ACIT-16(1), MUMBAI V. M/s. TV18 BROADCAST LIMITED, MUMBAI

ITA 4724/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4433 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 03-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A; 115JB; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , HON'BLE ACCOUNTANT MEMBER ITA NO. 4724 / MUM/201 8 (A.Y . 201 4 - 15) ASST. COMMISSIONER OF INCOME - TAX CIRCLE 16 (1) ROOM NO. 439, AAYAKAR BHAVAN M.K. ROAD , MUMBAI 400 020 V. M/S. TV18 BROADCAST LIMITED 414, EMPIRE COMPLEX SENAPATI BAPAT MARG, LOWER PAREL MUMBAI 400 013 PAN: AACCG3666M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NIMESH VORA & SHRI MOHIT KHANDELWAL DEPARTMENT BY : SHRI MAURYA PRATAP DATE OF HEARING : 04.12.2019 DATE OF PRONOUNCEMENT : 19 . 02 .2020 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 4, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATE D 2 9.05.2018 FOR THE A.Y. 2014 - 15. 2. THE F IRST ISSUE IN THE APPEAL OF THE REVENUE IS R ELATING TO DELETION OF DISALLOWANCE OF .3,84,32,677/ - MADE U/S. 14A R.W.R. 8D(2)(III) OF I.T. RULES WHILE COMPUTING INCOME UNDER NORMAL PROVISIONS OF THE ACT . 2 ITA NO. 4724/MUM/2018 (A.Y. 2014 - 15) M/S. TV18 BROADCAST LIMITED 3. AT THE OUTSET, LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN THE CASE OF M/S. T ELEVISION EIGHTEEN INDIA LTD., WHICH WAS LATER MERG ED WITH THE ASSES SEE COMPANY I.E. TV18 BROADCAST LIMITED . IT IS SUBMITTED THAT THE TRIBUNAL BY ORDER DATED 19.06.2019 IN ITA.NO. 4545/ DEL /2015 AT PARA 19 FOLLOWING THE DECISION OF THE SPE C IAL BENCH IN THE CASE OF ACIT V. VIREET INVESTMENTS PRIVATE LIMITED [165 ITD 27] HEL D THAT ONLY THOSE INVESTMENTS WHICH YIELDED DIVIDEND INCOME SHOULD BE CONSIDERED FOR DISALLOWANCE UNDER RULE 8D (2)(III ) OF I.T. RULES . 4. LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. ON A PERUSAL OF THE LD. CIT(A) ORDER , WE OBSERVE THAT THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO RECOMPUTE THE DISALLOWANCE UNDER C LAUSE ( III ) OF RULE 8D(2) OF I.T. RULES BY CONSIDERING ONLY THOSE INVESTMENTS FROM WHICH ASSESSEE HAS EARNED EXEMPT INCOME DURING THE YEAR AGAINST WHICH THE REVENUE IS IN APPEAL BEFORE US. WE ALSO OBSERVE THAT THE TRIBUNAL IN THE CASE OF M/S. TELEVISION EIGHTEEN INDIA LTD., WHILE DISPOSING OFF THE APPEAL IN ITA.NO. 4545/DEL/2015 DATED 19.06.2019 HELD AS UNDER: - 19. IN RESPECT OF DISALLOWANCE UNDER RULE 8D(2)(III) OF I.T. RULES IS CONCERNED FOLLOWING THE SPECIAL BENCH DECISION IN THE CASE OF VIREET INVESTMENT PVT. LTD., (SUPRA), WE HOLD THAT ONLY THOSE INVESTMENTS WHICH YIELDED DIVIDEND INCOME SHOULD BE CONSIDERED FOR DISALLOWANCE UNDER RULE 8D(2)(III) OF THE I.T. RULES. THUS, WE DIRECT THE ASSESSING OFFICER TO RECOMPUTE 3 ITA NO. 4724/MUM/2018 (A.Y. 2014 - 15) M/S. TV18 BROADCAST LIMITED THE DISALLOWANCE U/S. 14A R.W. RULE 8D OF THE ACT IN THE LIGHT OF OUR ABOVE OBSERVATIONS. 6. ISSUE BEING IDENTICAL , RESPECTFULLY FOLLOWING THE SAID DECISION WE UPHOLD THE DIRECTION GIVEN BY THE LD.CIT(A) AND REJECT THE GROUND RAISED BY T HE REVENUE. 7. COMING TO THE LAST ISSUE THE REVENUE IS CHALLENGING THE ORDER OF THE LD. CIT(A) IN HOLDIN G THAT DISALLOWANCE U/S 14A R.W.R RULE 8D SHOULD NOT BE CONSIDERED FOR THE PURPOSES OF COMPUTING BOOK PROFI TS U/S. 115JB OF THE ACT. 8. WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE SPECIAL BENCH IN THE CASE OF ACIT V. VIREET INVESTMENTS PRIVATE LIMITED [165 ITD 27] WHEREIN IT WAS HELD THAT COMPUTATION UNDER CLAUSE (F) OF EXPLANATION 1 TO SECTION 115JB OF THE ACT IS TO BE MADE WITHOUT RESORTING TO COMPUTATION AS CONTEMPLATED U/S 14A R.W. RULE 8D OF I.T. RULES. THUS , R ESPECTFULLY FOLLOWING THE SAID DECISION , WE UPHOLD THE ORDER OF THE LD. CIT(A) AND REJECT T HE GROUND RAISED BY THE REVENUE. 9. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 19 TH FEBRUARY , 2020 SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 19 / 02 / 2020 GIRIDHAR, SR.PS 4 ITA NO. 4724/MUM/2018 (A.Y. 2014 - 15) M/S. TV18 BROADCAST LIMITED COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM