Itxa/2262/2010 Of The Commissioner Of Income Tax - 11 Mumbai v. Zee Telefilms Ltd

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2262 OF 2010 The Commissioner of Income Tax-II, Mumbai ..Appellant. V/s. M/s. Zee Telefilms Ltd.(Now Zee Entertainment Enterprises Ltd.) ..Respondent. Mr. Suresh Kumar for the appellant. Dr. K. Shivram with Rahul Hakani i/b. Ajay R. Singh for the respondent. CORAM : J.P. DEVADHAR AND A.A. SAYED, JJ.DATED : 10TH AUGUST, 2011 P.C. :- 1.Six questions of law are raised by the revenue in this appeal, which read thus:- (1)Whether the ITAT was correct in considering the individual issues while holding that revisionary order of the CIT is correct in principle ?while holding that revisionary order of the CIT is correct in principle ? (2)Whether the Tribunal ought not to have decided the individual issues and should have reverted the issue back to the file of the assessing officer ?issues and should have reverted the issue back to the file of the assessing officer ? (3)Whether the Tribunal was justified in deciding the issue of treating the dividend income as part of the business income by considering the assessment order passed by the AO under Section 143(3) r/w. Sec. 263 dt. 29-12-2008 subsequent to the passing the revisionary order u/s.263 of the Act ?the dividend income as part of the business income by considering the assessment order passed by the AO under Section 143(3) r/w. Sec. 263 dt. 29-12-2008 subsequent to the passing the revisionary order u/s.263 of the Act ? (4)Whether the Tribunal was justified in deciding the issue of bad debts in favour of the assessee, which issue has not yet come up as consequence to order passed u/s.143(3) read with Section 263 of the I.T. Act dt. 29-12-2008, without appreciating the fact that the debts related to the company which was merged with the assessee company ?debts in favour of the assessee, which issue has not yet come up as consequence to order passed u/s.143(3) read with Section 263 of the I.T. Act dt. 29-12-2008, without appreciating the fact that the debts related to the company which was merged with the assessee company ? (5)Whether on the facts and circumstances of the case, Tribunal was justified in holding that the interest income be treated as “Business Income” for the computation of deduction u/s.80HHF of the Act, which issue has not yet come up as consequence to order passed u/s.143(3) read with Sec. 263 of the I.T. Act dt. 29-12-2008 without appreciating the fact that the said income had not arisen in convertible foreign currency ?justified in holding that the interest income be treated as “Business Income” for the computation of deduction u/s.80HHF of the Act, which issue has not yet come up as consequence to order passed u/s.143(3) read with Sec. 263 of the I.T. Act dt. 29-12-2008 without appreciating the fact that the said income had not arisen in convertible foreign currency ? (6)Whether the finding of the revisionary order of CIT could be interfered with or without any cogent material on each of the issues involved separately when the CIT has exercised his powers conferred on him in Section 263 was with materials in record and upheld by the ITAT ?interfered with or without any cogent material on each of the issues involved separately when the CIT has exercised his powers conferred on him in Section 263 was with materials in record and upheld by the ITAT ? 2.The question Nos.1 & 2 are academic questions and, hence, do not need consideration.do not need consideration. 3. As regards question No.3 is concerned, the dispute is, (6)Whether the finding of the revisionary order of CIT could be interfered with or without any cogent material on each of the issues involved separately when the CIT has exercised his powers conferred on him in Section 263 was with materials in record and upheld by the ITAT ?interfered with or without any cogent material on each of the issues involved separately when the CIT has exercised his powers conferred on him in Section 263 was with materials in record and upheld by the ITAT ? 2.The question Nos.1 & 2 are academic questions and, hence, do not need consideration.do not need consideration. 3. As regards question No.3 is concerned, the dispute is, whether the ITAT was justified in setting aside the order passed by the CIT under Section 263 of the Act. In the present case, CIT in his order passed under section 263 of the Income Tax Act, 1961 had held that the dividend income was exempt income to which Section 14A of the Act was applicable and, therefore, the assessing officer ought to have disallowed expenditure attributable to earning dividend income. The Tribunal has recorded a finding that in the present case the AO while giving effect to the order of CIT has held that the dividend income received by the assessee was liable to be assessed as business income. In such a case, disallowing expenditure under Section 14A of the Act does not arise. Consequently, no fault can be found with the decision of the ITAT in setting aside the order of CIT. Accordingly, the question No.3 cannot be entertained. 5.As regards question No.4 is concerned, it is not in dispute that on merits, the issue is covered against the revenue by the decision of the Apex Court in the case of T.R.F. Ltd. V/s. CIT reported in [2010] 323 ITR 397(SC). In these view of the matter, question No.4 cannot be entertained. 6. As regards question No.5 is concerned, the Tribunal has held that core business of the assessee was financing and, therefore, the interest income was liable to be treated as business income. The decision of the Tribunal is based on finding of fact and no question of law arises out of the same. 7.Question No.6 raised by the Revenue is a general question which requires no consideration. 8.Accordingly, the appeal is dismissed with no order as to costs. (A.A. SAYED, J.) (J.P. DEVADHAR, J.)