DCIT, New Delhi V. M/s. IBN 18 Braodcast Ltd., New Delhi

ITA 757/DEL/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69515 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-11-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 07-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH

Judgement Text

ITA NO. 757/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. NO. 757/DEL/2011 A.Y. : 200 6 - 07 DCIT, CIRCLE-11(1), NEW DELHI, ROOM NO. 312, CR BUILDING, NEW DELHI VS. M/S IBN 18 BROADCAST LTD. (EARLIER AS GLOBAL BROADCAST NEWS LTD. 601, 6 TH FLOOR, COMMERCIAL TOWER, HOTEL LE MERIDIAN, RAISINA ROAD, NEW DELHI) (PAN: AACCG3666M) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) ASSESSEE BY : SH. TARANDEEP SINGH, FCA DEPARTMENT BY : SH. SATPAL SINGH, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XV, NE W DELHI DATED 26.11.2010 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE GROUNDS RAISED READ AS UNDER:- 1. THE ORDER OF LD. CIT(A) IS WRONG, PERVERSE, IL LEGAL AND AGAINST THE PROVISIONS OF LAW, LIABLE TO BE SE T ASIDE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DELETING THE ADDITION OF ITA NO. 757/DEL/2011 2 RS. 1,06,44228/- MADE BY THE AO ON ACCOUNT OF FBT ON SALES PROMOTION EXPENSES. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF HEARING. 3. IN THIS CASE THE ASSESSING OFFICERED CHARGED B AND PLACEMENT CHARGES OF RS. 53221140/- TO FRINGE BENEFIT TAX BY HOLDING THE SAME AS BEING IN THE NATURE OF SALES PROMOTION EXPENSES. ASSESSING OFFICER STATED THAT THE EXPENDITURE CANNOT IN ANY CIRCUMSTANCES BE TREATED AS BEING PART OF COST OF BROADCASTING. AS SESSING OFFICER HELD THAT IT WAS PROMOTIONAL EXPENSES ON BROADCAST ALREADY BEING DONE SO THAT IT REACHES TO MAXIMUM NUMBER AND TO AT TRACT MAXIMUM POTENTIAL VIEWERSHIP FOR BROADCAST ALREAD Y TAKING PLACE. THE ASSESSING OFFICER PLACING RELIANCE ON THE DECIS ION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF C.I.T. VS. ZIPPER INDIA 284 ITR 142 AND THE DECISION OF THE HONBLE HIGH COURT OF MADRA S IN C.I.T. VS. PRINT SYSTEMS PRODUCT 243 ITR 8 HELD THAT THE EXPEN DITURE ON BAND PLACEMENT CHARGE WAS IN THE NATURE OF SALES PROMOTI ON EXPENSES AND THEREFORE WAS LIABLE FOR FRINGE BENEFIT TAX. 4. AGAINST THE ABOVE ORDER THE ASSESSEE APPEALED BEFORE THE LD. CIT(A). IN VIEW OF THE SUBMISSIONS AND THE JU DICIAL PRECEDENTS, LD. CIT(A) HELD THAT BAND PLACEMENT CHARGES OF RS. 53221140/- INCURRED BY THE ASSESSEE ARE NOT LIABLE FOR FBT U/S 115WB(2)(D) AS THEY ARE NOT IN THE NATURE OF SALES PROMOTION EXPEN SES. ACCORDINGLY, THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS DELETED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPE AL BEFORE US. ITA NO. 757/DEL/2011 3 6. AT THE OUTSET, LD. COUNSEL OF THE ASSESSEE SUBMI TTED THAT THE ISSUE INVOLVED IS COVERED IN FAVOUR OF THE ASSESS EE BY THE DECISION OF THE ITAT IN THE MATTER OF TV TODAY NETWORK LTD . VS. DCIT IN I.T.A. NOS. 1375 & 4301/DEL/2010 & 3937/DEL/2001 FO R A.Y.RS. 2006- 07 TO 2008-09 VIDE ORDER DATED 12.7.2013. LD. C OUNSEL OF THE ASSESSEE SUBMITTED THAT THE FACTS IN THIS CASE AND THAT DEALT WITH BY THE TRIBUNAL WERE IDENTICAL. THE TRIBUNAL IN THI S CASE HAS HELD AS UNDER:- 11. THAT IN THE CASE UNDER APPEAL BEFORE US, ADM ITTEDLY, THE EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR CHANNE L PLACEMENT WHICH IS MADE TO THIRD PERSONS AND THERE IS NO EMPL OYER-EMPLOYEE RELATIONSHIP BETWEEN THE ASSESSEE AND THE RECIPIEN T. THEREFORE, THE CIRCULAR OF THE CBDT AS WELL AS THE DECISION OF HON BLE APEX COURT IN THE CASE OF R & B FALCON (A) PTY. LTD. (SUPRA) WOUL D BE SQUARELY APPLICABLE. MOREOVER, HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF T&T MOTORS LTD. (SUPRA) HAS STATED THAT IN RESPECT OF PAYMENT TO THIRD PERSONS, FBT IS NOT APPLICABLE BECAUSE NO FRI NGE BENEFIT IS ENJOYED BY THE EMPLOYEE/ RECIPIENT. THE RATIO OF TH E ABOVE DECISION OF HONBLE JURISDICTIONAL HIGH COURT WOULD ALSO BE SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEES CASE BEC AUSE PAYMENT HAD BEEN MADE FOR CHANNEL PLACEMENT. BY SUCH PAYMENT, N O FRINGE BENEFIT IS ENJOYED BY THE EMPLOYEE/RECIPIENT. THE PAYMENT IS IN THE NATURE OF EXPENDITURE INCURRED FOR THE PURPOSE OF E XPENDITURE IS TAXABLE AS INCOME. MOREOVER, THE EXPENDITURE INCURR ED BY THE ASSESSEE IS NOT IN THE NATURE OF EXPENDITURE FOR SA LES PROMOTION. THE ASSESSEE HAS INCURRED THE EXPENDITURE FOR BROADCAST ING OF ITS CHANNELS ON THE DESIRED BANDS. THEREFORE, THE EXPEN DITURE IS FOR THE BROADCASTING OF ITS CHANNELS AND NOT FOR SALES PROM OTION OR PUBLICITY. ITA NO. 757/DEL/2011 4 7. ACCORDINGLY, LD. COUNSEL OF THE ASSESSEE CLAIMED THAT SINCE THE FACTS ARE IDENTICAL, RATIO FROM THE ABOVE DECISION SHOULD BE APPLIED. LD. D.R. DID NOT DISPUTE THAT THE FACTS ARE IDENTIC AL AND THAT THE DECISION OF THE TRIBUNAL IS APPLICABLE. ACCORDINGL Y, RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT, WE DO NOT FIND ANY I NFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY, WE UPHOLD TH E SAME. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21/11/2013. SD/- SD/- [ [[ [C.M. GARG C.M. GARG C.M. GARG C.M. GARG] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 22/11/2013 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES