Dy.CIT, Circle-16(1),, Hyderabad v. M/s New Today (P) Limited,, Hyderabad

ITA 251/HYD/2013 | 2009-2010
Pronouncement Date: 04-10-2013 | Result: Dismissed

Appeal Details

RSA Number 25122514 RSA 2013
Assessee PAN AAACN7323G
Bench Hyderabad
Appeal Number ITA 251/HYD/2013
Duration Of Justice 7 month(s) 3 day(s)
Appellant Dy.CIT, Circle-16(1),, Hyderabad
Respondent M/s New Today (P) Limited,, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 04-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 04-10-2013
Assessment Year 2009-2010
Appeal Filed On 01-03-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY JUDICIAL MEMBER ITA NO. 251/HYD/2013 ASSESSMENT YEAR : 2009-10 DY. COMMISSIONER OF INCOME- TAX CIRCLE 16(1) HYDERABAD. VS. M/S NEWS TODAY (P) LTD. HYDERABAD. PAN: AAACN7323G (APPELLANT) (RESPONDENT) REVENUE BY : SMT. MAYA MAHESWARI ASSESSEE BY : SHRI V. RAGHAVENDRA RAO DATE OF HEARING : 26-09-2013 DATE OF PRONOUNCEMENT : 04-10-2013 ORDER PER B. RAMAKOTAIAH A.M.: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER OF THE CIT(A)-V HYDERABAD DATED 23/11/2012 FOR THE ASSESSMENT YEAR 2009-10. 2. REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPE AL: 2. THE CIT(A) ERRED IN LAW IN GRANTING RELIEF TO TH E ASSESSEE BY DELETING THE AMOUNT OF RECEIPT OF RS. 1 50 00 000/- TREATING THE SAME AS ADVANCE RECEIPT WHEN THE ASSESSEE COMPANY I S CLAIMING CREDIT FOR TDS ON CERTAIN PORTION OF THE S AID ALLEGED ADVANCE. 3. THE CIT(A) OUGHT TO HAVE APPRECIATED THE FACT TH AT THE RECEIPTS OF RS. 1.50 CRORES HAS BEEN CORRECTLY IDEN TIFIED AS NOT RELATING TO ADVANCE AND ARE TOTAL BUSINESS RECEIPTS . GROUND NOS. 1 AND 2 ARE GENERAL IN NATURE. 2 ITA NO. 251/HYD/2013 M/S NEWS TODAY (P) LTD. 3. BRIEFLY STATED FACTS ARE ASSESSEE COMPANY IS IN THE BUSINESS OF NEWS SERVICES AND REPORTS CATERING TO DAILY NEWS PA PERS MAGAZINES & OTHER PUBLICATIONS AND ELECTRONIC MEDIA. IN THE C OURSE OF ASSESSMENT THE AO SOUGHT RECONCILIATION OF TDS WIT H AMOUNTS ACCOUNTED AND FOUND THAT TDS WAS MADE BY M/S USHODA YA ENTERPRISES LTD. ON AN AMOUNT OF RS. 1.50 CRORES. T HIS AMOUNT WAS STATED TO BE AN ADVANCE PAYMENT FOR WHICH TDS WAS MADE AT THE TIME OF PAYMENT WHEREAS THE SAME WAS NOT INCLUDED I N THE RECEIPTS OF THE YEAR AS IT WAS IN THE NATURE OF ADVANCE PAYMENT . THE AO HOWEVER DID NOT AGREE AND MADE ADDITION OF RS. 1.50 CRORES ON THE REASON THAT THE AMOUNT WAS RECEIVED FOR A PARTICULAR SERVICE TO BE RENDERED BY THE ASSESSEE AND THERE IS NO CLAUSE FOR ADVANCE PAY MENTS IN THE AGREEMENT ENTERED INTO WITH M/S USHODAYA PUBLICATIO NS LTD. IT WAS FURTHER NOTED BY THE AO THAT THE ASSESSEE CLAIMED T DS CREDIT OF RS. 3 40 500/- DEDUCTED ON THE ABOVE AMOUNT THEREFORE THE SAID AMOUNT IS INCLUDIBLE AS RECEIPT IN THE YEAR. ASSESSEE SUB MITTED RECONCILIATION OF GROSS RECEIPTS TDS AND INCOME AS PER P&L ACCOUN T WHICH IS AS UNDER: SL. NO. PARTICULARS AMOUNT RATE TDS A) B) BUSINESS INCOME PRINT DIVISION SUBSCRIPTION REVENUE FROM UEL PUBLICATION TOTAL TV DIVISION SUBSCRIPTION REVENUE FROM UEL TELEVISION DIVISION OTHER CHANNELS APRL 08 TO MAR 09 SUBSCRIPTION REVENUE FROM UEPL ETV (TELUGU) DIVISION (APR 08 TO MAR 09) 288000000 4432555 292432555 378000000 12000000 2.270 2.270 2.266 2.266 6537600 100619 6638219 8565480 271920 3 ITA NO. 251/HYD/2013 M/S NEWS TODAY (P) LTD. AMOUNT RECEIVED TOWARDS ELECTRONIC EXPENSES TOTAL TOTAL BUSINESS INCOME AS PER P&L A/C REIMBURSEMENT OF OTHER EXPENSES AMOUNTS RECD. IN ADVANCE 25211749 415211749 707644304 173191 15000000 2.266 2.266 2.270 571301 9408701 16046920 3925 340500 722817495 16391345 TAX COLLECTED AS SOURCE (TCS) ON SCRAP SALE 336 1.133 4 GROSS RECEIPTS AND TDS AS PER TDS CERTIFICATES 722817831 16391349 IT WAS EXPLAINED THAT ASSESSEE HAS TO GET MONTHLY REMUNERATION FROM VARIOUS PRINT AND TV DIVISIONS AND ACCORDINGLY TOT AL RECEIPTS DURING THE YEAR WAS SHOWN AT RS. 70 76 44 304/- BUT TDS WA S MADE ON REIMBURSEMENT AND OTHER EXPENSES OF RS. 1 73 191/- AND ALSO ON THE ADVANCE. IT WAS ALSO FURTHER EXPLAINED THAT ADVANCE S HAVE INCREASED FROM RS. 25 00 000/- IN THE IMMEDIATELY PRECEDING Y EAR TO RS. 1.50 CRORES DURING THE YEAR UNDER CONSIDERATION TO RS. 1.75 CRORES AS ON 31/03/2010 AND RS. 2.20 CRORES AS ON 31/03/2011 WH ICH WAS ULTIMATELY ADJUSTED AS ON 31/03/2012. 4. THE CIT(A) FOLLOWING THE DECISION OF HIS PREDECE SSOR IN AY 2003-04 ON SIMILAR ISSUE AND ALSO FOLLOWING THE ITA TS ORDER IN THAT YEAR DATED 31/10/2011 (ITA NO. 586/HYD/2011) HELD T HAT ADVANCE CANNOT BE TREATED AS INCOME AND ACCORDINGLY THE AM OUNT OF RS. 1.50 CRORES TREATED AS INCOME BY THE AO WAS DELETED. 5. REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 6. AFTER CONSIDERING THE RIVAL CONTENTIONS AND EXA MINING THE PAPER BOOK WE DO NOT SEE ANY REASON TO INTERFERE WITH TH E ORDER OF THE 4 ITA NO. 251/HYD/2013 M/S NEWS TODAY (P) LTD. LEARNED CIT(A). IT IS AN ADMITTED FACT THAT THE ASS ESSEE WAS RECEIVING ADVANCES FROM M/S USHODAYA PUBLICATIONS PVT. LTD. A S A PART OF SERVICES PROVIDED AND THESE AMOUNTS WERE ADJUSTED A S AND WHEN BILLS WERE RAISED SUBSEQUENTLY AND THUS AT ANY POINT OF TIME THERE WAS AN ADVANCE AVAILABLE IN THE BOOKS OF ACCOUNT OF THE AS SESSEE. SIMILAR RECONCILIATION WAS ALSO DONE IN AY 2003-04 WHICH G OT ADJUSTED IN AY 2004-05. THE ADVANCE AMOUNT CANNOT BE CONSIDERED AS INCOME AS IT DOES NOT ACCRUE TO THE ASSESSEE SINCE NO SERVICES W ERE RENDERED RELATING TO THAT PAYMENT. AS PER THE PROVISIONS OF SECTION 194C TDS HAS TO BE DEDUCTED ON THE AMOUNTS PAID BY THE DEDUC TOR BUT THAT DOES NOT MEAN THAT ADVANCE HAS CONSIDERED AS INCOME OF THE ASSESSEE. THERE IS NOTHING ON RECORD TO ESTABLISH T HAT ASSESSEE RENDERED ANY OTHER SERVICE OVER AND ABOVE THE SERVI CES WHICH ARE BEING REMUNERATED EVERY MONTH BY A FIXED AMOUNT SO AS TO TREAT THE ADVANCE AS INCOME. IT IS ALREADY ON RECORD THAT EVE RY YEAR THERE WOULD BE ADVANCES WHICH WERE BEING ADJUSTED IN THE LATER BILLS. THEREFORE WE DO NOT SEE ANY REASON TO INTERFERE WI TH THE ORDER OF THE CIT(A). 7. IN THE COURSE OF ARGUMENT THE LEARNED COUNSEL F OR THE ASSESSEE RELYING ON THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. DINESH KUMAR GOEL [2010] 331 ITR 10 SUBMITTED THAT REVENUE IS RECOGNIZED ONLY WHEN THE SERVICES ARE ACTUALLY REND ERED. THIS PRINCIPLE WILL APPLY TO THE FACTS OF THE CASE UNDER CONSIDERATION AS THERE IS NO EVIDENCE THAT THE AMOUNT WAS RECEIVED B Y THE ASSESSEE FOR ANY PARTICULAR SERVICES RENDERED SO AS TO TREAT IT AS ACCRUED INCOME. AS CONSIDERED BY THE COORDINATE BENCH OF IT AT MUMBAI BENCH IN CASE OF SMT. VARSHA G. SALUNKE VS. DCIT [2006] 98 ITD (MUM.) (TM) JUST BECAUSE THE AMOUNT WAS COVERED BY THE TDS AS PER THE PROVISIONS OF SECTION 194C OF THE ACT THE SAME CANNOT BE CONSIDERED AS INCOME. HOWEVER AS PER THE PROVISION S OF SECTION 199 THE CREDIT FOR THE TDS CAN BE GIVEN IN THE ASSESSME NT YEAR IN WHICH THE INCOME IS SHOWN TO HAVE BEEN OFFERED FOR ASSESS MENT. THEREFORE 5 ITA NO. 251/HYD/2013 M/S NEWS TODAY (P) LTD. TO THE EXTENT OF GIVING CREDIT FOR THE AMOUNT OF TD S CLAIMED THE AO IS FREE TO EXAMINE AND ALLOW THE CREDIT IN THE YEAR IN WHICH THE ADVANCE GOT ADJUSTED IN THE BILLS AND NECESSARY CREDIT CAN BE GIVEN IN THAT YEAR AS PER THE PROVISIONS OF THE ACT. HOWEVER WE DO NOT SEE ANY MERIT IN THE GROUNDS RAISED BY THE REVENUE ON MERIT S OF ADDITION MADE AND ACCORDINGLY THE SAME ARE DISMISSED UPHOLDING THE ORDER OF THE CIT(A). 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 04-10-2013. SD/- SD/- (SAKTIJIT DEY) (B. R AMAKOTAIAH) JUDICIAL MEMBER ACCOUNT ANT MEMBER HYDERABAD DATED: 4 TH OCTOBER 2013. KV COPY TO:- 1) DCIT CIRCLE 16(1) ROOM NO. 612 6 TH FLOOR AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. 2) M/S NEWS TODAY (P) LTD. 6-3-570 EENADU COMPLEX SOMAJIGUDA HYDERABAD 500 082. 3) CIT(A)-V HYDERABAD. 4) CIT-IV HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE I.T.A.T . HYDERABAD.