DCIT, New Delhi V. M/s. Digital Radio (Mumbai) Broadcasting Ltd., New Delhi

ITA 6254/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4757 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order; Capital expenditure
• Section: 154

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B : NEW DELHI BEFORE SHRI I.C.SUDHIR , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 6254/DEL/2014 (ASSESSMENT YEAR: 2010 - 11 ) DCIT, CIRCLE - 10(1), NEW DELHI VS. DIGITAL RADIO (MUMBAI) BROADCASTING LTD, 401, DADHA HOUSE, 18/17, WEA KAROL BAGH, NEW DELHI PAN:AABCR7871C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ANSHU PRAKASH, SR. DR ASSESSEE BY: SHRI SANJIV SAPRA, CA DATE OF HEARING 04/09 / 2017 DATE OF PRONOUNCEMENT 13 / 09 / 2017 O R D E R PER PRASHANT MAHARISHI, A. M. 1. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - XIII, NEW DELHI DATED 08.09.2014 FOR THE ASSESSMENT YEAR 2010 - 11. 2. THE REVENUE HAS THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN DIRECTING TO ALLOW ADDITION OF RS. 26376542/ - ON ACCOUNT OF LINCESE FEE, WITHOUT CONSIDERING THAT THE ASSESSEE HAD NOT MADE ANY SUCH CLAIM IN THE RETURN OF INCOME AND HAS ALSO NOT ACCEPTED FOR DECISI ON OF THE CIT(A) IN THE ASSESSMENT YEAR 2006 - 07 ON THIS TIME AND THE MATTER IN STILL PENDING FOR ADJUDICATION BEFORE THE HONBLE ITAT IN THAT YEAR. 2. ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT(A) HAS ERRED IN DECIDING THE ISSUE BY PASSIN G RECTIFICATION ORDER U/S 154 OF THE ACT,, WHICH IS NOT PROPER, AS THE ISSUE INVOLVED APPLICATION OF MIND AND THERE WAS NO MISTAKE. 3. BRIEFLY STATED THE FACTS ARE THAT ASSESSEE IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF FM BROADCASTING, FILED ITS RETURN OF INCOME ON 30/09/2 010 SHOWING INCOME OF RS. 4205 3788/ . THE ASSESSMENT UNDER SECTION 143 (3) OF THE INCOME TAX ACT WAS PASSED ON 18/02/2013 WHEREIN THE LD. AO DESPITE ORDER OF THE LD. CIT A, DID NOT ALLOW THE DEDUCTION OF 1/10 OF THE LICENSE FEE AS MATTER WA S PENDING BEFORE THE COORDINATE BENCH. THEREFORE AGGRIEVED BY THE ORDER OF THE LD. ASSESSING OFFICER THE ASSESSEE PREFERRE D APPEAL BEFORE THE LD. CIT - A. V IDE ORDER DATED 08/09/2014 THE LD. CIT APPEAL DIRECTED THE LD. ASSESSING OFFI CER TO ALL OW DEDUCTION OF RS. 1 776600 BEING 1/10 OF RS. 17765995 / - WHICH I S DEDUCTIBLE PAGE 2 OF 3 EXPENDITURE UNDER SECTION 35ABB OF THE INCOME TAX ACT. THE REVENUE AGGRIEVED BY THE ORDER OF THE LD. CIT A, HAS PREFERRED AN APPEAL BEFORE US RAISING THE GROUND THAT CIT HAS E RRED IN DIRECTING TO ALLOW THE DEDUCTION OF RS. 26376542 / - ON ACCOUNT OF LICENSEES WITHOUT CONSIDERING THAT THE ASSESSEE HAS NOT MADE ANY SUCH CLAIM IN THE RETURN OF INCOME AND REVENUE HAS ALSO NOT ACCEPTED THE DECISION OF THE LD. CIT A, IN THE ASSESSM ENT YEAR 2006 07, WHICH WAS PENDING BEFORE THE COORDINATE BENCH. 4. THE LD. DEPARTMENTAL REPRESENTATIVE REPEATED THE SAME ARGUMENT AND SUBMITTED WHAT IS STATED IN THE GROUNDS OF APPEAL. LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT NOW THE COORDINAT E BENCH H A S DECIDED THE ISSUE V IDE ITS ORDER DATED 24/11/2015 WHICH HAS BEEN FURTHER CONFIRMED BY THE HONBLE DELHI HIGH COURT V IDE ORDER DATED 24/05/2017. HE THEREFORE SUBMITTED THAT NOW THE MATTER HAS BECOME FINAL AND ASSESSEE IS ENTITLED TO GET THE DEDUCTION O F 1/10 TH OF THE TOTAL EXPENDITURE SPREAD OVER 10 YEARS OF USEFUL LIFE OF THE LICENSES . 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION AND ALSO PERUSED THE ORDERS OF THE LOWER AUTHORITIES AS WELL AS THE ORDERS OF THE HONBLE DELHI HIGH COURT IN CASE OF T HE ASSESSEE WHEREIN THE ISSUE OF SECTION 35ABB HAS BEEN DECIDED HOLDING THAT THE AMOUNT EQUAL TO 1/10 OF THE TOTAL CAPITAL EXPENDITURE WAS ALLOWED PROPORTIONATELY OVER 10 YEAR PERIOD TO THE ASSESSEE. THE LD. CIT A, HAS ALLOWED THE DEDUCTION. ACCORDING TO THE DECISION OF THE COORDINATE BENCH, WHICH THE HONBLE DELHI HIGH COURT AFFIRMED. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY IN ALLOWING THE CLAIM OF THE ASSESSEE. FURTHER, THE CLAIM OF THE REVENUE THA T WITHOUT BEING ANY CLAIM IN THE RETURN OF INCOME THE LD. 1 ST APPELLATE AUTHORITY HAS ALLOWED THE 1/10 TH DEDUCTION TO THE ASSESSEE. NOW IN THE PRESENT CASE THE CLAIM WAS MADE BEFORE THE LD. ASSESSING OFFICER BY THE ASSESSEE HOWEVER, IT WAS NOT GRANTED AS IT WAS NOT IN RETURN OF INCOME OF ASSESSEE AND THEREFORE ASSESSEE WENT INTO APPEAL. THE HONBLE DELHI HIGH COURT IN CIT VERSUS JAY PARABOLIC SPRINGS LTD 306 ITR 42 HELD THAT THE CONDITION OF THE CLAIM IN THE RETURN OF INCOME APPLIES ONLY TO THE ASSESSING OFFICER AND NOT TO THE APPELLATE AUTHORITIES. THEREFORE, EVEN THE LD. CIT APPEAL IS ALSO EMPOWERED TO GRANT SUCH DEDUCTION. IN VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT (A) IN ALLOWING THE CLAIM OF THE ASSESSEE OF 1/10 OF THE LICENSE EXPENDITURE. IN THE RESULT GROUND NO. 1 OF THE APPEAL OF THE REVENUE IS DISMISSED. 6. THE 2 ND GROUND OF APPEAL OF THE REVENUE WAS WITH RESPECT TO THE PASSING OF THE ORDER UNDER SECTION 154 OF THE INCOME TAX ACT BY THE LD. CIT APPEAL ON 08/09/2014 NO ARGUMENTS WERE ADVANCED BEFORE US THAT HOW THE MISTAKE WAS NOT APPARENT FROM THE RECORD . AS ACCORD ING TO US THE SUBSEQUENT DECISION OF THE PAGE 3 OF 3 HONBLE HIGH COURT CONSTITUTE A MISTAKE APPARENT FROM THE RECORD. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT.A, IN PASSING ORDER UNDER SECTION 154 OF THE ACT. GROUND NO. 2 OF THE APPEAL OF T HE REVENUE IS DISMISSED. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 / 0 9 / 2017 . - S D / - - S D / - ( I.C.SUDHIR ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 0 9 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI