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TMI Blog2023 (3) TMI 1530X X X X Extracts X X X X X X X X Extracts X X X X ..... ected with the Assessee. As recorded hereinabove in respect of M/s. Asianet TV Holdings Pvt. Ltd., and India Radio Ventures Pvt. Ltd., both CIT (A) and ITAT have accepted Assesse s contention that it was a payment made towards purchaser of shares and to consolidate share holding in the two companies. With regard to M/s. Azure Services Pvt. Ltd., both fact finding authorities have recorded that the expenditure was commercially expedient. It is settled that the AO cannot sit in the chair of an Assessee and decide what is commercially expedient in a particular transaction. Having re-examined the matter, we find no error in the order passed by the CITA and confirmed by the ITAT on this aspect. Accordingly, question No. 3 is answered in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenging the order dated 03.11.2016 in ITA No. 963/Bang/2013 passed by the ITAT1, B Bench, Bangalore, has been admitted to consider the following questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in setting aside the disallowance of short term loss of Rs. 11,27,2000/- claimed by assessee in Profit and Loss Account by holding that the shares have acquired by assessee under normal business transaction and can be taken as stock-in trade even when assessing authority has proved that the assessee has adopted colorable device to reduce the tax liability by booking business of 11.27 crore and assessee had intentionally shown shares of M/s.Asianet Communication as an inventory in its books to cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Standing Counsel for the Revenue prays to consider question No.5 also. Shri. Narendra Kumar J. Jain, learned Advocate for the Assessee has no objection. The said question reads as under: Whether on the facts and in the circumstances of the case the Tribunal is right in setting aside the disallowance made by assessing authority under section 37 of the Act, the payment made towards Consulting Fee for setting up joint venture with Star group by holding that assessee had made effort to start joint venture but could not do the same even when the this expenditure was not incurred exclusively for the business purposes or alternatively as a capital expenditure? 3. Shri. Sanmathi submitted that Revenue does not press question No. 1 with liber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n taken are liable to be disallowed as the money was being diverted for non business purposes. He argued that CIT (A) and ITAT [Income Tax Appellate Tribunal, Bench B at Bangalore] have reversed the finding of the AO without properly appreciating the fact that money was transferred to the sister concerns. 8. Shri. Narendra Kumar submitted that the Assessee had paid an amount of Rs. 74.49 crores as share application money to M/s. Asainet TV Holdings to consolidate JELV s holding. A sum of Rs. 10.20 crores was paid to M/s. India Radio Ventures Pvt Ltd., to get the controlling rights/interest. He submitted that the Assessee is in the business of advertisement and made investment as it was commercially expedient. 9. With regard to payment of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t made towards purchaser of shares and to consolidate share holding in the two companies. With regard to M/s. Azure Services Pvt. Ltd., both fact finding authorities have recorded that the expenditure was commercially expedient. It is settled that the AO cannot sit in the chair of an Assessee and decide what is commercially expedient in a particular transaction. Having re-examined the matter, we find no error in the order passed by the CITA and confirmed by the ITAT on this aspect. Accordingly, question No. 3 is answered in favour of the Assessee and against the Revenue. 13. Re - Questions No. 4 and 5: These two questions are considered together as transfer of money is to the sister concerns towards consultancy fee. The AO has recorded that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducing General Agreement, there is no material on record to substantiate the payment. Shri Sanmati has rightly pointed out from the order passed by the CIT (A) and ITAT, that there is no proper application of mind while reversing the findings recorded by the Assessing Officer. Although Shri. Narendra Kumar made a feeble attempt to justify the order of CIT (A) and ITAT, we are persuaded to accept the argument of the Revenue that except invoice and the agreement, there is no other material to substantiate the payment of large sums of money in the name of consultancy services. Moreso, first three companies are sister concerns. Hence, we are of the view that matter requires re-consideration, in the hands of Assessing Officer. 19. In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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