MEDIA CONTENT AND COMMUNICATIONS SERVICES (I) P.LTD, MUMBAI V. ASST CIT CIR 6(3), MUMBAI

ITA 7171/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88150 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: K
• Next Hearing Date: 22-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 03-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N PADMANABAN
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Transfer pricing; International transaction
• Section: 92C; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES K, MUMBAI , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ITA NOS.7170 AND 7171/MUM/2012 ASSESSMENT YEAR: 2007-08 AND 2008-09 M/S. MEDIA CONTENT & COMMUNICATIONS SERVICES (INDIA) PVT. LTD. MAHESH PATIRA & COMPANY 209-A RIZVI CHAMBERS-1, 2 ND FLOOR, HILL ROAD, BANDRA(W), MUMBAI-400050 VS. THE ASSISTANT COMMISSIONER OF INCOME TAX-6(3), MUMBAI ( ASSESSEE) ( ! REVENUE) P.A. NO.AADCM0507A ' # /ASSESSEE BY) SHRI SANJAY R. PARIKH ! ' # /REVENUE BY : SHRI N.PADMANABAN ' $ / DATE OF HEARING : 21/01/2015 %&' ' $ / DATE OF PRONOUNCEM ENT : 21/01/2015 ( ' $ / DATE OF ORDER : 21/01/2015 ( /O R D E R PER BENCH : BOTH THESE APPEALS ARE BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 24/09/2012 OF THE LD. FIRST AP PELLATE M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 2 AUTHORITY, MUMBAI , ON THE GROUND THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN MAKIN G ADJUSTMENT TO THE ARMS LENGTH PRICE OF THE ADVERTISEMENT SERVICES RECEIVED FROM THE ASSOCIATED ENTERPRISE BEING M/S SATELLITE ASIAN REGION LTD. TO THE EXTENT OF RS.1,99,28,100/- (ASSESSMENT YEAR 2007-08 ) AND RS.67,04,330/- (ASSESSMENT YEAR 2008-09) RESPECTIVELY WITHOUT APPRECIATING THE FACT THAT IN RESPECT OF INTERNATIONAL TRANSACTIONS, NONE OF THE CONDITIO NS, SET OUT IN SECTION 92C(3) OF THE ACT ARE SATISFIED. 2. AT THE TIME OF HEARING, SHRI SANJAY R. PARIKH, L D. COUNSEL FOR THE ASSESSEE FAIRLY AGREED THAT THE IMP UGNED ISSUE IS COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE TRIBUNAL DATED 05/04/2013, IN THE CASE OF ASSESSEE ITSELF, FOR ASSESSMENT YEAR 2006-07 (ITA NO.1138/MUM/2011). THE LD. COUNSEL PROVIDED THE COPY OF THE ORDER. THE LD. DR, SHRI N. PADMANABAN, ALSO CONTENDED THAT THE IMPUGNED ISSUE IS COVERED AGAINST THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE AFORESAID ORDER DATED 05/04/2013 F OR READY REFERENCE:- THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDE R OF DISPUTE RESOLUTION PANEL (DRP), U/S 144C(5) OF THE INCOME TAX ACT, 1961, DATED 09.08.2010, WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS: M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 3 1. THE LEARNED ASSISTANT COMMISSIONER OF INCOME TA X, CIRCLE 6(3), MUMBAI (AO) AND THE HONBLE DISPUTE RESOLUTION PAN EL (DRP) ERRED IN MAKING AN ADJUSTMENT TO THE ARMS LENGT H PRICE TO THE EXTENT OF RS. 82,78,760/-. 