M/s BBC World Service India Pvt. Ltd., New Delhi V. ACIT, New Delhi

CO 275/DEL/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1892 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 11 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 01-07-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 20-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ JAIN
• Keywords: Transfer pricing; Rectification of order; Tax effect
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I-1 NEW DLEHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 3152/DEL/2016 ASSESSMENT YEAR: 2009-10 BBC WORLD SERVICE INDIA PRIVATE LIMITED, 5TH FLOOR, HINDUSTAN TIMES HOUSE, KASTURBA GANDHI MARG, NEW DELHI 110001. VS. DCIT CIRCLE-2(1), NEW DELHI. PAN NO. AADCB2298P ASSESSEE/APPELLANT REVENUE/RESPONDENT ITA NO. 3492/DEL/2016 ASSESSMENT YEAR: 2009-10 ACIT, CIRCLE 4 (1), NEW DELHI VS. BBC WORLD SERVICE INDIA PRIVATE LIMITED, 5TH FLOOR, HINDUSTAN TIMES HOUSE, KASTURBA GANDHI MARG, NEW DELHI 110001. PAN NO. AACCA3104G REVENUE/ APPELLANT ASSESSEE/ RESPONDENT C.O. NO. 275/DEL/2016 (IN ITA NO. 3492/DEL/2016) ASSESSMENT YEAR: 2009-10 BBC WORLD SERVICE INDIA PRIVATE LIMITED, 5TH FLOOR, HINDUSTAN TIMES HOUSE, KASTURBA GANDHI MARG, NEW DELHI 110001. VS. ACIT, CIRCLE 4 (1), NEW DELHI PAN NO. AADCB2298P ASSESSEE/APPELLANT REVENUE/RESPONDENT 2 ASSESSEE BY SH. ATUL JAIN, AR MS PRIYANKA NAGPAL, AR REVENUE BY SH. DHEERAJ JAIN, SR. DR DATE OF HEARING: 1/7/2021 PRONOUNCEMENT ON 1/7/2021 ORDER PER BENCH ITA NO. 3492/DEL/2016 IS FILED BY REVENUE WHEREAS I TA NO. 3152/DEL/2016 AND C.O. NO. 275/DEL/2016 ARE FILED B Y THE ASSESSEE AND ALL THESE MATTERS EMANATE FROM THE ORDER DATED 16/3/201 6 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-42, NEW DELHI (LD. CIT(A)) IN APPEAL NO. 77/15-16/CIT (A)-42 IN THE CASE OF BBC W ORLD SERVICE INDIA PRIVATE LIMITED (THE ASSESSEE), FOR THE ASSESSMEN T YEAR 2009-10. 2. BRIEF FACTS OF THE CASE, RELEVANT FOR THE DISPOS AL OF THESE APPEALS AND CROSS OBJECTIONS, ARE THAT THE ASSESSEE IS A COMPAN Y PRIMARILY ENGAGED IN THE BUSINESS OF PRODUCING PROGRAM CONTENT FOR RADIO AND WEBSITE (ON SHORTWAVE AND FM FREQUENCIES) UNDER CONTRACTUAL AGREEMENTS WI TH PARENT AND OTHER GROUP OF COMPANIES; AND THAT THE MAIN SOURCE OF REV ENUE OF THE COMPANY IS DERIVED FROM ITS PARENT AND OTHER GROUP COMPANIES A ND ALSO FROM DIRECT SALE OF PROGRAMS, ORIGINALLY CREATED FOR ITS PARENT AND OTHER GROUP COMPANIES. 3. FOR THE ASSESSMENT YEAR 2009-10, THE ASSESSEE FI LED THE RETURN OF INCOME ON 30/9/2009 DECLARING AN INCOME OF RS. 48,5 3,220/-, BUT SUBSEQUENTLY ON 31/3/2011 REVISED THE SAME AT AN IN COME OF RS. 72,92,419/-. ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 (FOR SHORT THE ACT), WAS HOWEVER, COMPLETED AT RS. 4,7 1,10, 092/- BY MAKING 3 ADDITION OF RS. 3, 98, 17, 673/-. SINCE THE ASSESSE E GOT RELIEF IN APPEAL BEFORE THE LD. CIT(A), REVENUE PREFERRED THIS APPEAL, NAME LY, ITA 3492/DEL/2016. 4. AT THE OUTSET, IT IS SUBMITTED BY THE LD. AR THA T SUBSEQUENT TO THE FILING OF THIS APPEAL PURSUANT TO THE RECTIFICATION APPLICATION FILED BY THE ASSESSEE BEFORE THE LD. TRANSFER PRICING OFFICER-I (1) NEW DELHI, STATING THAT THE BUSINESS AND SUPPORT EXPENSES OF RS. 2, 43, 92, 0 21 INCURRED BY THE ASSESSEE WERE RECOVERED ON COST TO COST BASIS, AND, THEREFORE, SHOULD HAVE ALSO BEEN INCLUDED IN THE OPERATING INCOME WHILE DE TERMINING THE OPERATING PROFIT MARGIN OF THE ASSESSEE. LD. TPO BY ORDER DA TED 4/7/2013 ACCEPTED THE CONTENTION OF THE ASSESSEE AND SUGGESTED THE AD DITION OF RS. 1,62,57,135/-TO THE INCOME OF THE ASSESSEE INSTEAD OF RS. 3, 98, 17, 673/-. 5. SUBSEQUENTLY THE ASSESSEE FILED AN APPLICATION U NDER SECTION 154 OF THE ACT ON 30/4/2013 STATING THAT WHILE MAKING THE ADDITION ON THE ISSUE OF TRANSFER PRICING ADJUSTMENT IN THE ASSESSMENT ORDER , AN AMOUNT OF RS. 24, 39, 202 WHICH WAS ALREADY ADDED BACK BY THE ASSESSEE ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT IN ITS REVISED COMPUTATION OF IN COME, WAS NOT REDUCED FROM THE AMOUNT OF ADDITION ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT IN THE ASSESSMENT ORDER. ON VERIFICATION OF RECORD, LEARNE D ASSESSING OFFICER ACCEPTED THE SAME. 6. IN VIEW OF THESE RECTIFICATION ORDERS, THE ADDIT ION HAS COME DOWN FROM RS. 3, 98, 17, 673/- TO RS. 1, 38, 17, 933/-.A SSESSEE CHALLENGED THIS ADDITION OF RS. 1, 38, 17, 933/-BEFORE THE LD. CIT( A) AND WAS SUCCESSFUL. HENCE THE REVENUE CARRIED THIS MATTER IN APPEAL BEF ORE THE TRIBUNAL IN APPEAL IN ITA NO. 3493/DEL/2016. SINCE THE TAX EFFE CT INVOLVED IN THE GROUNDS RAISED BY THE REVENUE IN THE ABOVE APPEAL W AS BELOW RS.50 LAKHS, IN VIEW OF THE RECENT CBDT CIRCULAR NO.17/2019 DATE D 8 TH AUGUST, 2019, RAISING THE MONETARY LIMIT FOR FILING OF THE APPEAL BY THE REVENUE BEFORE THE 4 TRIBUNAL TO RS.50 LAKHS AND THE SUBSEQUENT CLARIFIC ATION OF THE CBDT, VIDE NOTIFICATION DATED 20 TH AUGUST, 2019 STATING THAT THE SAID CIRCULAR IS APPLICABLE EVEN TO PENDING APPEALS, THE APPEALS FIL ED BY THE REVENUE WAS HELD NOT MAINTAINABLE ON ACCOUNT OF LOW TAX EFFECT, AND ACCORDINGLY ITA NO. 3493/DEL/2016 WAS DISMISSED BY ORDER DATED 28/4/202 1. 7. IN THE CIRCUMSTANCES, LD. AR SUBMITS THAT ITA NO . 3492 /DEL/ 2016 HAS BECOME INFRUCTUOUS IN VIEW OF THE FINAL DISPOSA L OF THE ADDITIONS INVOLVED FOR THE ASSESSMENT YEAR 2009-10 SUBSEQUENT TO THE RECTIFICATION ORDER AND A DISMISSAL OF THE REVENUES APPEAL IN IT A NO. 3493/DEL/2016, AND, THEREFORE, THE SAME MAY BE DISMISSED. HE FURTH ER ARGUED THAT CONSEQUENTLY ASSESSEE WITHDRAWS THE C.O. NO. 275/DE L/2016 AND ITA NO. 3492/DEL/2016 ON THE GROUND THAT THE ASSESSEE DOES NOT WANT TO PRESS THE DISPOSAL THESE 2 MATTERS ON MERITS INASMUCH AS WHAT REMAINS TO BE ADJUDICATED IN WAS A VERY TRIVIAL AMOUNT OF ADDITIO N, AND THEREFORE, THE CROSS OBJECTION AND THE APPEAL OF THE ASSESSEE MAY ALSO B E DISMISSED AS WITHDRAWN. 8. LD. DR VERIFIED THE RECORD AND ADMITTED THE FACT S STATED BY THE LD. AR TO BE TRUE AND CORRECT. IN THE CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT SUBSEQUENT TO THE RECREATION ORDERS AN D THE DISMISSAL OF THE REVENUES APPEAL IN ITA 3493/DEL/2016 NOTHING REMAI NS TO BE CONSIDERED ON THE CONTENTIONS OF THE REVENUE AND, THEREFORE, I TA NO. 3492/DEL/2016 HAS TO BE DISMISSED AS INFRUCTUOUS. AT THE SAME TIM E WE DO NOT FIND ANYTHING COMING IN THE WAY OF THE ASSESSEE TO REQUE ST FOR THE TRIAL OF THE CROSS OBJECTION AND THEIR OWN APPEAL. RECORDING THE SAME, WE ARE OF THE CONSIDERED OPINION THAT IT IS JUST AND NECESSARY TO DISMISS ITA NO. C.O. NO AND ITA NO. 3152/DEL/2016ALSO AS WITHDRAWN. WE ORDE R ACCORDINGLY. 5 9. IN THE RESULT, ITA NO. 3492/DEL/2016 IS DISMISSE D AS INFRUCTUOUS, AND CO NO. 275/DEL/2016 AND ITA NO. 3152/DEL/2016 ARE D ISMISSED AS WITHDRAWN. ORDER PRONOUNCED IN OPEN COURT ON THIS THE 1 ST DAY OF JULY 2021 IMMEDIATELY ON CONCLUSION OF HEARING OR VIRTUAL MOD E. SD/- SD/- (ANIL CHATURVEDI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1/7/2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI