TaxTMI 
TaxTMI 
2019 (5) TMI 92
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....e. Considering the aforesaid submissions of the learned Sr. Counsel for the assessee, we dismiss grounds no.1, 2 and 3, as not pressed. 3. In ground no.4, the assessee has challenged the disallowance made of Rs. 45,02,500, under section 14A r/w rule 8D. 4. Brief facts are, during the assessment proceedings, the Assessing Officer noticing that in the relevant previous year the assessee has earned exempt income by way of dividend, whereas, it has debited expenditure to the Profit & Loss Account including interest expenditure of Rs. 21,80,000, called upon the assessee to explain why disallowance of proportionate expenditure should not be made in accordance with rule 8D(2). Though, the assessee objected to the proposed disallowance, however, the Assessing Officer rejecting the objections of the assessee proceeded to compute disallowance by applying the provisions of rule 8D r/w section 14A of the Act for an amount of Rs. 58,94,863. The assessee challenged the aforesaid disallowance before the first appellate authority. 5. Learned Commissioner (Appeals) after considering the submissions of the assessee deleted the disallowance of interest expenditure of Rs. 13,92,363. Insofar a....
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.... the disallowance of expenditure made under section 14A of the Act by the assessee at Rs. 50,000. It is relevant to observe, while deciding identical issue in assessee's own case for assessment year 2006-07 in ITA no.4818/Mum./2010, dated 1st April 2016, though, the Tribunal has observed that provisions of rule 8D are not applicable, however, the Tribunal has restored the issue to the Assessing Officer for re-examination. Keeping in view the decision of the Tribunal in assessee's own case, we restore the issue to the file of the Assessing Officer to verify assessee's claim that in the facts of assessee's case, disallowance under section 14A of the Act can be reasonably be computed @ 5% of the exempt income earned during the year. The Assessing Officer must decide the issue after due opportunity of being heard to the assessee. Ground is allowed for statistical purposes. ITA no.6030/Mum./2009 Revenue's Appeal 9. In ground no.1, the Department has challenged deletion of addition of Rs. 46,28,20,416, made by the Assessing Officer towards publicity expenses by the assessee. 10. As an off-shoot of the aforesaid ground, the Department has raised the following addit....
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....cipal. Thus, he observed, the advertisement expenses incurred by the assessee gives benefit both to the principal M/s. STAR, Hong Kong, as well as the assessee. He observed, since the principal is an overseas resident, the benefit accruing to it is neither ascertainable nor properly taxable. Thus, he observed, the expenditure incurred by the assessee towards advertisement and publicity cannot be allowed fully. Referring to similar disallowance made by the Assessing Officer in assessment years 1997-98 to 1999-2000, the Assessing Officer ultimately concluded that only 15% out of the total expenditure incurred towards advertisement and publicity can be allowed as a deduction to the assessee. Accordingly, out of the total expenditure of Rs. 58,41,53,467, the Assessing Officer allowed an amount of Rs. 8,76,23,020, as wholly and exclusively incurred for the purpose of assessee's business under section 37(1) of the Act and the balance amount of Rs. 49,65,30,447, was disallowed. The assessee challenged the aforesaid disallowance before the first appellate authority. 13. After considering the submissions of the assessee in the context of facts and material on record, learned Commissioner....
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....ival submissions in the light of facts and material available on record, we find that the dispute relating to the assessee's claim of deduction for advertisement and publicity expenses is a recurring dispute between the parties from assessment year 1997-98 onwards. In fact, the Assessing Officer himself has stated in the assessment order that while deciding assessee's appeals for assessment years 1997-98 to 1999-2000, there was difference of opinion between the Members of the Tribunal. While the Judicial Member decided the issue in favour of the assessee the Accountant Member upheld the disallowance made by the Assessing Officer. However, when the issue came up for consideration before the Third Member, he agreed with the Judicial member and the issue was ultimately decided in favour of the assessee. It is pertinent to mention, the aforesaid decision of the Tribunal in assessment year 1997-98 to 1999-2000 were challenged by the Department in appeal before the Hon'ble Jurisdictional High Court. While deciding the appeals of the Revenue in ITA no.165/2009, dated 24th March 2009, and ITAs no.282 and 283/2009, dated 8th April 2009, the Hon'ble Jurisdictional High Court upheld t....
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....ompleted before 1st July 2012. He submitted, restoration of the issue raised in additional grounds to the Transfer Pricing Officer at this stage would amount to re-opening of assessment for making transfer pricing adjustment. He submitted, even at this stage also, the Department has not demonstrated that advertisement and publicity expenditure incurred by the assessee falls within the definition of international transaction. He submitted, the Transfer Pricing Officer has accepted the margin shown by the assessee from marketing agency stream as well as distribution stream to be at arm's length. Further, he submitted, while deciding Department's appeal for assessment year 2006-07, the Tribunal refused to entertain identical additional grounds raised by the department. Therefore, he submitted, the additional grounds raised by the Revenue should not be admitted. 19. We have considered rival submissions and perused material on record. It is an undisputed fact that the advertisement and publicity expenses of Rs. 58,41,53,467, were paid to the third parties in India. The Assessing Officer himself has stated in the assessment order that advertisement and publicity expenditure was no....
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....enue. 20. In ground no.2, the Revenue has challenged the deletion of addition made of Rs. 2,37,64,235, on account of commission income. 21. Brief facts are, during the assessment proceedings, the Assessing Officer observed that the assessee is eligible for advertisement commission @ 15% on the total advertisement revenue obtained by it for the principal. He observed, as per the terms of contract, revenue accrues to the assessee as and when the advertisements are telecast. He observed, the assessee has changed the method of accounting from assessment year 1997-98 to show the commission income on receipt basis. Observing that in the preceding assessment years i.e., for the assessment years 1997-98 to 1999-2000, the Assessing Officer brought the commission income to tax on accrual basis, followed the same and made an addition of Rs. 2,37,64,235, to the income of the assessee. While deciding assessee's appeal on the issue, learned Commissioner (Appeals) found that subsequently, identical issue arising in assessee's own case in assessment years 1997-98 to 1999-2000 was decided in favour of the assessee by the Tribunal and the Hon'ble Jurisdictional High Court upheld such decis....
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....y treating them as normal plant and machinery and not part of computer. While deciding assessee's appeal, learned Commissioner (Appeals) followed his decision in assessee's own case for assessment year 2003-04 and 2004-05 and allowed depreciation @ 60% by treating the assets as computer peripherals. 27. We have considered rival submissions and perused material on record. Notably, while deciding identical issue in assessee's own case for assessment years 2003-04 and 2004-05, the Tribunal has upheld the decision of learned Commissioner (Appeals) in allowing assessee's claim of depreciation @ 60%. In fact, in the latest order of the Tribunal in assessee's own case for assessment year 2006-07 in ITA no.4675/Mum./2010, dated 1st April 2016, the Tribunal has upheld the decision of the learned Commissioner (Appeals) in allowing assessee's claim of depreciation @ 60%. Respectfully following the aforesaid decisions of the Tribunal in assessee's own case, we uphold the decision of the learned CIT(A) by dismissing the ground raised. 28. In ground no.4, the Revenue has challenged the deletion of addition made of Rs. 1,16,85,052, under section 68 of the Act. 29. Brief facts are, during....
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..../set-top boxes provided to the Cable Operators, the assessee keeps deposit which is refunded on receipt of set-top boxes. He submitted, out of the amount of Rs. 19 crore of deposits received from Cable Operators, the Assessing Officer has rejected Rs. 1.68 crore without affording any opportunity to the assessee to furnish the PAN details, etc. Therefore, it cannot be said that the deletion made by learned Commissioner (Appeals) is improper. Further, he submitted, since the Department has not taken any specific ground relating to violation of rule 46A, it cannot say that learned Commissioner (Appeals) has not called for a remand report from the Assessing Officer. Without prejudice, learned Sr. Counsel submitted, no such addition has ever been made by the Assessing Officer subsequently. 33. We have considered rival submissions and perused material on record. Insofar as the primary facts are concerned, there is no dispute that while distributing television channels to the Cable Operators in India, the assessee provides de-coder/set-top boxes against which it receives certain deposits. As could be seen from the discussions made by the Assessing Officer, in a majority of cases the as....