2. ADJUSTMENTS MADE BY THE LEARNED ASSISTANT COMMISS IONER OF INCOME TAX, TRANSFER PRICING -II), MUMBAI (TPO), CONFI RMED MECHANICALLY: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED AO AND THE LEARNED TPO HAVE ERRED IN PROP OSING AND THE HONBLE DRP HAS ERRED IN UPHOLDING THE ORDER P ASSED BY THE LEARNED TPO UNDER SECTION 92CA(3) OF THE ACT, A ND THEREBY CONFIRMING THE ADJUSTMENT OF RS. 82,78,760/- M ADE BY THE LEARNED TPO WITHOUT ANY FURTHER ENQUIRIES TO SAT ISFY WHETHER THE SAID ADJUSTMENT WAS WARRANTED IN LAW AN D ON THE FACTS OF THE CASE, IN LIGHT OF THE PROVISIONS OF SEC TION 92C(4) OF THE ACT READ WITH SECTION 92C(3) OF THE ACT. 3. CONDITIONS AND CIRCUMSTANCES UNDER WHICH ADJUSTME NTS UNDER SECTION 92C(3) OF THE ACT IS PERMISSIBLE: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED AO AND THE LEARNED TPO HAVE ERRED IN PROP OSING AND THE HONBLE DRP HAS ERRED IN NOT APPRECIATING THAT IN RESPECT OF THE INTERNATIONAL TRANSACTIONS, NONE OF TH E CONDITIONS SET OUT IN SECTION 92C(3) OF THE ACT ARE SATISFIED A ND THEREFORE, AS PER THE APPELLANT IT IS INCORRECT TO DISREGARD THE TRANSFER PRICING ANALYSIS CARRIED OUT BY THE APPELLANT AND TO RE- DETERMINE THE ARMS LENGTH PRICE. 4. THE APPELLANT CONTENDS THAT THE LD. TPO HAD NOT AP PLIED A CONSISTENT YARDSTICK WHILE PROPOSING THE IMPUGNED TRA NSFER PRICING ADJUSTMENT AND IN DETERMINING THE ARMS LENGT H PRICE OF THE TRANSACTION. FURTHER SUCH AN APPROACH IS REPUGNA NT TO RULE 1OB(1)(A) OF THE RULES. THE APPELLANT FURTHER CONTENDS THAT THE LD. TPO HAS M ADE THE COMPARABILITY BY BEING GUIDED BY BARE FIGURES WITHOUT APPRECIATING UNDERLYING ECONOMICS OF THE TRANSACTION. 5. THE APPELLANT BASED ON ABOVE GROUNDS, RESPECTFULLY SUB MITS THAT THE TRANSFER PRICING DISALLOWANCE OF RS. 82,78,760/ - IS ERRONEOUS, WRONG AND THEREFORE BE SET ASIDE. 6. THE APPELLANT FURTHER CRAVES, TO CONSIDER EACH OF THE ABOVE GROUNDS OF APPEAL WITHOUT PREJUDICE TO EACH OTHER AND TO ADD, ALTER, AMEND, DELETE OR WITHDRAW ALL OR ANY OF THE GROUND S OF APPEAL HEREIN AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 4 PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE APPEAL HEARING. 2. THE SOLITARY ISSUE INVOLVED IN THE APPEAL IS DOWNSL IDING ADJUSTMENT OF ALP OF RS. 82,78,760/- MADE BY THE TPO AN D SUSTAINED BY THE DRP. 3. THE FACTS OF THE CASE ARE , 2.1.1 M/S MEDIA CONTENT & COMMUNICATIONS SERVICES (IND IA) PVT. LTD., THE ASSESSEE COMPANY IS A JOINT VENTURE (74:26) BETWEEN ABP PRIVATE LIMITED, PART OF THE ABP GROUP AND STAR NEWS BROADCASTING LIMITED, WHOLLY-OWNED SUBSIDIARY OF THE STAR GROUP. 2.1.2. ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING VARIOUS SERVICES LIKE COLLECTING, GATHERING AND COLLATI NG TELEVISION NEWS CONTENT AND SUPPLYING THE SAME TO ITS CUSTOMERS IN INDIA AND OVERSEAS. THE FUNCTIONS ON DA Y TO DAY BASIS INVOLVE. RECORDING AND COLLATING NEWS CONTENT BY VARIOUS JOURNALISTS AND PROCURING THE SAME FROM OUTSIDE PART IES. AFTER COLLATING THE NEWS MATERIAL IT IS PROCESSED BY T HE TECHNICAL TEAM BY USING SPECIAL BROADCASTING EQUIPMENT S TO MAKE THE NEWS CONTENT WORTHY FOR TRANSMISSION AND BROADCASTING. POST PROCESSING THE NEWS CONTENT IS PRESENTED BY TH E EDITORIAL TEAM ON THE NEWS CHANNELS BROADCASTED BY THE ASSESSEE COMPANY. 2.1.3. ASSESSEE COMPANY ENTERED INTO THE BUSINESS OF TELEVISION BROADCASTING, PURSUANT TO THE PERMISSION RECEIVED FR OM THE MINISTRY OF INFORMATION & BROADCASTING, GOVERNMENT O F INDIA ON 7 JANUARY, 2004 FOR UPLINKING OF STAR NEWS CHANNEL AFTER FULFILLING ALL THE CONDITIONS ON 1 MARCH, 2 004. AT PRESENT THE ASSESSEE COMPANY IS THE BROADCASTER OF THE FOLLOWING NEWS CHANNELS STAR NEWS - 24X7 HINDI NEWS CHANNEL STAR ANANDA - 24X7 BENGALI NEWS CHANNEL STAR MAJHA - 24X7 MARATHI NEWS CHANNEL M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 5 2.1.4. DURING THE YEAR UNDER CONSIDERATION ASSESSEE H AS ENTERED INTO FOLLOWING TRANSACTIONS WITH ITS GROUP / AF FILIATE ENTERPRISES: NAME OF THE ASSOCIATED ENTERPRISE NATURE OF TRANSACTION VALUE OF INTL TRANSACTION (INR) STAR TELEVISION PRODUCTION LIMITED (COUNTRY OF RESIDENCE - BRITISH VIRGIN ISLAND) ROYALTY PAYMENTS FOR USE OF BRAND NAME STAR 8,925,006 SATELLITE TELEVISION ASIAN REGION LIMITED (COUNTRY OF RESIDENCE - HONG KONG) SERVICE AVAILED OPTICAL FIBER LINK SERVICES AND DIGITAL SERVICES 1,601,212 ADVERTISEMENT SERVICES AVAILED - AD-SPACE PURCHASED ON STAR PLUS CHANNEL 100,022,760 ASIAN BROADCASTING FZ- LLC (COUNTRY OF RESIDENCE DUBAI) SERVICES PROVIDED TELEVISION CONTENT SYNDICATION 24,537,639 2.2. BENCHMARKING OF INTERNATIONAL TRANSACTION - ADVERTISEM ENT SERVICES AVAILED: 2.2.1. ASSESSEE COMPANY PURCHASED AD-SPACE ON THE STAR PLUS CHANNEL THROUGH AN AGREEMENT DATED SEPTEMBER 19, 2003 ENTERED INTO WITH STAR INDIA PVT. LTD. BEING THE MARKET ING AND COLLECTION AGENT FOR SATELLITE TELEVISION ASIAN REGIO N (AE) IN RELATION TO ADVERTISEMENT SALES FOR THE SATELL ITE TELEVISIONS BROADCASTED BY AE IN INDIA. 2.2.2. ASSESSEE COMPANY WAS DESIROUS ON INCURRING R OUTINE ADVERTISEMENT AND PUBLICITY EXPENDITURE TO PROMOTE TH E PROGRAMS THAT ARE AIRED ON ITS NEWLY LAUNCHED STAR N EWS CHANNEL. FOR THIS PURPOSE THE ASSESSEE WAS WILLING TO SPEND A TARGET AMOUNT OVER PERIOD OF TIME. ACCORDINGL Y THE ASSESSEE SELECTED STAR PLUS CHANNEL FOR ITS PROMOTION AL ACTIVITY AND ENTERED INTO ADVERTISEMENT AGREEMENT WIT H SIPL FOR A TERM OF 10 YEARS. AS PER THE AGREEMENT, AS SESSEE WAS TO PAY THE AGGREGATE OF THE TARGET AMOUNTS AS S ET OUT THEREIN FOR EACH YEAR DURING THE TERM OF THE AGREEM ENT. FURTHER AS PER THE AGREEMENT ASSESSEE WAS TO UTILIS E THE TARGET AMOUNTS AS PER THE RATES MENTIONED IN THE TAB LE BELOW: M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 6 SLOT TIMING OF THE SLOT RATES PER 30 SECONDS AIRTIME (INR) PRIME TIME BETWEEN 8.00 PM TO 2.00PM 1,80,000 NON PRIME TIME BETWEEN 12.00 AM TO 8.00PM 60,000 2.2.3. THE NUMBER AND TIMING OF PRIME AND NON PRIME TIME SLOTS TO BE AIRED WAS TO BE AT THE ASSESSEES DISCRETION. BY IMPLICATION IT WAS UPON THE ASSESSEE TO DECIDE WHAT COMBINATION OF PRIME AND NON PRIME TIME SLOTS WOULD FACILITATE IT TO DERIVE MAXIMUM BENEFIT FOR THE PAYMEN T TO BE MADE AS PER THE AGREEMENT. 