M/s. Sun TV Network Ltd vs. ACIT and DCIT

Parties Involved

Facts Summary

The case pertains to the disallowance under section 14A and the taxability of deferred revenue income for the Assessment Year 2018-19. The assessee, M/s. Sun TV Network Ltd, is engaged in satellite television broadcasting and FM radio broadcasting. The assessee had made equity investments and raised bills on the time slots sold by it. The Ld. Assessing Officer (AO) applied Rule 8D(2)(ii) and computed disallowance @1% of annual average of monthly averages of opening and closing investment. The Ld. AO restricted the disallowance to the extent of Rs.1504.33 Lacs considering the exempt income earned by the assessee. The Ld. CIT(A) confirmed the action of Ld. AO but enhanced the disallowance to Rs.2133.14 Lacs. The assessee appealed against this decision. The assessee also claimed deferred revenue income of Rs.1364.10 Lacs, which was added to the income of the assessee by the Ld. AO. The Ld. CIT(A) allowed the claim of the assessee. The revenue appealed against this decision.…

Legal Issues

• 1. Disallowance u/s 14A
• 2. Taxability of deferred revenue income

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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