VIACOM 18 MEDIA P.LTD, MUMBAI V. ADDL CIT 11(1), MUMBAI

ITA 8754/MUM/2010

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5236 (ITAT-MUMBAI)
• Duration Of Justice: 10 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2006-2007
• Appeal Filed On: 15-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANPREET S GUGGLE
• Keywords: Related party transaction; Capital asset; Recovery proceedings; Depreciation; Transfer pricing; Business expenditure; Opportunity of being heard; International transaction; Retrospective amendment; Additional evidence; Question of law; Wholly owned subsidiary; Bad and doubtful debts; Revised return; Revenue expenditure; Capital expenditure; TDS; Set aside
• Section: 143(3); 92D; 234B; 40(a)(ia); 37(1); 194C; 10B; 250; 201; 64; 43; 48; 194J; 73; 72; 13; 119; 22; 255(4); 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI S. RIFA UR RAHMAN, ACCOUNTANT MEMBER ITA NO.8754/MUM./2010 ( ASSESSMENT YEAR : 2006 07 ) VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX RANGE 11(2), MUMBAI . RESPONDENT IT (TP) A NO.7337/MUM./2012 ( ASSESSMENT YEAR : 2007 08 ) VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . APPELLANT V/S ADDL. COMMISSIONER OF INCOME TAX RANGE 11(1), MUMBAI . RESPONDENT ITA NO.7147/MUM./2012 ( ASSESSMENT YEAR : 2007 08 ) ASSTT. COMMISSIONER OF INCOME TAX RANGE 11(1), MUMBAI . APPELLANT V/S VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . RESPONDENT 2 VIACOM 18 MEDIA PVT. LTD. IT (TP) A NO.2055/MUM./2014 ( ASSESSMENT YEAR : 2009 10 ) VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX RANGE 11(1), MUMBAI . RESPONDENT IT (TP) A NO. 1383 /MUM./2014 ( ASSESSMENT YEAR : 2009 10 ) ASSTT. COMMISSIONER OF INCOME TAX RANGE 11(1), MUMBAI . APPELLANT V/S VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . RESPONDENT IT (TP) A NO.1741/MUM./2015 ( ASSESSMENT YEAR : 2010 11 ) VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX RANGE 16(1), MUMBAI . RESPONDENT 3 VIACOM 18 MEDIA PVT. LTD. IT(TP)A NO.1735/MUM./2015 ( ASSESSMENT YEAR : 2010 11 ) ASSTT. COMMISSIONER OF INCOME TAX RANGE 16(1), MUMBAI . APPELLANT V/S VIACOM 18 MEDIA PVT. LTD. (FORMERLY MTV NETWORKS (I) PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . RESPONDENT IT(TP)A NO.791/MUM./2016 ( ASSESSMENT YEAR : 2011 12 ) VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX RANGE 16(1), MUMBAI . RESPONDENT IT(TP)A NO.1641/MUM./2016 ( ASSESSMENT YEAR : 2011 12 ) ASSTT. COMMISSIONER OF INCOME TAX RANGE 16(1), MUMBAI . APPELLANT V/S VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . RESPONDENT 4 VIACOM 18 MEDIA PVT. LTD. ITA NO.2131/MUM./2017 ( ASSESSMENT YEAR : 2012 13 ) VIACOM 18 MEDIA PVT. LTD. ZION BIZWORLD, SUBHASH ROAD A NEAR GARWARE OFFICE, VILE PARLE (E) MUMBAI 400 057 PAN AAACM9164E . APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX RANGE 16(1), MUMBAI . RESPONDENT REVENUE BY : SHRI MANPREET S. GUGGLE ASSESSEE BY : SHRI NIMESH VORA DATE OF HEARING 17 . 0 6 .202 1 DATE OF ORDER 3.9.21 O R D E R PER S. RIFAUR RAHMAN, A.M. T HE ASSESSEE AND THE REVENUE VICE VERSA FILED APPEALS AS WELL AS CROSS APPEALS FOR THE ASSESSMENT YEAR 2006 07, 2007 08, 2009 10, 2010 11, 2011 12 AND 2012 13 , CHALLENGING THE ORDER PASSED BY THE FIRST APPELLATE AUTHORITY, THE DETAILS OF WHICH ARE TABULATED BELOW: SR. NO. APPEAL NUMBER AND ASSESSMENT YEAR DATE OF ORDER PASSED BY THE FIRST APPELLATE AUTHORITY SECTION UNDER WHICH FIRST APPELLATE AUTHORITY HAS PASSED THE ORDER FIRST APPELLATE AUTHORITY 1. ITA NO.8754/MUM./2010 A.Y. 2006 07 BY ASSESSEE 29.09.2010 143(3) R/W 144C(5) DRP II, MUMBAI 2. IT(TP)A NO.7337/MUM./2012 A.Y. 2007 08 BY ASSESSEE 13.09.2012 SECTION 250 CIT(A) 15, MUMBAI 5 VIACOM 18 MEDIA PVT. LTD. 3. ITA NO.7147/MUM./2012 A.Y. 2007 08 BY REVENUE 13.09.2012 143(3) R/W 144C(5) CIT(A) 15, MUMBAI 4. IT(TP)A NO.2055/MUM./2014 A.Y. 2009 10 BY ASSESSEE 31.12.2013 143(3) R/W SECTION 144C(5) DRP II, MUMBAI 5. IT(TP) NO.1383/MUM./2014 A.Y. 2009 10 BY REVENUE 31.12.2013 144C(5) DRP II, MUMBAI 6. ITA NO.1741/MUM./2015 A.Y. 2010 11 BY ASSESSEE 08.02.2014 143(3) R/W SECTION 144C(13) DRP II, MUMBAI 7. ITA NO.1735/MUM./2015 A.Y. 2010 11 BY REVENUE 08.12.2014 144C(5) DRP II, MUMBAI 8. ITA NO.791/MUM./2016 A.Y. 2011 12 BY ASSESSEE 14.12.2015 143(3) R/W SECTION 144C(13) DRP 2, MUMBAI 9. ITA NO.1641/MUM./2016 A.Y. 2011 12 BY REVENUE 14.12.2015 144C(5) DRP 2, MUMBAI 10. ITA NO.2131/MUM./2017 A.Y. 12 13 BY ASSESSEE 07.11.2016 144C(13) DRP 2, MUMBAI 2. SINCE ALL THE AFORESAID APPEALS PERTAIN TO THE SAME ASSESSEE INVOLVING MULTIPLE ISSUES, THEREFORE, AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. WE NOW PROCEED TO DECIDE THE ISSUES ON MERIT , AS PER THE CHRONOLOG Y OF THE ASSESSMENT YEARS UNDER CONSIDERATION. 3. THE ASSESSEE IN THE PRESENT APPEALS, FORMERLY KNOWN AS MTV NETWORKS INDIA PVT. LTD., IS WHOLLY OWNED SUBSIDIARY OF MTV ASIA VENTURES INDIA PVT. LTD., MAURITIUS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CONTINUED ITS BUSINESS OF ACTING AS A SALES 6 VIACOM 18 MEDIA PVT. LTD. AGENT FOR ITS ASSOCIATE ENTERPRISES (A.E) AND AS A DISTRIBUTOR OF TV CHANNELS OF ITS A.ES AND PRODUCTION OF TV PROGRAMS FOR EXPORT AND BROADCASTING. THE ASSESSING OFFICER AND TRANSFER PRICING OFFICER HAVE MADE CERTAIN ADJUSTMENTS AND DISALLOWANCES. THE AS SESSEE BEING AGGRIEVED BY THE ORDER PASSED BY THE ASSESSING OFFICER AND THE TRANSFER PRICING OFFICER, FILED OBJECTIONS BEFORE THE DISPUTE RESOLUTION PANEL (DRP) A ND GOT PARTIAL RELIEF AND CONSEQUENT UPON THIS, THE FOLLOWING APPEALS HAVE BEEN FILED BY EITHE R PARTY WHICH WE PROCEED TO DISPOSE OFF ACCORDINGLY ON MERIT. ITA NO. 8754/MUM./2010 ASSESSEES APPEAL A.Y. 2006 07 4. G ROUNDS NO.1 AND 2, BEING CONSEQUENTIAL TO OTHER GROUNDS WHICH WE HAVE DECIDED ELSEWHERE IN THIS ORDER. 5. INSOFAR AS GROUND NO.3, IS CONCERNED, WE FIND THAT THIS GROUND BEING GENERAL IN NATURE, HENCE NO ADJUDICATION IS REQUIRED. 6. GROUNDS NO.4, 5 AND 6 , RELATES TO ADJUSTMENT IN THE CONTENT SEGMENT OF ` 5,17,25,848. 7. FACTS IN BRIEF ARE, FOR THE YEAR UNDER CONSIDERATION, MTV ASIA LDC (MTVA) AND NICKELODEON ASIA HOLDINGS PTE. LTD. (NICK ASIA) HAD ENGAGED VIACOM 18 MEDIA PVT. LTD. (THE ASSESSEE HEREIN) FOR THE PRODUCTION AND SUPPLY OF PROGRAMMES, PROMOS, INTERSTITIAL 7 VIACOM 18 MEDIA PVT. LTD. PROG RAMMING AND ADVERTISEMENTS FOR TELEVISION EXHIBITION ( PROGRAMMES ). THE ASSESSEE PRODUCES THE PROGRAMMES AND EXPORTS THE SAME TO MTVA / NICK ASIA AT COST PLUS 10% MARK - UP. THE ASSESSEE SELECTED TRANSACTIONAL NET MARGIN METHOD (TNMM) AS THE MOST APPROPRIAT E METHOD FOR BENCHMARKING THE AFORESAID TRANSACTION. UPDATED MARGIN OF COMPARABLE SELECTED BY THE ASSESSEE WAS 7.53% AS AGAINST ASSESSEES MARGIN OF 10%. THUS, THIS TRANSACTION WAS TREATED AS ARMS LENGTH BY THE ASSESSEE. 8. THE TRANSFER PRICING OFFICER HAD ASKED THE ASSESSEE TO CONDUCT A FRESH SEARCH BASED ON THE METHODOLOGY AND SEARCH CRITERION ADOPTED IN TRANSFER PRICING ORDER FOR THE A.Y. 2005 06. IN RESPONSE TO THE SAME, THE ASSESSEE HAD SUBMITTED VIDE LETTER DATED 17 SEPTEMBER 2009, A SET OF 18 COMPARA BLE COMPANIES. THE ASSESSEES ANALYSIS WAS REPLACED BY THE SAID BENCHMARKING ANALYSIS CONSISTING OF 18 COMPARABLE. AS PER SAID ANALYSIS, COMPARABLE MARGIN WAS DERIVED BY TRANSFER PRICING OFFICER AT 19.41% AND TRANSFER PRICING ADJUSTMENT OF ` 5,17,25,848 , W AS MADE. 9. THE DRP CONFIRMED THE ACTION OF THE TRANSFER PRICING OFFICER . 10. DURING THE COURSE OF HEARING, THE LEARNED A.R. , SHRI NIMESH VORA, APPEARING FOR THE ASSESSEE , AT THE VERY OUTSET, SUBMITTED THAT THE ISSUE FOR ADJUDICATION IS SQUARELY COVERED BY THE DECISION OF THE CO 8 VIACOM 18 MEDIA PVT. LTD. ORDINATE BENCH OF THE TRIBUNAL, RENDERED IN ASSESSEES OWN CASE F OR THE ASSESSMENT YEAR 2005 06. HE SUBMITTED THAT INSOFAR AS IN CLUSION OF BROADCASTING COMPANIES UNDER COMPARABLE SET IS CONCERNED, THE TRANSFER PRICING OFFICER, W HILE CONDUCTING ITS BENCH MARKING ANALYSIS, HAD I NCLUDED FOLLOWING 10 COMPARABLE WHICH ARE IN THE BUSINESS OF BROADCASTING: 1. ASIANET COMMUNICATIONS LTD. 2. E T C NETWORKS LTD. (MERGED) 3. E T C NETWORKS LTD. 4. INDIAN CABLE NET CO. LTD. 5. JAIN STUDIOS LTD. 6. KOHINOOR BROADCASTING CORP. LTD. 7. MALAYALAM COMMUNICATIONS LTD. 8. MAVIS SATCOM LTD. 9. RAJ TELEVISION NETWORK LTD. 10. ZEE NEWS LTD. 9. IN THIS REGARD, THE LEARNED A.R. SUBMIT TED THAT BROADCASTING COMPANIES ARE NOT FUNCTIONALLY COMPARABLE TO THE ASSESSEE AND THE SAME IS COVERED BY THE ORDER OF TRIBUNAL, MUMBAI BENCHES, RENDERED IN ASSESSEES OWN CASE IN ACIT V/S M/S. VIACOM 18 MEDIA PVT. LTD., ITA NO.8406/MUM./2010, ORDER DATED 8 T H FEBRUARY 2019, FOR THE ASSESSMENT YEAR 2005 - 06 . HE FURTHER SUBMITTED THAT SIMILAR ISSUE HAD CA ME BEFORE THE CIT(A) FOR THE ASSESSMENT YEAR 2007 08, WHEREIN THE CIT(A) DIRECTED TO REMOVE BROADCASTING COMPANIES BEING NOT FUNCTIONALLY COMPARABLE. HE SUBMITT ED THAT T HE S AID DIRECTION OF THE 9 VIACOM 18 MEDIA PVT. LTD. CIT(A) HAS BEEN ACCEPTED BY THE D E PARTMENT AND NO FURTHER APPEAL WA S FILED THOUGH THE APPEAL WA S PREFERRED ON OTHER COMPARABLE. 