Addl. CIT, Special Range- 9, New Delhi V. TV Today Network Ltd., New Delhi

ITA 5204/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9405 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 10-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RAKASH DUBEY SENIOR
• Keywords: Earning of tax free income; Rule 8D; Set aside
• Section: 43B; 14A; 139(1); 13; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.5204/DEL./2017 (ASSESSMENT YEAR : 2012-13) ADDL.CIT, SPECIAL RANGE 9, VS. M/S. TV TODAY NETWOR K LTD., NEW DELHI. F 26, CONNAUGHT CIRCUS, NEW DELHI 110 001. (PAN : AABCT0424B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MADHUR AGGARWAL, ADVOCATE REVENUE BY : SHRI PRAKASH DUBEY, SENIOR DR DATE OF HEARING : 14,07.2021 DATE OF ORDER : 29.07.2021 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, ADDL.CIT, SPECIAL RANGE 9, NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 08.02.2017 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-39, NEW DELHI QUA THE ASSESSMENT YEAR 2012-13 ON THE GROUNDS INTER ALIA T HAT :- (1) THE LD. CIT (A) HAS ERRED ON THE FACTS AND C IRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN NO~ APPRE CIATING THE FACT THAT AO MADE THE DISALLOWANCE IN ACCORDANCE WITH SE C. 14A R.W.R 8D OF THE IT ACT ONLY. ITA NO.5204/DEL./2017 2 (2) THE LD. CIT (A) HAS ERRED ON THE FACTS AND CIR CUMSTANCES OF THE CASE BY DELETING THE ADDITION MADE BY THE AO ON ACCOUNT OF CONSUMPTION INCENTIVES ON THE GROUND THAT IT IS ASC ERTAINED LIABILITY. (3) THAT THE LD.CIT(A) HAS ERRED ON FACTS AND IN L AW BY DELETING DISALLOWANCE OF RS.43,14,198/- ON ACCOUNT OF LATE DEPOSITION OF EMPLOYEES CONTRIBUTION TO P.F, IGNORI NG THE CBDT CIRCULAR NO. 22/2015 WHICH CLEARLY PROVIDES THAT TH E DEDUCTION RELATING TO EMPLOYEES CONTRIBUTION TO WELFARE FUNDS ARE GOVERNED BY THE SEC. 36(1)(VA) OF THE I.T ACT. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : ASSESSEE COMPANY IS INTO THE BUSINESS OF BROADCASTING, TELECASTING, RELAYING, TRANSMITTING O R DISTRIBUTING AUDIO, VIDEO OR OTHER PROGRAMMES OF SOFTWARE FOR TE LEVISION, RADIO AND OTHER MEDIA. DURING SCRUTINY PROCEEDINGS, ASSE SSING OFFICER (AO) NOTICED THAT THE ASSESSEE HAS MADE HUGE INVEST MENTS OF RS.45.67 CRORES OF EQUITY SHARES IN SUBSIDIARY AND ASSOCIATE COMPANY AND CLAIMED EXEMPT INCOME OF RS.2,34,585/-. AO BY INVOKING THE PROVISIONS CONTAINED UNDER SECTION 14A OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) READ WI TH RULE 8D OF THE INCOME-TAX RULES, 1962 PROCEEDED TO COMPUTE DIS ALLOWANCE TO THE TUNE OF RS.38,94,755/-. 3. AO ALSO MADE ADDITION OF RS.3,34,81,847/- BY WAY OF DISALLOWANCE OF CONSUMPTION INCENTIVE ON THE GROUND THAT THESE EXPENSES ARE IN THE NATURE OF PROVISION, LIABILITY FOR WHICH MAY OR MAY NOT ACCRUE IN THE TIME TO COME. ITA NO.5204/DEL./2017 3 4. AO ALSO MADE DISALLOWANCE OF RS.43,14,198/- ON A CCOUNT OF LATE DEPOSIT OF EMPLOYEES CONTRIBUTION OF PROVIDENT FUND (PF) U/S 36(1)(VA) EXPLANATION 2 AND ASSESSED THE TOTAL INCO ME OF THE ASSESSEE AT RS.30,99,68,141/-. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT ( A) BY WAY OF FILING APPEAL WHO HAS PARTLY ALLOWED THE SAME. FEE LING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. GROUND NO.1 7. UNDISPUTEDLY, ASSESSEE COMPANY HAS MADE INVESTME NT OF RS.45.67 CRORES IN EQUITY SHARES OF ITS SUBSIDIARY AND ASSOCIATE COMPANY DURING THE YEAR UNDER ASSESSMENT. IT IS AL SO NOT IN DISPUTE THAT DURING THE YEAR UNDER ASSESSMENT, ASSESSEE HAS MADE SUO MOTU DISALLOWANCE OF RS.29,04,491/- U/S 14A OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT DURING THE YEAR UNDER ASSESSMENT, ASSE SSEE HAS EARNED EXEMPT INCOME TO THE TUNE OF RS.2,34,585/-. AO BY INVOKING THE PROVISIONS CONTAINED U/S 14A READ WITH RULE 8D COMP UTED THE DISALLOWANCE AS UNDER :- ITA NO.5204/DEL./2017 4 COMPUTATION OF 14A DISALLOWANCE DIRECTLY ATTRIBUTED EXPENSES AMOUNT IN RS. NIL TOTAL DIRECT EXPENSES NIL (I) INTEREST EXPENSES A. INTEREST EXPENSES WHICH CANNOT BE DIRECTLY ATTRIBUTED 1,43,38,751 B. AVERAGE VALUE OF INVESTMENT RELATED TO TAX FREE INCOME 46,56,96,411 OPENING INVESTMENT 47,46,80,340 CLOSING INVESTMENT 45,67,12,482 C. AVERAGE TOTAL ASSETS IN BS 4,26,33,07,879 OPENING TOTAL ASSETS 4,03,71,27,486 CLOSING TOTAL ASSETS 4,48,94,88,272 (II) DEEMED INTEREST EXPENSES = A*B/C 15,66,272 (III) 0.5% OF RS.46,56,96,411/- AVERAGE INVESTMENT 23,28,482 TOTAL 14A DISALLOWANCE 38,94,755 LESS : DISALLOWANCE MADE BY THE ASSESSEE 29,04,491 DISALLOWANCE TO BE MADE 9,90,264 8. LD. CIT (A) DELETED THE ADDITION ON THE GROUND T HAT THE AO HAS FAILED TO RECORD HIS SATISFACTION BEFORE INVOKI NG THE PROVISIONS CONTAINED U/S 14A OF THE ACT AND ALSO RELIED UPON T HE DECISIONS OF COURTS INCLUDING THE HONBLE JURISDICTIONAL HIGH CO URT IN CASES OF:- (I) MAXOPP INVESTMENT LTD. VS. CIT (AY 2002-03) ITA NO.687/2009 (DEL); (II) CHEMINVEST LTD. VS. CIT (AY 2004-05) (2015) 61 TAXMANN.COM 118 (DEL.); (III) CIT-IV VS. HOLCIM INDIA PVT. LTD. ITA NO.48 6/2014 AND 299/2014 (DEL.); (IV) CIT VS. TAIKISHA ENGINEERING INDIA LTD. ITA 11 5/2014 & 119/2014 DATED 25.11.2014 (DEL.); (V) DCM LTD. VS. DCIT, CIRCLE 10(1), NEW DELHI AND VICE- VERSA 2015 (9) TMI 1110 (ITAT DELHI); (VI) JOINT INVESTMENTS PVT. LTD. VS. CIT 372 ITR 69 4 (DEL.); ITA NO.5204/DEL./2017 5 (VII) CIT VS. HERO CYCLES LTD. (2010) 189 TAXMANN 5 0 (PUNJ & HAR.); AND (VIII) M/S. ACB INDIA LTD. VS. ACIT ITA NO.615/2014 DATED 24.03.2015 (DEL.) 9. BARE PERUSAL OF THE FACTS ON RECORD SHOWS THAT A S AGAINST EARNED EXEMPT INCOME OF RS.2,34,585/- DURING THE YE AR UNDER ASSESSMENT, ASSESSEE COMPANY HAS SUO MOTU MADE DISA LLOWANCE OF RS.29,04,491/-. IT IS SETTLED PRINCIPLE OF LAW THA T IN ANY CASE, DISALLOWANCE U/S 14A CANNOT BE MORE THAN THE EXEMPT INCOME AS HAS BEEN HELD BY HONBLE DELHI HIGH COURT IN CASE OF JOINT INVESTMENT PRIVATE LTD. VS. CIT (2015) 372 ITR 694 (DEL.). 10. WHILE DECIDING THE IDENTICAL ISSUE, HONBLE DEL HI HIGH COURT IN CIT VS. TAIKISHA ENGG. INDIA LTD. (2015) 370 ITR 338 HAS HELD AS UNDER :- THUS, S. 14A(2) OF THE ACT AND R. 8D(1) IN UNISON AND AFFIRMATIVELY RECORD THAT THE COMPUTATION OR DISALL OWANCE MADE BY THE ASSESSEE OR CLAIM THAT NO EXPENDITURE WAS IN CURRED TO EARN EXEMPT INCOME MUST BE EXAMINED WITH REFERENCE TO TH E ACCOUNTS, AND ONLY AND WHEN THE EXPLANATION/CLAIM OF THE ASSE SSEE IS NOT SATISFACTORY, COMPUTATION UNDER SUB-R. (2) OF R. 80 OF THE RULES IS TO BE MADE. 13. WE NEED NOT, THEREFORE, GO ON TO SUB-R. (2) OF R. 8D OF THE RULES UNIT AND UNLESS THE AO HAS FIRST RECORDED THE SATISFACTION, WHICH IS MANDATED BY SUB-S. (2) OF S. 14A OF THE AC T AND SUB-R. (1) OF R. 8D OF THE RULES.' 11. FURTHERMORE, AO EXCEPT FOR MAKING GENERAL OBSER VATION THAT, IT CANNOT BE RULED OUT THAT SOME EXPENDITURE WOULD DEFINITELY BE INCURRED TOWARDS SUCH INVESTMENTS AND KEEPING IN VIEW THE HUGE ITA NO.5204/DEL./2017 6 INVESTMENTS OF RS.45.67 CRORES OUT OF TOTAL ASSETS OF ASSESSEE AT RS.448.94 CRORES, IT CAN BE SAFELY CONCLUDED THAT B UYING AND SELLING OF SECURITIES AS WELL AS MAINTAINING A PORT FOLIO OF LARGE NUMBER OF SCRIPS LEADING TO OR CAPABLE OF GENERATIN G THE DIVIDEND INCOME IS ONE OF THE MAIN ACTIVITIES OF THE ASSESSE E, HAS NOT RECORDED HIS SATISFACTION AS TO HOW AND UNDER WHAT CIRCUMSTANCES DISALLOWANCE HAS BEEN MADE BY THE ASSESSEE COMPANY OF RS.29,04,491/- IS INCORRECT U/S 14A OF THE ACT. AO HAS ALSO NOT DISPUTED BOOKS OF ACCOUNT ON THE BASIS OF WHICH ASS ESSEE HAS COME UP WITH THE PLEA THAT HE HAS INCURRED THE EXPENDITU RE ONLY TO THE TUNE OF RS.29,04,491/- OF WHICH IT HAS MADE SUO MOT U DISALLOWANCE. SO, IN THE ABSENCE OF SATISFACTION R ECORDED BY THE AO, MECHANICAL INVOKING OF PROVISIONS CONTAINED U/S 14A READ WITH RULE 8D IS NOT PERMISSIBLE AS HAS BEEN HELD B Y HONBLE DELHI HIGH COURT IN CASE OF MAXOPP INVESTMENT LTD. VS. CIT (2012) 347 ITR 272 (DEL.) , THE OPERATIVE PART OF WHICH IS EXTRACTED AS UNDER:- SECTION 14A EVEN PRIOR TO THE INTRODUCTION OF SUB -SECTIONS (2) AND (3) WOULD REQUIRE THE ASSESSING OFFICER TO FIRS T REJECT THE CLAIM OF THE ASSESSEE WITH REGARD TO THE EXTENT OF SUCH EXPENDITURE AND SUCH REJECTION MUST BE FOR DISCLOSE D COGENT REASONS. IT IS THEN THAT THE QUESTION OF DETERMINAT ION OF SUCH EXPENDITURE BY THE ASSESSING OFFICER WOULD ARISE. T HE REQUIREMENT OF ADOPTING A SPECIFIC METHOD OF DETERM INING SUCH EXPENDITURE HAS BEEN INTRODUCED BY VIRTUE OF .SUB-S ECTION (2) OF SECTION 14A . PRIOR TO THAT, THE ASSESSEE WAS FREE TO ADOPT ANY REASONABLE AND ACCEPTABLE METHOD. SO, EVEN FOR THE PRE-RULE 80 ITA NO.5204/DEL./2017 7 PERIOD, WHENEVER THE ISSUE OF SECTION 14A ARISES BE FORE AN ASSESSING OFFICER, HE HAS, FIRST OF ALL, TO ASCERTA IN THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE IN RESPECT OF THE EXPE NDITURE INCURRED IN RELATION TO INCOME WHICH DOES NOT FORM PART OF T HE TOTAL INCOME UNDER THE ACT. EVEN WHERE THE ASSESSEE CLAIM S THAT NO EXPENDITURE HAS BEEN INCURRED IN' RELATION TO INCOM E WHICH DOES NOT FORM PART OF THE TOTAL INCOME, THE ASSESSING OF FICER WILL HAVE TO VERIFY THE CORRECTNESS OF SUCH CLAIM. IN CASE, T HE ASSESSING OFFICER IS SATISFIED WITH THE CLAIM OF THE ASSESSEE WITH REGARD TO THE EXPENDITURE OR NO EXPENDITURE, AS THE CASE MAY BE, THE ASSESSING OFFICER IS TO ACCEPT THE CLAIM OF THE ASS ESSEE IN SO FAR AS THE QUANTUM OF DISALLOWANCE UNDER SECTION 14A IS CONCERNED. IN SUCH EVENTUALITY, THE ASSESSING OFFICER CANNOT E MBARK UPON A DETERMINATION OF THE AMOUNT OF EXPENDITURE FOR THE PURPOSES OF SECTION 14A(1). IN CASE, THE ASSESSING OFFICER IS N OT, ON THE BASIS OF THE OBJECTIVE CRITERIA AND AFTER GIVING THE ASSE SSEE A REASONABLE OPPORTUNITY, SATISFIED WITH THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE, HE SHALL HAVE TO REJECT THE CLAIM AND STA TE THE REASONS FOR DOING SO. HAVING DONE SO, THE ASSESSING OFFICER WILL HAVE TO DETERMINE THE AMOUNT OF EXPENDITURE INCURRED IN REL ATION TO INCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME UNDER THE ACT. HE IS REQUIRED TO DO SO ON THE BASIS OF A REAS ONABLE AND ACCEPTABLE METHOD OF APPORTIONMENT. 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE AR E OF THE CONSIDERED VIEW THAT LD. CIT (A) HAS RIGHTLY DELETE D THE ADDITION MADE BY THE AO U/S 14A OF THE ACT. SO, GROUND NO.1 IS DETERMINED AGAINST THE REVENUE. GROUND NO.2 13. AO MADE DISALLOWANCE OF RS.3,34,81,847/- CLAIME D BY THE ASSESSEE COMPANY ON ACCOUNT OF CONSUMPTION INCENTIV E ON THE GROUND THAT THESE EXPENSES ARE IN THE NATURE OR PRO VISION, LIABILITY FOR WHICH MAY OR MAY NOT ACCRUE IN THE TIME TO COME . HOWEVER, LD. CIT (A) DELETED THIS ADDITION WHICH IS UNDER CH ALLENGE BEFORE THE TRIBUNAL. ITA NO.5204/DEL./2017 8 14. LD. DR FOR THE REVENUE CHALLENGING THE IMPUGNED ORDER DREW OUR ATTENTION TOWARDS PARA 5.2 OF THE IMPUGNED ORDER WHEREIN SELF CONTRADICTORY FINDINGS ARE RECORDED BY THE LD. CIT (A). 15. WE HAVE PERUSED THE ORDER PASSED BY THE LD. CIT (A) WHO HAS DELETED THE ADDITION BY FOLLOWING HIS OWN ORD ER FOR AYS 2008-09, 2009-10 & 2010-11, WHICH HAS BEEN CONFIRME D BY THE TRIBUNAL, BY RETURNING FOLLOWING FINDINGS :- 5.2 AS REGARDS THE GROUNDS AT (IIIA), (IIIB) AND ( IIIC) RELATING TO DISALLOWANCE UNDER THE HEAD 'CONSUMPTIO N DEBTORS', IT IS MENTIONED IN THE IMPUGNED ORDER INTER ALIA, . .. THE CLAIM OF CONSUMPTION DEBTORS IS IN THE NATURE OF DISCOUNT TO THE ADVERTISERS TO BE ALLOWED TO THEM WHEN THEY BOOK AD DITIONAL TIME SPACE ON THE CHANNEL OF THE ASSESSEE IN THE YE AR TO COME. THUS THE LIABILITY IN RESPECT OF THE CLAIM WOULD CR YSTALLIZED ON THE HAPPENING OF FUTURE EVENTS I.E. BOOKING OF ADDI TIONAL TIME SPACE BY THE ADVERTISERS, WHICH MAY OR MAY NOT HAPP EN. THE LIABILITY IS CLEARLY OF CONTINGENT NATURE AND CANNO T BE CALLED 'ASCERTAINED LIABILITY'. THE LEGAL POSITION IS SETT LED THAT A LIABILITY CAN BE TERMED AS 'ASCERTAINED' ONLY WHEN IT CAN BE QUANTIFIED WITH REASONABLE ESTIMATE AND THE LIABILI TY IN RESPECT OF THE SAME HAS ACCRUED DURING THE YEAR. WHILE THE QUANTIFICATION OF LIABILITY MAY BE CORRECT IN THIS CASE, YET IT CANNOT BE SAID THAT THE LIABILITY IN RESPECT OF THE CLAIM HAS ACCRUED DURING THE YEAR. FROM THE DETAILS GIVEN IT IS CLEAR THAT THESE DISCOUNTS ARE IN THE NATURE OF PROVISIONS ONL Y AND MAY OR MAY NOT BE PASSED ON TO THE PARTIES. HAD IT BEEN AN ASCERTAINED LIABILITY THE SAME WOULD HAVE BEEN