PER BHAVNESH SAINI, J.M. Both the Stay Applications are filed by Assessee for A.Ys. 2013-2014 and 2014-2015 for stay of the outstanding demand of Rs.25,99,87,000/- for A.Y. 2013-2014 and Rs.43,23,75,983/- in A.Y. 2014-2015. S.A.Nos.730 & 731/Del./2018 in ITA.Nos.6453 & 6454/Del./2018 India Today Online Pvt. Ltd., New Delhi.
2. We have heard the Learned Representatives of both the parties and perused the material available on record. A.Y. 2013-2014 :
3. Assessee filed return of income declaring loss of Rs.34,269/- against which assessment order was framed under section 143(3) at Rs.11,42,53,357/- thereby making addition of Rs.11,42,86,626/- under section 56(2)(viib) of the
I.T. Act. The A.O. noted that assessee-company received share application money including premium to the tune of Rs.135.42 crores from Living Media India Pvt. Ltd., The assessee- company issued 5,07,94,056 number of shares at premium of Rs.20/- to its holding Company M/s. Living Media Pvt. Ltd., Hence, provisions of section 56(2)(viib) are attracted. The A.O. accordingly made the above addition. The Ld. CIT(A) however, deleted the said addition but proceeded to enhance the addition by a sum of Rs.48,16,66,660/- under Section 56(2)(viib) of the I.T. Act. The above addition was accordingly made which is in challenge before the Tribunal. S.A.Nos.730 & 731/Del./2018 in ITA.Nos.6453 & 6454/Del./2018 India Today Online Pvt. Ltd., New Delhi.
4. Learned Counsel for the Assessee referring to the stay application and other submissions submitted that assessee had already paid 5% of the outstanding demand of Rs.25,39,239/- and made request to the income tax authorities to stay the demand who have ultimately directed to pay 10% of the demand. He has submitted that since provisions of section 56(2)(viib) have been brought in the statute book w.e.f. 01.04.2013 as such the said provisions would only be applicable in cases where share application money is received after 01.04.2013 and also issued after 01.04.2013. In so far as the facts of the instant case are concerned for A.Y. 2013-2014, it is an undisputed fact that assessee has not received Rs.72,25,00,000/- in A.Y. 2013- 2014, in fact the said sum was received in preceding A.Ys. 2011-2012 and 2012-2013, therefore, the above provisions would not be applicable and the enhancement made by the Ld. CIT(A) is liable to be deleted. He has further submitted that the aforesaid sum of Rs.72,25,00,000/- in A.Y. 2013-2014 was not subject matter of appeal before Ld. CIT(A). Therefore, no S.A.Nos.730 & 731/Del./2018 in ITA.Nos.6453 & 6454/Del./2018 India Today Online Pvt. Ltd., New Delhi. enhancement could be made as is held by the Honble Apex Court in the case of CIT vs. Ram Bahadur Hardutroy Motilal Chamaria 66 ITR 443. A.Y. 2014-2015 :
5. In A.Y. 2014-2015, assessee filed return of income declaring loss of Rs.95,571/- against which, assessment was framed under section 143(3) at Rs.101,57,85,550/- and a sum of Rs.101,58,81,120/- was added under Section 56(2)(viib) of the I.T. Act. The Ld. CIT(A) gave part relief to the assessee and restricted the addition to Rs.100,74,22,722/- under Section 56(2)(viib) of the I.T. Act. The assessee paid a sum of Rs.2,29,60,156/- against the outstanding demand which is about 5%. The assessee similarly made request to the Income Tax Authorities for stay of the demand as was done in earlier year.
6. Learned Counsel for the Assessee apart from the above facts and submissions above also submitted that the value per share needs to be determined only in Explanation(i) S.A.Nos.730 & 731/Del./2018 in ITA.Nos.6453 & 6454/Del./2018 India Today Online Pvt. Ltd., New Delhi. to Section 56(2)(viib) of the I.T. Act and that too as per prescribed method under Rule 11U and 11UA of the I.T. Act. Therefore, finding of the Ld. CIT(A) that the value per share as per Explanation (ii) needs to be determined on the date of issue of share is legally untenable. He has further submitted that with respect to valuation of investment in M/s. Mail Today News Paper Pvt. Ltd., at Rs.40/- per share, it was submitted that the A.O. in the Order for A.Y. 2013-214 and even in the remand report had not disputed the fact that investment in M/s. Mail Today News Paper Pvt. Ltd., have correctly been made by the assessee at Rs.40/- fair market value. While valuing the shares of the assessee-company in A.Y. 2013-2014 and further, even the said fair market value of Rs.40/- has been accepted by the A.O. of M/s. Mail Today News Paper Pvt. Ltd., in A.Ys.2013-2014 and 2014-2015. Further, in A.Y. 2011-2012, assessee-company had sold its share holding in M/s. Mail Today News Paper Pvt. Ltd., to M/s. T.V. Today Network Ltd., valued at Rs.43.29 crores and due capital gain was offered by the assessee, which was S.A.Nos.730 & 731/Del./2018 in ITA.Nos.6453 & 6454/Del./2018 India Today Online Pvt. Ltd., New Delhi. accepted by the Revenue and such once the value of the share of M/s. Mail Today News Paper Pvt. Ltd., has been accepted in assessees own case for the A.Y. 2011-2012, then the same cannot be disputed in assessment year under appeal. Learned Counsel for the Assessee submitted that total demand in both the years comes to Rs.69,23,62,983/- and in case, the enhancement made in A.Y. 2013-2014 is held to be without jurisdiction, there would be no demand and as such, the demand would only remain in A.Y. 2014-2015, against which, assessee has already paid about 6% of the demand. He has submitted that assessee is willing to pay Rs.2.50 crores to the Revenue Department at present and is not in a position to pay further amount to the Revenue. He has filed copy of the statement of account to show that as on 05.10.2018 the credit balance was Rs.9810.75 crores and that an investment in subsidiary was Rs.2503.47 lakhs. He has submitted that assessee is willing to undertake not to dispose of or alienate any of its fixed assets till the disposal of the appeal. Learned Counsel for the Assessee, therefore, submitted that assessee S.A.Nos.730 & 731/Del./2018 in ITA.Nos.6453 & 6454/Del./2018 India Today Online Pvt. Ltd., New Delhi. has a prima facie case, therefore, balance demand may be stayed till the disposal of the appeal and that assessee is willing to argue the appeal at the earliest.
7. On the other hand, Ld. D.R. submitted that assessee may be asked to deposit atleast 20% of the outstanding demand.
8. We have considered the rival submissions and perused the material available on record. In A.Y. 2013-2014, the Ld. CIT(A) deleted the addition made by the A.O. but enhanced the income on which the present demand arise. The contention of the Learned Counsel for the Assessee shows that assessee has an arguable case. Similar issue is in A.Y. 2014- 2015. Since the appeals of the assessee are pending for disposal, therefore, without commenting on the merits of the case and considering the financial condition of the assessee, we are of the view that assessee has a prima facie case for grant of stay, subject to certain conditions. We, accordingly, stay the outstanding demand for both the assessment years in S.A.Nos.730 & 731/Del./2018 in ITA.Nos.6453 & 6454/Del./2018 India Today Online Pvt. Ltd., New Delhi. reference, subject to payment of Rs. 2.50 (Rs. 1.25 crore each) crores for both the years within 10 days from the date of the order. The assessee shall not alienate or dispose of any of its fixed assets till the disposal of the appeals. Assessee is directed to file an undertaking in writing to that effect before A.O. within 10 days of the date of the Order. The appeals be fixed for hearing on out of turn basis on 10.12.2018. Assessee shall not seek any unnecessary adjournment in the matter and shall file paper book, if any, as per Rules. Copy of the Order be provided to both the parties. Issue notice to both parties for date fixed for hearing of appeals.
9. In the result, stay applications of the assessee are allowed subject to the above directions. Order pronounced in the open Court. Sd/- Sd/- (LP SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi, Dated 05November, 2018 VBP/- S.A.Nos.730 & 731/Del./2018 in ITA.Nos.6453 & 6454/Del./2018 India Today Online Pvt. Ltd., New Delhi. Copy to
1. The appellant
2. The respondent
3. CIT(A) concerned
4. CIT concerned
5. D.R. ITAT FRIDAY Bench, Delhi
6. Guard File. // BY Order // Assistant Registrar : ITAT Delhi Benches : Delhi Date of dictation 02.11.2018/05.11.18 Date on which the typed draft order is placed before the dictation Member 05.11.2018 Date on which the approval draft comes to the Sr. Date on which the fair order is placed before the Dictation member for pronouncement Date on which the fair order comes back to the Sr. P.S. 05.11.2018 Date on which the final order is uploaded on the website of ITAT 05.11.2018 Date on which the file goes to the Bench Clerk 05.11.2018 Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order.