DCIT, New Delhi V. M/s. INX News Pvt. Ltd., New Delhi

ITA 6532/DEL/2015

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A)-4, Mumbai, which had overturned the decision of the Assessing Officer (AO). The AO had disallowed the business loss claimed by INX News Pvt. Ltd. for the assessment year 2008-09, asserting that no business activities were conducted during the year. The CIT(A), however, found that the company had indeed commenced business activities by launching a news channel and incurred related expenses. The Tribunal's decision affirmed the CIT(A)'s findings, dismissing the Revenue's appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113811 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 24-04-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 07-12-2015
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘E’ : NEW DELHI) BEFORE SH. N.K.BILLAIYA, ACCOUNTANT MEMBER AND SH.ANUBHAV SHARMA, JUDICIAL MEMBER ITA No. 6532/Del/2015, A.Y. 2008-09 DCIT New Delhi Vs. M/s. INX News Pvt. Ltd. B-116, Ground Floor, Okhla Industrial Area, Phase-1, New Delhi PAN : Assesseeby Sh. Pradeep Singh Rawat, Adv. Revenue by Ms. Sarita Kumar, CIT-DR Date of hearing: 25.04.2023 Date of Pronouncement: 23.05.2023 ORDER Per Anubhav Sharma, JM : The appeal has been preferred by the Revenue against the order dated 13.08.2015 of CIT(A)-4, Mumbai (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in appeal No. CIT(A)-4/Tr- 426/Appeal(3)/ACIT.16(1)/2015-16 arising out of an appeal before it against the order dated 24.12.2010 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the DCIT-5(2), Mumbai (hereinafter referred as the Ld. AO). 2. The facts in brief are that after going through the details filed by the appellant, the A.O. observed that as per Schedule 14 to P&L Account, the following are the only credit to P&L Account:- 6532.Del.2015 INX News P. Ltd. 2 i) Interest Rs.25,61,059/- ii) Dividend Income Rs.28,59,438/- iii) Profit on sale of investment Rs.28,59,512/- iv) Miscellaneous Income Rs. 350/- In the computation of income, according to A.O., the appellant has subjected to tax interest income under the head ‘income from other sources’, dividend has been claimed exempt, profit on sale of investment has been considered for tax under the head capital gain. It was, therefore, observed that miscellaneous income could not be said to be business income whereas the appellant after claiming various expenses and allowances arrived at a business loss of Rs.49,13,34,690/-. The appellant was asked to explain the claim of expenses under the head business and arriving at a business loss of Rs.49,13,34,690/-. It is mentioned that the appellant failed to furnish any document to establish that the company was really involved in any business activity during the relevant previous year. The Assessing Officer, therefore, disallowed the business loss claimed holding that since no business activities had been carried out during the year, the same is not allowable and brought to tax the capital gain and income from other sources totaling to Rs.53,90,920/-. 3. The appeal before Ld. CIT(A) remand report was called upon the written submissions of the assessee and the paper book filed for which the Ld. AO submitted that para 4.5 of Ld. CIT(A) “4.5 Thus the only issue to be verified is whether the claim of launch of news channel is correct. From the submission/proof it appears that channel was inaugurated on 27.03.2008. And this is also genuine that before inauguration assessee must have incurred some expenses but fixed asset schedule is showing that most of the assets were put to use on 27.03.2008, so it is doubtful that this much expenses was incurred during the year.” 4. The Bench is of considered opinion that Ld. CIT(A) has rightly appreciated the facts in the light of the submissions of assessee and the remand 6532.Del.2015 INX News P. Ltd. 3 report once statutory permission were received from the competent authority on 21.09.2007 the business operations of the assessee company required creation of content and resources for broadcasting the news. The Ld. AO had failed to appreciate the nature of business of the assessee to conclude that the assessee had not done any business activity during the relevant period. Thus, there is no substance in the grounds raised by the revenue, Consequently, the appeal of revenue is dismissed. Order pronounced in the open court on 23 rd May, 2023. Sd/- Sd/- (N.K.BILLAIYA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:-23 rd .05.2023 *Binita, SR.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI