2024 (11) TMI 1313 - AT - Income Tax

Revenue's appeal dismissed as production and broadcasting fees at 15.70% rate allowed despite late agreement filing

Income Tax Officer, Ward No. 16 (4), New Delhi Versus M/s MNM Trading Solution Pvt. Ltd.

ITAT Delhi dismissed the revenue's appeal regarding disallowance of excess production and broadcasting fees. The assessee was allowed production and ... Disallowance on account of excess production and broadcasting fee - payment under the head ‘Production and Broadcast Fees’ has not been made or that it was not genuine and also the fact that ‘Production and Broadcasting Fees’ was allowed @18.5% for AY 2012-13 deleted the disallowance - HELD THAT:- AO has not made any adverse comment on the merits of the allowability of the expenses towards ‘Production and Broadcasting Fees’ @15.70% and has only objected to the filing of the agreement in this regard effective from 01.04.2013 before the Ld. CIT(A) and not during the assessment proceedings despite opportunities given. There is no ground to interfere with the finding of the CIT(A) in deleting the disallowance. Further, as per the submissions of the AR about the short time made available to the assessee company for submitting the agreement effective from 01.04.2013, which has not been contested by the AO, it is held that there is no violation of Rule-46A in this case in admitting the agreement effective from 01.04.2013 by the Ld. CIT(A). Ground no.1 and 2 of the appeal is dismissed. Issues:1. Disallowance of excess production and broadcasting fee claimed by the assessee.2. Admission of additional evidence under Rule 46A by the CIT(A).Analysis:1. The appeal by the Revenue challenged the CIT(A)'s order deleting the disallowance of Rs. 5,21,02,473/- on account of excess production and broadcasting fee claimed by the assessee for Assessment Year 2014-15. The AO disallowed the amount as the assessee failed to provide necessary documentary evidence during assessment proceedings. The AO considered the charges as purchase cost of products and added the difference to the total income. The CIT(A) examined the case and allowed the production and broadcasting fees at the rate of 15.7% based on an additional agreement submitted by the assessee, contrary to the AO's calculation at 8%. The CIT(A) found no evidence to show the payment was not genuine and noted that higher percentages had been allowed in previous assessments. Thus, the disallowance was deleted by the CIT(A) in favor of the assessee.2. The second issue revolved around the admission of additional evidence under Rule 46A of the Income Tax Rules, 1962. The Revenue contended that the CIT(A) erred in admitting the agreement effective from 01.04.2013 as additional evidence. However, the CIT(A) found no violation of Rule 46A as the agreement was crucial to determine the correct rate of production and broadcasting fees. The Revenue's appeal was dismissed as the CIT(A)'s decision was based on sound reasoning and supported by the agreement submitted by the assessee. The AO did not object to the allowability of expenses at 15.7% but only to the late submission of the agreement. The Tribunal upheld the CIT(A)'s decision, emphasizing that there was no violation of Rule 46A in admitting the additional evidence.In conclusion, the Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s order to delete the disallowance of the production and broadcasting fees claimed by the assessee. The decision was based on the submission of additional evidence and the absence of evidence indicating the payment was not genuine. The Tribunal found no grounds to interfere with the CIT(A)'s decision and upheld the allowance of expenses at 15.7% as per the agreement submitted by the assessee.