9911796707
TMI Blog2016 (4) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... ould not agree to bear such a high cost. Hence there appears to be merit in view taken by tax authorities. However, we notice that they have taken adverse view without conducting any enquiry. There is merit in assessee contention that the reimbursement of property tax partakes the character of rent only - what is required to be seen is as to whether to aggregate amount of rent plus reimbursements compares well with the earlier years payment. If it does not compare well, then it is the duty of the assessee to justify the payment. This issue required fresh examination at the end of AO. Accordingly we set aside the order of learned CIT(A) on this issue and restore this issue to the file of Assessing Officer for fresh examination. Allowance of the expenditure incurred upon the advertisement and promotion - HELD THAT:- As decided in assessee's own case [ 2008 (4) TMI 535 - ITAT MUMBAI], [ 2006 (7) TMI 569 - ITAT MUMBAI] , [ 2009 (3) TMI 990 - BOMBAY HIGH COURT] , [ 2009 (8) TMI 1246 - BOMBAY HIGH COURT] such expenditure has been treated as revenue expenditure. Accrual of income - commission accrued to the assessee on the date of actual receipt of commission or on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icated by a single order. The said appeals are pertaining to the A.Y. 2006-07. 2. The assessee is in the profession of producing procuring television programmes and supplying the same to the overseas media companies, agent for advertisement sales for overseas media companies and carries on channel subscription business. The return of income of the assessee for the assessment year 2006-07 was finalized by the A.O. vide order dated 07.12.2009 assessing the total income of ₹ 166,20,10,410/-. Feeling aggrieved, the assessee filed an appeal before learned Commissioner of Income Tax (Appeal) 8, Mumbai [hereinafter referred to as the CIT(A) ], who passed the order dated 22.03.2010 in question. Since both the parties were not satisfied with the finding of learned CIT(A) therefore both the appeals have been filed. 3. The assessee has taken the following grounds:- 1. The learned CIT(A) has erred in upholding the disallowance of ₹ 16,86,893/- representing expenditure incurred by the Appellant on leasehold improvements as being capital in nature. 2. The learned CIT(A) has erred in upholding the addition of ₹ 69,883/- on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case and in law, the Ld.CIT(A)-3, Mumbai has erred in holding that the commission would accrue to the assessee on the date of actual receipt of commission or on the payment by the client directly to the principal and not on the raising of invoices. 3. On the facts and in the circumstances of the case and in law, the Ld.CIT(A)- 3, Mumbai has erred in directing the Assessing Officer to allow depreciation @ 60% on computer peripherals, treating the same as computers, though the same is not specified in the Act. 4. On the facts and in the circumstances of the case and in law, the Ld.CIT(A)- 3, Mumbai has erred in directing the Assessing Officer to delete the disallowance made u/sl4A r.w.Rule8D of the Act with respect to interest expense, ignoring the fact that the assessee earned exempted income and incurred direct and indirect expenses to earn the said exempted income and the Assessing Officer was rule bound by Rule 8D(2)(ii) of the I T Rules, 1962,to calculate the disallowance taking into account interest expense also. ITA No. :- 4818/M/10(Assessee s Appeal):- ISSUE NO . 1 2:- 5. The issue number 1 and 2 rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of s. 14A of the IT Act, 1961 are constitutionally valid; (iv) The provisions of r. 8D of the IT Rules as inserted by the IT (Fifth Amendment )Rules, 2008 are not ultra vires the provisions of s. 14A, more particularly sub-s. (2) and do not offend Art. 14 of the Constitution; (v) The provisions of r.8d of the IT Rules which have been notified w.e.f. 24th March, 2008 shall apply with effect from asst. yr. 2008-09; (vi) Even prior to asst. yr. 2008-09, when r.8D was not applicable, the AO has to enforce the provisions of sub-s (1) of s. 14A. For that purpose, the AO is duty bound to determine the expenditure which has been incurred in relation to income which does not form part of the total income under the Act. The AO must adopt a reasonable basis or method consistent with all the relevant facts and circumstances after furnishing a reasonable opportunity to the assessee to place all germane material on the record. (vii) The proceedings for asst. yr. 2002-03 shall stand remanded back to the A.O. The AO shall determine as to whether the assessee has incurred any expenditure (direct or indirect) in relation to dividend income / income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... property tax. We notice that the monthly rent paid by the assessee was ₹ 1,16,000/-. However, the property tax reimbursed by the assessee works out to ₹ 30,63,248/-, which works out to about 26 months of rent. This proportion appears to be highly disproportionate and beyond human conduct and probabilities. A tenant, under normal circumstances would not agree to bear such a high cost. Hence there appears to be merit in view taken by tax authorities. However, we notice that they have taken adverse view without conducting any enquiry. The learned A.R. contended the reimbursement of property tax partakes the character of rent only. There is merit in its said contention also. Hence, what is required to be seen is as to whether to aggregate amount of rent plus reimbursements compares well with the earlier years payment. If it does not compare well, then it is the duty of the assessee to justify the payment. In view of the above, this issue required fresh examination at the end of Assessing Officer. Accordingly we set aside the order of learned CIT(A) on this issue and restore this issue to the file of Assessing Officer for fresh examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... smissed by the Hon ble Bombay High Court in ITA No.165 of 2009 dated 24.03.2009. No doubt in the said circumstance the ground raised by revenue does not seems justifiable therefore we have arrived at this conclusion that the learned CIT(A) has passed the order correctly and judiciously on this issue which does not require to be interfered with at this appellate stage. Hence, this issue is in decided in favour of the assessee and against the revenue. ISSUE NO. 3:- 10. The revenue has raised an objection on account of allowance of depreciation @ 60% on computer peripherals like rack, printer, port, routers, cord etc. This controversy has been decided by the Tribunal in case filed as DCIT Vs. Datacraft India Ltd. cited as (2011)9 ITR (Trib) 712 (Mumbai)(SB) and by the Hon ble High Court of Delhi while the deciding the case of CIT Vs. BSES Rajdhani Powers Ltd. The plea which has been taken by the revenue is that the depreciation which has been allowed @ 60% and the value of the paper and other materials, is higher but the matter has been considered by the learned CIT(A) who allowed the same on the basis of the assessment held in the year of 2003-04, 2004-05 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
