The New Delhi bench of the Income Tax Appellate Tribunal ( ITAT) allowed the claim of Business loss in which the assessing officer (AO) failed to appreciate the nature of the business activity of the INX News.
INX News Pvt. Ltd, the respondent-assessee was a media company and claimed the business loss to the assessing officer in the relevant year. But the assessing officer failed to appreciate the nature of the business activity and disallowed the claim of business loss. Thus the assessee appealed against the order passed by the assessing officer.
The Commissioner of Income Tax (Appeals) allowed the appeal and questioned the disallowance of the claim of Business loss by the assessee. Thus the revenue appealed against the order passed by the Commissioner of Income Tax (Appeals).
Pradeep Singh Rawat, the counsel for the assessee contended that before the inauguration assessee had incurred some expenses and the fixed asset schedule was showing that most of the assets were put to use for the inauguration of the news channel.
It was also submitted that the assessing officer disallowed the business loss claimed holding that since no business activities had been carried out during the year not allowable and brought to tax the capital gain and income from other sources.
Sarita Kumar, the counsel for the revenue contended that for the computation of income, the assessee had been subjected to tax interest income under the head’s income from other sources, the dividend had been claimed exempt, profit on sale of investment had been considered for tax under the head capital gain. It was observed that the miscellaneous income could not be said to be business income whereas the assessee after claiming various expenses and allowances arrived at a business loss.
It was also submitted that the assessee failed to furnish any document to establish that the company was involved in any business activity during the relevant year.
The two-member bench comprising N.K.Billaiya(Accountant) and Anubhav Sharma(Judicial) held that the Commissioner had rightly appreciated the facts in the light of the submissions of the assessee and the remand report once statutory permission was received from the competent authority of the business operations of the assessee company required the creation of content and resources for broadcasting the news.
It was also held that the assessing officer had failed to appreciate the nature of business of the assessee to conclude that the assessee had not done any business activity during the relevant period while dismissing the appeal filed by the revenue.
SHABNA RAHIM
Suggested image: INX News, business claim
Suggested keywords: Income Tax Act,1961, INX News, Media, business activity, Claim, Business loss, News channel, Remand report, Expenses, Income, Disallowance.
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