TaxTMI 
TaxTMI 
2026 (1) TMI 188
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..... 3. Briefly stated that the facts of the case are that assessee is a holding company of various group of companies and filed his return of income on 20.09.2014 declaring total income at Rs. 11,13,99,400/-. The case of the assessee was selected for scrutiny under CASS and after considering the submission made from time to time in response to the quarries raised, the assessment order was passed dated 31.08.2016 wherein the business expenses claimed at Rs. 1,30,69,038/- were disallowed by holding that the assessee has not carried out at any business activity, therefore, expenses could not be allowed and further denied the set off of the same against the income declared under other heads of income. 4. Against the said order, assessee preferred an appeal before Ld. CIT(A) who vide impugned order dated 17.10.2018 confirmed the findings given by AO and dismissed the appeal of the assessee. 5. Aggrieved by the said order, the assessee is in appeal before the Tribunal by taking the following grounds of appeal: 1. That on facts and in circumstances of the case and law, the assessment order dated 31.08.2016 passed by the Ld. Assessing Officer ("Ld. AO") under section 143(3)....
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....material diversification into complementary lines related to the Lifestyle Segment, directly or through joint ventures or subsidiaries. 2. To engage in sales, marketing and syndication of its content, directly or through joint ventures or subsidiaries." 7. The Ld. AR submits that the assessee carried its business of the main object being the holding company for other group companies which are operating non-news and non- current affairs channel dedicated to creation, content production and aggregation of content in the Lifestyle Segment etc. and is holding 92.66% share in NDTV Lifestyle Limited which is engaged in same business. The Ld. AR submits that assessee incurred various expenses which are debited to Profit and Loss Accounts necessary for day to day operations and administration of the company such as Salary, Auditor remuneration, legal expenses and other expenses. He submits that business of the assessee is established and ready to commence thus, it can be said that business is set up. Ld. AR submits that under identical circumstances, the expenses were disallowed in the case of NDTV Networks Ltd. vs. DCIT in [2025] 173 taxmann.com 269 wherein the Co-ordinate Ben....
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....nt order and the submissions of the appellant. It is to be noted that as per the memorandum of Association, the main object of the assessee company has been stated to be to be the holding company for other companies operating a non-news and non-current affairs channel. Another of the main objects is to engage in sales, marketing and syndication of its content, directly or through joint ventures or subsidiaries. As noted by the AO it is seen that no income from these activities is apparent from the financial statements of the assessee even though the said company was incorporated on 10/06/2010. From the balance sheet it is also noted that the assessee has no fixed assets, both tangible as well as intangible. Hence it cannot be said that the assessee was pursuing its main objects as per the Memorandum of Association. The view of the AO that the assessee has no income which is chargeable under the head 'Profits and gains of business or profession' is upheld. Further, as has also been pointed out by the AO, once there is no income which is chargeable under the head 'Profits and gains of business or profession', deductions which are specific to the said head of income ar....
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....ssee was in the business of making investments. For the said purposes, it obtained loans and paid interest thereon. Nevertheless, the purpose of loan was in furtherance of assessee's business activities and to fulfill its main objects. The dominant object of investment was to exercise business control by way of acquiring shareholding and not to earn the dividend. The assessee's activity of holding such investment, in our opinion, constitute business activity and therefore, the interest would be fully deductible u/s 36(1)(iii) notwithstanding the fact that the assessee earned various streams of income out of these investments, one of which was assessable under the head 'Income from other sources'. Similar is the view of coordinate bench in assessee's own case for AY 2009-10 as extracted by us in preceding para 10.1. Further, it is trite law that the earning of the income was not a pre-requisite to grant deduction of expenditure. Therefore, we do not concur with the approach of Ld. CIT(A) in invoking the provisions of Sec.14A of the Act. Consequently, the interest expenditure of Rs. 246.88 Crores would be fully deductible u/s 36(1)(iii) of the Act. The various case laws as enumerated....