CREDITED TO THE PARTY ACCOUNT AND WOULD NOT HAVE BEEN KEPT IN A SEPARATE ACCOUNT. THE RIGHT ACCOUNTING ENTRY FOR PASSING THE ACCOUNT WOULD HAVE BEEN AS FOLLOWS:- DISCOUNT ACCOUNT DR. TO PARTY ACCOUNT CR. THE DISCOUNT IN THIS CAN BE SAID TO BE HAVE BEEN PA SSED ON TO THE CUSTOMERS. HOWEVER, THE ASSESSEE HAS MADE THE FOLLOWING ENTRY IN ITS BOOKS OF ACCOUNTS :- DISCOUNT ACCOUNT DR ITA NO.5204/DEL./2017 9 TO PROVISION FOR CONSUMPTION DEBTOR CR THUS IT IS CLEAR THAT THE EXPENSES IN THE NATURE OF PROVISION, LIABILITY FOR WHICH MAY OR MAY NOT ACCRU E IN THE TIME TO COME. THAT IS WHY THE CLAIM OF EXPENSES HAS NOT BEEN PASSED ON TO THE PARTIES AND HAVE BEEN KEP T IN A SEPARATE ACCOUNT TITLED 'CONSUMPTION DEBTORS'. THEREFORE THE CLAIM FOR THE SAME, CANNOT BE ALLOWED AS AN EXPENSE AND AS SUCH PROVISION FOR CONSUMPTION DEBTORS AMOUNTING TO RS.3,34,81,847/- IS BEING DISALLOWED ... FROM THE ABOVE EXTRACT, IT IS OBSERVED THAT THE MA IN REASON FOR SUCH DISALLOWANCE APPEARS THAT THE LIABI LITY HAS BEEN HELD NOT TO BE ASCERTAINED AS PER THE BOOKS OF ACCO UNTS OF THE APPELLANT WHERE APPARENTLY, THERE APPEARS TO BE ENT RIES WHICH LEAD TO THE CONCLUSION THAT THE LIABILITY IS YET TO BE ASCERTAINED. HOWEVER, IT CAN BE SAFELY CONCLUDED THAT QUANTIFICA TION OF A LIABILITY IS THE NEXT LOGICAL STEP AFTER ASCERTAINI NG THE LIABILITY PER SE. IF THE LIABILITY IS NOT ASCERTAINED, QUANT IFICATION THEREOF CAN BE DIFFICULT. BUT IT IS OBSERVED FROM THE ABOV E PORTION OF THE IMPUGNED ORDER THAT ON ONE HAND, IT IS MENTIONE D THAT THE QUANTIFICATION OF LIABILITY IN THE PRESENT CASE IS CORRECT BUT THE LIABILITY FOR THE CLAIM OF EXPENSE HAS NOT ACCRUED IN THE RELEVANT FY THIS IS CERTAINLY, CONTRADICTORY. DURING THE APPEAL HEARING THE AR OF THE APPELLANT REITERATED ITS SUBMISSION THAT THE INDIVIDUAL PARTY ACCOUNTS IN RESPECT OF DISCOUNTS GIVEN WERE SUBMITTED AT THE AS SESSMENT STAGE. FURTHER, HE RELIED ON THE APPELLATE ORDERS OF THE FIRST APPELLATE AUTHORITY IN THE APPELLANTS OWN CASE FOR AY 2008-09 AND 2010-11 AND FILED COPIES THEREOF. IN THE APPEL LATE ORDER FOR AY 2010-11, IT IS OBSERVED THAT THE CIT (A) HAS HEL D THAT THIS CLAIM OF EXPENSES AS AN ASCERTAINED LIABILITY AND A LLOWED IT. SIMILAR IS THE CASE WITH ORDER OF CIT (A) IN AY 200 8-09 WHEREBY A SIMILAR ADDITION HAS BEEN DELETED. THE S ITUATION APPEARS SIMILAR IN THE PRESENT CASE AS GATHERED FRO M THE AFOREMENTIONED APPELLATE ORDERS. THE APPELLANT'S CO NTENTION IS NOT ONLY BORNE OUT FROM RECORDS BUT IS ALSO PLAUSIB LE THAT THE LIABILITY WAS CLEARLY AN ASCERTAINED ONE ALLOWABLE AS PER THE MERCANTILE SYSTEM OF ACCOUNTING FOLLOWED CONSISTENT LY. I AM THEREFORE IN AGREEMENT WITH THE VIEW TAKEN BY THE C IT(A) IN THE APPELLANT'S OWN CASE FOR AY 2008-09, 2009-10 AN D 2010-11 ON THIS ISSUE AND ACCORDINGLY DELETE THE DISALLOWAN CE MADE IN THE IMPUGNED ORDER (RS.3,34,81,847/- ) ON THIS POIN T. THIS GROUND OFF APPEAL IS ALLOWED. ITA NO.5204/DEL./2017 10 16. LD. AR FOR THE ASSESSEE FURTHER CONTENDED THAT AFORESAID FINDING RETURNED BY THE LD. CIT (A) IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2008-09 & 2009-10 HAVE BEEN CONFIR MED BY THE TRIBUNAL IN ITA NOS.6080/DEL/2012 & 4097/DEL/20 13 VIDE ORDER DATED 28.03.2019 . WE HAVE PERUSED THE ORDER PASSED BY THE TRIBUNAL WHICH IS ON THE IDENTICAL FACTS AND OPERAT IVE PART OF WHICH IS EXTRACTED AS UNDER :- 30. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTEN TION AND FOUND THAT THE CLAIM OF THE ASSESSEE IS THAT COMPAN Y HAS GIVEN DISCOUNT TO ITS DEBTORS BASED ON CONSUMPTION OF AIR TIME DURING THE CURRENT YEAR. IT FILED ITS DETAIL OF THE CREDIT BALANCE OF THE DEBT. FROM THE DETAILS OF CREDIT BALANCE OF DEBTORS , THE LEARNED ASSESSING OFFICER ENQUIRED ABOUT THE DETAILS OF THE CONSUMPTION DEBTOR OF RS. 34,000,000/- WHICH WAS EXPLAINED BY T HE ASSESSEE, THAT THIS IS A DISCOUNT ACCOUNT WHICH IS CREDITED B Y THE COMPANY BY PASSING AN ACCOUNTING ENTRY BY CREDITING ONE CON TROL ACCOUNT HAVING DETAILS OF ALL THE PARTIES SEPARATELY. AS TH E ASSESSEE IS IN THE BUSINESS OF THE MEDIA THE MAIN SOURCE OF INCOME OF THE ASSESSEE COMPANY IS BROADCASTING OF ADVERTISEMENT I N ITS CHANNEL. THE ASSESSEE COMPANY SALE SPACE IN ITS CHA NNELS TO ADVERTISER USUALLY A UNIT OF SALE OF SPACE IS 10 SE CONDS. THE ASSESSEE COMPANY GAVE VARIOUS SCHEMES TO ITS ADVERT ISER LIKE CONSUMPTION INCENTIVE, SERIES DISCOUNT ETC. IN CASE OF CONSUMPTION INCENTIVE, THE ADVERTISERS ARE GIVEN AN OFFER THAT IN CASE IF IT CONSUMES PARTICULAR AMOUNT OF TIME DURIN G THE GIVEN PERIOD FOR BROADCASTING AND ADVERTISING THEN IT WIL L BE ENTITLED TO THE CONSUMPTION INCENTIVE. DURING THE YEAR, ASSESSE E HAS PASSED ON THIS CONSUMPTION INCENTIVE OF RS.34059992/. LEA RNED CIT(A) HAS HELD THAT THIS IS THE EXPENDITURE IN THE NATURE OF INCENTIVE TO THE ADVERTISER AND THE ASSESSEE HAS ALSO SHOWN INCO ME AGAINST THIS EXPENDITURE. BEFORE THE LEARNED CIT A THE AS SESSEE DEMONSTRATED BY PRODUCING THE COPIES OF THE DEALS O F SOME OF THE PARTIES AND SHOWN THAT IT IS NOT AN ASSET OR LIABIL ITY BUT ACTUAL EXPENDITURE. IN VIEW OF THIS, HE HELD THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION OF THE ABOVE EXPENDITURE. THE LEARNED DEP ARTMENTAL REPRESENTATIVE COULD NOT POINT OUT ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). THEREFORE, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) AND DISMISS GROUND NUMBER 4 OF THE A PPEAL OF THE AO. ITA NO.5204/DEL./2017 11 17. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE AND FOLLOWING THE ORDER PASSED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR AYS 2008-09 & 2009-1 0, WE ARE OF THE CONSIDERED VIEW THAT WHEN THE ASSESSEE HAS BEEN CONSISTENTLY FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THE LIAB ILITY BROUGHT ON RECORD IS AN ASCERTAINED LIABILITY AND THE PARTY-WI SE DETAIL HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE AND PERUSED BY TH E AO AS WELL AS LD. CIT (A) QUA THE DISCOUNT GIVEN. SO, WE FIND NO ILLEGALITY OR PERVERSITY IN THE FINDINGS RETURNED BY THE LD. CIT (A), HENCE GROUND NO.2 IS DETERMINED AGAINST THE REVENUE. GROUND NO.3 18. AO MADE A DISALLOWANCE OF RS.43,14,198/- UNDER