ACIT, NEW DELHI vs. M/S. SAHARA INDIA MASS COMMUNICATION, LUCKNOW

आदेश / ORDER

PER SHRI M BALAGANESH, ACCOUNTANT MEMBER:

The appeal in ITA No.64/Del/2014 for AY 2003-04, arises out of the 1. order of the ld. Commissioner of Income Tax (Appeals)-1, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 18.10.2013 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 31.03.2006 by the Assessing Officer, ACIT, Central Circle-6, New Delhi (hereinafter referred to as ‘ld. AO’).

At the outset, we find that the Hon'ble Delhi High Court in ITA No. 2. 139/2018 dated 02.08.2024 had remanded back to the Tribunal with regard to the issue of disallowance of advertisement expenses amounting to Rs. 5,10,78,366 raised by the revenue vide Ground No. 8 before the Tribunal. Hence, the present appeal requires adjudication of Ground No. 8 raised by the revenue alone.

We have heard the rival submissions and perused the materials 3. available on record. The assessee is a partnership firm engaged in the business of printing and publication of newspapers, magazines, printing- related job work, advancing of money and trading in consumable products. The assessee during the AY 2003-04 debited advertisement expenses of Rs. 5,11,24,476 as tabulated under:- S. Particulars Amount (in No. Rs.) 1. Advertisement expenses incurred directly by the assessee. 46,110 2. 1/5th share of advertisement expenditure incurred by Sahara India 3,91,09,956 Commercial Corporation Ltd ("SICCL") pertaining to sponsorship and clothing cost for Indian Cricket Team for brand promotion of "Sahara". 3. 1/5th share of advertisement expenditure incurred by Sahara India Financial 1,19,68,410 Corporation Ltd ("SIFCL") pertaining to newspaper ads, neon signboards, ad films, brand promotions with cricketers. Total 5,11,24,476

Out of the total advertisement expenditure of Rs. 5,11,24,476, a sum of 4. Rs. 5,10,78,366 represents the assessee’s 1/5th share of the total advertisement and brand promotion expenses incurred by Sahara India Commercial Corporation Ltd (SICCL) and Sahara India Financial Corporation Ltd (SIFCL). The aforesaid expenditure primarily related to sponsorship of the Indian Cricket Team and other large scale promotional campaigns and ad films related to cricket matches undertaken for promotion of brand “Sahara” in terms of agreement between SICCL and International Merchandising Corporation for sponsorship to Indian Cricket Team. The said agreement is enclosed in pages 136 to 151 of the paper book. Since, these advertisements were in the name of “Sahara”, it was agreed amongst the group concerns that the expenditure incurred thereon shall be shared by five main group concerns equally which decision was arrived at by the group after considering the stand and view of the Income Tax Department in case of other group concerns which were being assessed by the same Assessing Officer. The claim of 1/5th share of the total expenses by the assessee during the year originated from assessment order passed in the case of SIFCL for AY 1996-97 and where the Assessing Officer in para 13.4.1.1 of the assessment order, on allowability of advertisement expenditure in the hands of SIFCL, contended that the benefit of sponsorship and the brand promotion expenditure was derived by the entire Sahara Group of major entities namely:- i. Sahara India (firm); ii. Sahara Airlines Limited; iii. Sahara India Financial Corporation (SIFCL); iv. Sahara India Mutual Benefit Company Limited (SIMBCL); v. Sahara India Housing Limited (name changed to Sahara India Commercial Corporation Limited i.e. SICCL); and vi. Sahara India Mass Communication (assessee herein)

The ld AO thus held the said expenditure should be shared equally 5. amongst all 6 major entities of Sahara Group and accordingly the ld AO disallowed 5/6th of the total expenditure incurred on advertising and brand promotion by the SIFCL during the year. SIFCL accepted the said disallowance in as much as it did not dispute the same before the ld CIT(A). Consistent with the aforesaid stand of the Income Tax Department, the Sahara Group adopted a structured and uniform mechanism whereby advertisement and sponsorship expenditure incurred for the promotion of brand "Sahara" was shared equally amongst the major six(6) entities deriving benefit therefrom. Later, due to merger of Sahara India Mutual Benefit Company Ltd. into SICCL., the number of major entities stood reduced to five (5). Accordingly, the expenditure was shared equally between the remaining five major entities in the ratio of 1/5th each namely: (1) Sahara India (Firm), (ii) Sahara Airlines Limited, (iii) Sahara India Financial Corporation (iv) Sahara India Commercial Corporation Ltd. and (v) Sahara India Mass Communication ('the assessee') 4 In view of the above, SICCL and SIFCL apportioned the sponsorship and 6. brand promotion expenditure amongst the five major entities of the group. Accordingly, the assessee booked 1/5th share of expenditure incurred on sponsorship and brand promotion by SICCL and SIFCL under the head "Advertisement and Publicity" expenses. The ld AO, while passing the impugned assessment order in case of the assessee, however, took a contradictory position, contrary to the earlier stand of the department, and held in para 10 that he fails to comprehend the basis of apportioning the said expenditure within the five group entities. The AO further alleged that since the direct nexus of the advertisement expenses with the business of the assessee has not been substantiated, the said expenditure is not allowable as deduction. This action of the ld AO was deleted by the ld CIT(A).

It was submitted that the sponsorship and brand promotion expenditure 7. was incurred in relation to the brand name “Sahara” and therefore it was decided amongst the group entities that wherever the brand “Sahara” is being used in the advertisement, the said expenditure shall be apportioned to 5 major entities equally which was done in consonance with the stand taken by the Income Tax Department in AY 1996-97 in the assessment order of a group concern SIFCL. This stand of the Income Tax Department has been accepted by the SIFCL by not preferring any appeal. The revenue having taken this stand in earlier years which had enabled the assessee and its group entities to take a particular tax positioning, cannot take a divergent view for the year under consideration for the assessee. The direct nexus between the advertisement expenditure and the business of the assessee has been proved and established beyond reasonable doubt by the brand name “Sahara” getting prominently displayed on the newspapers, publications and the related 5 materials promoting the business of the assessee. These facts were rightly appreciated by the ld CIT(A) while deleting the addition and hence we do not deem it fit to interfere in the order passed by the ld CIT(A) in this regard. Accordingly, the Ground No. 8 raised by the revenue is dismissed for AY 2003- 04.

All other contents of earlier order passed by this Tribunal in ITA No. 8. 64/Del/2014 dated 18-08-2017 for AY 2003-04 except Ground No. 8 shall remain unchanged.

In the result, the appeal of the revenue is dismissed. 9.

ITA 1970/Del/2013 for AY 2004-05 (Revenue Appeal).

The appeal in ITA No.1970/Del/2013 for AY 2004-05, arises out of the 10. order of the ld. Commissioner of Income Tax (Appeals)-1, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 11.01.2013 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.11.2006 by the Assessing Officer, DCIT, Central Circle-6, New Delhi (hereinafter referred to as ‘ld. AO’).

Ground Nos. 1 and 8 raised by the revenue are general in nature. 11.

The Ground No. 2 raised by the revenue is challenging the deletion of 12. addition of Rs. 30,10,410 made by the ld AO on account of excessive wastage of newsprint.

We have heard the rival submissions and perused the materials 13. available on record. During the year under consideration, the consumption of raw material (newsprint) of the assessee as disclosed in the tax audit report was as under:-

Particulars Newsprint (in MT) Opening Stock 380.605 Purchase during the year 9640.095 Consumption during the year 7862.375 (A) Sales during the year - Closing Stock 1532.218 Shortage/Damage/Wastage 626.107 (B) Total Consumption +Wastage 8488.482 (A+B=C) Wastage percentage 7.38% (B/C*100) During the course of assessment proceedings, the ld AO raised queries 14. regarding the consumption of newsprints. In response thereto, the assessee furnished complete details of raw material purchases along with books of account, bills, vouchers and stock registers for the relevant assessment year fully substantiating the above consumption and wastage figures. The ld AO however relying solely on the assessment proceedings for AY 1994-95 arbitrarily adopted a wastage rate of 6% purportedly based on the newsprint policy issued by the Registrar of Newspapers. On this basis, the ld AO disallowed excess wastage of 1.38% amounting to 117 MT and applied an average purchase rate of Rs. 25,730/MT resulting in an addition of Rs. 30,10,410 without pointing out any defects in the books of accounts, bills, vouchers and stock registers submitted by the assessee. The ld CIT(A) deleted the addition by placing reliance on the decision of this Tribunal in assessee’s own case for AY 1994-95 in ITA No. 465/Del/2001 dated 29-05-2009. The revenue preferred an appeal before the Hon’ble Delhi High Court for AY 1994- 95. The Hon’ble Delhi High Court vide its order dated 10-05-2011 upheld the action of the Tribunal by observing as under:- “7. Having considered the rival submissions of learned counsel for the parties and on perusal of the entire records, particularly, the orders of the authorities below we are of the considered view that the CIT(A) accepted that the assessee was maintaining quantitative records of wastage but he allowed the wastage @7%. We could not persuade ourselves to the reasoning given by the authorities below in respect of restricting the wastage to 6% or 7% when the assessee was able to demonstrate that the reasons of wastage were various and in such circumstances standard of 7% wastage rate prescribed by Registrar of Newspaper could not be applied. In fact, standard of 7% may be for the purpose of raising the demand of newsprint, but the amount of wastage would depend upon various factors including the location of office, printing units, godowns, etc. Otherwise also it is a clear finding of fact and we do not see any perversity or illegality in the order of the Tribunal.”

It could be seen from the above that issue in dispute is practically 15. covered by the decision of Hon’ble Delhi High Court referred supra for AY 1994-95. Hence, we hold that there cannot be any ad hoc disallowance of 1.38% on account of wastage by the ld AO which has been rightly deleted by the ld CIT(A). Hence, the Ground No. 2 raised by the revenue is dismissed.

The Ground No. 3 raised by the revenue is challenging the deletion of 16. addition made on account of the employees’ contribution to provident fund and ESI.

We have heard the rival submissions and perused the materials 17. available on record. It is not in dispute that the employees’ contribution to provident fund and ESI were deposited beyond the due date prescribed under the respective Acts by the assessee. This issue is no longer res integra in view of the decision of the Hon'ble Supreme Court in the case of Checkmate Services Private Limited Vs. CIT reported in 448 ITR 518 (SC) which is decided in favour of the revenue. Hence, respectively following the same, the Ground No. 3 raised by the revenue is allowed.

The Ground No. 4 raised by the revenue is challenging the deletion of 18. disallowance of Rs. 12,43,356 made by the ld AO on account of expenses related to repairs of building.

We have heard the rival submissions and perused the materials 19. available on record. The assessee, for the purposes of carrying out its business, had taken a building on lease in Noida, U.P., the said premises is owned by Sahara India Financial Corporation Ltd. ("SIFCL"). During the year under consideration, the assessee had incurred expenses amounting to Rs. 12,43,356 on day-to-day repair and maintenance of the building. The assessee vide its reply dated 22.11.2006 furnished copy of lease agreement. The ld AO disallowed the said expenses stating that according to the lease agreement, the lessor is responsible to carry out the repair and maintenance of the building. Thus, the ld AO held that any expenditure incurred by the assessee is not allowable as a deduction.

This disallowance was deleted by the ld CIT(A). 20.

We find that the issue in dispute is already decided in favour of the 21. assessee by the decision of this Tribunal in assessee’s own case AY 2003-04 in ITA No. 64/Del/2014 dated 18-08-2017 in para 18 thereon. The assessee submitted that the internal repairs were carried out in the building and hence the same are to be borne only by the lessee and not the lessor. The lease agreement is enclosed in pages 120 to 123 of the paper book. On perusal of the lease agreement, it is noticed that only external repairs to the building are to be borne by the lessor. Since only internal repairs were carried out by the assessee, the same are to be borne only by the assessee and would be allowable as deduction to the assessee as current repairs.

We find that reliance on the judgment of Hon’ble Delhi High Court in the 22. case of CIT Vs. Escorts Finance Limited reported in 205 CTR 574 by the ld CIT(A) is well placed and respectfully following the same, the Ground No. 4 raised by the revenue is dismissed. Ground No. 5 raised by the revenue is identical to Ground No. 8 raised 23. by the Revenue for AY 2003-04. Hence the decision rendered by us hereinabove for Ground No. 8 in AY 2003-04 shall apply mutatis mutandis for Ground No. 5 in AY 2004-05 except with variance in figures. Ground No. 6 raised by the revenue is challenging the deletion of 24. addition of telephone expenses of Rs. 8,02,543. We have heard the rival submissions and perused the materials 25. available on record. During the year under consideration, the assessee incurred telephone expenses of Rs. 1,00,87,436 in the normal course of business. The complete details of telephone expenses, telephone numbers, locations of installation, names in which the connections stood, billing periods and bill amounts were duly furnished by the assessee before the ld AO. Out of the total telephone expenses of Rs. 1,00,87,436, the ld AO disallowed telephone expenses aggregating to Rs. 8,02,543/- on the ground that telephone connections to the extent of Rs. 6,66,029 were not in the name of the assessee and telephone bills to the extent of Rs. 1,36,514 pertained to the prior period and not allowable as deduction. The ld CIT(A) deleted the aforesaid disallowance relying upon the decision of this Tribunal in the case of M/s. Chabbi Advertising, a Sahara group entity, in ITA No. 542/Del/2009. We also find that the issue in dispute has been addressed by this Tribunal in assessee's own case for AY 2003-04 in ITA No. 64/Del/2014 dated 18-08-2017 in Para 21. Hence, respectfully following the aforesaid decision, merely because the telephone connections were in the name of different persons, the same cannot be subjected to disallowance in the hands of the assessee as long as the said telephones were utilized by the assessee for the purpose of its business. It is a fact that getting a telephone connection in those days was very difficult and a tedious process and accordingly the unused connections were used by some other persons was normal practice prevailing in the market. Hence, we hold that the disallowance of telephone expenditure of Rs 6,66,029 has been rightly deleted by ld CIT(A).

With regard to disallowance of prior period expense of telephone 26. charges of Rs 1,36,514/-, it was submitted that the telephone bills for the month of March are raised in the month of April. Since for the month of March and part of April are generated and received only in the month of April and consequently the liability in respect thereof crystallizes only upon receipt of such bills and accordingly recorded as expenditure in the month of April. This is a routine expenditure and a recurring feature. It is not the case of the revenue that assessee had claimed deduction for the month of March and part of April twice. Hence, it cannot be considered as prior period expenditure for the purpose of allowability of deduction under the Income Tax Act. Hence, we hold that the ld CIT(A) had rightly deleted the disallowance of Rs 1,36,514/- in this regard. Accordingly, Ground No. 6 raised by the revenue is dismissed. The Ground No. 7 raised by the revenue is challenging the deletion of 27. disallowance of Rs. 53,357 made on account of business promotion expenses.

We have heard the rival submissions and perused the materials 28. available on record. During the year under consideration, the assessee incurred expenditure aggregating to Rs. 53,357 towards purchase of gifts on festive occasion for distribution to its customers, dealers and business associates in the regular course of business, which were claimed as deduction u/s 37 of the Act. The ld AO disallowed the entire expenditure on the ground that it is capital in nature, which was deleted by the ld CIT(A) by following the order of this Tribunal in assessee’s own case for AY 1994-95 in ITA No. 465/Del/2001 dated 29-05-2009. We find that the ld CIT(A) relied on the decision of this Tribunal in assessee’s own case. Further, there is a similar issue had also cropped up in AY 2003-04 in assessee’s own case, wherein the Tribunal decided in favour of the assessee. It is pertinent to note that this issue was not challenged by the revenue before the Hon'ble Delhi High Court in AY 2003-04. As such, the issue had already attained finality at the level of Tribunal in AY 2003-04, wherein it was decided in favour of the assessee. Respectfully following the same, we do not find any infirmity in the order of the ld CIT(A) granting relief to the assessee. Accordingly, Ground No. 7 raised by the revenue is dismissed.

In the result, the appeal of the revenue is partly allowed. 29.

ITA 1039/Del/2013 (Assessee’s appeal) & ITA No. 1346/Del/2013 (Revenue’s appeal) for AY 2005-06

The grounds raised by the revenue except Ground No. 3 are identical to 30. those raised by the revenue in AY 2004-05. Hence, the decision rendered by us hereinabove for AY 2004-05 shall apply mutatis mutandis for the respective grounds in AY 2005-06 except with variance in figures.

The Ground Nos. 1 to 4 raised by the assessee and Ground No. 3 raised 31. by the revenue are in connection with disallowance of commission expenditure.

We have heard the rival submissions and perused the materials 32. available on record. During the year under consideration, the assessee commenced a new division of business namely Sahara City Homes Marketing & Sales Corporation for undertaking real estate marketing and trading activities. In this regard, a supplementary partnership deed was duly executed for commencement of new business and the same is enclosed in pages 16 to 18 of the paper book. In furtherance of the aforesaid business activity, the assessee entered into an agreement with Sahara India Commercial 12 Corporation Limited ("SICCL"), in terms of which, the assessee was entitled to purchase up to 20% of specified real estate units proposed to be developed by SICCL at a discount of 10% of the prevailing market price. The said agreement is enclosed in Pages 107 to 111 of the paper book. The agreement further stipulated that the consideration in respect of each unit so purchased would become payable by the assessee to SICCL in lump sum when the units were ready for possession. In order to facilitate the marketing and booking of such housing units, the assessee entered into a marketing agreement with M/s Sahara India, appointing it as its marketing agent for the sale of such real estate units. The copy of the said marketing agreement is enclosed in Pages 113 to 115 of the paper book. In terms of the said agreement, Sahara India was entrusted with the responsibility of soliciting prospective purchasers and collecting booking advances on behalf of the assessee. In consideration of the marketing and flat booking services rendered by Sahara India, the assessee agreed to pay commission at the rate of 7% on the gross amount of booking advances collected by Sahara India from customers on its behalf. During the year under consideration, M/s Sahara India collected booking advances aggregating to Rs. 201,51,87,010/- from prospective purchasers on behalf of the assessee. The buyer-wise details of booking amounts collected were placed on record. Accordingly, in accordance with the terms of understanding between the assessee and Sahara India, the assessee booked commission expenditure amounting to Rs. 14,10,99,450/-, being 7% of the gross booking advances collected. It is pertinent to point out here that TDS amounting to Rs. 79,15,680 was duly deducted at source under section 194H of the Act and deposited on the said commission which is also evidenced by the TDS challan placed at page 112 of the Paper Book. The AO, however, disallowed the entire commission expenditure primarily on three grounds:- a) that the commission rate of 7% was excessive and unreasonable as compared to prevailing market rate of 2%;

b) that the commission payment was purportedly structured to mislead the tax authorities and TDS was not deducted on the commission; and c) that the commission expenditure had been claimed without booking any corresponding income in the hands of assessee, since the entire booking amount was payable to SICCL in lump sum. On appeal, after examining the agreements and materials on record, the ld CITA dismissed the objections of the ld AO holding that the commission rate of 7% was not unreasonable, particularly in view of the commercial arrangement under which the assessee was entitled to purchase the flats at a 10% discount from SICCL, thereby leaving a margin of 3% for the assessee. The ld CITA, upon verification of the TDS challan submitted by the assessee, also categorically observed that the allegation regarding non-deduction of TDS was factually incorrect. However, the ld CITA restricted the allowability of commission expenditure in respect of the amount of booking advances remitted to the assessee by Sahara India i.e. Rs. 91.88 crores out of the total booking advances of Rs. 201.57 crores collected by Sahara India on behalf of the assessee, during the year. Accordingly, the ld CITA restricted the allowance of commission expenditure to the extent of Rs. 6,43,15,241 being 7% of Rs. 91,87,89,153 actually remitted by Sahara India to the assessee during the year, out of the total commission expenditure of Rs. 14,10,99,450/- , thereby sustaining the disallowance the balance commission of Rs. 7,67,84,209/-. Accordingly, the assessee is in appeal against the sustained disallowance of Rs, 7,67,84,209 vide Ground Nos. 1 to 4. The revenue is in appeal before this tribunal vide Ground No. 3 challenging the partial relief granted to the assessee by the ld CITA.

The ld AR placed heavy reliance on the submissions made by the 33. assessee before the ld AO during the assessment proceedings of AY 2006-07 on the impugned issue by drawing our attention to pages 526 to 527 of the factual paper book for AY 2006-07. It was submitted that assessee had offered commission income of Rs. 42.50 crores in AY 2008-09 on the subject mentioned transaction and hence it cannot be said that no commission income at all was offered by the assessee. The ld AR submitted that in AY 2006-07 similar claim of the assessee was allowed by the ld AO. Accordingly, it was pleaded that the basic premise of the revenue that commission expenditure was claimed as deduction without recognizing income is factually incorrect and lacks substance. It is not in dispute that commission expenditure has been claimed by 34. the assessee in AY 2005-06 on accrual basis based on 7% of gross booking advances. Accordingly, Rs. 14,10,99,450 was claimed by the assessee as expenditure on accrual basis. As per the terms, the assessee is entitled to receive 10% of commission on the gross bookings made. The assessee chose to offer the commission income on receipt basis while choosing to claim commission expenditure on accrual basis. It is a fact that assessee had indeed offered commission income to tax in AY 2008-09 to the extent of Rs. 42.50 crores. The assessee is only trying to plead that there is no change in rate of taxation and the income has been offered to tax in subsequent years in AY 2008-09 and hence there is no loss to the exchequer. We are unable to comprehend to accept to this argument in view of the fact that right income should be taxed in the right assessment year in the hands of the correct assessee and also to give weightage to matching principle of income and expenditure, the commission expenditure claimed by the assessee during the year on accrual basis without any corresponding commission income deserve to be disallowed in its entirety. However, the assessee would be eligible for claiming the same in AY 2008-09 where the commission income has been offered to tax by the assessee. This would be in consonance with the matching principle governing the general principles of accounting and matching of income with corresponding expenditure and which in turn would meet the ends of justice. Accordingly, we uphold the action of the ld AO. The Ground Nos. 1 to 4 raised by the assessee are dismissed and Ground No. 3 raised by the revenue is allowed.

In the result, both the appeals of the assessee as well as the revenue 35. for AY 2005-06 are partly allowed.

ITA No. 67/Del/2014 for AY 2006-07 (Revenue’s appeal)

The Ground Nos. 1 to 6 and 8 raised by the revenue for AY 2006-07 are 36. identical to those raised in AY 2004-05. Hence, the decision rendered by us herein above for the respective grounds in AY 2004-05 shall apply mutatis mutandis for AY 2006-07 also except with variance in figures.

The Ground No. 7 raised by the revenue is challenging the deletion of 37. disallowance of depreciation on printer amounting to Rs. 3,96,022.

We have heard the rival submissions and perused the materials 38. available on record. During the year under consideration, the assessee claimed depreciation on printers at the rate of 60% treating the same to be part of computer and peripherals. The ld AO disallowed the excess depreciation alleging that printers are not part of computer and peripherals and therefore eligible for depreciation @ 15%, being plant and machinery. The ld CITA deleted the disallowance by holding that printers are part of computers and thus eligible for depreciation @ 60%. Aggrieved, the revenue is in appeal before us.

We find that the issue in dispute is no longer res integra in view of the 39. decision of Hon’ble Jurisdictional Delhi High Court in the case of CIT vs BSES Yamuna Power Ltd in ITA No. 1267/2010 reported in 358 ITR 47, wherein it was held that computer accessories and peripherals such as printers, scanners, server etc. form an integral part of computer system and hence would be entitled for depreciation at a higher rate of 60 %. Respectfully 16 following the same, we do not find any infirmity in the order of the ld CITA. Accordingly the Ground No. 7 raised by the revenue is dismissed.

In the result, the appeal of the revenue in ITA 67/Del/2014 for AY 2006- 40. 07 is partly allowed.

ITA No. 68/Del/2014 for AY 2007-08 (Revenue’s appeal)

The Ground No. 1 to 7 and 9 raised by the revenue for AY 2007-08 are 41. identical with those raised in AY 2006-07. Hence the decision rendered by us here in above for AY 2006-07 shall apply mutatis mutandis for the respective grounds in AY 2007-08 except with variance in figures.

The Ground No. 8 raised by the revenue is challenging the deletion of 42. disallowance of Rs. 4,88,251 made by the ld AO u/s 40a(i) of the Act for short deduction of tax at source.

We have heard the rival submissions and perused the materials 43. available on record. In the course of business, the assessee subscribes to news wire services provided by Press Trust of India (PTI), a premier national news agency engaged in collection and dissemination of news to various media houses, research bodies, institutions and other subscribers across India and abroad. Under the subscription arrangement, PTI supplies standardized news content which the assessee accesses and utilizes for publication in its newspapers. The arrangement is in the nature of a periodic subscription for access to news content collected and compiled by PTI. It was submitted that it does not involve any customized consultancy, advisory input, technical analysis, or professional opinion rendered specifically to the assessee. During the year under consideration, the assessee deducted tax at source under section 194C of the Act as an abundant precaution and deposited the same with the Government. However, based solely on the auditor's observation that 17 section 194J of the Act may be applicable for the subject mentioned transaction, the ld AO held that there was short deduction of TDS and consequently invoked section 40(a)(i) to disallow Rs. 4,88,251/-.

The short issue that arises for our consideration is as to whether 44. disallowance u/s 40a(i) of the Act could at all be made for short deduction of tax at source. This issue is no longer res integra in view of the decision of the Hon’ble Jurisdictional Delhi High Court in the case of PCIT vs Future First Info Services Private Limited reported in 447 ITR 299 wherein it was categorically held that no disallowance u/s 40a(ia) of the Act could be made on the ground that there was short deduction of tax at source and that right course of action would be to invoke u/s 201 of the Act treating that assessee as an ‘assessee in default’ for the shortfall in deduction of tax at source. Respectfully following the said decision, we hold that the ld CITA had rightly deleted the disallowance made by the ld AO. Accordingly, the Ground No. 8 raised by the revenue is dismissed.

In the result, the appeal of the revenue in ITA No. 68/Del/2014 for AY 45. 2007-08 is partly allowed.

ITA No. 69/Del/2014 for AY 2008-09 (Revenue appeal)

The grounds raised in AY 2008-09 by the revenue are identical to those 46. raised in AY 2006-07. Hence, the decision rendered by us hereinabove for AY 2006-07 shall apply mutatis mutandis for AY 2008-09 also except with variance in figures.

In the result, the appeal of the revenue in ITA No. 69/Del/2014 for AY 47. 2008-09 is partly allowed.

To Sum Up, 48.

Appeal by ITA No. Assessment Result Year Revenue 64/Del/2014 2003-04 Dismissed Revenue 1970/Del/2013 2004-05 Partly allowed Assessee 1039/Del/2013 2005-06 Dismissed Revenue 1346/Del/2013 2005-06 Partly allowed Revenue 67/Del/2014 2006-07 Partly allowed Revenue 68/Del/2014 2007-08 Partly allowed Revenue 69/Del/2014 2008-09 Partly allowed Order pronounced in the open court on 15-Oct-2026.

-Sd/- -Sd/- VIKAS AWASTHY M BALAGANESH JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi Dated: 15/10/2026 AK keot Copy to: ACIT, CENTRAL CIRCLE-6,, 1 NEW DELHI-, DELHI M/S. SAHARA INDIA MASS COMMUNICATION, 2 1, KAPOORTHALA COMPLEX, ALIGANJ,, LUCKNOW-, UTTAR PRADESH 3 THE PCIT / CIT, 4 THE D.R., ITAT, DELHI BENCH 5 GUARD FILE