Income Tax Appellate Tribunal - Delhi
Planetcast Media Services Ltd. ... vs Acit, Central Circle- 26, New Delhi on 10 November, 2020
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'F', NEW DELHI
Before Sh. Amit Shukla, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
(Through Video Conferencing)
ITA No. 6894/Del/2017 : Asstt. Year : 2014-15
Planetcast Media Services Ltd. Vs ACIT,
(formerly known as Essel Shyam Central Circle-26,
Communication Ltd.), 1121, New Delhi
Hemkunt Chambers, 11th Floor,
89, Nehru Place, New Delhi
(APPELLANT) (RESPONDENT)
PAN No. AAACE2299Q
Assessee by : Sh. Ved Jain, Adv.
Revenue by : Sh. Ramesh Kumar, Sr. DR
Date of Hearing: 05.11.2020 Date of Pronouncement: 10.11.2020
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assesse e against the order of the ld. CIT(A)-XXVI, New Delhi, dated 13.10.2017.
2. Following grounds have been raised by the assessee:
"1. On the facts and circumstances of the case, the order passed by the learned Commissione r of Income Tax (Appeals) is bad bo th in the eyes of law and on facts.
2. On the facts and circumstances of the case the ld. CIT (A) has erred both on facts and in law in confirming the addition of Rs.7,37,989/- on account of expenses incurred for earning exempt income u/s 14A of the Act.2 ITA No. 6894/Del/2017
Planetcast Media Services Ltd.
3. That the addition has been confirmed rejecting the contention of the assessee that no such expenses in relation to earning exe mpt income has been incurred by the assessee.
4. That the disallowance has been confirmed rejecting the contention of the assessee that in the absence of any satisfaction with regard to the contention of the assessee being not correct having being recorded by the Assessing Office r the disallowance is not sustainable."
3. The assessee is in the business of providing telecommunication services like VSAT & Broadband services and made cumulative investment in 8.1% IRFC tax free bonds and other investme nts. The total investments made by the assessee at the beginning of the year was Rs.13.89 Cr. and at the end of the year was Rs.15.62 Cr. The AO has disallo wed Rs.16.82 lacs on account of Se ction 14A after computing the average value of investment and taking into co nsideration the ave rage value of the total assets. Out of the disallowance of Rs.16.82 lacs, the ld. CIT (A) has given relief of Rs.9.44 lacs holding that no disallowance is warranted on account of inte rest as the assessee has got sufficient own funds for the said investment.
4. Before us, during the arguments, the ld. AR brought to our notice that the assessee has earned Rs.24.66 lacs as exempt income from the cumulative investment in tax free bonds of IRFC of Rs.3.04 Cr. and relied upon the order of the Special Bench of ITAT in the case of Vireet Investments in ITA No. 502/Del/2012 wherein it was held that the disallowance under Rule 8D(iii) be computed taking into consideration the only the investments yielding exempt income. Hence, it was argue d that 3 ITA No. 6894/Del/2017 Planetcast Media Services Ltd.
the 0.5% of the average investment on Rs.3.04 Cr. be computed as right disallowance.
5. The ld. DR argued that the contention of the assessee cannot be acce pte d and the entire investme nt should be considered for computing 0.5% of the average investments.
6. Having gone through the facts o f the case, we also find that in the case of the assessee for the assessment year 2014- 15 the disallowance has been restricte d to the investments yielding exempt income placing reliance on judgment in the case of Vireet Investme nts (supra). In the absence of any material change to the facts o f the case and in the preposition of the law, we hereby direct that the disallowance be computed @0.5% on the investment of Rs.3.04 Cr.
7. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 10 /11/2020.
Sd/- Sd/-
(Amit Shukla) (Dr. B. R. R. Kumar)
Judicial Member Accountant Member
Dated: 10/11/2020
*Subodh/Binita*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR