ACIT, CHENNAI V. Raj Television Network Ltd., CHENNAI

ITA 3554/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 3781 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 31-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R CLEMENT RAMESH KUMAR
• Assessee Lawyers: G BASKAR
• Keywords: Revenue expenditure

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: CHENNAI , , ' BEFORE SHRI GEORGE MATHAN , JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.3554/CHNY/2018 /ASSESSMENT YEAR: 2010-11 ASSISTANT COMMISSIONER OF INCOME TAX, NON CORPORATE CIRCLE-20(I), CHENNAI-34. VS. M/S.RAJ TELEVISION NETWORK LTD ., 32,POES ROAD, 2 ND STREET, TEYNAMPET, CHENNAI 600 018. PAN AAACR 3580 P ( ) /APPELLANT) ( *+) /RESPONDENT) ) , / APPELLANT BY : MR.R.CLEMENT RAMESH KUMAR ADDL. C.I.T D.R *+) , /RESPONDENT BY : MR.G.BASKAR,ADVOCATE , /DATE OF HEARING : 08.08.2019 , /DATE OF PRONOUNCEMENT : 08.08.2019 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, CHENNAI, I N ITA NO.42/C.I.T(A)-12/2018-19 DATED 31.10.2018 FOR THE ASSESSMENT YEAR 2010-11. ITA NO.3554/CHNY/2018 :- 2 -: 2. MR.R.CLEMENT RAMESH KUMAR REPRESENTED ON BEHALF OF THE REVENUE, AND MR.G.BASKAR REPRESENTED ON BEHALF OF THE ASSESS EE. 3. IT WAS SUBMITTED BY LD.DR THAT THE ONLY ISSUE R AISED IN THIS APPEAL IS AGAINST THE ACTION OF LD.CIT(A) IN DELETING THE PUR CHASE COST OF SATELLITE RIGHTS, WHICH HAD BEEN TREATED BY THE ASSESSING OFF ICER AS CAPITAL IN NATURE AS AGAINST REVENUE EXPENDITURE BY THE ASSESS EE. IT WAS A SUBMISSION THAT THE LD.CIT(A) HAD RELIED UPON THE D ECISION OF CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR IMMEDIATELY PRECEDING ASSESSMENT YEAR 2009-10 IN ITA NO.1522/MDS./2013 VI DE ORDER DATED 17.04.2015. FURTHER, IT WAS SUBMITTED BY LD.DR THAT THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE REFERRED TO SUPRA HAS NOT B EEN ACCEPTED BY THE DEPARTMENT AND REVENUES APPEAL AGAINST THE ORDER O F TRIBUNAL DATED 17.04.2015 IS PENDING BEFORE THE HONBLE JURISDICTI ONAL HIGH COURT. 4. IN REPLY, LD.AR VEHEMENTLY SUPPORTED THE ORDER OF LD.CIT(A). HE DREW OUR ATTENTION TO PARA 5.3 OF ORDER OF TRIBUNAL IN ITA NO.1522/MDS./2013 FOR ASSESSMENT YEAR 2009-10 VIDE ORDER DATED 17.04.2015 WHEREIN IT HAS BEEN HELD AS FOLLOWS:- 5.3. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PERUSED THE MATERIALS AVAILABLE ON RECORD. ON PERUSING RULE 9B OF THE IN COME TAX RULES, IT IS CLEAR THAT WHEN THE FILM RIGHTS IS ACQUIRED DURING THE PREVIOUS YEAR AND IF THE FILM IS EXHIBITED IN THE SAME YEAR GENERATING I NCOME, THEN THE ENTIRE EXPENDITURE INCURRED FOR ACQUIRING THE FILM IS ALLO WED AS DEDUCTION DURING ITA NO.3554/CHNY/2018 :- 3 -: THE SAME PREVIOUS YEAR. IN THE INSTANT CASE BEFORE US ALSO, THE ASSESSEE HAS ACQUIRED THE FILM RIGHTS AND BROADCASTED DURING THE SAME PREVIOUS YEAR. WHEN THE ANALOGY OF RULE 9B IS CONSIDERED, TH EN IN THE CASE OF THE ASSESSEE, THE ENTIRE EXPENDITURE INCURRED FOR ACQUI RING THE FILM RIGHTS HAS TO BE WRITTEN OFF IN THE SAME YEAR WHEN THE FILM IS BROADCASTED. IT SHOULD BE NOTED THAT THOUGH THE FILM RIGHTS VESTED WITH TH E ASSESSEE OVER A NUMBER OF YEARS AND REMAINS AS AN ASSET, THE CAPABI LITY OF EARNING INCOME GETS PREDOMINANTLY EXHAUSTED ONCE THE FILM IS BROAD CASTED. FROM THE SUBSEQUENT BROADCAST ONWARDS THE INCOME DERIVED WIL L BE MINIMAL WHEN COMPARED WITH THE INITIAL BROADCASTING OF THE FILM. THEREFORE, IN ORDER TO ADHERE TO THE MATCHING CONCEPT RECOGNIZED BY THE AC T, RULE 9B IS BROUGHT IN TO TIDE OVER THE PECULIAR CIRCUMSTANCES OF THE I SSUE. THE LD. CIT (A) ALSO HAS CONSIDERED THE VARIOUS ASPECTS AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY TREATING SUCH EXPENDITURE AS REVENU E IN NATURE. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION THAT NO INTERF ERENCE IS NECESSARY WITH THE ORDER OF THE LD. CIT (A). HENCE THE ISSUE IS D ECIDED IN FAVOUR OF THE ASSESSEE. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AS IT IS NOTICED THAT THE ISS UE RAISED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF TRIBUNAL IN ASS ESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 REFERRED TO SUPRA, AND LD.C IT(A) FOLLOWED THE JUDICIAL DISCIPLINE IN FOLLOWING THE DECISION OF CO -ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR IMMEDIATELY PRE CEDING ASSESSMENT ITA NO.3554/CHNY/2018 :- 4 -: YEAR, THERE IS NO REASON TO INTERFERE IN THE ORDER OF LD.CIT(A). 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT AFTER CONCLUSIO N OF HERING ON THE 08 TH AUGUST, 2019 IN CHENNAI. SD/- SD/- ( ) ( INTURI RAMA RAO ) /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) /JUDICIAL MEMBER /CHENNAI, 3 /DATED: 08 TH AUGUST, 2019. K S SUNDARAM , *45 65 /COPY TO: 1. ) /APPELLANT 4. 7 /CIT 2. *+) /RESPONDENT 5. 5 * /DR 3. 7 ( ) /CIT(A) 6. /GF