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ITO, Ward 18 (3) , New Delhi Versus West Delhi Cable Network P. Ltd

Disallowance of 20% of the expenses incurred under the head “Pay Channel Expenses” - CIT(A) deleted the addition admitting the additional evidence - Held that:- On perusal of the agreement dated 18th August, 2008, we observe that the assessee is bound to procure the pay channel expenses by virtue of clause 2.2 of the agreement and has to bear all the pay channel expenses from its own fund. The AO has conveniently omitted to refer to the said agreement of the appellant company with City Cable Net .....

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as denied the receipt of letter dated 24/12/2008. However, in the remand report the ld.A.O has accepted the acknowledgement of the documents. Further, we observe that all the payments made to the channels have been made vide account payee cheques only. We, therefore, do not find any infirmity in the order passed by the ld. CIT(A). We, therefore, uphold the order of the ld. CIT(A) and the grounds of the Department are thereby dismissed. - Decided against revenue. - I.T.A .No. 85/Del/2011, Cross .....

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llows: 1. Despite ample opportunity, the only material that was submitted during the assessment proceedings in support of pay channel expenses were copies of the concerned ledger accounts which was not sufficiently adequate to prove genuineness of the entire claim. 2. Despite ample opportunity the onus cast on the assessee to produce confirmations of the pay channels was neither discharged by it nor shifted by it. 3. All the evidence filed during the appellate proceedings other than copies of th .....

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return of income on 29/11/2006 declaring total income at nil, which was processed u/s 143(1). This case was selected for scrutiny and notice u/s 143(2) of the I.T. Act, 1961 was issued. The assessee in its return had incurred following expenditure under the head Pay Channel Expenses: Sony Package 1,22,68,262.00 ESPN Package 68,70,519.00 Star Package 1,78,47,027.00 Zee Package 86,05,829.00 Total 4,55,91,637.00 4. The assessee had submitted the books of accounts which were called for and examined .....

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ssee and that the TDS certificate which was duly filed before the AO. Therefore, the adhoc disallowance @ 20% made by the AO was deleted. The ld. CIT(A) also recorded the issue relating to admittance of additional evidence filed before him because he had given due opportunity to the ld. AO and called the assessee with accounts book and relevant record examined them and then submitted his remand report. Therefore, the ld. CIT(A) observed that there was no violation of Rule 46A and that no additio .....

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nce to substantiate the claim in spite of several opportunities afforded to the assessee. 9. On the contrary the ld. AR submits that the observations of the AO in the assessment order are factually incorrect and contrary to the material placed on record. It has been submitted that the entire details of pay channel expenses have been placed on record duly substantiated by bank statements showing debit of pay channel payments as well as TDS certificates issued by the assessee company. 10. The ld. .....

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echnical equipment etc., require for running the business of the company. The said agreement dated 18th August, 2008 has been enclosed to the paper book at page 139 to 147. The ld. AR took us through the various clauses i.e. relevant to decide the issue being clause no. 2.1(ii) and clause no. 2.2. It is submitted that the pay channel expenses have been incurred for the purpose of business and as per the requirements under the agreement dated 18th August, 2008. The ld.AR submits that as per the a .....

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ot found any discrepancy or defect in the books of account. Even with the ledger accounts of the various pay channel expenses as well as the bank statement and TDS certificates furnished by the assessee company no discrepancy or defects have been observed and pointed out by the AO. 12. We have perused the records and the paper book filed before us. It is observed from the assessment order that the AO himself records that the books of accounts were called and the same has been examined on the tes .....

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essary to disallow 20% of the pay channel expenses claimed by the assessee. From the order passed by the ld. CIT(A) it appears that the assessee had placed on record during the assessment proceedings the TDS returns filed by the assessee assuming though the TDS certificates were not filed during the assessment proceedings. It has been recorded by the ld. CIT(A) that the TDS certificates are statutory certificates and can be directly verified from the records available with the Income tax Departm .....

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