Appeal Details
Counselvise Citation
[2016] 121 COUNSELVISE.COM (IT) 3290 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 20 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-01-2016
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
F
Next Hearing Date
19-11-2014
Assessment Year
2008-2009
Appeal Filed On
09-01-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM & SHRI RAMIT KOCHAR, A M ITA NO.7336/MUM/2012 ASSESSMENT YEAR : 2008-09 VIACOM 18 MEDIA P LTD. ZION BISWORLD SUBHASH ROAD-A NEAR GARWARE OFFICE VILE PARLE (E) MUMBAI- 400 057 PAN AAACM9164E VS. THE ADDL. CIT RG. 11(1) MUMBAI (APPELLANT) RESPONDENT) ITA NO.265/MUM/2013 ASSESSMENT YEAR : 2008-09 THE ADDL. CIT RG. 11(1) MUMBAI VS. VIACOM 18 MEDIA P LTD. MUMBAI- 400 057 PAN AAACM9164E (APPELLANT) RESPONDENT) FOR THE ASSESSEE : SHRI FARROKH V IRANI FOR THE REVENUE : SHRI AIRIJU JAIKARAU DATE OF HEARING : 11.01.2016 DATE OF PRONOUNCEMENT : 29.01.2016 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER THESE CROSS APPEALS BY THE ASSESSEE AND THE DEPART MENT ARE AGAINST THE ORDER DATED 16.10.2012 OF LEARNED CIT(A)-3, MUMBAI PERTAINING TO A.Y. 2008-09. 2. GROUND NO.1 IS AGAINST THE DISALLOWANCE OF CLAIM OF DEPRECIATION OF RS.69,53,343/- ON GOODWILL. BRIEFLY STATED, THE AS SESSEE, AN INDIAN COMPANY, IS ITA NOS.7336/MUM/2012 & 265/MUM/2013 2 ENGAGED IN THE BUSINESS OF MARKETING OF ADVERTISING AIR TIME, DISTRIBUTION OF TELEVISION CHANNELS AND PRODUCTION AND EXPORT OF TE LEVISION PROGRAMS. 3. DURING THE RELEVANT PREVIOUS YEAR, THE ASSESSEE ENTERED INTO A BUSINESS TRANSFER AGREEMENT ON 11.09.2007 WITH NETWORK 18 ME DIA AND INVESTMENTS PRIVATE LTD., ACQUIRING ITS STUDIO 18 DIVISION AS A GOING C ONCERN. THE STUDIO 18 DIVISION WAS CARRYING ON THE BUSINESS OF FILM PRODUCTION, MARKET ING AND ACQUISITION OF WORLDWIDE DISTRIBUTION RIGHTS. AS PER THE TERMS OF AGREEMENT , THE ASSESSEE ACQUIRED NET CURRENT ASSETS OF THE CONCERN AT THE VALUE OF RS.3, 44,00,309/- AGAINST WHICH THE ASSESSEE PAID TOTAL CONSIDERATION OF RS.4,13,53,652 /- TO NETWORK18. AS PER THE AGREEMENT, THE ADDITIONAL AMOUNT OF RS.69,55,343/- PAID TO NETWORK18 WAS ON ACCOUNT OF GOODWILL. THOUGH, IN THE ORIGINAL RETUR N OF INCOME FILED FOR THE ASSESSMENT YEAR THE ASSESSEE HAD NOT CLAIMED DEPREC IATION ON THE AMOUNT OF RS.69,53,343/- PAID TO NETWORK18 TOWARDS GOODWILL, BUT IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE VIDE LETTER DAT ED 8.11.2011 PUT ITS CLAIM FOR DEPRECIATION ON GOODWILL. THE AO REJECTED THE ASSE SSEES CLAIM OF DEPRECIATION ON GOODWILL FOR TWO REASONS. FIRSTLY, HE OBSERVED THA T GOODWILL IS NOT A CAPITAL ASSET LET ALONE BEING AN INTANGIBLE ASSET. SECONDLY, HE OBSE RVED THAT THE AMOUNT CLAIMED TOWARDS GOODWILL IS ACTUALLY A BALANCING FIGURE AND NOT PAID FOR ACQUIRING ANY INTANGIBLE ASSET AS PROVIDED U/S. 32(1)(II). HE OB SERVED THAT FROM THE COMPUTATION FURNISHED BY THE ASSESSEE IT IS CLEAR THAT THE DIFF ERENCE BETWEEN THE PURCHASE CONSIDERATION AND FIXED ASSETS PLUS CURRENT ASSETS OF THE ASSESSEE IS TERMED AS GOODWILL. HE THEREFORE, DISALLOWED ASSESSEES CLAI M OF DEDUCTION TOWARDS DEPRECIATION. BEING AGGRIEVED WITH SUCH DECISION OF THE AO, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). THE LEARNED CIT(A) WHILE CONCURRING WITH THE AFORESAID ITA NOS.7336/MUM/2012 & 265/MUM/2013 3 REASONING OF THE AO ALSO HELD THAT ASSESSEES CLAIM CANNOT ALSO BE ALLOWED AS IT IS NOT MADE THROUGH A REVISED RETURN U/S. 139(5). 4. THE LEARNED COUNSEL FOR THE ASSESSEE TAKING US T HROUGH THE DIFFERENT CLAUSES OF THE AGREEMENT SUBMITTED BEFORE US THAT AS PER CL AUSE 2.1.1 OF THE BUSINESS TRANSFER AGREEMENT THE ASSESSEE HAS ACQUIRED BUSINE SS FREE FROM ALL ENCUMBRANCES. REFERRING TO THE TERM BUSINESS AS PROVIDED UNDER THE AGREEMENT HE SUBMITTED IT INCLUDES BUSINESS GOODWILL AS WELL AS BUSINESS IPR. REFERRING TO THE TERM CURRENT ASSET VALUE AS PROVIDED UNDER THE BUSINESS TRANSFE R AGREEMENT, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED IT WOULD MEAN THE VALUE OF THE CURRENT ASSETS OF THE BUSINESS AS PER BALANCE SHEET. HE SUBMITTED, BUSI NESS CONSIDERATION AS PER TERMS OF THE AGREEMENT WOULD MEAN THE COMPLETE SALE CONSI DERATION OF RS.1,76,89,500/- (US $ 4,50,000/-). THE LEARNED COUNSEL SUBMITTED, WHEN THE NET CURRENT ASSET VALUE OF THE COMPANY IS RS.2,36,64,152/- ALONG WITH FIXED ASSETS OF RS.1,07,36,157/- AMOUNTS TO RS.3,44,00,309/- THE BA LANCE OF RS.69,53,343/- HAS TO BE ON ACCOUNT ON GOODWILL. THE LEARNED COUNSEL SUB MITTED, WHEN THE AO HAS NOT DISPUTED NET CURRENT VALUE OF THE ASSETS AS WELL AS THE VALUE OF FIXED ASSETS, THERE IS NO JUSTIFICATION ON HIS PART TO DISALLOW ASSESSEES CLAIM OF DEPRECIATION ON GOODWILL. HE SUBMITTED, EVEN ACCEPTING THAT THE AMOUNT OF RS. 69,53,343/- IS A BALANCING FIGURE, STILL THE ASSESSEE WOULD BE ELIGIBLE TO CLA IM DEPRECIATION ON SUCH BALANCING FIGURE. HE SUBMITTED AOS REASONING THAT GOODWILL IS NOT A CAPITAL ASSET IS NOT AT ALL ACCEPTABLE IN VIEW OF THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF CIT VS. SMIFS SECURITIES LTD. (2012) 24 TAXMANN.COM 222 AND THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF AREVA T & D INDIA L TD. VS. DCIT [2012] 20 TAXMANN.COM 29. THE LEARNED COUNSEL SUBMITTED, IN THE AFORESAID TWO DECISIONS, ITA NOS.7336/MUM/2012 & 265/MUM/2013 4 THE HONBLE COURTS HAVE ALSO ADDRESSED THE ISSUE OF CLAIM OF DEPRECIATION ON BALANCING FIGURE AS ALLEGED BY THE AO. AS FAR AS T HE OBSERVATION OF THE CIT(A) THAT ASSESSEES CLAIM CANNOT BE ALLOWED AS SUCH CLAIM WA S NOT MADE THROUGH THE REVISED RETURN, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED, IN VIEW OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. PRUTHVI BROKERS & SHARESHOLDERS PVT. LTD. 349 ITR 336, THE OBSERVATI ON OF THE CIT(A) IS NOT VALID. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A). 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIAL ON RECORD. THE ISSUE WHETHER GOODWILL IS AN CAPITA L ASSET COMING WITHIN THE TERM INTANGIBLE ASSET AS PROVIDED U/S. 32(1)(II) OF THE ACT IS NO MORE RES INTEGRA IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SMIFS SECURITIES LTD. (SUPRA), WHERE THE HONBLE APEX COURT AFTER IN TERPRETING THE EXPLANATION (3) TO SECTION 32(1) HELD THAT GOODWILL WOULD FALL UNDER THE EXPRESSION ANY OTHER BUSINESS OR COMMERCIAL RIGHT OF A SIMILAR NATURE AND, HENCE HAS TO BE CONSIDERED AS A ASSET UNDER EXPLANATION (3B) TO SECTION 32(1). SAME VIEW HAS BEEN EXPRESSED BY HONBLE DELHI HIGH COURT IN THE CASE OF AREVA T & D INDIA L TD. (SUPRA). IN VIEW OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT WE CANNOT AC CEPT THE CONTENTION OF THE DEPARTMENTAL AUTHORITIES THAT GOODWILL IS NOT AN AS SET OR FOR THAT MATTER IS NOT AN INTANGIBLE ASSET. 6. HAVING HELD SO, WE WILL PROCEED TO EXAMINE ALLOW ABILITY OF ASSESSEES CLAIM OF DEPRECIATION ON GOODWILL. THE SECOND REASONING OF THE AO WHICH HAS ALSO BEEN ACCEPTED BY THE CIT(A) FOR DISALLOWING THE ASSESSEE S CLAIM OF DEPRECIATION IS THAT THE ASSESSEE HAS NOT ACTUALLY PAID ANY AMOUNT TOWAR DS GOODWILL BUT IS A BALANCING ITA NOS.7336/MUM/2012 & 265/MUM/2013 5 FIGURE. IN THIS CONTEXT, ON A REFERENCE TO THE BUS INESS TRANSFER AGREEMENT IT IS SEEN THAT THE ASSESSEE HAS ACQUIRED BUSINESS FROM NETWOR K 18 AS A GOING CONCERN. AS PER THE MEANING OF BUSINESS UNDER THE BUSINESS TR ANSFER AGREEMENT IT WILL ALSO INCLUDE BUSINESS GOODWILL AND BUSINESS IPR. SIMILA RLY, NET CURRENT ASSET VALUE WOULD MEAN THE VALUE OF NET CURRENT ASSET OF THE BUSINESS AS PER THE BALANCE SHEET. THUS, IF WE EXAMINE THE FACTS OF THE CASE WITH REFERENCE TO THE TERMS OF BUSINESS TRANSFER AGREEMENT IT IS TO BE SEEN THAT THE NET CURRENT ASS ET VALUE OF STUDIO 18 AT THE TIME OF SALE AS PER THE BALANCE SHEET WAS RS.2,36,64,152 /- THE VALUE OF FIXED ASSET IS RS.1,07,36,157/-. THUS, THE BALANCE AMOUNT OF RS.6 9,53,343/- OUT OF THE TOTAL CONSIDERATION PAID BY THE ASSESSEE OF RS.4,13,56,35 2/- IS OBVIOUSLY ON ACCOUNT OF GOODWILL. EVEN ACCEPTING THAT SUCH AMOUNT IS A BAL ANCING FIGURE BUT STILL IT BEING IN THE NATURE OF GOODWILL, THE ASSESSEE IS ELIGIBLE TO CLAIM DEPRECIATION. FURTHER IT IS ALSO IN ACCORDANCE WITH THE ACCEPTED ACCOUNTING PRI NCIPLE AND ACCOUNTING STANDARD AS BROUGHT ON RECORD BY THE LEARNED COUNSEL FOR THE ASSESSEE. EVEN OTHERWISE, IN THE DECISION REFERRED TO ABOVE, THE HONBLE COURTS HAVE HELD THAT SUCH BALANCING FIGURE IS ON ACCOUNT OF GOODWILL. THUS, THE ASSESS EE IS ENTITLED TO CLAIM DEPRECIATION. AS FAR AS THE FINDING OF THE LEARNED CIT(A) THAT AS ASSESSEE HAS NOT MADE THE CLAIM THROUGH REVISED RETURN THE SAME CANN OT BE ACCEPTED, WE CANNOT AGREE WITH THE SAME IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (2006) 157 TAXM AN 1 AND HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. (SUPRA). IN VIEW OF THE AFORESAID DECISIONS, WE DIRECT THE A O TO ALLOW ASSESSEES CLAIM OF DEPRECIATION ON THE AMOUNT OF RS.69,53,343/-. THIS GROUND IS ALLOWED. ITA NOS.7336/MUM/2012 & 265/MUM/2013 6 7. IN GROUND NOS. 2 & 3, THE ASSESSEE HAS CLAIMED A LLOWANCE OF DISTRIBUTION EXPENSES OF RS.28,23,279/- AND RS.20,47,237/- DISAL LOWED IN THE A Y 2006-07 ON ACCOUNT OF NON-DEDUCTION OF TAX U/S. 40(A)(I) IN AY 2006-07. BRIEFLY, THE FACTS ARE IN THE AY 2006-07, THE ASSESSEE HAD CLAIMED DISTRIBUTI ON EXPENSES OF RS.5,55,28,565/- ON ACCOUNT OF PAYMENT MADE TO MTV ASIA AND OTHER CH ANNELS. THE AO ON REFERRING TO THE ASSESSMENT MADE IN CASE OF MTV ASIA FOUND TH AT THE DISTRIBUTION REVENUE RECEIVED WAS IN THE NATURE OF ROYALTY AS PER INDIA SINGAPORE DTTA. IT WAS ALSO NOTICED THAT THE ASSESSEE HAD NOT DEDUCTED TAX AT S OURCE, THOUGH IT IS IN THE NATURE OF ROYALTY. HE THEREFORE CALLED UPON THE ASSESSEE TO EXPLAIN WHY THE EXPENSES CLAIMED SHOULD NOT BE DISALLOWED U/S. 40(A)(I). IN RESPONSE TO THE QUERY IT WAS STATED BY THE ASSESSEE THAT IT HAD DEDUCTED TAX AT SOURCE ON THE AMOUNT, WHICH IS SUBJECT TO THE DEDUCTION OF TAX IN TERMS OF SECTION 197. BUT THE AO NOT BEING CONVINCED WITH THE SUBMISSIONS OF THE ASSESSEE HELD THAT THOUGH THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE ON THE ENTIRE AMOUNT OF RS.5,55,28,565/- PAID TOWARDS ROYALTY BUT OUT OF WHICH THE ASSESSEE HAD NOT DEDUC TED TAX ON AMOUNT OF RS.2,23,04,019/- HENCE, SAME IS LIABLE TO BE DISALL OWED U/S. 40(A)(I). THE LEARNED CIT(A) ALSO UPHELD SUCH DISALLOWANCE. BEING AGGRIE VED OF THE ORDER OF THE CIT(A) THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE TH E ITAT. THE TRIBUNAL, TAKING NOTE OF THE FACT THAT THE ADDITIONAL EVIDENCE BROUG HT ON RECORD BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY WERE NOT CONSI DERED, REMITTED THE MATTER BACK TO HIS FILE FOR ADJUDICATING AFRESH. WHILE DOING SO T HE TRIBUNAL DIRECTED THE CIT(A) TO DECIDE WHETHER THE CREDIT FOR DEDUCTION OF TAX CAN BE GIVEN IN THE APPROPRIATE ASSESSMENT YEAR, WHEREIN THE TAX WAS ACTUALLY DEDUC TED. AS FAR AS DISTRIBUTION EXPENSES OF RS.20.47 LACS IN CONCERNED, THE TRIBUNA L, CONSIDERING THE ASSESSEES ITA NOS.7336/MUM/2012 & 265/MUM/2013 7 SUBMISSION THAT IF THE AMOUNT IS DISALLOWED IN AY 2 006-07, THE SAME HAS TO BE ALLOWED IN AY 2008-09 WHEREIN THE EXPENSES WERE ALS O REVERSED, REMITTED THE MATTER BACK TO THE FILE OF THE CIT(A) FOR CONSIDERI NG AFRESH. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT IN VIEW OF TH E DECISION OF THE TRIBUNAL FOR A.Y. 2006-07, THE MATTER RELATING TO DISTRIBUTION E XPENSES MAY BE REMITTED BACK TO THE FILE OF THE CIT(A) FOR DECIDING AFRESH ALONG WI TH A.Y. 2006-07, WHICH IS STILL PENDING BEFORE HIM. THE LEARNED DR HAS NO OBJECTIO N IF THE ISSUE IS REMITTED BACK TO THE CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN, THE ISSUES RAISED IN GROUND NOS. 2 & 3 DO NOT DIRECTLY ARISE OUT OF THE ASSESSMENT ORDER OR IMPUGNED ORDER OF CIT(A). THEY ARE IN CONSEQUENCE TO THE ASSESSMENT ORDER PASSED FOR A.Y. 2006-07. ON A PERUSAL OF THE ORDER PASSED BY THE CO-ORDINATE BENCH FOR A.Y. 2006 -07 IN ITA NO. 3888/MUM/2013 DATED 26.11.2014, IT IS SEEN THAT AS FAR AS DISTRIB UTION EXPENSES ARE CONCERNED, AT THE TIME OF HEARING BEFORE THE TRIBUNAL THE ASSESSE E MADE A SPECIFIC CLAIM THAT EITHER THEY HAVE TO BE ALLOWED IN A.Y. 2006-07 OR I N A.Y. 2008-09. CONSIDERING SUCH CLAIM OF THE ASSESSEE, THE TRIBUNAL REMITTED THE MA TTER BACK TO THE FILE OF THE AO FOR DECIDING ASSESSEES CLAIM AFRESH BY CONSIDERING ADD ITIONAL EVIDENCE BROUGHT ON RECORD. THE LEARNED COUNSEL FOR THE ASSESSEE HAD S UBMITTED BEFORE US THAT THE AMOUNT CLAIMED TOWARDS DISTRIBUTION EXPENSES WHICH ARE SUBJECT MATTER OF GROUND NOS. 2 & 3 ARE ALSO PART OF THE EXPENDITURE CLAIMED FOR A.Y. 2006-07. THE AFORESAID FACTUAL ASPECT HAS NOT BEEN OPPOSED OR DISPUTED BY THE LEARNED DR. CONSIDERING THE FACT THAT SIMILAR ISSUE HAS ARISEN IN A.Y. 2006 -07, WHICH IS PENDING FOR ADJUDICATION BEFORE THE CIT(A), WE DEEM IT PROPER T O REMIT THIS ISSUE TO THE FILE OF ITA NOS.7336/MUM/2012 & 265/MUM/2013 8 THE CIT(A) FOR DECIDING AFRESH ALONG WITH SIMILAR I SSUES PENDING FOR AY 2006-07 AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSE E. GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. 9. GROUND NO.4 BEING CONSEQUENTIAL IS NOT REQUIRED TO BE ADJUDICATED AT THIS STAGE. THUS THIS GROUND IS DISMISSED AS INFRUCTUOU S. 10. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED. ITA 265/MUM/2013 FOR A.Y, 2008-09 11. THE ONLY ISSUE RAISED IN THE DEPARTMENTAL APPEA L PERTAINS TO DELETION OF ADDITION OF RS.2,79,26,769/- MADE BY THE AO ON ACCO UNT OF ADVERTISEMENT AND SALES PROMOTION EXPENSES. 12. BRIEFLY STATED, THE ASSESSEE DURING THE YEAR CL AIMED EXPENDITURE OF RS.6,06,60,269/- ON ACCOUNT OF ADVERTISEMENT AND SA LES PROMOTION. WHEN THE AO CALLED UPON THE ASSESSEE TO JUSTIFY THE BUSINESS EX PEDIENCY FOR INCURRING SUCH EXPENDITURE THE ASSESSEE AS PER ITS REPLY REPRODUCE D IN THE ASSESSMENT ORDER JUSTIFIED ITS CLAIM BY STATING THAT IT WAS WHOLLY A ND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. THE AO HOWEVER, WAS NOT CONVINCED WITH T HE SAME. HE WAS OF THE VIEW THAT BY INCURRING SUCH HUGE EXPENDITURE THE ASSESSE E HAS PROMOTED THE BRAND OF THE ASSOCIATED ENTERPRISE RESULTING IN BENEFITS TO THE AES IN INDIA. HE OPINED THAT THERE SHOULD NOT BE ANY ATTEMPT ON THE PART OF THE ASSESSEE TO UTILIZE THE EXPENSES TO CLAIM DEDUCTION WHICH HE WOULD NOT HAVE OTHERWIS E BEEN ELIGIBLE FOR. HE STATED THAT THE ASSESSEE HAS DEBITED ADVERTISEMENT AND SAL E PROMOTION EXPENSES, WHICH DOES NOT COMMENSURATE WITH THE INCOME. HE ALSO NOT ED THAT THIS PARTICULAR ISSUE ITA NOS.7336/MUM/2012 & 265/MUM/2013 9 HAS BEEN A MATTER OF DISPUTE FROM THE PRECEDING ASS ESSMENT YEAR. THOUGH HE NOTED THAT THE JURISDICTIONAL HIGH COURT HAS DECIDE D THE ISSUE IN FAVOUR OF THE ASSESSEE FOR A.Y. 2003-04, THE AO OBSERVING THAT DE PARTMENT HAS PREFERRED SLP IN CASE OF STAR INDIA PVT. LTD. WHICH WAS FOLLOWED BY THE JURISDICTIONAL HIGH COURT WHILE DECIDING THE ISSUE IN ASSESSEES FAVOUR, WORKED OUT PROPORTIONATE DISALLOWANCE OUT OF THE ASSESSEES EXPENDITURE AT RS 2,75,75,739/-. BEING AGGRIEVED OF SUCH DISALLOWANCE THE ASSESSEE PREFERRED APPEAL BEFORE T HE CIT(A). THE FIRST APPELLATE AUTHORITY TAKING NOTE OF THE FACT THAT HONBLE JURI SDICTIONAL HIGH COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE DELETED THE ADD ITION. 13. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. AT THE OUTSET, THE LEARNE D REPRESENTATIVES OF BOTH THE PARTIES AGREED THAT THE ISSUE IN DISPUTE HAS BEEN D ECIDED IN FAVOUR OF THE ASSESSEE BY HONBLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE FOR A.Y. 2003-04. MOREOVER, ON A PERUSAL OF IMPUGNED ASSESSMENT ORDER , IT IS CLEARLY EVIDENT THAT THOUGH THE AO ACCEPTS THE FACT THAT THE HONBLE JUR ISDICTIONAL HIGH COURT HAS DECIDED THE ISSUE IN ASSESSEES FAVOUR FOR A.Y. 200 3-04, BUT STATING THAT THE DEPARTMENT HAS PREFERRED AN SLP IN THE CASE OF STAR PLUS INDIA PVT. LTD. BEFORE THE HONBLE SUPREME COURT HAS DISALLOWED A PART OF THE ADVERTISEMENT AND SALES PROMOTION EXPENSES AMOUNTING TO RS.2,75,75,739/-. IN OUR VIEW, THIS IS NOT A VALID GROUND TO DISALLOW PART OF THE EXPENDITURE WHEN THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONB LE JURISDICTIONAL HIGH COURT. IT IS MANDATORY PRINCIPLE OF JUDICIAL DISCIPLINE TO ACCEP T THE VIEW OF THE HONBLE JURISDICTIONAL HIGH COURT, WHICH IS OF BINDING NATU RE. ACCORDINGLY, WE DO NOT FIND ITA NOS.7336/MUM/2012 & 265/MUM/2013 10 ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT(A) IN ALLOWING THE ASSESSEES CLAIM. THE GROUND RAISED BY THE DEPARTMENT IS DISMISSED. 14. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY ALLOWED AND THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 9 TH JANUARY 2016. SD/- SD/- (RAMIT KOCHAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED :29 TH JANUARY, 2016. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI
