DCIT, New Delhi V. M/s. Television Eighteen India Ltd., New Delhi

ITA 4127/DEL/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53169 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 14-11-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-09-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H L DIHANA
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : I NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMEBR AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A NO. 4127/DEL/2011 ASSTT. YEAR 2007-08 DY. COMMISSIONER OF INCOME TAX CIRCLE 16(1), NEW DELHI. VS. M/S. TELEVISION EIGHTEEN INDIA LTD., 601, 6 TH FLOOR, COMMERCIAL TOWER, LE- MERIDIAN, RAISINA ROAD, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI H.L. DIHANA, CIT DR RESPONDENT BY: SHRI TARANDEEP SINGH, SHRI MANEESH UPNEJA, CA ORDER PER RAJPAL YADAV, JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT(A) DATED 2 ND JUNE, 2011 PASSED FOR ASSTT. YEAR 2007-08. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD. CIT(A ) HAS ERRED IN REMITTING THE ISSUE BACK TO THE FILE OF AO FOR READ JUCIATION IN RESPECT OF DISALLOWANCE REQUIRED TO BE MADE U/S 14A OF INCOME TAX ACT, FOR THE EXPENDITURE INCURRED TOWARDS EARNI NG OF DIVIDEND INCOME U/S 14A OF THE INCOME. ITA NO. 4127/DEL/11 ASSTT. YEAR 2007-08 2 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED ITS RETURN OF INCOME ON 31.10.2007 DECLARING NIL INCOME . ASSESSEE HAS MADE AN INVESTMENT OF ` 2,14,97,22,658/- IN MUT UAL FUNDS AND SHARES OF LISTED AND UNLISTED COMPANY. IT HAS S HOWN EXEMPTED INCOME OF ` 3,12,00,316/- FROM THESE INVES TMENTS. IT HAS NOT SHOWN ANY EXPENDITURE TOWARDS EARNING OF EX EMPTED INCOME. AO MADE A DISALLOWANCE U/S 14A WITH THE HE LP OF RULE 8D. DISSATISFIED WITH THE ACTION OF AO, ASSESSEE CA RRIED THE MATTER IN APPEAL BEFORE LD. CIT(A). IT WAS CONTENDE D BY THE ASSESSEE THAT HONBLE BOMBAY HIGH COURT HAS HELD IN THE CASE OF GODREJ AND BOYCE MFG. PVT. LTD. THAT RULE 8 D IS PROSPECTIVE IN NATURE. IT IS APPLICABLE W.E.F. 24.3.2008. IT IS NOT APPLICABLE IN THE PRESENT ASSESSMENT YEAR. LD. FIRST APPELLATE AU THORITY HAS ACCEPTED THE CONTENTION OF ASSESSEE AND OBSERVED TH AT RULE 8D IS APPLICABLE FROM ASSTT. YEAR 2008-09. HE REMITTED THE ISSUE TO THE FILE OF AO WITH THE DIRECTION THAT AO SHALL CAL L FOR THE DETAILS FOR EXPENDITURE AND THEREAFTER READJUDICATE THE ISS UE. 3. LD. DR SUBMITTED THAT SUB SECTION 1 CLAUSE (A) O F SECTION 251 HAS BEEN AMENDED W.E.F 1 ST JUNE, 2001. THEREAFTER THE ITA NO. 4127/DEL/11 ASSTT. YEAR 2007-08 3 POWER OF LD. CIT(A) FOR SETTING ASIDE ANY ISSUE TO THE FILE OF AO HAS BEEN OMITTED. THUS, LD. CIT(A) OUGHT TO HAVE CA LLED UPON ALL THE DETAILS AND OUGHT TO HAVE DECIDED THE ISSUE ON MERIT. LD. CIT(A) CANNOT REMAND THE ISSUE TO THE AO. LD. COUNS EL FOR THE ASSESSEE ON THE OTHER HAND UNABLE TO CONTROVERT THI S PREPOSITION RAISED BY THE LD. DR. HOWEVER, HE SUBMI TTED THAT ORDER OF THE LD. CIT(A) MAY BE MODIFIED AND THE ISS UE BE SET ASIDE TO THE AO. HE POINTED OUT THAT IN CASE THE OR DER OF THE LD. CIT(A) IS SET ASIDE ON THIS ISSUE AND IT IS REMITT ED AGAIN TO THE FILE OF LD. FIRST APPELLATE AUTHORITY THEN ASSESSEE WOULD BE EXPOSED TO TWO PROCEEDINGS. ONE BEFORE THE LD. CIT( A) AND THE OTHER BEFORE THE AO, BECAUSE LD. FIRST APPELLATE AU THORITY WOULD CALL FOR THE REMAND REPORT FROM THE AO AND TH E ASSESSEE WILL HAVE TO APPEAR BEFORE THE AO ALONGWITH THE DET AILS. THUS, IN ORDER TO AVOID THIS DUAL PROCEEDINGS, THE MATTER MAY BE SENT TO THE FILE OF AO. 4. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. ADMITTEDLY ,AFTER 1 ST JUNE, 2011 LD. FIRST APPELLATE AUTHORITY HAS NO POWER TO SET A SIDE ANY ITA NO. 4127/DEL/11 ASSTT. YEAR 2007-08 4 ISSUE TO THE FILE OF AO. THEREFORE, LD. CIT(A) HAS NOT EXERCISED THE POWERS WITHIN THE REALM OF ITS POWER PROVIDED U /S 251(1)OF THE ACT. ITS ORDER DESERVES TO BE SET ASIDE TO THAT EXTENT. HOWEVER, WE FIND THAT HONBLE BOMBAY HIGH COURT IN THE CASE OF GODREJ AND BOYCE MFG. PVT. LTD. REPORTED IN 321 ITR PAGE 81 HAS OBSERVED THAT RULE 8D IS NOT APPLICABLE WITH RE TROSPECTIVE EFFECT. IT IS APPLICABLE FROM ASSTT. YEAR 2008-09 B ECAUSE IT WAS INTRODUCED ON 24 TH MARCH, 2008. IN THE ABSENCE OF THIS RULE, THE DISALLOWANCE U/S 14A HAS TO BE MADE ON THE BASIS OF SURROUNDING FACTS AND CIRCUMSTANCES. IN OTHER WORDS , AO HAS TO IDENTIFY THE EXPENSES ATTRIBUTABLE TO EARNING OF TA X FREE INCOME. IN SUCH SITUATION, IF WE REMIT THE ISSUE TO THE FILE OF LD. CIT (A), THEN HE WILL AGAIN CALL FOR A REMAND REPOR T FROM THE AO WHICH WILL ONLY INCREASE THE MULTIPLICITY OF LITIGA TION. THEREFORE, WE ALLOW THE APPEAL OF REVENUE, SET ASIDE THE ORDER OF LD. CIT(A) REMIT THE ISSUE BACK TO THE FILE OF AO FOR READJUDICATION. IT IS NEEDLESS TO SAY THAT OBSERVATION MADE BY US W OULD NOT IMPAIR OR INJURE THE CASE OF AO OR WILL NOT CAUSE A NY PREJUDICE TO THE DEFENCE /EXPLANATION OF THE ASSESSEE. LD. AO SHALL DECIDE ITA NO. 4127/DEL/11 ASSTT. YEAR 2007-08 5 THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING DU E OPPORTUNITY OF HEARING TO THE ASSESSEE. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH NOVEMBER, 2011. SD/- SD/- [K.G. BANSAL] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER VEENA DATED: 18.11.2011 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT