Prism TV Pvt. Ltd., Hyd, Hyderabad V. DCIT, Circle-14(1), Hyderabad, Hyderabad

ITA 1249/HYD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5896 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 04-01-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 02-11-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KONDA RAMESH
• Assessee Lawyers: ARVIND SONDE
• Keywords: Capital asset; Depreciation; Share purchase agreement; Additional evidence; Question of law; Valuation report; Revenue expenditure; Capital expenditure
• Section: 143(3); 32; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.466/HYD/2015 ASSESSMENT YEAR 2011-2012 PRISM TV PRIVATE LIMITED , HYDERABAD 500 001 PAN AAFCP9275J VS. DCIT, CIRCLE - 16(3) HYDERABAD 500 004. (APPELLANT) (RESPONDENT) ITA.NO.1249/HYD/2015 ASSESSMENT YEAR 2012-2013 PRISM TV PRIVATE LIMITED HYDERABAD 500 001 PAN AAFCP9275J VS. DCIT, CIRCLE - 16(3) HYDERABAD 500 004. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. ARVIND SONDE FOR REVENUE : MR. KONDA RAMESH DATE OF HEARING : 04.01.2016 DATE OF PRONOUNCEMENT : 24 .03.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. BOTH THE ABOVE APPEALS ARE THE ASSESSEES APPEALS FOR THE A.YS. 2011-2012 AND 2012-2013. IN B OTH THESE APPEALS, THE GROUNDS RAISED BY THE ASSESSEE A RE THE SAME EXCEPT FOR THE QUANTUM AND THEREFORE, THESE AP PEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COM MON AND CONSOLIDATED ORDER. 2 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY M/S. PRISM TV PVT. LTD., WAS FORMED AS A RE SULT OF DEMERGER OF M/S. USHODAYA ENTERPRISES P. LIMITED . M/S. USHODAYA ENTERPRISES P. LTD., WAS IN THE BUSIN ESS OF PRODUCING AND TELECASTING ENTERTAINMENT/NEWS/ INFORMATION PROGRAMMES UNDER THE TRADE NAME OF ETV AND GOT DEMERGED ITS TELEVISION BUSINESS INTO THREE COMPANIES NAMELY (1) M/S. EENADU TELEVISION P. LTD. , (2) M/S. PRISM TV P. LTD., AND (3) M/S. PANORAMA TELEVI SION P. LTD. THE SCHEME OF DEMERGER WAS APPROVED BY THE HONBLE HIGH COURT OF A.P. VIDE ORDER DATED 15 TH DECEMBER, 2010 W.E.F. 1 ST APRIL, 2010. THE NON-TELUGU CHANNELS OTHER THAN HINDI AND URDU WERE CLUBBED TOGETHER AND TRANSFERRED TO M/S. PRISM TV P. LTD. T HE ASSESSEE FILED ITS RETURN OF INCOME FOR THE A.Y. 20 11-2012 ON 28.03.2012 DECLARING A LOSS OF RS.10,61,15,264. FOR THE A.Y. 2012-2013, THE ASSESSEE FILED ITS RETURN O F INCOME ON 29.09.2012 ADMITTING TOTAL INCOME OF RS.NIL AFTE R SET OFF OF BROUGHT FORWARD LOSSES OF RS.19,56,84,859. D URING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT, THE A.O. NOTICED THAT IN THE A.Y. 2007-08, M/S . USHODAYA ENTERPRISES P. LTD., WHICH IS THE PARENT COMPANY OF M/S. PRISM TV P. LTD., ACQUIRED M/S. USHAKIRAN TELEVISION AND M/S. USHAKIRAN MOVIES AND THAT IT ENTERED INTO A NON-COMPETE AGREEMENT WITH M /S. USHAKIRAN TELEVISION AND M/S. USHAKIRAN MOVIES ON 30.01.2008 FOR NON-COMPETING IN THE BUSINESS DIRECT LY OR INDIRECTLY FOR A PERIOD OF FIVE YEARS FROM THE DATE OF AGREEMENT AND ACCORDINGLY, IN THE PREVIOUS YEAR REL EVANT 3 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. TO THE A.Y. 2008-09, THE ASSESSEE COMPANY PAID AN AMOUNT OF RS.670 CRORES TOWARDS NON-COMPETE FEE AND DURING THE F.Y. 2009-2010 RELEVANT TO THE A.Y. 2010 - 2011, THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.109,92,18,756 AND DURING THE RELEVANT ASSESSMENT YEAR 2011-2012, THE ASSESSEE CLAIMED A SUM OF RS.28,08,12,656 AS DEPRECIATION ON NON-COMPETE FEE. THE A.O. THEREFORE, EXAMINED THE ALLOWABILITY OR OTHERW ISE OF DEPRECIATION ON THE NON-COMPETE FEE AND INFERRED TH AT ONE CANNOT COMPETE WITH ITSELF AND THAT THE TRANSACTION OF NON-COMPETE FEE IS A SHAM ONE TO REDUCE THE TAX BUR DEN OF M/S. USHODAYA ENTERPRISES P. LTD., IN THE GUISE OF PAYMENT OF NON-COMPETE FEE TO HUF CONCERNS HAVING H UGE BROUGHT FORWARD LOSSES. WHILE DISALLOWING THE DEPRE CIATION ON THE NON-COMPETE FEE, THE A.O. ALSO DISCUSSED ABO UT THE NECESSITY OF THE NON-COMPETE FEE AND THE VALUATION DONE FOR ARRIVING AT THE HUGE FIGURE OF RS.670 CRORES IN THE HANDS OF M/S. USHODAYA ENTERPRISES P. LTD., AND ALLOWABILITY OF DEPRECIATION ON NON-COMPETE FEE. HE , THEREFORE, DISALLOWED THE CLAIM OF DEPRECIATION ON NON- COMPETE FEE. AGAINST THIS DISALLOWANCE, THE ASSESSE E FILED AN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE O RDER OF THE A.O. AND THE ASSESSEE IS IN SECOND APPEAL BEFOR E US. 3. AT THE TIME OF HEARING, SHRI ARVIND SONDE, LD. COUNSEL FOR THE ASSESSEE, REITERATED THE SUBMISSION S MADE BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW A ND SUBMITTED THAT THE ISSUE OF THE ALLOWABILITY OF THE NON- COMPETE FEE AND THE DEPRECIATION THEREON IN THE CAS E OF 4 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. THE PARENT COMPANY M/S. USHODAYA ENTERPRISES P. LTD ., ON ITS DEMERGER AND THEREFORE, THE DECISION OF THE TRIBUNAL IN THE CASE OF USHODAYA ENTERPRISES P. LTD., VS., ACIT, CIRCLE-16(2), HYDERABAD FOR THE EARLIER ASSESSMENT YEAR I.E., A.Y. 2008-09 IN ITA.NO.26/HYD/2011 AND ITA.NO.100/HYD/2012 DATED 22.10.2014 IS VERY MUCH APPLICABLE TO THE FACTS OF THE CASE BEFORE US. HE H AS FILED A COPY OF THE SAID JUDGMENT BEFORE US WHEREIN THE TRI BUNAL HAS REMANDED THE ISSUE TO THE FILE OF THE A.O. TO E XAMINE THE GENUINENESS OF THE NON-COMPETE FEE AND ALSO VALUATION THEREOF. 4. THE LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT ON DEMERGER OF THE PARENT COMPANY, THE ASSESSEE HAS SUCCEEDED TO THE ISSUE OF THE DEPRECIATION ON NON-COMPETE FEE AS WELL AND THEREFO RE, THE DECISION OF THE TRIBUNAL FOR THE A.Y. 2008-2009 (CI TED SUPRA) ON THE VERY SAME ISSUE WOULD BE CONSEQUENTIA L AND APPLICABLE TO THE FACTS OF THE CASE BEFORE US. WE FIND THAT THE TRIBUNAL AT PARAS 25 TO 28 OF ITS ORDER HA S HELD AS UNDER : 25. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WE LL AS OTHER MATERIALS ON RECORD AND ALSO GONE THROUGH THE DECISIONS CITED. A PERUSAL OF THE ASSESSMENT OR DER AS WELL AS THE ORDER PASSED BY CIT(A) WOULD LEAVE N O ROOM FOR DOUBT THAT ASSESSEES CLAIM OF DEPRECIATIO N 5 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. ON NON-COMPETE FEE HAS BEEN REJECTED BASICALLY FOR THE FOLLOWING TWO REASONS: 1. GENUINENESS OF THE PAYMENT MADE AND NECESSITY OF PAYING NON-COMPETE FEE. 2. NON-COMPETE FEE NOT BEING IN THE NATURE OF AN INTANGIBLE ASSET AS DEFINED IN SECTION 32(1)(II), DEPRECIATION IS NOT ALLOWABLE. 26. BEFORE EXAMINING WHETHER NON-COMPETE FEE CAN BE CONSIDERED TO BE AN INTANGIBLE ASSET SO AS TO ENTITLE THE ASSESSEE TO CLAIM DEPRECIATION ON IT, I T IS NECESSARY, AT THE OUTSET, TO ADDRESS THE ISSUE OF GENUINENESS OF PAYMENT OF NON-COMPETE FEE AND NECESSITY TO MAKE SUCH PAYMENT. AS CAN BE SEEN FROM THE ASSESSMENT ORDER, AO HAS TREATED THE AGREEMENT ENTERED INTO BETWEEN ASSESSEE FOR PAYMENT OF NON-COMPETE FEE AS A SHAM TRANSACTION AS SHRI RAMOJI RAO IS NOT ONLY THE OWNER OF UKT AND UKM BEING THE KARTA OF HUF TO WHICH THESE CONCERNS BELONG BUT HE ALSO IN HIS INDIVIDUAL CAPACITY IS TH E CHAIRMAN OF THE ASSESSEE COMPANY. AS SUCH, ASSESSEE CANNOT BE CONSIDERED TO BE COMPETING WITH HIMSELF. AS IT IS AN ARRANGEMENT BETWEEN RELATED PARTIES, THERE IS NO NECESSITY FOR PAYMENT OF NON- COMPETE FEE. AO FURTHER OBSERVED THAT THE ASSESSEE HAS ENTERED INTO AGREEMENT FOR PAYMENT OF NON- COMPETE FEE TO REDUCE ITS TAX BURDEN BY ALLOWING SH RI RAMOJI RAO HUF TO ADJUST THE NON-COMPETE FEE AGAINST THE HUGE BROUGHT FORWARD LOSSES SUFFERED BY IT. AO ALSO RAISED DOUBTS WITH REGARD TO THE VALUE OF NON-COMPETE FEE AT RS. 670 CRORES. HOWEVER, THE CIT(A) HAS REJECTED ASSESSEES CLAIM BY HOLDING THA T AS SHRI RAMOJI RAO, WHO IS THE KARTHA OF HUF, WHICH OWNS UKT AND UKM AND ALSO IN HIS INDIVIDUAL CAPACITY IS THE CHAIRMAN OF THE ASSESSEE COMPANY, THEREFORE, THERE IS NO QUESTION OF PAYING NON-COMPE TE FEE AS A PERSON CANNOT COMPETE WITH HIMSELF. OF COURSE THE CIT()A) HAS ALSO HELD THAT AS NON-COMPET E FEE DOES NOT PROVIDE ANY ASSET OF ENDURING NATURE, DEPRECATION CANNOT BE ALLOWED. IN THIS CONTEXT, IT IS TO BE NOTED THAT ASSESSEE ON 25/01/2008 HAS ENTERED INTO SUBSCRIPTION AGREEMENT AND SHARE PURCHASE 6 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. AGREEMENT WITH A DOMESTIC COMPANY, VIZ.; EQUATOR TRADING ENTERPRISES PVT. LTD. AS PER WHICH THE SAID DOMESTIC COMPANY AGREED TO MAKE SUBSTANTIAL INVESTMENT IN PURCHASE OF EQUITY SHARES OF THE ASSESSEE COMPANY. HOWEVER, AS A PRECONDITION FOR MAKING SUCH INVESTMENT, THE SAID DOMESTIC COMPANY REQUIRED THE ASSESSEE COMPANY TO ENTER INTO A NON- COMPETE AGREEMENT WITH UKT AND UKM. THOUGH, COPIES OF THE SHARE PURCHASE AGREEMENT AND SUBSCRIPTION AGREEMENT ARE NOT AVAILABLE ON RECORD BEFORE US, HOWEVER, ON PERUSAL OF THE CLOSING AGREEMENT DATED 30/01/08 BETWEEN ASSESSEE AND M/S EQUATOR TRADING ENTERPRISES PVT. LTD. A COPY OF WHICH IS AT PAGE 220 OF PAPER BOOK, WE FIND A REFERENCE TO SUCH PRECONDITION IN CLAUSE 2(A). FURT HER, AS IT APPEARS FROM THE FACT ON RECORD AND WHICH REMAINS UNCONTROVERTED IN PURSUANCE TO THE CONDITIO N IMPOSED BY THE DOMESTIC INVESTOR ASSESSEE HAS ENTERED INTO THE NON COMPETE AGREEMENT WITH UKT AND UKM FOR A PERIOD OF 5 YEARS ON PAYMENT OF NON- COMPETE FEE OF RS. 670 CRORES, WHICH IS ALSO APPROV ED BY THE DOMESTIC INVESTOR. IT IS THE CONTENTION OF ASSESSEE THAT AS A RESULT OF FULFILLMENT OF SUCH CONDITION OF NON-COMPETE FEE THEREBY EXCLUDING UKT AND UKM COMPETING WITH ASSESSEE COMPANY IN FUTURE, THE DOMESTIC COMPANY INVESTED SUBSTANTIAL AMOUNT BY ACQUIRING 39% OF SHARE IN THE ASSESSEE COMPANY. 27. FROM THE AFORESAID FACTS IT CANNOT BE DENIED THAT EQUATOR TRADING ENTERPRISES PVT. LTD IS A MAJO R STAKEHOLDER IN ASSESSEE COMPANY. AS CAN BE SEEN FROM THE ASSESSMENT ORDER AS WELL AS ORDER PASSED BY THE CIT(A) BEFORE COMING TO THEIR RESPECTIVE CONCLUSION THAT THE TRANSACTION ENTERED INTO BY PAR TIES FOR PAYMENT OF NON-COMPETE FEE IS NOT GENUINE OR THERE IS NO NECESSITY FOR PAYING THE NON-COMPETE FE E AS THE SAME PERSON IS CONTROLLING BOTH THE ASSESSEE COMPANY AND THE TWO OTHER COMPANIES ACQUIRED BY THE ASSESSEE, THE ROLE OF M/S EQUATOR TRADING ENTERPRISES PVT. LTD. IN ANY DECISION TAKEN BY ASSESSEE COMPANY HAS NOT AT ALL BEEN CONSIDERED. NEITHER THE AO NOR THE CIT(A) HAS EXAMINED THE EFFE CT 7 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. OF ACQUISITION OF 39% OF EQUITY SHARES BY ANOTHER ENTITY AND WHETHER AFTER SUCH ACQUISITION OF SHARES , IT CAN STILL BE HELD THAT SHRI RAMOJI RAO IS THE CONTROLLING AUTHORITY OF ASSESSEE COMPANY AND IT IS A TRANSACTION BETWEEN RELATED PARTIES. UNFORTUNATELY, THE ASSESSMENT ORDER AND ORDER OF CIT(A) IS TOTALLY SILENT ON THIS ASPECT. THOUGH IN THE REMAND REPORT, AO HAS EXAMINED THE ISSUE OF INVESTMENT MADE BY THE DOMESTIC INVESTOR AND HAS ALLEGED THAT IT AS A SHAM TRANSACTION AND A COLLUSIVE AGREEMENT ENTERED INTO BETWEEN THE PARTIES TO REDUCE THE TAX BURDEN B Y CLAIMING DEPRECIATION ON PAYMENT OF NON-COMPETE FEE . HOWEVER, SUCH INFERENCE DRAWN BY AO, IN OUR VIEW, I S MORE ON PRESUMPTIONS AND SURMISES RATHER THAN ON THE BASIS OF STRONG EVIDENCE. WHEN TWO INDEPENDENT PARTIES ENTER INTO AN AGREEMENT ON CERTAIN TERMS AN D CONDITIONS, IT CANNOT BE TERMED AS SHAM OR COLLUSIV E WITHOUT BRINGING SUFFICIENT EVIDENCE TO PROVE SUCH FACT. AO CANNOT TREAT THE TRANSACTION AS A COLOURAB LE DEVICE ADOPTED BY THE PARTIES MERELY ON PRESUMPTIONS AND SURMISES WITHOUT PROVING THE FACT THAT EITHER THE PROMOTERS OF BOTH THE COMPANIES ARE SAME OR M/S EQUATOR TRADING ENTERPRISES PVT. LTD. I S A FRONT COMPANY OF EITHER THE ASSESSEE OR THE RAMOJ I RAO GROUP. IN THESE CIRCUMSTANCES, THE INFERENCE DRAWN ON MERE ASSUMPTIONS AND PRESUMPTIONS THAT THE AGREEMENT IS A COLOURABLE DEVICE TO REDUCE THE TAX BURDEN CANNOT BE ACCEPTED. THEREFORE, WITHOUT EXAMINING THE IMPACT OF INVESTMENT MADE IN EQUITY SHARES TO THE EXTENT OF 39% BY THE DOMESTIC INVESTO R AND CONDITION IMPOSED BY IT, THE CONCLUSION DRAWN B Y THE CIT(A) THAT THERE IS NO NECESSITY OF PAYMENT OF NON-COMPETE FEE AS THE SAME PERSON IS CONTROLLING T HE ASSESSEE COMPANY AS WELL AS UKT AND UKM, IN OUR VIEW, IS WITHOUT PROPER APPRECIATION OF FACTS AND EVIDENCES BROUGHT ON RECORD, HENCE, CANNOT BE SUSTAINED. 28. EVEN THOUGH THE AO IN THE ASSESSMENT ORDER HAS ALSO RAISED THE ISSUE OF PAYMENT OF NON-COMPETE FEE FOR THE PURPOSE OF SETTING OFF THE LOSS SUSTAIN ED BY THE HUF AND ALSO HAS QUESTIONED THE VALUE OF NON- COMPETE FEE BUT THE LEARNED CIT(A) HAS NOT AT ALL D EALT 8 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. WITH THESE ISSUES. BE THAT AS IT MAY, IT NEEDS TO B E OBSERVED THAT SO FAR AS VALUATION OF NON-COMPETE FE E IS CONCERNED, IN COURSE OF ASSESSMENT PROCEEDING, ASSESSEE HAS SUBMITTED A VALUATION REPORT OF A CA FIRM IN SUPPORT OF THE VALUATION MADE BY IT. THEREF ORE, IF THE AO HAD ANY DOUBT WITH REGARD TO THE VALUATI ON MADE, HE SHOULD HAVE GOT IT VALUED THROUGH AN INDEPENDENT VALUER IN STEAD OF REJECTING THE VALUAT ION BY SIMPLY OBSERVING THAT THE METHOD ADOPTED IS NOT CORRECT OR SCIENTIFIC. IT IS ALSO ALLEGED BY THE AO THAT THE PAYMENT OF NON-COMPETE FEE WAS MADE ON THE ONE HAND TO ENABLE THE ASSESSEE TO REDUCE ITS PROFIT AN D AT THE SAME TIME ALLOWING SHRI RAMOJI RAO HUF TO ADJUST IT AGAINST ITS HUGE BROUGHT FORWARD LOSSES. IN THIS CONTEXT, IT IS TO BE OBSERVED THAT IN COURSE O F HEARING BEFORE US THE LEARNED AR HAS SUBMITTED CERTAIN DOCUMENTS AS ADDITIONAL EVIDENCE. A PERUSAL OF THE SAID DOCUMENTS REVEAL THAT SHRI RAMOJI RAO HUF FOR THE ASSESSMENT YEAR 2008-09 HAS NOT ONLY SHOWN THE NON COMPETE FEE RECEIVED BY IT AS INCOME BUT HAS ALSO ADJUSTED IT AGAINST THE BROUGHT FORWAR D LOSSES OF EARLIER YEARS. AO I.E. JCIT, RANGE -16, W HILE COMPLETING ASSESSMENT IN CASE OF SHRI RAMOJI RAO HUF HAS ACCEPTED NOT ONLY THE INCOME BUT ALSO ITS ADJUSTMENT AGAINST BROUGHT FORWARD LOSSES IN AN ASSESSMENT ORDER PASSED U/S 143(3) ON 24/12/2010. THEREFORE, WHEN THE NON-COMPETE FEE PAID BY ASSESSEE HAS BEEN ACCEPTED AT THE HANDS OF SHRI RAMOJI RAO HUF AND ALLOWED TO BE SET OFF AGAINST THE BROUGHT FORWARD LOSSES, IT NEEDS TO BE EXAMINED WHETHER STILL THE PAYMENT OF NON-COMPETE FEE MADE BY THE ASSESSEE TO SHRI RAMOJI RAO HUF CAN BE HELD TO BE EITHER NON-GENUINE OR NOT NECESSARY. THEREFORE, CONSIDERING THE TOTALITY OF T HE FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT AS THE IMPACT OF ACQUISITION OF 39% OF EQUITY SHARES B Y M/S EQUATOR TRADING ENTERPRISES PVT. LTD. HAS NOT A T ALL BEEN EXAMINED BY AO AT THE TIME OF ASSESSMENT PROCEEDING OR BY THE LEARNED CIT(A) WHILE DISPOSING OF ASSESSEES APPEAL AND FURTHER AS THE ADDITIONAL EVIDENCES PRODUCED BEFORE US WERE NOT EXAMINED EITHER BY THE AO OR BY CIT(A), WHICH CERTAINLY HAVE A CRUCIAL BEARING ON THE ISSUE AS TO WHETHER THE 9 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. PAYMENT OF NON-COMPETE FEE IS GENUINE AND NECESSARY, WE ARE INCLINED TO REMIT THE MATTER BACK TO THE FILE OF AO FOR DECIDING AFRESH. ... 5.1. THIS APPEAL BEFORE US BEING FOR THE SUBSEQUEN T ASSESSMENT YEAR, ALSO NEEDS TO BE REMANDED TO THE F ILE OF THE A.O. TO GIVE CONSEQUENTIAL EFFECT TO THE DECISI ONS TAKEN BY HIM FOR THE A.Y. 2009-2010. THIS GROUND OF APPEA L IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURP OSES. 6. AS REGARDS GROUND NO.2, AGAINST THE TREATING OF THE COST OF PRODUCTION OF TV SERIALS AND PROGRAMMES AS CAPITAL EXPENDITURE, BRIEF FACTS ARE THAT THE ASSES SEE COMPANY DEBITED AN AMOUNT OF RS.123,63,94,000 TOWAR DS COST OF PRODUCTION OF TV SERIALS AND PROGRAMMES FOR THE YEAR UNDER CONSIDERATION. INSTEAD OF CLAIMING DEPRECIATION, THE ENTIRE EXPENDITURE WAS CLAIMED AS REVENUE EXPENDITURE AND DEBITED TO THE P & L ACCOUN T. THE A.O. OBSERVED THAT THE COST OF PRODUCTION OF TV SERIALS AND PROGRAMMES IS NOT COVERED UNDER RULE 9A OR 9B O F I.T. RULES. AS THESE RULES ARE APPLICABLE ONLY TO PRODUCTION OF FEATURE FILMS. THE A.O. TREATED THE E NTIRE EXPENDITURE AS CAPITAL EXPENDITURE AND ALLOWED THE DEPRECIATION THEREON. AGGRIEVED, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ORDE R OF THE A.O. AND THE ASSESSEE IS IN SECOND APPEAL BEFOR E US. 7. THE LD. COUNSEL FOR THE ASSESSEE, WHILE REITERATING THE SUBMISSIONS MADE BY THE ASSESSEE BE FORE THE AUTHORITIES BELOW, HAS RELIED UPON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL AT CHENNAI AND 10 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. MUMBAI AND ALSO THE DECISION OF HONBLE HIGH COURT AT DELHI IN SUPPORT OF HIS CONTENTION THAT THE EXPENDI TURE INCURRED ON PRODUCTION OF TELEVISION PROGRAMMES SHO ULD BE ALLOWED AS REVENUE EXPENDITURE UNDER SECTION 37 OF THE I.T. ACT. COPIES OF THE SAID DECISIONS ARE ALSO FIL ED BEFORE US. 8. THE LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 9. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE A BENCH OF T HIS TRIBUNAL AT CHENNAI IN THE CASE OF ACIT, MEDIA CIRC LE-II, CHENNAI VS. M/S. SUN TV NETWORK LTD., CHENNAI IN ITA.NOS.1515 TO 1520/MDS/2013 BY ITS ORDER DATED 31.10.2013 HAS HELD AS UNDER : 8. NOW, WE TAKE UP THE COMMON ISSUE INVOLVED IN ALL THE APPEALS. THE ASSESSEE IS IN THE BUSINESS OF RUNNING SATELLITE TELEVISION CHANNELS. THESE CHANNE LS TELECAST FILMS, SERIALS ETC., THROUGH SATELLITE CHA NNELS. THE RIGHTS OVER THESE FILMS ARE PURCHASED FROM THE PRODUCERS OF THE RESPECTIVE FILMS FOR BROADCASTING THROUGH SATELLITE TELEVISION. THESE RIGHTS COME WIT H AN EMBARGO THAT THE FILMS SHALL NOT BE BROADCASTED OR AIRED FOR A SPECIFIED PERIOD FROM THE DATE OF RELEA SE IN THEATRES DEPENDING UPON THE SUCCESS AT THE BOX OFFI CE AND OTHER FACTORS. TILL THE TIME, SUCH FILMS ARE BROADCASTED, THEY ARE TO BE TREATED AS STOCK IN TRA DE. ONCE THE FILMS ARE BROADCASTED, THE PURCHASE VALUE OF THE FILMS IS WRITTEN-OFF. THE EXPENDITURE ON PURCHA SE OF FILMS IS CLAIMED IN THE FIRST YEAR ITSELF. THE ASSESSEE HAS GOT ONLY SATELLITE TELECASTING RIGHTS AND HAS NO UNIVERSAL RIGHTS FOR AIRING THE FILMS OR SER IALS. ONCE THE FILM OR THE SERIAL IS AIRED, ITS VALUE IS DIMINISHED IN SUBSEQUENT TELECASTS. THE ASSESSEE 11 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. EARNS SUBSTANTIAL REVENUE IN THE FIRST TELECAST ITS ELF. IN REPEAT TELECAST, THE ASSESSEE IS ABLE TO GENERATE MARGINAL REVENUE. WHATEVER INCOME IS EARNED FROM THE SUBSEQUENT TELECASTS IS OFFERED AS INCOME WITHO UT CLAIMING ANY EXPENDITURE. THE ASSESSEE ALSO GENERATES REVENUE FROM BROADCASTING SERIALS THROUGH SATELLITE CHANNELS. TH E ASSESSEE GETS REVENUE FROM PRODUCTION AND BROADCASTING SERIALS ON THE LINES OF FEATURE FILMS, THE RIGHTS OF BROADCASTING SUCH SERIALS ARE ALSO TREATE D AS STOCK IN TRADE TILL THE TIME THEY ARE AIRED AND THE EXPENSES ARE DEBITED TO THE PROFIT & LOSS ACCOUNT. THE ASSESSEE TREATS THE FILMS AND THE SERIALS AT PA R AND APPLIED THE PROVISIONS OF RULE 9A AND 98 OF THE INCOME TAX RULES, AS ARE APPLICABLE IN CASE OF FILM S ON SERIALS AS WELL. ON THE OTHER HAND, THE CONTENTION OF THE REVENUE IS THAT THE FILM AND SERIAL BROADCASTING RIGHTS ACQUIRED BY ASSESSEE ARE PERPETUAL IN NATURE . AFTER FIRST TELECAST, THE ASSESSEE DOES NOT DISCARD THE FILMS BUT CAREFULLY STORE THE SAME IN DIGITAL LIBRA RY FOR AIRING THE SAME AGAIN. THEREFORE, THE ASSESSEE GETS ENDURING BENEFIT FROM THE RIGHTS ACQUIRED IN FILMS AND SERIALS AND THEY DO NOT EXPIRE ON THE DATE OF FIRST TELECAST AS CONTEMPLATED BY THE ASSESSEE. THE RIGHT S ARE INTANGIBLE ASSETS WITHIN THE MEANING OF EXPLANATION (III) TO SECTION 32 AND DO NOT FALL WIT HIN THE PURVIEW OF SECTION 37(1). THE ASSESSEE IS ENTIT LED TO CLAIM DEPRECIATION ON SAME. 9. THE ISSUE OF AMORTIZATION OF COST OF MOVIE AND SERIAL RIGHTS, PROGRAMME PRODUCTION EXPENSES, CONSUMABLE AND MEDIA EXPENSES BY TREATING THEM AS INTANGIBLE ASSETS U/S.32(1)(II) HAS BEEN DEALT IN D ETAIL BY THE CIT (APPEALS) IN HIS ORDER DATED 23-02-2013 RELEVANT TO THE A Y. 2006-07 AND 2007-08. WE FULLY AGREE WITH THE DETAILED FINDINGS AND THE REASONING GIVEN BY THE CIT(APPEALS) IN HIS ORDER ALLOWING THI S GROUND OF APPEAL OF THE ASSESSEE. FOR THE SAKE OF BREVITY, WE ARE NOT REPRODUCING THE FINDINGS OF CIT (APPEALS) IN ACCORDANCE WITH THE JUDGMENT OF THE 12 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT V S. K. Y. PILLAH & SONS REPORTED AS 63 ITR 411 SUBSEQUENTLY FOLLOWED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. GLOBAL VANTEDGE (P) LT D., REPORTED AS 354 ITR 21 (DEL). THE ID. DR HAS NOT BE EN ABLE TO CONTROVERT THE WELL REASONED ORDER OF THE C IT (APPEALS) ON THE ISSUE. ACCORDINGLY, THE FINDINGS O F THE CIT (APPEALS) ON THE ISSUE ARE AFFIRMED AND THI S GROUND OF APPEAL OF THE REVENUE IN RESPECT OF ALL T HE AYS IS DISMISSED. 9.1. IN THE CASE OF ZEE MEDIA CORPORATION LTD., (FORMERLY KNOWN ZEE NEWS LIMITED), MUMBAI VS. DCIT, CIRCLE-7(3), MUMBAI, THE G BENCH OF TRIBUNAL AT M UMBAI IN ITA.NO.1590/MUM/2015 BY ORDER DATED 12.08.2015 HAS HELD AS UNDER : 25. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS TH E CITED PRECEDENTS AND PAPER BOOK FILED BEFORE US. TH E CASE OF THE ASSESSEE ON THE MERITS IS THAT THE ASSESSEE HAS A METHOD OF VALUATION OF THE NEWS ITEMS/NON FICTIONAL IN NATURE, TV PROGRAMS AND THE FILM RIGHTS. THE DETAILS ARE GIVEN IN THE AFOREMENTIONED 'NOTE NO 7' TO THE FINANCIAL STATEMENTS. ACCORDING TO THE SAME, WHILE THE NEWS ITEMS PURCHASED ARE DEBITED TO THE P AND L ACCOUNT AS THEY DO NOT HAVE THE REPEAT TELECAST VALUE, OTHE R ITEMS LIKE THE TV PROGRAM AND THE FILM RIGHTS CONSTITUTES 'CURRENT ASSETS', WHICH ARE AMORTISED O VER THE YEARS AND THE PERIOD OF SUCH AMORTIZATION IS GI VEN IN THE SAID NOTE. PER CONTRA, THE CASE OF THE REVEN UE ON THESE ISSUES IS THAT THESE ITEMS CONSTITUTE 'INTANGIBLE DEPRECIABLE CAPITAL ASSETS' AND PROVISI ONS OF SECTION 32 OF THE ACT APPLY. CONSIDERING THE SAM E, WE SHALL NOW UNDERTAKE TO DISCUSS THE ITEM WISE ADJUDICATION AS FOLLOWS. A. ON THE DEBITS RELATING TO THE PURCHASES OF THE NEWS ITEMS: REGARDING THE NATURE OF THE NEWS 13 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. ITEMS PURCHASED BY THE ASSESSEE AND DEBITED TO THE P AND L ACCOUNT, WE FIND IT IS IN THE COMMON KNOWLEDGE OF EVERY CITIZEN THAT THE NEWS ITEMS DO N OT HAVE ENDURING BENEFIT. NORMALLY, THE NEWS ITEMS/NON FICTIONAL ITEMS PURCHASED BY THE ASSESSEE LOSE ITS VALUE ONCE THEY ARE TELECAST. THEREFORE, SUCH ITEMS DO NOT HAVE REPEAT TELECAST VALUE IN TERMS OF THE REVE NUE GENERATION BY WAY OF ADVERTISEMENT FROM THE SPONSORS. AS SUCH, IT IS A SETTLED ISSUE AT THE LEV EL OF HON'BLE DELHI HIGH COURT IN THE CASE OF TELEVISION EIGHTEEN INDIA LTD (SUPRA) THAT THE CLAIMS OF THE ASSESSEE RELATING TO NEWS/NON-FICTIONAL ITEMS ARE ALLOWABLE. EVEN OTHERWISE, EVEN IF SOME INCOME GENERATED, THAT IS NOT CRITERION FOR DESCRIBING THE ITEMS AS 'INTANGIBLE ASSETS' FOR THE PURPOSE OF INVOKING THE PROVISIONS OF SECTION 32(II) OF THE AC T. WE RELY ON THE ABOVE REFERRED DELHI HIGH COURT'S JUDGMENT IN THE CASE OF TELEVISION EIGHTEEN INDIA L TD (SUPRA). FURTHER, WE FIND THAT THE ASSESSEE HAS A DECLARED METHOD OF ACCOUNTING RELATING TO ACCOUNTIN G OF THESE TRANSACTIONS. HE HAS BEEN CONSISTENTLY FOLLOWING THE SAME WITHOUT ANY CHANGE. IN FACT, THE REVENUE HAS CONSISTENTLY ALLOWED THE CLAIM IN THE PAST. THIS IS FOR THE FIRST TIME, AO DISTURBED THE CLAIM OF THE ASSESSEE AND INVOKED THE PROVISIONS OF SECTI ON 32 (II) OF THE ACT, WITHOUT ANY SUSTAINABLE REASONI NG. THEREFORE, CONSIDERING ALL THE POINTS MENTIONED ABO VE, WE ARE OF THE FIRM OPINION THAT THE DECISION OF THE AO/CIT(A) IS UNSUSTAINABLE LEGALLY. HENCE, THE ASSESSEE IS ENTITLED TO CLAIM THE PURCHASES OF NEWS ITEMS/NON-FICTIONAL ITEMS AS AN ALLOWABLE EXPENDITURE. ACCORDINGLY, WE DIRECT THE AO TO DELET E THE RELEVANT ADDITION. B. ON THE DEBITS RELATING TO THE PURCHASES OF THE TV PROGRAMS/FILM RIGHTS : ASSESSEE AMORTISED THE 'INVENTORIES' AS PER THE METHOD OF ACCOUNTING CONSISTENTLY FOLLOWED BY HIM OVER THE YEARS. IN FAC T, THE REVENUE HAS CONSISTENTLY ALLOWED THE CLAIM IN T HE PAST. THIS IS FOR THE FIRST TIME, AO DISTURBED THE CLAIM OF THE ASSESSEE AND INVOKED THE PROVISIONS OF SECTI ON 32 (II) OF THE ACT WITHOUT ANY SUSTAINABLE REASONIN G. WE HAVE PERUSED HE JUDGMENT OF HONBLE HIGH COURT 14 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. OF DELHI AND THE ORDER OF THE TRIBUNAL OF CHENNAI BENCH IN THE CASE OF M/S SUN TV NETWORKS LTD (SUPRA). WE HAVE ALSO EXTRACTED THE RELEVANT PARAGRAPHS AND ALREADY PLACED IN THIS ORDER ABOVE. WE FIND SIMILAR ISSUE OF AMORTIZATION OF THE TV PROGRAMS/FILM RIGHTS CAME UP BEFORE THE CHENNAI BENCH OF THE TRIBUNAL WHEREIN THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND REJECTED THE AD'S PROPOSAL TO INVOKE THE PROVISIONS OF SECTION 32(II) OF THE ACT IN RESPECT OF THE ABOVE PROGRAMS/ RIGHTS. AS SUCH, THE LD DR'S ARGUMENT ON THE APPLICABILITY OF THE AS-26 TO THE TV PROGRAMS AND FILM RIGHTS IS NOT SUPPORTED BY ANY PRECEDENTS AND THEREFORE, THE ARGUMENTS RAISED BY THE REVENUE ARE NOT ALLOWED. THUS, CONSIDERING THE COVERED NATURE OF THE ISSUE A S WELL AS THE CONSISTENT METHOD OF ACCOUNTING FOLLOWE D BY THE ASSESSEE IN THIS REGARD AND ALSO IN THE ABSENCE OF ANY CONTRARY MATERIAL TO SUPPORT THE ARGUMENTS OF THE REVENUE AGAINST THE ASSESSEE'S CLAIM, WE ARE OF THE OPINION THAT THE DECISION TAKE N BY THE CIT (A) IN THE IMPUGNED ORDER IS REQUIRED TO BE REVERSED. ACCORDINGLY, GROUND NOS. 2 AND 3 RAISED BY THE ASSESSEE ARE ALLOWED. 9.2. IN COMING TO THIS CONCLUSION, THE TRIBUNAL HA S FOLLOWED THE JUDGMENT OF THE HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS. TELEVISION EIGHTEEN INDIA LIMIT ED REPORTED IN (2014) 364 ITR 597 (DEL.). THE RELEVANT PORTION OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IS REPRODUCED AS UNDER : THE REVENUE HAS PREFERRED THIS APPEAL CLAIMING TO BE AGGRIEVED BY AN ORDER OF THE INCOME TAX APPELLAN T TRIBUNAL (ITAT) DATED 17.03.2006. THE QUESTION OF L AW FRAMED IN THIS CASE IS:- (I) WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS R IGHT IN HOLDING THAT THE ENTIRE EXPENDITURE INCURRED BY THE ASSESSEE ON PRODUCTION OF PROGRAMMES WHICH BECAME PART OF NEWS ARCHIVES SHOULD BE ALLOWED AS A REVENU E EXPENSE UNDER SECTION 37 OF THE INCOME TAX ACT, 196 1 15 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. AND SHOULD NOT BE TREATED AS INCURRED FOR CREATING A CAPITAL ASSET? THE ASSESSEE, AT THE RELEVANT TIME, WAS IN THE BUSINESS OF TELEVISION PROGRAMME PRODUCTION. THE ASSESSEE REFLECTED RS.88,83,128/- BEING 10% OF THE TOTAL EXPENDITURE INCURRED BY IT AS VALUE OF NEWS ARCHIV ES UNDER THE HEAD OF FIXED ASSETS. IN THE RETURN FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 1997, THE SAID AMO UNT WAS CLAIMED AS REVENUE EXPENDITURE. ACCORDING TO TH E ASSESSEE THIS EXPENDITURE WAS ALLOCATED FOR THE CRE ATION OF NEWS ACHIEVES, WHICH COMPRISED OF ITS PUBLISHE D OR TELECASTED PROGRAMMES. THE AO CAPITALISED THIS AMOU NT HOLDING THAT THE EXPENDITURE LED TO CREATION OF AN ASSET OF ENDURING ADVANTAGE. THE CIT (APPEALS) ON APPEAL, HOWEVER, REVERSED THE FINDINGS OF THE AO. IT WAS NO TICED THAT THE NEWS ARCHIVES WERE NOT IN THE NATURE OF PL ANT OR INCOME GENERATING APPARATUS BUT PART OF THE PRODUCT . IT WAS ALSO HELD THAT THE UNAVAILABILITY OF ANY OBJECT IVE BASIS, TO QUANTIFY WITH ANY DECREE OF ACCURACY FUTU RE REVENUE THAT WERE LIKELY TO BE GENERATED AND THE PROPORTIONATE COST OF PRODUCTION THAT COULD BE DEFE RRED, LED TO THE CONCLUSION THAT THE 10% OF THE TOTAL EXPENDI TURE EARMARKED FOR CREATION OF NEWS ARCHIVES COULD NOT BE TREATED AS A CAPITAL EXPENDITURE. ON THE REVENUES APPEAL, THE ITAT HELD AS FOLLOWS:- 12. IT IS ADMITTED THAT NO SEPARATE ACCOUNT WAS MAINTAINED WHEREIN ANY EXPENDITURE WAS DEBITED WHICH COULD BE EARMARKED TOWARDS CREATION OF NEWS ARCHIVES LIBRARY. THE ASSESSEE FELT A PART OF FOOTAGE OF THE NEWS BASED ON PROGRAMMES PRODUCED HAS REPEAT VALUE WHICH COULD BE USED FOR THE PRODUCTION OF PROGRAMME IN FUTURE. THE ASSESSEE, THEREFORE, ESTIMATED 10% EXPENDITURE INCURRED AS REASONABLE TO BE ATTRIBUTABLE TO THE NEWS ARCHIVES LIBRARY. THE ASSESSEE HAS BEEN ENGAGED IN THE PRODUCTION OF SUCH PROGRAMMES SINCE ASSESSMENT YEAR 1994-95 AND ALL ALONG THE COST OF PRODUCTION OF SUCH EXPENDITURE HAS BEEN TREATED AS REVENUE EXPENDITURE AND ALSO ALLOWED BY THE DEPARTMENT. LEARNED A.R. HAS REFERRED TO JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF ALEMBIC CHEMICAL WORKS LTD. VS. CIT 177 ITR 377 WHICH LAID DOWN THAT WHAT IS CAPITAL 16 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. EXPENDITURE AND WHAT IS REVENUE ARE NOT ETERNAL VERITIES BUT MUST NEEDS TO BE FLEXIBLE SO AS TO RESPOND TO THE CHANGING ECONOMIC REALITIES OF BUSINESS. VIEWED IN THAT PERSPECTIVE, WE ARE OF THE OPINION THAT THE ESTIMATED VALUE ASSIGNED TO THE NEWS ARCHIVES CANNOT BE TREATED TO BE AN EXPENDITURE INCURRED IN THE CAPITAL FIELD. WE, THEREFORE, UPHOLD THE ORDER OF CIT (A) ON THIS GROUND. IN THIS CASE, THERE IS NO DISPUTE THAT THE DATA BAS E OF THE PROGRAMMES WHICH ARE UTILISED FOR THE CREATI ON OF NEWS ARCHIVES BELONGED TO THE ASSESSEE. THE FUTUR E LIKELIHOOD OF THESE RESOURCES BEING A POSSIBLE SOUR CE OF REVENUE, CANNOT IN THE OPINION OF THIS COURT JUSTIF Y ITS INCLUSION IN THE CAPITAL STREAM. FURTHERMORE, THIS COURT NOTICES THAT THE EXPENDITURE I.E. 10% RS.88,83,128/ - IS A PART OF THE ENTIRE TOTAL EXPENDITURE INCURRED BY TH E ASSESSEE WHICH IS CONCEDEDLY TREATED AS REVENUE, EV EN OTHERWISE. IN VIEW OF THE ABOVE DISCUSSIONS, THIS COURT IS OF THE OPINION THAT THE QUESTION OF LAW FRAMED IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEAL IS DISMISSED. 9.3. THUS, IT IS SEEN THAT THE ISSUE IS FAIRLY COV ERED IN FAVOUR OF THE ASSESSEE BY THE ABOVE DECISION AND THE A.O. IS DIRECTED TO TREAT THE EXPENDITURE INCURRED BY THE ASSESSEE ON COST OF PRODUCTION OF TV PROGRAMMES AS REVENUE EXPENDITURE. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. 10. AS REGARDS GROUND NO.3 AGAINST THE DISALLOWANCE OF DEPRECIATION ON FILM SOFTWARE LIBRA RY, WE FIND THAT THIS ISSUE HAS ARISEN FOR THE FIRST TIME IN THE ASSESSMENT YEAR 2007-2008 WHEN M/S. USHODAYA ENTERPRISES P. LTD., HAD TAKEN OVER THE BUSINESS OF M/S. 17 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. USHAKIRAN MOVIES AND M/S. USHAKIRAN TELEVISION. THE ISSUE HAD COME UP FOR ADJUDICATION BEFORE THE A B ENCH OF THIS TRIBUNAL IN ITA.NO.1265/HYD/2013 AND THIS TRIB UNAL VIDE ITS ORDER DATED 16.02.2016 HAS REMITTED THE IS SUE TO THE FILE OF THE A.O. FOR THE LIMITED PURPOSE OF VER IFICATION OF FACTS AND CIRCUMSTANCES STATED TO BE THE CAUSE OF T HE TRANSFER OF THE ASSET I.E., THE FILM SOFTWARE LIBR ARY TO THE ASSESSEE AND ALSO FOR THE RE-VALUATION OF THE ASSET IN ACCORDANCE WITH THE PROVISIONS OF LAW. THE ISSUE IN THE GROUND BEFORE US IS CONSEQUENTIAL TO THE DECISION G IVEN BY THIS TRIBUNAL IN THE CASE OF M/S. USHODAYA ENTERPRI SES LIMITED. THEREFORE, THIS ISSUE IS ALSO REMITTED TO THE FILE OF THE A.O. WITH A DIRECTION TO GIVE CONSEQUENTIAL EFF ECT AFTER A DECISION IS TAKEN IN THE CASE OF M/S. USHODAYA ENTERPRISES LIMITED IN ACCORDANCE WITH THE DIRECTIO NS OF THE TRIBUNAL. THIS GROUND NO.3 IS ALSO TREATED AS A LLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, ASSESSEES APPEALS FOR BOTH THE ASSESSMENT YEARS ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24.03.2016. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 24 TH MARCH, 2016 VBP/- 18 ITA.NOS.466 & 1249/HYD/2015 PRISM TV PRIVATE LIMITED, HYDERABAD. COPY TO : 1. PRISM TV PRIVATE LIMITED, 1 - 10 - 76, FAIR FIELD, BEGUMPET, HYDERABAD 500 001. 2. THE DCIT, CIRCLE - 16(3), 6 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD 500 004. 3. THE DCIT, CIRCLE - 14(1), 6 TH FLOOR, C - BLOCK, I.T. TOWERS, A.C. GUARDS, MASAB TANK, HYDERABAD-004. 3. CIT(A) - VI , HYDERABAD. 4. PR. CIT - VI , HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE