AI Drafter 
TaxTMI 
TaxTMI 
2025 (8) TMI 760
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..... 3. The grounds raised by the assessee are extracted below: - No.189/Mum/2025 1. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in passing an order without granting any personal hearing to the Appellant? 2. Whether in the facts and circumstances of the case and in law. the Ld. CIT(A) was justified in upholding the disallowance of Rs. 21,31,87,825- made by the Ld. Assessing Officer ("AO" under Section 14A of the Income Tax Act, 1961 (Act) read with Rule 8D of the Income Tax Rules, 1962 (Rules)? 3. Whether in the facts and circumstances of the case and in law, the Ld. CTT(A) was justified in invoking Rule 8D of the Rules in the absence of any objective satisfaction recorded by the Assessing Officer, in terms of Section 144(2) of the Act, having regard to the accounts of the Appellant? 4. Whether in the facts and circumstance of the case and in law, the Learned CIT (A) was bound to accept the Appellant's working of disallowance especially in light of the consistent past practice and earlier orders of this Hon'ble Tribunal for prior assessment years upholding such practice of the Appellant a....
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.... the 'Times Group', India's largest media conglomerate, with operations spanning across various media platforms including print, internet, television, radio, and outdoor media, either directly or through its subsidiaries. The assessee is primarily engaged in the business of publishing and printing newspapers and operating multimedia platforms. The assessee has also invested its own funds and temporary surplus arising from treasury operations in shares, debentures, and mutual funds. During the relevant assessment year, the assessee earned dividend income amounting to Rs. 19.73 crores from such investments. Additionally, it reported exempt long-term capital gains of Rs. 50.95 crores from the sale of equity shares and earned tax-free interest income of Rs. 65.43 crores from tax-free bonds. The aforesaid income was claimed exempt under section 10(35) of the Act. While filing the return of income, the assessee, on a suo motu basis, computed the disallowance of expenditure incurred in relation to the earning of exempt income under section 14A of the Act at Rs. 35,01,925/-. However, the Ld. AO did not accept the assessee's computation and proceeded to determine the disallowance unde....
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....ad not claimed that no expenses were incurred for earning exempt income. To the contrary, the Appellant had made suo-moto disallowance under Section 14A of the Act and had furnished the computation and the basis of making such computation during the assessment proceedings. The Appellant disallowed the Securities Transaction Tax Expenses of INR 1,26,808/- as expenses directly connected to earning of exempt income. In addition, the Appellant had claimed that only common expenses aggregating to INR 86,88,906/- could be said to have been incurred for earning both exempt and taxable income; and in respect of the same the quantum of disallowance under Section 14A was computed at INR.4,16,898/- on proportionate basis (Exempt Income/Total Revenue). While rejecting the suo-moto disallowance made by the Appellant under Section 14A of the Act, the Assessing Officer neither made reference to nor alluded to either the accounts of the Appellant or the expenditure debited by the Appellant to the Profit & Loss Account for the relevant previous year. On perusal of paragraph 3.3 to 3.7 of the Assessment Order, we find merit in the contention advanced on behalf of the Appellant that the Assessing Off....
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..... It is only thereafter, the occasion to apply rule 8D of the Rules for apportionment of expenses can arise 13. In the present facts, the Tribunal has correctly come to the conclusion that nonsatisfaction as recorded by the Assessing Officer for rejecting the sou motu disallowances claimed by the assessee is not done as required under section 14A(2) of the Act. On facts, the view taken by the Tribunal is a possible view and calls for no interference. 14. In the above view, the question as proposed does not give rise to any substantial question of law. Thus, not entertained. 15. Accordingly, appeal is dismissed." (Emphasis Supplied) 15. In view of the above, we hold that the Assessing Officer has failed to record requisite dissatisfaction in terms of Section 14A(2) of the Act before invoking the provisions contained in Rule 8D of the IT Rules. Therefore, the additional disallowance of INR.1,43,83,306/- made by the Assessing Officer as per Section 14A of the Act read with Rule 8D of the IT Rules cannot be sustained and is, therefore, deleted. Thus, Ground No. 2.1, 2.2 and 2.5 raised by the Appellant are allowed while Ground 2.3, 2.4 and 3 are dismi....
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.... 651.52 650.16 Equity shares - Joint venture 60.0 36.5 Equity shares - Associates 10.33 8.72 Equity warrants - others 188.53 145.91 Preferential shares - Subsidiaries 1240.00 634.65 Preference shares - others Total 4507.4 4260.19 Average 4333.795 Calculation of 14A disallowance 1 Direct expenses attributable 2 Interest claimed (A) average investments (B)/average of total assets (C) i.e. A*B/C 3 0.5% Of the average investments 4333.795&.5/100 2,16,68,975 Total 2,16,68,975 Since the assessee has already disallowed Rs. 35,01,925/-, a further addition of Rs. 21,31,87,825/- is made in the total income returned by assessee. Total disallowance (Normal Provisions of MAT) = Rs. 21,31,87,825/-." We find that the assessee had suo motu disallowed the expenditure incurred in relation to earning exempt income under Section 14A of the Act. Upon perusal of the impugned assessment order and in view of the decision of the Coordinate Bench in the assessee's own case, we observe that the Ld. AO has not recorded any dissatisfaction with ....
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....cally designated for the disclosure of any difference between the sale consideration and the fair market value, with express reference to Sections 43CA and 50C. Therefore, we do not find any instance of misrepresentation on the part of the assessee's Chartered Accountant in the Tax Audit Report. Further, the assessee has placed reliance on the decision of the Coordinate Bench of the ITAT, Mumbai, in the case of John Flower India Ltd. v. DCIT, ITA No. 7545/Mum/2014, order dated 25/01/2017, wherein it was held that where the difference between the value adopted by the stamp valuation authority and the actual sale consideration is within the permissible tolerance limit of 10% of the stamp duty value, no addition under Section 50C is warranted. In the present case, we find that the assessee had declared a sale consideration of Rs. 1.90 crores, and the differential amount was Rs. 17,46,440/-, which is well within the 10% tolerance threshold. Accordingly, the ratio laid down in the case of John Flower India Ltd. (supra) is squarely applicable to the facts of the present case. In view of the above, the observation of the Ld. CIT(A) is set aside, and the addition of Rs. 17,46,440/....
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....rrency Translation Reserve in FY 2011-12 to FY 2014-15 and amortized over a period in the Statement of Profit and Loss The Exchange Differences amortized (debited) to the Statement of Profit and Loss by TIMI was added hack to its income while filing its return of income in FY 2008-09 to F Y 2010-11 (AY 2009- 10 to AY 2011-12). Similarly, the exchange differences amortized (credited) to the Statement of Profit and Loss was reduced from its income by TIML while filing its return of income for FY 2011- 12 and FY 2014-15 (AY 2012-13 to AY 2015-16) Year-wise treatment of the amortization of gain/(loss) on foreign currency translation in the income tax returns of TIML are summarized in Annexure 1. Copies of assessment orders and/or computation of total income in the case of TIML reflecting the aforesaid adjustment for the respective years is enclosed vide Annexure 2 to 10 for your reference. In the circumstances, it may be noted that the amounts debited to the Statement of Profit and Loss were not claimed as deductions neither was the amount credited to the Statement of Profit and Loss included in the income of TIML. On 1 April 2014 the balance lying i....
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....rence shares of Rs 3,55,98,160, both aggregating Rs 37,64,61,452 (Rs 34,08,63,292 + Rs 3,55,98,160) were rightly reduced in computing the income while filing the return of income for A Y 2015-16. In the circumstances the claim of the company is in order and may be accepted." 13. The Ld.DR argued and fully relied on the order of the revenue authorities. 14. We have heard the rival submissions and perused the material available on record. It is noted that, as on 01/04/2014, the assessee was maintaining a balance in long-term foreign currency. As per the balance sheet of TIML, the said balance stood at Rs. 34,08,63,292/-. This amount represented the unamortised exchange difference arising on account of the translation of preference shares at the yearend exchange rates prevailing during the financial years 2008-09 to 2013-14. During the year ended 31/03/2015, the preference shares held by TIML were redeemed by its overseas subsidiary, and a sum of Rs. 214,32,64,000/- was received upon such redemption. The cost of acquisition of these preference shares, as recorded in the books of TIML, was Rs. 210,76,65,840/-. Consequently, this resulted in a profit of Rs. 3,565,98,16....
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....gains arising from transfer of shares. It does not lead to exclusion of computation of capital gain of long-term capital asset or Short term capital asset being shares. Accordingly, Long term capital loss on sale of shares would be allowed to be set off against long term capital gain on sale of land in accordance with section 70(3)" 4.9.4 The appellant company stated that this decision relied upon the appellant case for this year and to be allowed the same. It is mentioned here that the above decision relied on the sale of listed securities on the stock exchange and on the redemption of units of mutual funds, on both of which STT has been paid by the appellant company. Since the appellant company after years be used to set off against long term capital gains even on sale of movable or immovable properties and it would not be possible for AO to verify such action of the appellant company. Therefore, disallowance made by the AO on account of long term capital loss is held to be valid." 16. The Ld. DR argued and stands in favour of the order of revenue authorities. 17. We have considered the rival submissions and perused the orders of the authorities below, along with t....