ACIT, New Delhi V. M/s Living Media India Ltd., New Delhi

ITA 4460/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4907 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VARMA
• Assessee Lawyers: UMASHANKAR
• Section: 143(3); 14A

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4 460 / DEL/201 5 A.Y. : 20 1 0 - 1 1 ACIT, CIRCLE - 15(2), NEW DELHI VS. M/S LIVING MEDIA INDIA LTD., K-9-BLOCK, CONNAUGHT PLACE, NEW DELHI 110 001 (PAN:AAACL0087H) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. VIJAY VARMA, CIT(DR) ASSESSEE BY : SH. SALIL AGGARWAL & SH. UMASHANKAR, ADVOCATES. ORDER PER H.S. SIDHU, JM THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 09/4/2015 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-V, NEW DELHI O N THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RESTRICTING THE 2 DISALLOWANCE TO RS. 9,00,621/- INSTEAD OF RS. 4,13,37,871/- MADE BY THE AO U/S. 14 R/W RULE 8D. 2. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 3. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR FOREGO ANY GROUND(S) OF APPEAL RAISED ABOVE AT T HE TIME OF HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C OMPANY IS ENGAGED IN THE BUSINESS OF SUBSCRIPTION, PUBLISHING AND TRADING OF BOOKS, MAGAZINES AND DIARIES, SALE OF ADVERTISEMENT SPACE IN MAGAZINES, TRADING OF AUDIO CASSETTES, CDS AND ART O BJECTS ETC. THE ASSESSEE FILED ITS RETURN OF INCOME ON 14.10.2011 AT N IL INCOME I.E. LOSS OF RS. 36,4,08,332/-, WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT ). THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 1 43(2) OF THE ACT DATED 30.8.2011 WAS ISSUED AND SERVED UPON THE ASSES SEE. IN RESPONSE THERETO, THE AR OF THE ASSESSEE COMPANY ATTE NDED THE PROCEEDINGS FROM TIME TO TIME AND FURNISHED THE REQUISI TE DETAILS/ INFORMATION AND REQUISITIONED DOCUMENTS INCLUDING BO OKS OF ACCOUNTS, BILLS AND VOUCHERS, BANK STATEMENTS. AO VIDE ORDER 3 SHEET DATED 1.11.2012 ASKED THE ASSESSEE TO EXPLAIN W HY DISALLOWANCE U/S. 14A READ WITH RULE 8D SHOULD NOT BE MADE IN RESPECT OF INVESTMENT MADE. ASSESSEE SUBMITTED ITS REL Y AND AFTER CONSIDERING THE SAME, THE AO OBSERVED THAT SECTION 14A OF THE I.T. ACT, PROVIDES THAT FOR THE PURPOSE OF COMPUTING THE TO TAL INCOME NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF EXPENDITURE INCURRED BY THE ASSESSEE IN RELATION TO INCOME WHICH DOES NOT FORM PA RT OF THE TOTAL INCOME. ACCORDINGLY, AO DISALLOWED THE AMOUNT U/S. 1 4A OF THE ACT WHICH WORKS OUT TO BE RS. 4,23,84,135/- (AS PER RULE 8D), THE ASSESSEE HAS SELF DISALLOWED AN AMOUNT OF RS. 10,6 4,264/- U/S. 14A IN THE COMPUTATION OF INCOME, HENCE, BALANCE OF RS. 4 ,13,37,871/- (RS. 4,23,84,135 10,46,264) WAS DISALLOWED U/S. 1 4A AND ADDED TO THE TAXABLE INCOME OF THE ASSESSEE BY ASSESSING TH E INCOME OF THE ASSESSEE AT RS. 32,00,70,460/- VIDE ORDER DATED 2 0.12.2012 PASSED U/S. 143(3) OF THE ACT. 3. AGGRIEVED BY THE ASSESSMENT ORDER DATED 20.12.20 12, ASSESSEE FILED APPEAL BEFORE THE LD. FIRST APPELLATE A UTHORITY WHO HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE VIDE O RDER DATED 9.4.2015 AND RESTRICTED THE ADDITION IN DISPUTE TO RS. 9,00,621/- MADE U/S. 14A OF THE ACT. 4 4. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERA TED THE CONTENTIONS RAISED IN THE GROUNDS OF APPEAL AND REQ UESTED THAT THE APPEAL OF THE REVENUE MAY BE ALLOWED. 5. LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON THE OR DER OF THE LD. CIT(A) AND STATED THAT LD. CIT(A) HAS PASSED A W ELL REASONED ORDER WHICH DOES NOT NEED ANY INTERFERENCE, HENCE, H E REQUESTED THAT THE APPEAL OF THE REVENUE MAY BE DISMISSED. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECO RDS AVAILABLE ON RECORD ESPECIALLY THE IMPUGNED ORDER. W E FIND THAT THE ASSESSEE BEFORE THE LOWER AUTHORITIES STATED THAT NO BORROWED FUNDS USED FOR INVESTMENT PURPOSE AND ALSO FILED INVESTMENT C HART FOR THE LAST 15-20 YEARS WHICH ESTABLISHES THAT NO BORROWED F UNDS HAS BEEN USED FOR INVESTMENT PURPOSES. ONLY DISALLOWANCE U/S . 14A ON RULE 8D(2)(III) WAS REQUIRED ON DIVIDEND RECEIVED DURING THE YEAR FROM THOSE SHARES. THEREFORE, THE LD. CIT(A) HAS RIGHTLY HELD THAT DISALLOWANCE MADE BY THE AO IS NOT AS PER LAW AND H E ACCORDINGLY, REDUCED THE AMOUNT OF DISALLOWANCE TO RS. 9,00,621/-, WHICH DOES NOT NEED ANY INTERFERENCE ON OUR PART, THEREFORE, WE AFFIRM THE IMPUGNED ORDER ON THE ISSUE IN DISPUTE INVOLVED IN G ROUND NO. 1 AND ACCORDINGLY REJECT THE SAME. 5 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/09/2017. SD/- SD/- (PRASHANT MAHARISHI) [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 01/09/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES 6