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TMI Blog2018 (7) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... re Hon’ble Bombay High court the board resolution for waiver of interest on debentures was passed on 31-05-2004 and approved by board for waiver of interest for 6 years and including AY 2007-08 and 2009-10. But in the present case before us, the reduction was done after almost 2 years i.e. on 31-07-2012 for the AY 2012-13. Hence, the facts are entirely different and distinguishable. - Decided against assessee. - ITA No. 357/Mum/2017 - - - Dated:- 29-6-2018 - Sri Mahavir Singh, JM And Sri G Manjunatha, AM Appellant by : Shri Sanjay R Parikh, AR Respondent by : Shri Rajesh Kumar Yadav, DR ORDER Per Mahavir Singh, JM This appeals by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-21, Mumbai [in short CIT(A)], in appeal No. CIT(A)-10/ITO-5(1)(4)/30/2015-16 dated 30-10-2016. The Assessment was framed by the ITO, Ward-5(1)(4), Mumbai (in short ITO / AO) for the A.Y. 2012-13 vide order dated 30.03.2015 under section 143(3) of the Income Tax Act, 1961 (hereinafter the Act ). 2. The first issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in making disallowance by invoking the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion on account of interest ₹ 93,24,110/-. 3) The learned CIT(A) erred on facts and in law in confirming the order of the AO making an addition of ₹ 93,24,110/- on account of interest. 4) The learned CIT(A) and the AO failed to appreciate that the appellant had earned only ₹ 27,97,232/- from M/s. Next Media works Limited as against the figure of ₹ 1,21,21,342/- shown as per Form 26AS. Hence, the addition of ₹ 93,24,110/- was uncalled for. 5) The appellant prays that the addition on account of interest ₹ 93,24,110/- as made by the AO and as confirmed by the CIT(A), may be deleted. 7. Briefly stated facts are that the AO during the course of assessment proceedings noticed that the assessee has credited interest received from Next Media Works Limited (NMW) amounting to ₹ 27,97,232/-, but as per form No. 26AS, the total interest received from NMW was ₹ 1,21,21,342/-. According to the AO there is short disclosure of interest income from NMW at ₹ 93,24,110/-. Accordingly, the AO required the assessee to reconcile the same and in reply to the assessee stated that the NMW has initially credit interest at the rate of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payer and payee to paid any tax on the impugned amount. 12.6 The assessee has given the reason for the reduction of interest being the low growth in Indian Advertising Industry as compared to the growth anticipated by the payer M/s NMW. Coming to the growth of the Indian Advertising Industry, it is seen that M/s NMW is engaged in the business of running a FM channel through its subsidiary Radio One. For the moment even it is assumed that the actual growth was 8% as against the anticipated 17, the reduction of interest from 13% to 3% is just inexplicable. No documents or supporting were produced in support, of the reduction from 13% to 3%. It is also inexplicable that a listed company took five quarters and one month to understand, that the growth is not as expected. Further theta is nothing. sacrosanct about the expected growth of 17% as stated by the assessee. Tie payer may expect 100% growth but end Up achieving nothing. That does not mean the assessee should sacrosanct its taxable income. 12.7 While on the issue it will be relevant to cite certain instances as under: a) M/s T.V. Today Network Ltd in its annual report for the FY 2011-12 has mentioned as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as initially credited interest at the rate of 13% but subsequently revised to 3% and reversal entry by adopting the interest was passed on 30-09-2011 and 31-07-2012. Therefore, the learned Counsel for the assessee stated that even form No. 26Q i.e. TDS return was also revised by disclosing interest expenses at ₹ 27,97,232/- for AY 2012-13 by NMW. The revised TDS return was submitted before the AO vide letter dated 21-10-2014. The learned Counsel for the assessee argued that NMW has reduced interest rate to 3% from 13% and the company has accepted to the request of the assesse in view of the fact that the advertising industry has been through a slowdown and it would not be in a position to pay the interest dues. It was further explained that during the FY 2011-12, the Indian Media and Entertainment Industry was going through bad phase and this he tried to explained that Indian advertising business grew by 8% as against the expectation of 17% and the Radio Advertising grew by 2% only. The learned Counsel for the assessee explained that on account of the above reason the interest accrued and accounted for at the rate of 13% during the year was reversed and brought down to 3% whi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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