2.2.4. DURING THE PERIOD IN CONSIDERATION AE HAD CHARG ED THIRD PARTIES FOR PLACING ADVERTISEMENTS ON STAR PLUS CHANN EL. IN THE ABOVE SCENARIO, THE INTERNAL COMPARABLES WERE AVAI LABLE TO BENCHMARK THE ADVERTISEMENT TRANSACTION. HENCE, COMPARABLE UNCONTROLLED PRICE METHOD WAS CONSIDERED TO BE THE MOST APPROPRIATE METHOD TO COMPUTE THE ARMS LE NGTH PRICE OF THE TRANSACTION AND AE WAS CONSIDERED AS T ESTED PARTY FOR THIS PURPOSE. 2.2.5. FOR THE PURPOSE OF DETERMINING WHETHER THE PRIC E FOR PURCHASE OF AD-SPOTS FROM AE ES AT ARMS LENGTH, THE AVERAGE RATES CHARGED BY AE TO THIRD PARTIES FOR AD -SPACE ON STAR PLUS FOR PRIME TIME AND NON PRIME TIME SPOTS WER E CONSIDERED. AND THE AVERAGE RATE CHARGED TO THIRD PA RTIES HAS BEEN APPLIED TO THE PRIME TIME AND NON PRIME TIME S LOT MIX AVAILED BY THE ASSESSEE. AN ANALYSIS OF THE SAME IS AS FOLLOWS: SLOT NO. OF 30 SEC. SLOTS UTILIZED RATE PAID FOR THE SLOT BY AMOUNT AS PER ASSESSEE (INR) THIRD PARTY (INR) ASSESSEE (INR) THIRD PARTY (INR) PRIME TIME 4448 180,000 248,850 80,062,000 110,692,000 NON PRIME TIME 3327 60,000 35,115 19,960,000 11,682,000 TOTAL 7775 10,00,22,00 0 12,23,74,000 2.2.6 . ON APPLICATION OF THE RATES CHARGED TO THIRD PART IES THE ARMS LENGTH PRICE OF THE ABOVE TRANSACTION WITH AE. IS RS. 122,374,000. SINCE THE PRICE PAID BY THE ASSESSEE IS LE SS THAN THE ARMS LENGTH PRICE, THE TRANSACTION ENTERED INTO WITH AE FOR PURCHASE OF AD-SPACE MEETS THE ARMS LENGT H TEST UNDER CUP METHOD. M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 7 4. ON THE ABOVE FACTS, THE AO REFERRED THE CASE TO T PO, WHO AFTER DELIBERATION OBSERVED, DURING THE F.Y. 2005-06 ASSESSEE HAS PURCHASED AD-SPA CE FOR ADVERTISING AND PROMOTING THE STAR NEWS CHANNEL ON T HE STAR PLUS CHANNEL IN PURSUANCE TO THE AGREEMENT DATED 19.0 9.2003 ENTERED INTO WITH M/S. STAR INDIA PRIVATE LIMITED (COUNTRY OF RESIDENCE: INDIA) FOR A PERIOD OF 10 YEARS. M/S. STAR INDIA PRIVATE LIMITED ACTS AS A MARKETING AND COLLECTION AGENT FOR A.E . M/S. SATELLITE TELEVISION ASIAN REGION LIMITED. ACCORDING THE ASSESSEE HAS PAID RS. 10,00,22,760/- TO ITS AE TOWARDS THE PURCHA SE OF AD-SPACE FOR ADVERTISEMENT. ASSESSEE HAS ADOPTED CUP METHOD FOR DETERMINING THE ALP OF THE ABOVE TRANSACTION AND AE HAS BEEN CONSIDERED AS TE STED PARTY FOR THE PURPOSE OF THIS TRANSACTION. THE ASSESSEE, V IDE ITS LETTER DATED 14.10.2009, HAD SUBMITTED THE DETAILS OF ADVERTISE MENT SERVICES CHANGED BY THE AE TO THE ASSESSEE AND TO T HIRD PARTY, AS UNDER: S. NO. SLOT NO. OF 30 SEC. SLOTS UTILIZED RATE PAID FOR THE SLOT BY AMOUNT AS PER ASSESSEE (INR) THIRD PARTY (INR) ASSESSEE (INR) THIRD PARTY (INR) 1 PRIME TIME 444.8 180,000 248,8509 8,00,62,000 11,06,92,000 2 NON PRIME TIME 332.7 60,000 35,115 1,99,60,000 1,16,82,000 TOTAL 777.5 10,00,22,000 12,23,74,000 THUS, FROM THE ABOVE,. IT IS CLEAR THAT THE AE HAS CHAR GED HIGHER RATES OF ADVERTISING CHARGES FROM THE ASSESSEE WITH RESPECT O THE NON-PRIME TIME SLOTS, IN COMPARISON TO THE THIRD PARTI ES. THEREFORE, THE TRANSACTION IS NOT AT ALP. IN VIEW OF ABOVE, THE ALP OF THE PAYMENT OF ADVERTIS ING SERVICE CHARGES PAID TO THE AE IS DETERMINED, BY ADOPTION TH E RATE OF RS.35.115 PER 30 SEC NON PRIME TIME SLOTS AS WAS SOLD BY THE AE TO THIRD PARTIES, AS UNDER: S. NO. PARTICULARS AS PER ASSOCIATE (FORM 3CEB) ALP DETERMINED BY DEPARTMENT 1 PRIME TIME ADVERTISEMENT CHARGES 8,00,62,000 8,00,62,000 2 NON PRIME TIME ADVERTISEMENT CHARGES 1,99,60,000 1,16,82,000 3 TOTAL ADVERTISEMENT COST SHOWN BY ASSESSEE 10,00,22,760 9,17,44,000 4 ARM LENGTH VALUE OF TRANSACTION TO AE 9,17,44,000 5 INTERNATIONAL TRANSACTION VALUE 10,00,22,760 6 DIFFERENCE/ADJUSTMENT TO BE MADE (4 - 5) 82,78, 760 ACCORDINGLY, THE ALP OF THE INTERNATIONAL TRANSACTION IS DETERMINED AT RS. 9,17,44,000/- AS AGAINST RS. 10,00,22,760/- SHOWN BY THE ASSESSEE. THEREFORE, THE NECESSARY ADJUSTMENT IN THE ALP COMES TO RS. 82,78,760/- (RS. 9,17,44,000 RS. 10,00,22,760/-) M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 8 AND COMPUTED THE ADJUSTMENT OF RS. 82,78,760/- (RS. 10,00, 22,760 RS. 9,17,44,000). 5. THE ASSESSEE APPROACHED THE DRP, WHO VIDE ORDER U /S 144C(5) SUSTAINED THE ADJUSTMENT MADE BY THE TPO U/S 92CA(3). 6. THE ASSESSEE IS NOW AGGRIEVED BY THE ORDER OF TH E DRP IN BEFORE THE ITAT. 7. THE AR, EXPLAINING THE CASE OF THE ASSESSEE POINTE D OUT THAT THE ASSESSEE HAD PURCHASED ADDITIONAL SPACE IN THE STAR N EWS CHANNEL BEING TELECAST BY STAR TV NETWORK. HE SUBMITTED THAT T HERE ARE TWO TIME SLOTS BEING CALLED AS PRIME TIME AND NON PRIME TIME SLOTS. NON PRIME TIME SLOT IS FROM 12 MIDNIGHT TO 7.59 P.M. AND PRIME TIME SLOT IS FROM 8 P.M. TO 11.59 P.M. ACCORDINGLY, THE RATES FOR PER 30 SE COND AD TIME ARE RS. 180,000/- AT PRIME TIME DURATION AND RS. 60,000/- AT N ON PRIME TIME SLOT. HE SUBMITTED THAT THE AREA OF DISPUTE IN THE ADJUSTMENT MADE IS ON THE NON PRIME TIME ADVERTISEMENT REVENUE. 8. FROM THE DETAIL EXTRACTED BY THE TPO IN THE ORDE R SHOWN THAT THE ASSESSEE IN PAYING MUCH HIGHER AMOUNT FOR AD SPACE, COMPARED TO THE THIRD PARTY PAYMENT, WHICH WERE AT RS. 35,115/-. THE AR , ON THE QUERY FROM THE BENCH AS TO WHY THE HIGHER PAYMENTS AT NON PRIME TIME, THE AR REPLIED THAT THE ASSESSEE IS PAYING FOR THE AD S PACE WHICH ARE TARGETED BY STAR TV AT RS. 15,10,22,365/-. THE ASSESSEE T O REACH THE TARGET HAD TO PAY MORE AT THE NON-PRIME TIME. THE AR S UBMITTED THAT IN ANY CASE THE ASSESSEE HAD PAID MUCH LESS THEN THIRD PARTY PAYMENTS, WHICH IN AGGREGATE WERE AT RS. 12,23,74,000/- AS AGAINST RS. 10,00,22,000/- PAID BY THE ASSESSEE. THE AR, THEREFORE, SU BMITTED THAT SINCE THE OVERALL OUTGOING IS LESS, NO ADJUSTMENT IS CALLED FO R. 9. THE AR PLACED RELIANCE ON THE DECISION OF ATUL LTD. VS ACIT, REPORTED IN 80 DTR 210 (AHM) (COPY PLACED ON RECORD), WHEREIN THE M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 9 COORDINATE BENCH AT PARA 5.20 OBSERVED, THERE ARE CE RTAIN SITUATIONS, WHERE IT IS ALMOST IMPRACTICABLE TO DETERMINE THE PRIC E OF EACH INDIVIDUAL PRODUCT OR AN INDEPENDENT TRANSACTION. THERE IS A SIT UATION, WHEREIN A PRODUCT LINK EACH PRODUCT IN INTRICATELY CONNECTED WITH EACH OTHER, SO THAT IT IS IMPRACTICABLE TO DETERMINE THE PRICE A SING LE COMMODITY IN A LINKED PRODUCTS COMPRISING THE LINE OF PRODUCT. IN S UCH A SITUATION, THE AGGREGATION IS REQUIRED. THE AR SIMILARLY PLACED RELIA NCE ON THE DECISION OF ACIT VS UE TRADE CORPORATION (INDIA) (P) LTD., REPORTED IN 50 DTR 379 (DEL) (COPY PLACED ON RECORD). 10. THE AR, SUBMITTED THAT NEITHER THE TPO NOR THE DR P TOOK INTO ACCOUNT THE DETAILS AND SUBMISSIONS PLACED BY THE ASSES SEE. 11. THE AR, RELIED ON A NUMBER OF DECISIONS, WHEREIN THE COORDINATE BENCHES HAD HELD THAT SINCE THE ORDER OF DRP WAS NON SPEAKING, AS IT WAS HERE IN THE INSTANT CASE, THE ISSUE MUST BE REST ORED TO THE DRP FOR A FRESH ADJUDICATION: CITED DECISION COVERED CASE 136 ITD 46 ACIT VS AGILITY LOGISTICS (P.) LTD. 134 ITD 546 EVALUSERVE.COM(P) LTD. VS ITO(DELHI) 16 ITR (TRI) 481 ILJIN AUTOMOTIVE (P) LTD. VS ACIT (CHENNAI) 149 ITD 171 FORD INDIA (P) LTD. VS. DCIT(LTPU)(CHENNAI) 12. THE DR ON THE OTHER HAND STRONGLY OBJECTED TO T HE SUBMISSION MADE BY THE AR THAT THE ISSUE BE RESTORED TO THE FI LE OF THE DRP FOR FRESH ADJUDICATION, BECAUSE, AS SUCH THERE IS NO GROUND OF THIS GRIEVANCE IN THE GOA BEFORE THE ITAT AND SECONDLY THE DRP HAD GIV EN ADEQUATE TIME FOR REPRESENTATION BEFORE IT TO THE ASSESSEE COMPAN Y, WHICH THE ASSESSEE FAILED TO UTILIZE. THE DR, THEREFORE, SUBMITTED THAT THERE CANNOT BE ANY REASON WHICH COULD LEAD TO THE UNREASONABILITY OF THE ORDER. 13. ON THE FACTS, THE DR POINTED OUT THAT, AS REFERRE D TO BY THE AR, THE AGREEMENT REFER TO THE RATE CARD, WHICH SUPPORTS TWO TYPES OF SLOTS, I.E. PRIME TIME SLOT AND NON PRIME TIME SLOT. HENCE, ON THE VER Y BASIS, THE ISSUE IN QUESTION PERTAINS TO TWO DIFFERENT PRODUCT S, I.E. PRIME TIME AND M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 10 NON PRIME TIME. HENCE, THEY COULD NOT BE CLUBBED. TO SUBS TANTIATE THAT DIFFERENT TIME SLOTS WERE IN FACT DIFFERENT PRODUCTS, THE DR THEN REFERRED TO THE EXPRESSIONS USED IN THE RELEVANT SECTIONS, I.E., 92(1) AND 92C(1) AND RULES 10A(D) AND 10B(1), WHICH READS AS UNDER: SECTION 92(1) ANY INCOME ARISING FROM AN INTERNATIONAL TRANSACTION SHALL BE COMPUTED HAVING REGARD TO THE ARM'S LENGTH PRICE. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y CLARIFIED THAT THE ALLOWANCE FOR ANY EXPENSE OR INTEREST ARISING FROM AN INTERNATIONAL TRANSACTION SHALL ALSO BE DETERMINED HAVING REGARD TO THE ARM'S LENGTH PRICE. SECTION 92C (1) THE ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION OR SPECIFIED DOMESTIC TRANSACTION SHALL BE DETERMINED BY ANY OF THE FOLLOWING METHODS, BEING THE MOST APPROPRIATE METHOD, HAVING REGARD TO THE NATURE OF TRANSACTION O R CLASS OF TRANSACTION OR CLASS OF ASSOCIATED PERSONS OR FUNCTIONS PERFORMED BY SUCH PERSONS OR SUCH OTHER RELEVANT FACTORS AS THE BOARD MAY PRESCRIBE, NAMELY : (A) COMPARABLE UNCONTROLLED PRICE METHOD; (B) RESALE PRICE METHOD; (C) COST PLUS METHOD; (D) PROFIT SPLIT METHOD; (E) TRANSACTIONAL NET MARGIN METHOD; (F) SUCH OTHER METHOD AS MAY BE PRESCRIBED BY THE BOARD. RULE 10A. FOR THE PURPOSES OF THIS RULE AND RULES 10B TO 10E, (A) (B) (C) ; (D) 'TRANSACTION' INCLUDES A NUMBER OF CLOSELY LINKED TRANSACTIONS. RULE 10B(1): FOR THE PURPOSE OF SUB-SECTION (2) OF SECTION 92C, THE ARMS LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSACTION SHALL BE DETERMINED BY ANY OF THE FOLLOWING METHODS, BEING THE MOST APPROPRIATE METHOD, IN THE FOLLOWING MANNER, NAMELY:- 15. THE DR POINTED OUT THAT THE ASSESSEE IS PAYING F OR DIFFERENT TIME SLOTS AND HENCE ARE DIFFERENT PRODUCTS WHICH ARE EVI DENT FROM THE PROVISIONS OF THE ACT, READ WITH RELEVANT RULES. HE FURTHER SUB MITTED THAT M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 11 TILL THIS STAGE, THE ASSESSEE, PER SE, HAS NOT BEEN ABLE TO JUSTIFY AS TO WHY THERE AROSE THE NEED FOR PAYMENT OF HIGHER AMOU NT FOR AD SPACE IN NON PRIME TIME SLOT, AS COMPARED TO THIRD PARTY PAYMENTS. 16. THE DR, REFERRING TO THE CASE OF ATUL LTD. (SUPRA) A ND UE(SUPRA) SUBMITTED THAT, THE CONTROVERSY IN RESPECT OF THE DEMAND OF THE AS SESSEE TO AGGREGATE ALL THE TRANSACTIONS HAS ALSO BEEN ADDR ESSED BY THE TRIBUNAL IN A CITED DECISION OF ASSTT. CIT VS. U E TRADE CORPORATION (INDIA) (P) LTD. (SUPRA), WHEREIN VID E PARA 4.2, IT WAS HELD AS UNDER: 4.2 THE SECOND GROUND IS THAT THE POSITION SHOULD BE SEEN AS A WHOLE WITH RESPECT TO ALL THE TRANSACTIONS AND NOT ONLY WITH RESPECT TO THE DISPUTED TRANSACTIONS. IN OTHER WORDS, IF TRANSFER PRICING STUDY IS MADE FOR ALL THE TRANSACTIO NS, THE VARIATION MADE BY THE AO WOULD BE OF INSIGNIFICANT AM OUNT WARRANTING NO ADDITION. ON THE OTHER HAND, THE CASE OF THE LEARNED DEPARTMENTAL REPRESENTATIVE IS THAT PURCHASES BY WAY OF IMPORT DO NOT CONSTITUTE A SERIES OF CONNECTED TRANSACTIONS, BUT EACH TRANSACTION IS A SEPARATE TRANSACTION. THEREFORE, THE AO WAS RIGHT IN EXAMINING EACH TRANSACTION SEPARATELY FOR THIS PURPOSE. IT IS SEEN TH AT THE ASSESSEE HAS NOT BEEN ABLE TO BRING ANYTHING ON RECO RD THAT VARIOUS PURCHASES WERE A PART OF PRE-ARRANGED SCHEME OR AGREEMENT SO AS TO CONSTITUTE A PART OF THE INDIVISI BLE TRANSACTIONS OF PURCHASE. ACCORDINGLY, IT IS HELD THAT T HE AO WAS WITHIN HIS RIGHT TO EVALUATE EACH TRANSACTION SEPARATELY. IN THE LIGHT OF THE ABOVE DISCUSSION AND RESPECTFULLY FOLLOWING THE PRECEDENTS CITED, WE HEREBY REJECT THE PLEADING OF LEARNED AUTHORISED REPRESENTATIVE THROUGH WHICH IT WAS DEMANDED TO AGGREGATE THE ENTIRE TRANSA CTIONS WITH THE AE FOR THE WHOLE YEAR. 17. THE DR, THEREAFTER, RESPONDING TO THE APPLICATION OF FAR CONCEPT, SUBMITTED THAT IT IS APPLICABLE ON TNMM AND OT HER BASIS, BUT NOT ON CUP BASIS, WHICH HAS BEEN BASED BY THE AS SESSEE. THE DR, THEREFORE, SUBMITTED THAT FAR ANALYSIS HAS NO RELEV ANCE IN THE GIVEN SET OF CIRCUMSTANCES. M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 12 18. THE DR, CONCLUDING THE ARGUMENTS SUBMITTED THAT ON FACTS, THE AGREEMENT DOES NOT MAKE ANY MENTION FOR OFF-SET IN THE PRICE PAID TO THE OTHER PRODUCTS AND HENCE THE ORDERS OF THE TPO AND DRP DOES NOT INDICATE ANY INFIRMITY. 