EXPLANATION 2 OF SECTION 36(1)(VA) OF THE ACT ON TH E GROUND THAT EMPLOYEES CONTRIBUTION OF RS.40,55,290/- (TV DIVISI ON) PLUS RS.2,58,908/- (RADIO DIVISION) FOR THE MONTH OF MAR CH, 2012 WAS DEPOSITED ON 25.04.2012 AS AGAINST THE DUE DATE OF 20.04.2012. LD. CIT (A) DELETED THE ADDITION BY RETURNING FOLLOWING FINDINGS :- THE REASON FOR THE DISALLOWANCE APPEARS TO BE NO MODIFICATION OF THE DUE DATE WITH RESPECT TO THE EMPLOYEES CONTRIBUTION U/S 36(1)(VA) AS IT IS WITH RESPECT TO THAT FOR THE EMPLOYERS CONTRIBUTION TO PF U/S 43B OF THE ACT. DURING THE APPELLATE STAGE, THE AR OF THE APPELLANT ARGUED ON THE LINES OF THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT RELYING ON COURT DECISIONS INCLUDING THAT OF THE APEX COURT IN THIS CONNECTION. THE APPELLANTS CONTENTION RESTS ON READING SECTION 43B IN CONJUNCTION WITH SECTION 36(1)(VA) OF THE ACT. WHI LE SECTION ITA NO.5204/DEL./2017 12 36(1)(VA) ALLOWS DEDUCTION TOWARDS ANY SUM RECEIVED BY THE ASSESSEE FROM ITS EMPLOYEES AND CREDITED TO THE EMP LOYEES ACCOUNT IN THE RELEVANT FUND OR FUNDS ON OR BEFORE THE DUE DATE. AS PER THE EXPLANATION UNDER THE SUB CLAUSE, DUE D ATE MEANS THE DATE BY WHICH THE ASSESSEE IS REQUIRED AS AN E MPLOYER TO CREDIT AN EMPLOYEES CONTRIBUTION TO THE EMPLOYEES ACCOUNT IN THE RELEVANT FUND UNDER ANY ACT, RULE, ORDER OR NOT IFICATION ISSUED THERE UNDER OR UNDER ANY STANDING ORDER, AWA RD, CONTRACT OR SERVICE OR OTHERWISE'. HOWEVER, SECTION 43B OF T HE ACT, WHICH BEGINS WITH A NON-OBSTANTE CLAUSE ALLOWS DEDUCTION UNDER SUB- SECTION (B) ONLY ON ACTUAL PAYMENT. THE FIRST PROVI SO U/S 43B STATES PROVIDED THAT NOTHING CONTAINED IN THIS SEC TION SHALL APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HI S CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION ( 1) OF SECTION 139 IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LI ABILITY TO PAY SUCH SUM WAS INCURRED AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FURNISHED BY THE ASSESSEE ALONG WITH SUC H RETURN. THE ARGUMENT AGAINST THE DISALLOWANCE U/S 36(1)(VA) ADDUCED BY THE AR OF THE APPELLANT APPEARS PLAUSIBL E IF THE LAW REGARDING ITS ALLOWABILITY IS TAKEN INTO ACCOUNT ON A HARMONIOUS READING OF BOTH THE DATE AFOREMENTIONED SECTIONS OF THE ACT ALONG WITH THE EXPLANATION AS WELL AS THE PROVISO THERE U NDER. THE 'DUE DATE, BEING THE BONE OF CONTENTION IS, IN MY OPINI ON, THE DATE OF FILLING OF THE RETURN OF THE INCOME U/S 139(1) OF T HE ACT. THIS IS IN DUE DEFERENCE TO THE JUDICIAL PRONOUNCEMENT IN THE CASE OF CIT VS. AIMIL LTD [(2010) 321 ITR 508 (DELHI) WHEREIN T HE JURISDICTIONAL HIGH COURT HAS ALLOWED THE APPEAL ON THIS POINT RELYING ON THE PRINCIPLES LAID DOWN BY THE APEX COU RT IN COMMISSIONER OF INCOME TAX VS. ALOM EXTRUSIONS LIMI TED (2009) 319 ITR 306 (SC) AS WELL AS IN CIT VS. VINAY CEMENT LTD. 213 ITR 268 (SC) WHERE THE HONBLE SUPREME COURT HA S DISMISSED THE SLP OF THE REVENUE ON THIS POINT. AC CORDINGLY, THE DISALLOWANCE ON THIS POINT (RS.43,14,198/-) IS DELE TED AND THE GROUND OF APPEAL IS ALLOWED. 19. LD. AR FOR THE ASSESSEE SUPPORTING THE ORDER PA SSED BY THE LD. CIT (A) CONTENDED THAT BOTH THE PROVISIONS CONT AINED U/S 36(1)(VA) AND SECTION 43B ARE TO BE READ CONJOINTLY . LD. CIT (A) DELETED THE ADDITION IN THE LIGHT OF THE CONJOINT R EADING OF SECTION 36(1)(VA) AND SECTION 43B AND BY FOLLOWING THE LAW LAID DOWN BY ITA NO.5204/DEL./2017 13 HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS. AIMIL LTD. (2010) 321 ITR 508 (DELHI). 20. SO, WHEN THE ASSESSEE HAS UNDISPUTEDLY PAID THE EMPLOYEES CONTRIBUTION OF PF BEFORE FILING THE RETURN OF INCO ME, LD. CIT (A) HAS RIGHTLY DELETED THE DISALLOWANCE MADE BY THE AO . 21. HONBLE DELHI HIGH COURT IN CASE OF CIT VS. AIMIL L TD. (2010) 321 ITR 508 (DELHI) DECIDED IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY RELYING UPON THE DECISION OF HONBLE APEX COURT IN CASE OF CIT VS. ALOM EXTRUSIONS LTD. (2009) 319 ITR 306 (SC) AS WELL AS IN CIT VS. VINAY CEMENT LTD. 213 IT R 268 (SC) , OPERATIVE PART THEREOF IS EXTRACTED FOR READY PER USAL AS UNDER:- THE DELETION WITH EFFECT FROM APRIL 1, 2004 BY TH E FINANCE ACT, 2003 OF THE SECOND PROVISO TO SECTION 43B OF T HE INCOME-TAX ACT, 1961, WHICH STIPULATES THAT CONTRIBUTIONS TO T HE PROVIDENT FUND AND EMPLOYEES STATE INSURANCE FUND SHOULD BE M ADE WITHIN THE TIME MENTIONED IN SECTION 36(1)(VA), THAT IS, T HE TIME ALLOWED UNDER THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANE OUS PROVISIONS ACT, 1952, AS WELL AS THE EMPLOYEES STAT E INSURANCE ACT, 1948, IS TREATED AS RETROSPECTIVE IN NATURE. IF THE EMPLOYEES CONTRIBUTION IS NOT DEPOSITED BY THE DUE DATE PRESC RIBED UNDER THE RELEVANT ACTS AND IS DEPOSITED THEREAFTER, THE EMPL OYER NOT ONLY PAYS INTEREST ON DELAYED PAYMENT BUT CAN INCUR PENA LTIES ALSO, FOR WHICH SPECIFIC PROVISIONS ARE MADE IN THE THOSE ACT S. IN SO FAR AS THE INCOME-TAX ACT, 1961, IS CONCERNED, THE ASSESSE E CAN GET THE BENEFIT OF DEDUCTION OF THE PAYMENTS, IF THE ACTUAL PAYMENT IS MADE BEFORE THE RETURN IS FILED. WHERE FOR THE ASSESSMENT YEAR 2002-03 THE ASSESSEE HAD DEPOSITED EMPLOYERS CONTRIBUTION AS WELL AS EMPLOY EES CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI AFTER T HE DUE DATE, AS PRESCRIBED UNDER THE RELEVANT ACT/RULES BUT BEFO RE THE DUE DATE FOR FILING THE RETURN UNDER THE INCOME-TAX ACT : ITA NO.5204/DEL./2017 14 HELD ACCORDINGLY, THAT NO DISALLOWANCE COULD BE MA DE IN VIEW OF THE PROVISIONS OF SECTION 43B AS AMENDED BY THE FINANCE ACT, 2003. 22. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WHEN THE ASSESSEE HAS DEPOSITED THE EMPLOYEES CONTRIBUTION OF PF ON 2 5.04.2012 AS AGAINST THE DUE DATE OF 20.04.2012 BUT WELL BEFORE FILING THE RETURN OF INCOME, WE FIND NO ILLEGALITY OR PERVERSITY IN T HE DELETION MADE BY THE LD. CIT (A), HENCE GROUND NO.3 IS DETERMINED AGAINST THE REVENUE. 23. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF JULY, 2021. SD/- SD/- (ANIL CHATURVEDI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 29 TH DAY OF JULY, 2021. TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-39, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.