHICH THE PROVISION WAS MADE AND WHETHER THE IDENTITY OF THE PROSPECTIVE PAYEES WAS ESTABLISHED OR NOT. THE LD. A.R. HAS FAIRLY AD MITTED THAT THE ENTIRE ISSUE REQUIRES RE - EXAMINATION AT THE END OF THE AO. WE THEREFORE SET ASIDE THE IMPUGNED FINDINGS OF THE LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE AO FOR EXAMINATION AFRESH AND THEN TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER DULY CONSIDERING ALL THE RELEVANT CONTENTIONS OF THE ASSESSEE ON THIS ISSUE. GROUND NO.2 7. GROUND NOS.2(I) TO 2(III) RELATE TO THE ISSUE OF DISALLOWANCE ON ACCOUNT OF AIR MISMATCH OF RS.2 , 76 , 302/ - THE AO NOTICED THAT THE AIR INFORMATION SHOWED AN INCOME OF RS.2 , 76 , 302/ - TO THE ASSESSEE FROM RAM SILK. THE ASSESSEE HOWEVER DENIED ABOUT RECEIPT OF ANY INCOME FROM THE SAID PARTY. THE AO ISSUED NOTICE UNDER SECTION 133(6) OF THE INCOME TAX ACT TO THE ABOVE PARTY CALLING FOR INFORMATION/EVIDENCES FROM THE ABOVE PARTY. HOWEVER, NO REPLY WAS RECEIVED FROM THE SAID PARTY. THE ASSESSEE CONTENDED THAT IN THE ABSENCE OF ANY EVIDENCE THAT SUCH AN AMOUNT WAS RECEIVED BY THE ASSESSEE, NO ADDITION CAN BE MADE. THE AO, HOWEVER, OBSER VED THAT SINCE THE INFORMATION HAD BEEN RECEIVED FROM THE DEPARTMENT, HENCE THE ADDITION WAS TO BE MADE. 8. IN APPEAL, THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, DELETED THE ADDITION OBSERVING THAT THE ASSESSEES PAN NUMBER MIGHT HAVE BEEN ENTERED BY THE SAID PARTY BY MISTAKE. SINCE THE ASSESSEE HAS CATEGORICALLY DENIED THE RECEIPT OF ANY INCOME FROM THE ABOVE PARTY, THE LD. CIT(A), WHILE RELYING UPON THE DECISION OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN CASE OF SHRI S. GANES H VS. CIT ITA NO.527/M/2010 08.12.10, DELETED THE ADDITION SO MADE BY THE AO. ITA NO.3531/M/2013 M/S. RELIANCE BROADCAST NETWORK LTD. 5 9. BEFORE US, THE LD. A.R. OF THE ASSESSEE HAS RELIED UPON THE ANOTHER DECISION OF THE TRIBUNAL IN THE CASE OF M/S. A.F. FERGUSON & CO. VS. JCIT ITA NOS.5037/M/2012 & 437/M /2013 DECIDED ON 17.10.2014 WHEREIN THE TRIBUNAL WHILE DEALING THE ISSUE OF UN - RECONCILED AMOUNT AS PER THE AIR INFORMATION HAS HELD THAT THE ADDITION CANNOT BE MADE SOLELY ON THE BASIS OF AIR INFORMATION , ESPECIALLY , WHEN THE ASSESSEE DENIES ANY SUCH RECE IPT AS THE BURDEN TO PR OVE SUCH RECEIPTS IS ON THE AO AS THE ASSESSEE CANNOT BE ASKED TO PROVE THE NEGATIVE. THE RELEVANT FINDINGS OF THE TRIBUNAL FOR THE SAKE OF REFERENCE ARE REPRODUCED AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE LD. R EPRESENTATIVES OF THE PARTIES. IT IS AN UNDISPUTED FACT ON THE FILE THAT THE PROFESSIONAL FEES SHOWN BY THE ASSESSEE IN ITS P&L ACCOUNT FAR EXCEEDS THAN THE AMOUNT SHOWN IN THE AIR INFORMATION. EVEN THE ASSESSEE HAS RECONCILED THE MAJOR PORTION OF THE RE CEIPTS. IT HAS NOT BEEN DENIED BY THE REVENUE AUTHORITIES THAT FULL AND COMPLETE DETAILS OF THE PARTIES ARE NOT MENTIONED IN THE AIR INFORMATION. THE ADDITION IN THIS CASE HAS BEEN MADE BY THE LOWER AUTHORITIES SOLELY ON THE BASIS OF AIR INFORMATION. IN OUR VIEW, THE ADDITION, MADE SOLELY ON THE BASIS OF AIR INFORMATION, ESPECIALLY IN THE ABSENCE OF FULL DETAILS OF PARTIES AND WHEN THE PROFESSIONAL RECEIPTS DECLARED BY THE ASSESSEE FAR EXCEEDS THAN THE AMOUNT MENTIONED IN THE AIR INFORMATION, IS NOT SUST AINABLE IN THE EYES OF LAW. OUR ABOVE VIEW IS FORTIFIED WITH THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SHREE G. SELVA KUMAR IN ITA NO.868/BANG/2009 DECIDED ON 22.10.10 AND ANOTHER IN THE CASE OF MRS. ARATI RAMAN VS. DC IT IN ITA NO.245/BANG/12 DECIDED ON 05.10.12 WHEREIN IT HAS BEEN HELD THAT THE ASSESSMENT ORDER BASED ONLY ON THE AIR INFORMATION WOULD NOT STAND IN THE EYES OF LAW. IF THE ASSESSEE DENIES THAT HE IS IN RECEIPT OF INCOME FROM A PARTICULAR SOURCE, IT IS F OR THE AO TO PROVE THAT THE ASSESSEE HAS RECEIVED INCOME AS THE ASSESSEE CANNOT PROVE THE NEGATIVE. RELIANCE CAN ALSO BE PLACED ON THE DECISION OF MUMBAI BENCH OF TRIBUNAL IN THE CASE OF SHRI S. GANESH VS. ACIT IN ITA NO.527/M/2010 DECIDED ON 08.12.10 WH EREIN THE TRIBUNAL HAS HELD THAT IN THE ABSENCE OF ANY MATERIAL BROUGHT BY THE REVENUE AUTHORITIES THAT THE ASSESSEE HAS RECEIVED AMOUNT MORE THAN THE PROFESSIONAL FEES WHICH HAS BEEN DECLARED BY HIM IN THE P&L ACCOUNT AND WHEN THE PROFESSIONAL INCOME DECL ARED BY THE ASSESSEE FAR EXCEEDS THE PROFESSIONAL FEES SHOWN IN THE AIR INFORMATION, THEN ADDITIONS SOLELY BASED ON THE AIR INFORMATION ARE NOT SUSTAINABLE. 7. IN VIEW OF OUR ABOVE OBSERVATIONS AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITIO NS MADE BY THE REVENUE SOLELY BASED ON THE AIR INFORMATION ARE NOT SUSTAINABLE AND THE SAME ARE HEREBY ORDERED TO BE DELETED. ITA NO.3531/M/2013 M/S. RELIANCE BROADCAST NETWORK LTD. 6 10. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE. 11. IN TH E RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.05. 201 5 . SD/ - SD/ - ( B.R. BASKARAN ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27.05.2015 . * KISHORE , SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCE RNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.