19. THE AR IN THE REJOINDER, REITERATED HIS SUBMISSIONS. 20. WE HAVE HEARD THE ARGUMENTS IN DETAIL AND PERUSED THE MATERIAL PLACED ON RECORD. WE DO NOT FIND ANYWHERE EITH ER IN THE AGREEMENT OR IN THE SUBMISSIONS MADE BEFORE THE REV ENUE AUTHORITIES THAT THE ASSESSEE HAD TO PAY MORE IN NON PRIME TIME SLOT TO OFF-SET THE DEFICIT OF REVENUE TRANSFERRED TO STAR TV IN PRIME TIME SLOTS. 21. FROM THE RATE CARD (APPEAL PAPERS, PAGE 45), THE AS SESSEE HAD TO MAKE THE PAYMENT OF RS. 15,10,22,365/- IN THE FI NANCIAL YEAR, AGAINST WHICH THE ASSESSEE WAS ABLE TO MAKE TH E PAYMENTS OF RS. 10,00,22,000/- ONLY. EXCEPT FOR A CLAUSE PRESCRIBI NG AN INTEREST @ 9% ON SHORTFALL, THERE ARE NO PENALTY CLAUS ES, WHICH COULD CREATE PRESSURE OR INSINUATE THE ASSESSEE TO F ALL BACK ON NON PRIME TIME SLOTS TO RECOVER THE SHORTFALLS IN PAYMEN T TO BE MADE AS PER AGREED RATE CARD. SINCE THE AGREEMENT IS ALSO SILENT, WE DO NOT ACCEPT THAT THE ASSESSEE COULD UTILIZE THE BASKET OF AD- SLOTS AND AGGREGATE THE SAME FOR ACHIEVING THE TARGET . WE CANNOT ACCEPT THE SUBMISSIONS OF THE AR THAT THE AGGREGATIO N COULD BE ALLOWED BECAUSE, THE PAYMENTS WERE BEING MADE FOR SAM E CHANNEL AND SAME FUNCTIONS, I.E. AD-SPACE, THE DIFFERENC E BETWEEN THEM ONLY BEING PRIME TIME SLOT AND NON PRIME TIME SLOT. 22. SINCE THERE WAS NO JUSTIFICATION FOR HIGHER PAYMEN T MADE BY THE ASSESSEE AS COMPARED TO THE THIRD PARTY PAYMENT S, THE ADJUSTMENT AS SUGGESTED BY THE TPO AND SUSTAINED BY THE DRP, M/S. MEDIA C ONTENT & COMMUNICATIONS SERVICES (INDIA) PRIVATE LIMITED 13 ACCORDING TO US IS FAIR AND REASONABLE AND DOES NOT CALL FOR ANY DISTURBANCE, WHICH WE SUSTAIN. 23. THE APPEAL, THUS FILED BY THE ASSESSEE IS DISMISSED. 2.2. IN THE AFORESAID ORDER, THE TRIBUNAL ON IDENT ICAL FACTS/ISSUE DELIBERATED UPON IN LENGTH AND FINALLY DECIDED AGAINST THE ASSESSEE. SINCE THE ASSESSEE NEITHER A GITATED THE ISSUE NOR ANY CONTRARY DECISION, IN SUPPORT OF ITS CLAIM, THAT TOO, IN THE CASE OF ASSESSEE ITSELF, THEREFORE, RESPECTF ULLY FOLLOWING THE AFORESAID DECISION, WE DISMISS THE APPEALS OF THE A SSESSEE ON THE REASONING CONTAINED IN THE AFORESAID ORDER. FINALLY, THE APPEALS OF THE ASSESSEE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 21/01/2015. SD/- (SANJAY ARORA) SD/- (JOGINDER SINGH) ACCOUNTANT MEMBER JUD ICIAL MEMBER MUMBAI; DATED : 21/01/2015 F{X~{T? P.S/. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT, MUMBAI. 4. CIT(A)- , MUMBAI 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, TRUE COPY// DY./ASSTT. REGISTRAR ITAT, MUMBAI