T V TODAY NETWORK LTD.,NEW DELHI V. ADDL. CIT, NEW DELHI

MA 470/DEL/2017

AI Insights

The case involves M/s. TV Today Network Limited, the applicant, who filed a miscellaneous application against the order of the ITAT concerning the assessment year 2008-09. The application sought rectification of mistakes apparent on record from the original tribunal decision, which had upheld certain disallowances made by the AO under Rule 8D of the Income-tax Rules, 1962. The primary contention was regarding the satisfaction recorded by the AO and the applicability of Rule 8D(2)(ii) and 8D(2)(iii) concerning disallowances related to finance charges and indirect expenditures respectively. The tribunal found that the finance charges were not linked to the investments and thus, Rule 8D(2)(ii) should not apply, leading to the partial allowance of the application.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717524 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 10-08-2017
• Other Referred Cases: Maxopp Investments Ltd. 347 ITR 272
• Laws Referred To: Income-tax Act, 1961, Income-tax Rules, 1962
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMIT KUMAR SINGH
• Assessee Lawyers: SALIL AGARWAL
• Keywords: Earning of tax free income; Rule 8D

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘D’: NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI VIMAL KUMAR, JUDICIAL MEMBER MA No.470 /Del/2017 (in ITA No.5617/DEL/2012) (Assessment Year: 2008-09) M/s. TV Today Network Limited, vs. Addl. CIT, E – 1, Videocon Tower, Range 16, Jhandewalan Extension, New Delhi. New Delhi. (PAN : AABCT0424B) (APPLICANT) (RESPONDENT) APPLICANT/ASSESSEE BY : Shri Salil Agarwal, Sr. Advocate Shri Shailesh Gupta, CA Shri Umashankar, Advocate REVENUE BY : Shri Amit Kumar Singh, Sr. DR Date of Hearing : 08.08.2025 Date of Order : 14.08.2025 O R D E R PER S.RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. This misc. application is filed by the Applicant/Assessee against the order of the Tribunal in ITA No.5617/Del/2012 dated 10.04.2017 for AY 2008-09 for rectifying the mistakes apparent on record. 2. At the time of hearing, ld. AR of the assessee submitted that ITAT has considered the submissions of the assessee at the time of disposing the appeal preferred by the assessee and he submitted that ITAT has not considered the satisfaction recorded Printed from counselvise.com 2 MA No.470/DEL/2017 by the AO in his order which is not as per the provisions of section 14A(2) of the Income-tax Act, 1961 (for short ‘the Act’). It is fact on record that assessee has suo moto disallowed some expenditure and AO has not recorded proper satisfaction. However, he agreed that coordinate Bench has rejected the plea of the assessee on the issue of satisfaction. However, he submitted that ITAT has not considered the submissions of the assessee on the issue of disallowance under Rule 8D(2)(ii) of the Income-tax Rules, 1962 (for short ‘the Rules’) and it is settled position of law that when the assessee has substantial reserves in its business and the secured loan borrowed by the assessee meant for specific purpose and there is no connection with the investments made by the assessee. The ITAT has discussed the indirect expenditure and proceeded to confirm the additions made by the AO under Rule 8D(2)(ii) and 8D(2)(iii). He submitted that as regards Rule 8D(2)(iii) is concerned, the issue is remitted back to the AO to consider only those investments that has yielded exempt income as laid down in the case of Maxopp Investments Ltd. 347 ITR 272. He submitted that there is no grievance of the assessee since the matter is remitted back to the AO and the OGE is to be passed. With regard to disallowance made under Rule 8D2(ii) with regard to finance charges that this issue is not dealt with and prayed that the Bench may consider the same. 3. On the other hand, ld. DR of the Revenue relied on the findings of the coordinate Bench and findings of the lower authorities. 4. Considered the rival submissions and material placed on record. We observe that the ld. AR has raised two issues in the misc. applications preferred by the assessee. As far as satisfaction is concerned, we do not see any reason to disturb the same. Printed from counselvise.com 3 MA No.470/DEL/2017 Coming to the issue of Rule 8D(2)(ii), the disallowance made by the AO on finance expenditure, we observe that assessee has made investments and at the same time, assessee has huge reserves and surplus in its Balance Sheet which is much more than the investments made by the assessee. Since the finance charges are linked to the borrowings by the assessee for the specific purpose, therefore, it is a settled proposition of law that when the finance charges are not linked to the investments and incurred wholly for the purpose of other running business of the assessee, Rule 8D(2)(ii) is not applicable. Therefore, in our considered view, the coordinate Bench has not dealt with the issue of Rule 8D(2)(ii) in its order. It is a mistake apparent on record, therefore, assessee has a point in its favour. Therefore, we are inclined to grant the relief to the assessee. With regard to disallowance made under Rule 8D(2)(iii) is concerned, the issue is already remitted back to the AO by the direction of the coordinate Bench, we do not see any reason to disturb the same as there is no prejudicial caused to the assessee. Accordingly, the impugned order dated 10,04.2017 is amended to that extent as per our directions as above. 5. In the result, the misc. application filed by the assessee is partly allowed. Order pronounced in the open court on this 14th day of August, 2025. Sd/- sd/- (VIMAL KUMAR) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 14.08.2025 TS Printed from counselvise.com 4 MA No.470/DEL/2017 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "