Media Features (India) Pvt. Ltd., New Delhi v. ITO, Ward- 16(3), New Delhi

ITA 4682/DEL/2017 | 2012-2013
Pronouncement Date: 29-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 468220114 RSA 2017
Assessee PAN AADCM3904D
Bench Delhi
Appeal Number ITA 4682/DEL/2017
Duration Of Justice 4 month(s) 9 day(s)
Appellant Media Features (India) Pvt. Ltd., New Delhi
Respondent ITO, Ward- 16(3), New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 29-11-2017
Assessment Year 2012-2013
Appeal Filed On 20-07-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI SMC BENCH NEW DELHI BEFORE SHRI B.P. JAIN ACCOUNTANT MEMBER ITA NO. 4 6 82 /DEL/201 7 [A.Y. 20 1 2 - 1 3 ] M/S MEDIA FEATURES [INDIA] PVT. LTD VS. THE I.T. O 11/5B PARAM TOWER 2 ND FLOOR WARD 1 6 ( 3 ) PUSA ROAD NEW DELHI N EW DELHI PAN : A ADCM 3904 D [APPELLANT] [RESPONDENT] DATE OF HEARING : 27 . 1 1 .2017 DATE OF PRONOUNCEMENT : 29 . 1 1 .2017 AS SESSEE BY : SHRI S.K. CHATURVEDI CA REVENUE BY : SHRI ATIQ AHMED SR. DR ORDER THIS APPEAL OF THE ASSESSEE ARISES F ROM THE ORDER OF THE LD. CIT(A) - 38 DELHI VIDE ORDER DATED 31 .0 5 .201 7 FOR A.Y. 20 1 2 - 1 3 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. CIT(A) HAS ERRED BY CONFIRMING THE ADDITION OF THE AMOUNT OF STALE CHEQUES AT RS. 99 87 7/ - DESPITE THE FACT THAT THE SAME AMOUNT WAS NOT CLAIMED AS EXPENSES DURING THE YEAR UN DER APPEAL T HIS ACTION IS ILLEGAL AR BITRARY AND AGAINST TH E FACTS AND CIRCUMSTANCES O F THE CASE. 2 ITA NO. 4690 /DEL/2017 2. CIT(A) HAS ERRED ON FACTS AND IN LAW BY CONFIRMING THE DISALLOWAN CE OF RENEWAL FEE PAID TO SIKKIM MANIPAL UNIVERSITY ON THE GROUND THAT NO TDS WAS DEDUCTED HER AC TION IS ILLEGAL ARBITRARY AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. CIT(A) HAS ERRED BY CONFIRMING THE ADDITION OF RS. 5 50 000/ - THE AMOUNT PAID FOR ACQUIRING A NEW SIKKIM MANIPAL UNIVERSITY CENTRE WITH REGISTERED STUDENTS ON THE GROUND T HAT NO TDS WAS DEDUCTED FROM THIS AMOUNT AND ALSO WITHOUT PROPERLY ADJUDICATING THE FACTS AND CONTENTION OF APPELLANT HER ACTION IS ILLEGAL ARBITRARY AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE APPELLANT CRAVES LEAVE TO ADD DELETE MODI FY ANY GROUND OF APPEAL. 3 . BRIEFLY STATED THE FACTS OF THE CASE PERTAINING TO GROUND NO. 1 ARE THAT T HE ASSESSEE HAS MAINTAINED A STALE CHEQUE WHICH IS AVAILABLE AT PAGE 36 OF THE PAPER BOOK. THE ASSESSEE HAS SUBMITTED EXPLANATION ABOUT THE SAME WHIC H WAS NOT ACCEPTED BY THE ASSESSING OFFICER WHO MADE THE ADDITIONS WHICH WAS CONFIRMED BY THE LD. CIT(A). 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT WAS SUBMITTED BY THE LD. COUNSEL FOR THE 3 ITA NO. 4690 /DEL/2017 ASSESSEE THAT THE C HEQUES WERE ISSUED TO MCD WHICH WERE NEVER ENCHASED AND THE ASSESSEE HAS REVERSED THE ENTRY DURING THE IMPUGNED YEAR. THE ASSESSING OFFICER HAS TO VERIFY WHETHER THE ASSESSEE HAS CLAIMED THE EXPENSES IN THE PRECEDING YEARS AND IN CASE HE HAS CLAIMED THE S AME IN THE PRECEDING YEAR THAT REVERSAL ENTRY WILL DEFINITELY BE INCOME OF THE IMPUGNED YEAR. ACCORDINGLY THE MATTER IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WHO WILL DECIDE THE ISSUE DE NOVO AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND NO. 1 IS ALLOWED FOR STATISTICAL PURPOSES. 5. AS REGARDS THE NEXT ISSUE I.E. GROUND NO. 2 THE ASSESSING OFFICER MADE ADDITION U/S 40A(2) OF THE INCOME - TAX ACT 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] AND THE ASSESS ING OFFICER AS WELL AS THE LD. CIT(A) HAS MENTIONED THAT THE TRANSACTION IS SQUARELY COVERED U/S 194J(I)(BA) OF THE ACT WHICH STATES THAT ANY PERSON NOT BEING AN INDIVIDUAL OR HUF WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY SUM BY WAY OF REMUNERATION OR FEES OR COMMISSION BY WHATEVER NAME CALLED OTHER THAN THOSE ON WHICH TAX IS DEDUCTIBLE U/S 192 OF THE ACT TO DIRECTOR OF A COMPANY..SHALL DEDUCT AN AMOUNT OF 10% AS INCOME TAX THEREON. BUT THIS AMENDMENT HAS COME INTO FORCE W.E.F. 1.7.2012 IE REL EVANT TO ASSESSMENT YEAR 2013 - 14 AND NOT IN THE IMPUGNED YEAR 4 ITA NO. 4690 /DEL/2017 I.E. 2012 - 13. THEREFORE NO ADDITION U/S 40(A)(IA) OF THE ACT CAN BE MADE IN THE IMPUGNED YEAR AND HENCE THE ADDITION SO MADE IS DIRECTED TO BE DELETED. THUS GROUND NO. 2 RAISED BY THE ASSESSE E IS ALLOWED. 6. AS REGARDS GROUND NO. 3 THE ASSESSING OFFICER HAS MADE AN ADDITION OF RS. 5 50 000/ - ON THE GROUND THAT THE ASSESSEE HAS CLAIMED REVENUE EXPENDITURE OF AN AMOUNT OF RS. 5 50 000/ - WHICH IN FACT SHOULD HAVE BEEN CAPITAL EXPENDITURE AND WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A). 7. BRIEF FACTS OF THE CASE AS EMANATING FROM THE ORDER OF THE LD. CIT(A) ARE THAT A S A MATTER OF FACT RS.5 50 000/ - WAS PAID TO PURCHASE A NEW CENTRE NO.O 2969 FROM M/S ANUPAM INSTITUTE OF INFORMATION TECHNOLOG Y & MANAGEMENT THE COP Y OF AGREEMENT IS BEING ENCLOSED AT PAGE NO. 12 - 14 OF PAPER BOOK. 8. THIS AMOU NT WAS PAID TO ACQUIRE A RIGHT WITH THE PERMISSION OF SMU TO RUN ALREADY SET CENTRE. THIS PAYMENT HAS NOT GENERATED ANY CAPITAL ASSET AND ALSO NOT OF END URING NATURE BUT A PAYMENT TO FACILITATE THE ASSESSE E TO START A NEW CENTRE . THEREFORE IT IS A REVEN UE EXPENDITURE. THIS HAS BEEN HELD BY HON BLE SUPREME COURT AS UNDER: 5 ITA NO. 4690 /DEL/2017 ANY EXPENDITURE - MEANING - SPENDING IN THE SENSE OF PAYING OUT OR AWAY : MONEY IS THE PRIMARY MEANING OF 'EXPENDITURE IS WHAT IS PAID OUT OR AWAY AND IS SOMETHING WHICH IS GONE IRRETRIEVABLY. EXPENDITURE WHICH IS DEDUCTIBLE FOR INCO ME FOR TAX PURPOSES IS ONE WHICH IS EITHER ACTUALLY PAID OR IF THE ACCOUNTS ARE OR MERCANTILE BASIS P ROVIDED FOR TOWARDS A LIABILITY ACTUALLY EXISTING AT THE TIME BZ: PUTTING ASIDE OF MONEY WHICH MAY BECOME EXPENDITURE ON THE HAPPENING OF AN. EVENT IS NOT EXPENDITURE. [INDIAN MOLASSES CO. PR. LTD. V. CIT (1959) 37 ITR 66 (SC) IF THE ADVANTAGE CONSISTS MERELY IN FACILITATING THE ASSESSEES TRADING OPERATIONS OR ENABLING THE MANAGEMENT AND THE CONDUCT OF THE ASSESSES BUSINESS TO BE CARRIED ON MORE EFFICIENTLY OR MORE PROFITABLY WHILE LEAVING THE FIXED CAPITAL UNTOUCHED THE EXPENDITURE WOULD BE ON REVENUE ACCOUNT EVEN THOUGH THE ADVANTAGE MAY ENDURE FOR AN INDEFINITE FUTURE [EMPIRE JUTE CO. LTD. V. CIT (1980) 124 ITR 1 10 (SC)] 9. IT IS THE INTENSION OF THE OBJECT WITH WHICH THE ASSET IS ACQUIRED THAT NATURE OF THE EXPENDITURE INCURRED OVER IT AND NOT THE METHOD OR THE MANNER IN WHICH THE PAYMENT IS MADE OR THE SOURCE OF SUCH PAYMENT. 6 ITA NO. 4690 /DEL/2017 10. FURTHER RELIANCE IS PLACE D ON DELHI HIGH COURT DECISION IN CASE OF CIT V. RELAXO FOOTWEAR LTD. 293 ITR 231 (DEL) WHEREIN IT HAS BEEN HELD THAT NEW UNIT WAS A PAR T OF THE EXISTING BUSINESS AND THERE WAS NO DISPUTE THAT THERE WAS UNITY OF CONTROL AND INTERLACING OF THE UNITS. THUS THE EXPENSES INCURRED BY THE ASSESS E E FOR THE SETTING UP OF THE NEW UNIT WHICH WAS A PART OF THE EXISTING BUSINESS WERE THEREFORE TO BE ALLOWED AS A REVENUE EXPENDITURE. 11. SIMILARLY MADRAS HIGH COURT HAS ALSO HELD THE SAME IN THE CASE OF CIT V. RANE (MADRAS) LTD. 293 ITR 459 (MAD ) 12. IN THAT VIEW OF THE MATTER I AM OF THE VIEW THAT THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING TH E ADDITION MADE BY THE ASSESSING OFFICER AND THE SAME IS DIRECTED TO BE DELETED. THUS GROUND NO. 3 IS ALLOWED. 5 . IN THE RESULT THE APPEAL OF THE ASSESSEE IN ITA NO. 4 6 82 /DEL/2017 IS PARTLY ALLOWED . THE ORDER IS PRO NOUNCED IN THE OPEN COURT ON 29 . 1 1 . 2017. SD/ - [B.P. JAIN] ACCOUNTANT MEMBER 7 ITA NO. 4690 /DEL/2017 DATED: 28 TH NOVEMBER 2017 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR ITAT NEW DELHI