10. INSOFAR AS E XCLUSION OF LOSS - MAKING COMPANIES UNDER COMPARABLE SET IS CONCERNED, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE TRANSFER PRICING OFFICER W HILE CONDUCTING ITS BENCH MARKING ANALYSIS, HAD EXCLUDED CERTAIN COMPARABLE (SR NO 18 TO 25) ON ACCOUNT OF THEY BEING LOSS MAKING COMPANIES. IN THIS REGARD, H E SUBMIT TED THAT ONLY CONSISTENT LOSS - MAKING COMPANIES SHOULD BE EXCLUDED FROM BENCHMARKING SET. THE COMPARABLE LIKE M/S. MOVING PICTURES AND M/S. CINEVISTA , WHICH HAVE MADE LOSSES ONLY IN SINGLE YEAR, SHO ULD BE CONSIDERED. 11. THE LEARNED A.R. SUBMITTED THAT T HE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 - 06 CITED SUPRA HELD THAT LOSS MAKING FUNCTIONALLY COMPARABLE COMPANIES ARE TO BE CONSIDERED FOR BENCHMARKING PURPOSES AND SPECIFICALLY MENTIONED THAT M/S. CREATI VE EYE LTD., TO BE ACCEPTED AS A VALID COMPARABLE. THE LEARNED A.R. FOR THE ASSESSEE F URTHER POINT ED OUT THAT THE COMPARABLE LIKE M/S. MOVING P ICTURES AND M/S. CINEVISTA , WERE CONSIDERED AS COMPARABLE FOR BENCHMARKING BY THE TRANSFER PRICING OFFICER ITSELF IN THE ASSESSMENT YEAR 2005 06, BECAUSE IT HAD POSITIVE MARGIN. FURTHER OTHER COMPARABLE LIKE M/S.CREST ANIMA TION STUDIOS LTD., M/S. RADAAN MEDIA WORKS LTD . AND M/S. COLOR CHIPS (INDIA) LT D . , WERE THOUGH REJECTED 10 VIACOM 18 MEDIA PVT. LTD. HAVING INCURRED LOSSES, SHALL BE DIRECTED TO INCLUDE AS THE SAME HAVE EARNED POSITIVE MARGIN AND NOT INCURRED LOSSES. THE LEARNED A.R. WHILE CONCLUDING HIS ARGUMENTS SUBMITTED THAT THE ISSUES ARE SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL, MUMBAI BENCH, RENDERED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 06 (SUPRA) WHEREIN THE TRANSFER PRICING ADJUSTMENT MADE TO CONTENT SEGMENT IS NOT WARRANT ED BASIS THE FINAL COMPARABLE SET AS UNDER: SR NO COMPARABLE OP/TC% 1 BAG FILMS LTD 9.47 2 MEDIA MATRIX WORLD WIDE LTD 0.55 3 PENTAMEDIA GRAPHICS LTD 10.00 4 PRTISHNANDY COMMUNICATIONS LTD 25.86 5 SANGUINE MEDIA LTD 12.20 6 SRI ADHIKARI BROTHERS TELEVISION NETWORK LTD 21.70 7 SYNERGY ADLABS MEDIA LTD 42.64 8 MOVING PICTURES CO (INDIA) LTD - 7.75 9 CINEVISTAAS LTD - 5.15 10 CREST ANIMATION STUDIOS LTD 9.60 11 RADAAN MEDIAWORKS 9.34 12 COLOR CHIPS (INDIA) LTD 4.24 AVERAGE 11.06 12. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 13. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BOTH THE PARTIES CONCEDED BEFORE US THAT THE ISSUES RAISED IN THE GROUND NO.5 OF APPEAL ARE NOW SETTLED BY TH E DECISION OF THE 11 VIACOM 18 MEDIA PVT. LTD. TRIBUNAL, MUMBAI BENCH, RENDERED IN ASSESSEE S O W N CASE FOR THE ASSESSMENT YEAR 2005 06 IN ACIT V/S M/S. VIACOM 18 MEDIA PVT. LTD., ITA NO. 8406/MUM./2010, ORDER DATED 8 TH FEBRUARY 2019 , WHEREIN THE TRIBUNAL OBSERVED AS UNDER: 8. WE HAVE GONE THROUGH THE DISTINCTION BROUGHT OUT BY THE CIT(A) AND NOW ASSESSEE'S A.R. BEFORE US BETWEEN THE BROADCASTING COMPANY AND CONTENT PRODUCER WHICH ARE FUNCTIONALLY DIFFERENT. THIS IS CLEAR FROM THE FAR ANALYSIS OF CONTENT PRODUCER AND BROADCAS TING COMPANIES THAT FUNCTIONALLY THESE ARE TWO DIFFERENT ENTITIES. HENCE, WE ARE OF THE VIEW THAT THE MEDIA CONTENT AND TV BROADCASTING ARE TOTALLY DISSIMILAR ACTIVITIES EXCEPT THE ONLY LINKAGE IS THAT OF MEDIA CONTENT IS MADE ONLY FOR THE PURPOSE OF BROAD CASTING ON THE TV CHANNELS. PRODUCTION OF MEDIA CONTENT IS ONE OF THE FUNCTIONS OF THE ASSESSEE WHILE BROADCASTING IS THE FUNCTION OF ITS AE AND HENCE, DUE TO FUNCTIONAL DIVIDE & DUE TO THIS ASPECT, THIS IS THE PRIME REASON FOR ENTERING INTO INTERNATIONAL TRANSACTION BY THE ASSESSEE WITH ITS AE. HENCE, THE ACTIVITY OF PRODUCING CONTENT AND BROADCASTING THE CONTENT IS ALTOGETHER DIFFERENT AND NOT AT ALL COMPARABLE. EVEN INVESTMENT REQUIRES FOR MAKING SAME CONTENT IS VERY LESS COMPARED TO INVESTMENT REQUIRED FOR CARRYING OUT THE BROADCASTING ACTIVITY. HENCE, ON ECONOMIC FACTOR, FUNCTIONAL ANALYSIS AND THE ACTIVITIES, THESE TWO ARE ENTITIES ARE DISSIMILAR AND CANNOT BE COMPARED. HENCE, THE CIT(A) HAS RIGHTLY DIRECTED THE AO/ TPO TO EXCLUDE THE BROADCASTING COMP ANIES TAKEN BY REVENUE AND BY ASSESSEE WHILE COMPARING THE TWO. WE CONFIRM THE ORDER OF CIT(A). 9. THE ANOTHER ASPECT IS THAT THERE IS NO ESTOPPEL AGAINST THE ASSESSEE WHEN ARGUING AGAINST THE EXCLUSION OF ITS OWN COMPARABLE AND THIS ISSUE IS COVERED BY THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF DCII VS. QUARK SYSTEMS PVT. LTD. (2010) 38 SOT 307 (CHANDIGARH) (SB). HENCE, ON THAT ACCOUNT ALSO THE CIT(A) HAS RIGHTLY DIRECTED! AO I TPO FOR EXCLUSION OF ASSESSEE'S OWN COMPARABLE OF BROADCASTING COMPANIES. 13.1 ACCORDINGLY, GROUND NO.5, RAISED BY THE ASSESSEE IS ALLOWED. 14. WITH REGARD TO GROUNDS NO.6 AND 7, BOTH THE PARTIES CONCEDED BEFORE US THAT THE ISSUES RAISED IN THESE GROUNDS ARE NOW SETTLED BY 12 VIACOM 18 MEDIA PVT. LTD. THE DECISION OF THE CO ORDINATE BENCH IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 06, IN ITA NO.8406/MUM./2010, DATED 8 TH FEBRUARY 2019, WHEREIN T HE TRIBUNAL OBSERVED AS UNDER: 11. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. ADMITTEDLY, THIS COMPANY IS MAKING PROFIT IN EARLIER YEARS AND SUBSEQUENT YEARS AS NOTED BY CIT(A) AS WELL AS TPO IN THEIR ORDER S. THE LOSS INCURRED IN THIS YEAR IS ON ACCOUNT OF FAILURE OF 'ABRA KA DABRA' 3D MOVIE PRODUCED BY IT DURING THE YEAR, IS ONLY A PART OF THE REASON ALONG WITH COMPETITIVE PRESSURE FOR THE LOSS INCURRED BY THIS COMPANY. THE ASSESSEE PLACE THE EVIDENCE IN IT S PAPER BOOK, WHEREIN DIRECTOR'S REPORT OF THE COMPANY FOR THE FY 2004 - 05, WHEREIN IT WAS MENTIONED THAT LOSS OF VOLUME BECAUSE OF COMPETITIVE PRESSURE COUPLED WITH A LOW PRICING TOOK A TOLL ON OPERATING MARGIN. FOR THIS THE LEARNED A.R. FOR THE ASSESSEE ARGUED THAT MERELY BECAUSE COMPARABLE IS MAKING LOSS IN ONE YEAR BUT MAKING PROFITS IN EARLIER YEARS AND SUBSEQUENT YEARS, IT CANNOT BE EXCLUDED FROM THE LIST OF COMPARABLES AND FOR THIS HE RELIED ON THE FOLLOWING TWO CASE LAWS: - '1. DC IT VS. QUARK SYSTEM PVT. LTD. (2020) 38 SOT 307 (CHANDIGARH) (SB) 2. CAPGEMINI INDIA P. LTD. VS. ACIT (2013) 33 TAXMANNCOM 5 (MUMBAI - TRIB)' 12. WE FIND THAT THE CREATIVE EYE LIMITED IS FUNCTIONALLY SIMILAR TO THE ASSESSEE COMPANY REASON BEING IT IS ALSO ENGAGED IN PRODUCTION OF FILM PRODUCTION THAT IS WHY IS FUNCTIONALLY SAME WITH THE ASSESSEE. EVEN OTHERWISE, IN THIS YEAR ONLY, THE LOSS IS MADE BY CREATIVE EYE LIMITED DUE TO LOSS OF VOLUME BECAUSE OF COMPETITIVE PRESSURE ON ACCOUNT OF PRODUCTION OF 3D F ILM 'ABRA KA DABRA'. HENCE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND THE SAME IS CONFIRMED. THIS ISSUE OF REVENUE'S APPEAL IS DISMISSED. 15. SINCE THE ISSUES FOR OUR ADJUDICATION ARE SQUARELY COVERED BY THE AFORESAID DECISION OF THE TRIBUNAL RENDERED IN ASSESSEES OWN CASE IN AN APPEAL FILED BY THE REVENUE CITED SUPRA , WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE 13 VIACOM 18 MEDIA PVT. LTD. REASONS STATED THEREIN , C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED OR DER PASSED BY THE DRP ON THESE ISSUES BY ALLOWING THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. THUS, GROUNDS NO. 5, 6 AND 7 ARE ALLOWED. 16. AS FAR AS GROUNDS NO.4, 9, 10, 11 AND 12 ARE CONCERNED, WE FIND THAT THESE GROUNDS BEING CONSEQUENTIAL TO THE OUTCOME OF GROUNDS NO.5, 6 AND 7, WHICH WE HAVE DECIDED ABOVE VIDE PARA 6 TO 15 ABOVE, THEREFORE, GROUNDS NO. 4, 9, 10, 11 AND 12, ARE ALSO ALLOWED. 17. THE ISSUE ARISING OUT OF GROUNDS NO. 13 TO 16 , RELATES TO TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF DISTRIBUTION R EVENUE OF ` 4,82,72,402. 18. FROM THE RECORDS AVAILABLE BEFORE US, IT IS SEEN THAT MTVA AND NICK ASIA HAD APPOINTED VIACOM 18 TO ACT AS THE DISTRIBUTOR OF THE MTV CHANNEL , VH1 CHANNEL AND NICKELODEON CHANNEL . THE ASSESSEE EARNED ` 40,536,903 , AS ITS INCOME FROM DI STRIBUTION AND HAD REMITTED ` 90,311,952 TO ITS A. ES AS A PASS - THROUGH ENTITY. THE ASSESSEE HAD EARNED A MARGIN OF ( - ) 37.85% AS THESE BEING INITIAL YEARS OF OPERATIONS. 19. T HE TRANSFER PRICING OFFICER FOLLOWING THE ORDER OF ITS PREDECE SSOR IN OFFICE , DETERMINED ARM'S LENGTH PRICE AND APPLICATION OF TNMM METHOD BY TAKING CABLE T . V . OPERATORS AS COMPARABLE BY 14 VIACOM 18 MEDIA PVT. LTD. DOING SEARCH ON INTERNET AND COMPUTED NET MARGIN OF TWO COMPARABLE AT ( - )28.16% AND MADE ADJUSTMENT OF ` 4,82,72,402. 20. THE DRP CON FIRMED THE ADJUSTMENT PROPOSED BY THE TRANSFER PRICING OFFICER AND ALSO DID NOT ADJUDICATE ON THE ALTERNATIVE BENCHMARKING USING CUP METHOD. 21. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS APPOINTED AS DISTRIBUTOR BY ITS A. E . AND THE ASSESSEE HAD IN TURN APPOINTED THIRD PARTY BEING SET DISCOVERY LTD . AND ZEE TURNER LTD ., AS SUB DISTRIBUTOR AND SHARED THE DISTRIBUTION REVENUE WITH THEM. ACCORDINGLY, THE ASSESSEE BENCHMARKED THE SAID TRANSACTION UNDER CUP METHOD AND HELD THAT TH E TRANSACTION IS AT ARMS LENGTH AS THE ASSESSEE GETS 50% REVENUE SHARE FROM ITS A. E . WHEREAS THE THIRD PARTY DISTRIBUTOR GETS ONLY 31.60% / 37.50% FROM THE ASSESSEE . THUS, THE CUP BEING DIRECT METHOD SHALL BE PREFERRED OVER TNMM APPLIED BY THE TRANSFER PR ICING OFFICER . THE LEARNED A.R. FURTHER SUBMITTED THAT THE COMPARABLE TAKEN BY THE TRANSFER PRICING OFFICER UNDER TNMM ARE RANDOM COMPARABLE SELECTED FROM INTERNET AND NOT FOLLOWING ANY SCIENTIFIC SEARCH PROCESS AND SUCH APPROACH OF THE TRANSFER PRICING OF FICER SHALL NOT BE ACCEPTED . THE LEARNED A.R. FOR THE ASSESSEE FURTHER SUBMITTED THAT THE TRIBUNAL, MUMBAI BENCH, IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 06, IN ACIT V/S M/S. VIACOM 18 MEDIA PVT. LTD., ITA NO.8406/MUM./2010, ORDER DATED 8 TH FEB RUARY 2019 ACCEPTED 15 VIACOM 18 MEDIA PVT. LTD. THE BENCHMARKING OF THE ASSESSEE UNDER CUP METHOD AND REJECTED AD HOC BENCHMARKING DONE BY THE TRANSFER PRICING OFFICER USING INTERNET/GOOGLE. THE LEARNED A.R. SUBMITTED THAT F ACTS BEING THE SAME AND THE ARRANGEMENT WITH A . E . AS WELL AS SUB DISTRIBUTOR CONTINUE TO REMAIN THE SAME, THEREFORE, THE CUP METHOD MAY BE CORRECTLY FOLLOWED AND ACCORDINGLY NO ADJUSTMENT IS CALLED FOR. 22. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVAT IONS OF THE REVENUE AUTHORITIES AND F URTHER SUBMITTED THAT THIS ISSUE MAY BE REMITTED BACK TO THE ASSESSING OFFICER / TRANSFER PRICING OFFICER FOR FRESH VERIFICATION AND ASSESSMENT. 23. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ISSUE ARISING OUT OF THE AFORESAID GROUNDS OF APPEAL HAVE BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ACIT V/S M/S. VIACOM 18 MEDIA PVT. LTD., ITA NO. 8406/MUM./2010, ORDER DATED 8 TH FEBRUARY 2019, WHEREIN THE TRIBUNAL DECIDED THE ISSUE AGAINST THE REVENUE BY OBSERVING AS UNDER: 1 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS ARE THAT THE ASSESSEE AS A DISTRIBUTION SEGMENT AND EARNING REVENUE UNDER DISTRIBUTION PAYMENT SEGMENT ENTERED INTO AGREEMENT AND TO DISTRIBUTE THE RIGHTS WITH MTV, VH1 AND NICKELODEON CHANNEL AND A SHARING ARRANGEMENT WITH ITS AE AT 50:50. THE DISTRIBUTION OF REVENUE FLOWS AS UNDER: - MTV INDIA 50% SET DISCOVERY 31.6% MTV INDIA 18.5% MTV AISA / NICKK ASIA 50% MTV ASIA / NICK ASIA 50% 16 VIACOM 18 MEDIA PVT. LTD. REVENUE SPLIT BETWEEN MTV INDIA, MTVAJ NICKA AND SET DISCOVERY . MTV INDIA 50% ZEE TURNER 37.5% MTV INDIA 12.5% MTV ASIA 50% MTV ASIA 50% 17. THE ASSESSEE HAS BENCHMARKED ITS TRANSACTION UNDER THE CONTROL PRICE (CUP METHOD) BY COMPARING THE TRANSACTIONS WITH THIRD PARTY DISTRIBUTORS BUT THE TPO REJECTED THE TP STUDY OF THE ASSESSEE AND ADOPTED THE TNMM AS AGAINST CUP METHOD EMPLOYED BY ASSESSEE. THE TFO CONDUCTED A SEARCH ON GOOGLE BY THE WORD CAPITAL TV OPERATOR AND ARRIVED AT A SET OF THREE COMPARABLES, THE DATA OF ONE OF THE COMPANIES WAS NOT AVAILABLE FOR THE RELEVANT ASSESSMENT YEAR OUT OF THESE THREE. WE FIND FROM THE ARGUMENTS OF THE LEARN ED A.R. THAT THE ASSESSEE IS CONSISTENTLY DETERMINING THE ARMS LENGTH PRICE FOR DISTRIBUTION REVENUE BY EMPLOYING CUP FROM AY 2004 - 05 TILL DATE. THE ASSESSEE'S A.R. CONTENDED THAT THE CUP METHOD USED BY ASSESSEE HAS ALSO BEEN USED BY REVENUE CONSISTENTLY A S THE MOST APPROPRIATE METHOD AND NO ADJUSTMENT HAS BEEN MADE. ON ACCOUNT OF CONSISTENCY, THE LEARNED A.R. FOR THE ASSESSEE STATED THAT NO ADJUSTMENT SHOULD HAVE BEEN MADE. FURTHER, ON MERITS ALSO THE LEARNED A.R. FOR THE ASSESSEE STATED THAT AS PER THE DI STRIBUTION AGREEMENT I.E. AGREEMENT WITH SUB - DISTRIBUTOR SET DISCOVERY LIMITED AND ZEE TURNER LIMITED, THE SAME IS RELATING TO GRANTING OF RIGHTS BUT DISTRIBUTE THE CHANNELS ARE SIMILAR TO THE TERMS OF DISTRIBUTION AGREEMENT. AS PER THE TERMS OF DISTRIBUTI ON AGREEMENT OF THE ASSESSEE THAT MTV, VHI CHANNEL AND NICKELODEON, THE ASSESSEE HAS REMITTED 50% OF DISTRIBUTION REVENUE CALCULATED BY IT FROM THE CABLE OPERATORS OR THE SUBSCRIBERS AS THEIR SHARE OF REVENUE. FOR THE 50% OF THE REVENUE IS THE SHARE OF THE ASSESSEE FROM WHICH IT HAS TO INCUR VARIOUS DISTRIBUTION COSTS IN INDIA. THERE ARE TWO TYPE OF SHARING OF DISTRIBUTION REVENUE I.E. THE FIRST SET OF SUB DISTRIBUTORS I.E. SET DISCOVERY LIMITED AND ASSESSEE IS IN THE RATIO OF 31.60 AND 68.40. SIMILARLY, TH E DISTRIBUTION RATIO BETWEEN ZEE TURNER LIMITED AND THE ASSESSEE IS 37.50 AND 62.50 RESPECTIVELY. WHEREAS, AS PER DISTRIBUTION AGREEMENT SHARING ARRANGEMENT WITH DISTRIBUTION I.E. BETWEEN THE ASSESSEE AND MTV AND NICKELODEON I.E. BROADCASTERS 5:50 WHICH IS REMAINED THE SAME. WE FIND THAT THE ASSESSEE WHILE MAKING TRANSFER PRICING STUDY UNDER CUP METHOD, WHICH IS DIRECT METHOD AVAILABLE TO THE ASSESSEE AND ASSESSEE HAS USED THE PROPER AND SCIENTIFIC DATA WHICH IS AVAILABLE FOR COMPARISON. BUT THE TPO APPLIED TNMM METHOD FOR COMPUTING ARMS LENGTH PRICE WITHOUT ANY BASIS JUST ON THE BASIS OF SEARCH CONDUCTED ON GOOGLE AND COMPARING THE DATA WITH CABLE TV OPERATORS. IN OUR VIEW, THE 17 VIACOM 18 MEDIA PVT. LTD. ASSESSEE IS CONSISTENTLY FOLLOWING THE CUP METHOD FOR BENCHMARKING THE TRANSACTI ON WITH ITS AE'S AND FOR WHICH SCIENTIFIC AND CORRECT DATA IS AVAILABLE. THE TPO OR THE AO HAS NOT POINTED OUT ANY AMBIGUITY IN THE DATA SUPPLIED BY THE ASSESSEE FOR BENCHMARKING THE CUP METHOD IN THE IF STUDY. THE AO APPLIED TNMM METHOD WHICH IS WITHOUT A NY DATA OR ANY BASIS. HENCE, WE ARE OF THE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED THE ADJUSTMENT AND WE CONFIRM THE SAME. THIS ISSUE OF REVENUE'S APPEAL IS DISMISSED. 24. THE ISSUE BEFORE US BEING COVERED BY THE AFORESAID DECISION OF THE TRIBUNAL RENDERED IN ASSESSEES OWN CASE CITED SUPRA IN AN APPEAL FILED BY THE REVENUE WHEREIN THE CO ORDINATE BENCH HAS DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE , CONSISTENT WITH THE FINDINGS GIVEN AS AFORESAID, WE SET ASIDE THE IMPUGNED ORDER PAS SED BY THE DRP AND ALLOW THE GROUNDS OF APPEAL NO.1 5 . THE OTHER GROUNDS RAISED BY TH E ASSESSEE I.E., GROUND NO.13, BEING GENERAL IN NATURE, GROUND NO.14 AND 16, BECOMES ACADEMIC IN NATURE CONSIDERING THE FACT THAT WE HAVE ALLOWED GROUND NO.15, IN FAVOUR OF THE ASSESSEE. CONSEQUENTLY, GROUNDS NO.13, 14 AND 16 BEING ACADEMIC IN NATURE ARE LEFT UN ADJUDICATED. 25. THE ISSUE ARISING OUT OF GROUNDS NO.17 TO 19, RELATES TO TRANSFER PRICING ADJUSTMENT RELATING TO MARK UP ON REIMBURSEMENT OF EXPENSES AT ` 1,32,82,364. 26. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD INCURRED CERTAIN EXPENSES FOR ITS BUSINESS AND RECOVERED THE SAME FROM ITS A.E. THE SAME WAS THE INITIAL PERIOD OF ITS BUSINESS OPERATIONS. FOR CERTAIN 18 VIACOM 18 MEDIA PVT. LTD. EXPENSES THE ASSESSEE ONLY ACTED AS A FACILITATOR AND HA S RECOVERED T HE SAME ON A COST TO COST BASIS WITHOUT ANY MARK - UP. 27. THE TRANSFER PRICING OFFICER CONSIDERED AD HOC 10% MARK - UP ON THE GROUND THAT THE ASSESSEE HAS PROVIDED FINANCIAL AND MANPOWER SERVICES TO ITS A.E. AND MADE ADDITION OF ` 1,32,82,36 4. 28. THE DRP CONFIRMED THE ACTION OF THE TRANSFER PRICING OFFICER. 29. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED BEFORE US THAT F ROM THE NATURE OF EXPENSES WHICH ARE REIMBURSED BY THE AES, THE MAJOR PART WAS ON ACCOUNT OF A DVERTISEMENT AND SALES PROMOTION E XPENSES WHICH WERE INCURRED FOR THE PURPOSE OF THE BUSINESS OF THE ASSESSEE AND THE SAME WERE REIMBURSED TO SUPPORT THE BUSINESS OPERATIONS OF THE ASSESSEE AND S IMILARLY, THE ASSESSEE HAD MADE FULL AND FINAL SETTLEMENT WITH ITS M ANAGING DIRECTOR, WHICH ALSO GOT REIMBURSED FROM ITS AE. THESE TWO TYPES OF EXPENSES ACCOUNTS FOR 2/3 RD OF THE TOTAL REIMBURSEMENT RECEIVED. T HE BALANCE OF VARIOUS EXPENSES INCURRED ON BEHALF OF A . E . AND SUBSEQUENTLY RECOVERED. 30. FURTHER, THE LEARNED A.R. SUBMITTED THAT T HE ASSESSEE HA D NOT FUNDED BY THE A . E . BUT THERE WAS ALWAYS AMOUNT PAYABLE TO A . E S AND THUS THERE IS NO FINANCIAL SERVICES PROVIDED BY THE ASSESSEE . THE ACTIVITIES ARE DONE FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE AND NO SPECIFIC MANPOWE R IS DEPLOYED TO PROVIDE SERVICES TO THE A . E. B ENEFIT, 19 VIACOM 18 MEDIA PVT. LTD. IF ANY TO THE A.E. IS ONLY INCIDENTAL. THE TRANSFER PRICING OFFICER HAS NOT DONE ANY FAR ANALYSIS OF THIS ACTIVITY SO AS TO ARRIVE AT AS THE FUNCTIONS CARRIED OUT BY THE ASSESSEE IN DISCHARGE OF THE AL LEGED SERVICES, ASSETS, IF ANY, EMPLOYED OR ASSUMPTION OF ANY RISK BY THE ASSESSEE . FURTHER, THE TRANSFER PRICING OFFICER HAS NOT DONE ANY BENCHMARKING BY TAKING ANY COMPARABLE AND HAS APPLIED ONLY AD HOC MARK OF 10%. THUS, THE ADJUSTMENT COMPUTED BY THE T RANSFER PRICING OFFICER WITHOUT PROPER FAR ANALYSIS, WITHOUT APPLYING ANY MOST APPROPRIATE METHOD AND WITHOUT CONSIDERING ANY COMPARABLE IS NOT JUSTIFIED. IN SUPPORT OF HIS SUBMISSIONS, THE LEARNED A.R. FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) CIT V LEVER INDIA EXPORTS LTD ITA NO 1306 OF 2014 , ORDER DATED 23.01.2017 (BOM) ; II) CIT V MERCK LTD ITA NO 272 OF 2014 , ORDER DATED 08.08.2016 (BOM) ; III) CIT V KODAK INDIA PVT LTD ITA NO 15 OF 2014 , ORDER DATED 11.07.2016 (BOM) ; AND IV) BARCLAYS BANK P LC , ITA NO 584/M/2011 , ORDER DATED 12.01.2018 (MUM TRIB). 31. THE LEARNED A.R. FOR THE ASSESSEE FURTHER SUBMITTED THAT I DENTICAL ADJUSTMENT OF MARK UP ON REIMBURSEMENT OF ADVERTISEMENT AND MARKETING EXPENSES WAS MADE IN IMMEDIATELY PRECEDING YEAR I.E. , A.Y. 2005 - 06 AND THE TRIBUNAL HAS DELETED THE SAME. 20 VIACOM 18 MEDIA PVT. LTD. 32. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 33. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF THE DECISIONS RELIED UPON , WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY THE CO ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 06 IN AN APPEAL FILED BY THE REVENUE IN ACIT V/S M/S.VIACOM 18 MEDIA PVT. LTD., ITA NO.8406/MUM./2010, ORDER DATED 8 TH FEBRUARY 2019, WHEREIN THE CO ORDINATE BENCH ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. FOR BETTER APPRECIATION OF FACTS, THE RELEVANT OBSERVATION S OF THE TRIBUNAL ARE RE PRODUCED BELOW : 20. WE FIND THAT AS PER AGREEMENT BETWEEN THE ASSESSEE AND HIS AE IN RESPECT OF ADVERTISING SALE AGENCY, IT KEEPS 15% OF GROSS SALE REVENUE AND FOR THIS INCOME, THE ASSESSEE BEARS THE NORMAL ADVERTISING AND SALES PROMOTION COSTS. FURT HER, IN CASE OF CERTAIN MAJOR MARKETING COSTS INCURRED BY IT AT THE INSTANCES OF ITS AE IT IS ENTITLED TO REIMBURSEMENT OF THE SAME. DURING THE FINANCIAL YEAR, THE ASSESSEE INCURRED CERTAIN MAJOR ADVERTISEMENT AND SALES PROMOTION COSTS AMOUNTING TO RS. 86,43476/ - ON BEHALF OF ITS AE NICKELODEON THE SAME WAS REIMBURSED BY NICKELODEON AS PER TERMS OF AGREEMENT. IN REGARD TO EXPORT OF CONTENTS TO ITS AE, THE ASSESSEE RECEIVES ADVANCE PAYMENT FROM THE ASSOCIATE ENTERPRISES BASED ON ESTIMATES AND FINAL PAYMENT WAS RECEIVED BASED ON INVOICES WITHIN 30 DAYS. FOR THE ADVERTISEMENT AND DISTRIBUTION, THE ASSESSEE GIVES CREDIT PERIOD OF AROUND 30 TO 90 DA YS TO ITS CUSTOMERS AND THE PAYMENT TO BE MADE TO THE AE WHICH MADE ONLY AFTER THE SAME ARE RECEIVED FROM THE CUSTOMERS. BUT THE ASSESSEE HAS NOT AVAILED ANY SPECIFIC MANPOWER FOR THIS PURPOSE AND EXISTING MANPOWER OF THE ASSESSEE HAS CARRIED OUT FOR THE I NCIDENTAL ACTIVITY. IN THIS PROCESS, THE ASSESSEE ALSO RECEIVED INDIRECT BENEFIT IN THE SHAPE OF INCREASED MARKET DEVELOPMENT, AS A RESULT OF MAJOR ADVERTISEMENT AND SALES PROMOTION COSTS. SUCH COSTS WILL INCREASE THE VIEWERSHIP OF THE CHANNEL WHICH WILL I N TURN RESULT IN 21 VIACOM 18 MEDIA PVT. LTD. HIGHER INCOME FOR THE ASSESSEE IN TERM OF INCREASE SALES AND DISTRIBUTION OF ADDS RECEIPT ON THE CHANNELS. HENCE, ACCORDING TO US, NO FURTHER EXPENDITURE HAS BEEN INCURRED BY ASSESSEE AND CONSEQUENTLY NO FURTHER REIMBURSEMENT WAS MADE BY T HE ASSESSEE AND HENCE, NO MARKUP CAN BE ADDED. HENCE, WE CONFIRM THE ORDER OF CIT(A) DELETING THE ADDITION. THIS APPEAL OF REVENUE IS DISMISSED. 34. SINCE THE ISSUE FOR OUR CONSIDERATION IS COVERED BY THE AFORESAID DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE CITED SUPRA, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP AND ALLOW THE GROUNDS OF APPEAL NO.17 TO 19. 35. GROUND NO.20, RELATES TO DISALLOWANCE OF ADVERTISEMENT AND SALES PROMOTION EXPENSES UNDER SECTION 37(1 ) OF ` 2,63,41,675. 36. THE ASSESSEE HAD INCURRED ADVERTISEMENT AND MARKETING EXPENSES FOR ITS BUSINESS AND CLAIMED AS REVENUE EXPENDITURE. THE TOTAL EXPENSES INCURRED WAS ` 8,12,80,876, (NET OF RECOVERY FROM A.E. OF ` 6,22,30,226). OUT OF THE SAME, ` 5,23,56,231, WAS CONSIDERED AS PART OF DIRECT COST OF PRODUCTION OF PROGRAMMES WHICH HAS BEEN RECOVERED BY THE ASSESSEE FROM MTV ASIA AND NICK ASIA AT COST PLUS 10% MARK UP. BALANCE ADVERTISEMENT AND MARKETING COST OF ` 2,89,24,645, WAS CLAIMED AS HAVE BEE N INCURRED FOR THE PURPOSE OF BUSINESS OF ACTING AS ADVERTISING SALES AGENT AND DISTRIBUTION OF CHANNELS. THE ASSESSING OFFICER OBSERVED THAT THE I NCOME FROM EXPORT OF PROGRAMMES, EXCHANGE GAIN ON EXPORTS AND COMMISSION (REFERRED 22 VIACOM 18 MEDIA PVT. LTD. TO BY THE ASSESSING OFFICE R AS INCOME FROM FOREIGN OPERATIONS) CONSTITUTED 91.07% OF THE TOTAL REVENUES OF THE ASSESSEE AND ONLY 8.93% OF THE INCOME RELATES TO INDIA SPECIFIC OPERATIONS. THE ASSESSING OFFICER ACCORDINGLY, WAS OF THE VIEW THAT 91.07% OF THE ADVERTISING EXPENDITURE SHOULD BE ALLOCATED TO PROGRAM EXPORTS BUSINESS AND RECOVERED FROM MTV ASIA/ NICK ASIA. HOWEVER, SINCE THE ASSESSEE HAS ALLOCATED ONLY 64.41% OF THE TOTAL ADVERTISING EXPENSE TO THE FOREIGN INCOME, IT HAS RESULTED IN EXCESS CLAIM OF ` 2,63,41,675 , WHICH T HE ASSESSING OFFICER DISALLOWED. 37. THE DRP CONFIRMED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SINCE AS PER DRP, THE EXPENSES WERE INCURRED BY THE ASSESSEE WITHOUT ANY LEGAL OBLIGATION. 38. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE E XPENSES ARE INCURRED FOR THE PURPOSE OF BUSINESS AND , HENCE ALLOWABLE UNDER S ECTION 37(1) OF THE ACT . THE EXPENSES ARE INCURRED FOR ACHIEVING THE FOLLOWING TARGETS LIKE M ORE POPULAR ISE A CHANNEL, MORE ADVERTISERS ARE WILLING TO ADVERTISE ON SUCH CHANNELS AND H IGHER A D SALES WOULD RESULT IN HIGHER REVENUE FOR THE ASSESSEE (COMMISSION REVENUE, DISTRIBUTION REVENUES AND REVENUE FROM LICENSING AND MERCHANDISING) WHICH ARE ALL LINKED TO THE POPULARITY OF THE CHANNEL. THE LEARNED A.R. FURTHER SUBMITTED THAT ITS CASE IS SQUARELY COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT RENDERED IN ASSESSEES OWN 23 VIACOM 18 MEDIA PVT. LTD. CASE FOR THE A.Y. 2003 - 04. HE FURTHER SUBMIT TED THAT THE DEPARTMENT HAS NOT FILED APPEAL IN SUPREME COURT AGAINST THE SAID ISSUE. BASIS THE SAME, ON DIRECTION OF DRP, THE ASSESSING OFFICER HAS NOT MADE ANY DISALLOWANCE IN FINAL ASSESSMENT ORDER FOR A.Y. 2012 - 13. THE LEARNED A.R. FURTHER SUBMITTED THAT THE ISSUE IS ALSO COVERED BY DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 - 06. 39. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW: 40. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BEFORE US, THE LEARNED A.R. APPEARING FOR THE PARTIES CONCEDED THAT THE ISSUE IS NOW SETTLED BY THE DECISION OF THE CO ORDINATE BENCH OF THIS TRIBUNAL RENDERED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2005 06 IN AN APPEAL FILED BY THE REVENUE IN ACIT V/S M/S.VIACOM 18 MEDIA PV T. LTD., ITA NO.8406/MUM./2010, ORDER DATED 8 TH FEBRUARY 2019, WHEREIN THE CO ORDINATE BENCH HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE RELEVANT OBSERVATION OF THE TRIBUNAL IS REPRODUCED BELOW FOR THE SAKE OF READY REFEREN CE: 24. IT WAS CONTENDED BY THE LEARNED A.R. THAT THIS ORDER OF TRIBUNAL WAS AFFIRMED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. VIACOM 18 MEDIA PRIVATE LIMITED IN INCOME TAX APPEAL NO. 4599 OF 2010 VIDE ORDER DATED 25.11.2011 , WHEREIN IT IS HELD AS UNDER: - 24 VIACOM 18 MEDIA PVT. LTD. ' 4. THE INCOME TAX APPELLATE TR IBUNAL RELYING UPON ITS DECISION IN THE CASE OF STAR INDIA PRIVATE LIMITED, HELD THAT THE ASSESSEE WAS IN THE BUSINESS OF ACTING AS ADVERTISING SALES AGENT IN INDIA AND AS THE ASSESSEE WAS TO RECEIVE A PERCENTAGE OF ADVERTISING REVENUE RECEIVED IN INDIA AS ITS COMMISSION, IT WAS IN THE BUSINESS INTERESTS OF THE ASSESSEE TO INCUR ADVERTISEMENT AND SALES PROMOTION EXPENDITURE SO THAT THERE IS INCREASED ADVERTISEMENT REVENUE WHICH IN TURN WOULD ENTITLE THE ASSESSEE TO RECEIVE INCREASED COMMISSION. ACCORDINGLY, THE EXPENDITURE CLAIMED BY THE ASSESSEE WAS ALLOWED AS BUSINESS EXPENDITURE. IT IS BROUGHT TO OUR NOTICE THAT THE APPEAL FILED BY THE REVENUE AGAINST THE DECISION OF THE INCOME TAX APPELLATE TRIBUNAL IN THE CASE OF STAR INDIA PRIVATE LIMITED BEING INCOME TAX APPEAL NO.165 OF 2009 HAS BEEN DISMISSED BY THIS COURT ON 24TH MARCH 2009 .' 25. WE FIND THAT THE FACTS ARE IDENTICAL AND RESPECTFULLY FOLLOWING THE BOMBAY HIGH COURT, WE CONFIRMED THE ORDER OF CIT(A) AND DISMISS THIS ISSUE OF REVENUE'S APPEAL. 41. T HE ISSUE IN HAND IS COVERED BY THE AFORESAID DECISION OF THE CO ORDINATE BENCH OF THE TRIBUNAL CITED SUPRA. WE ALSO FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT HAS CONFIRMED THE ORDER OF THE TRIBUNAL RENDERED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2003 04 . C ONSISTEN T WITH THE VIEW TAKEN THEREIN IN ASSESSEES OWN CASE CITED SUPRA AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT AS AFORESAID, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY ALLOWING GROUND NO.20 , R AISED BY THE ASSESSEE. 42. GROUND NO.21, RELATES TO DISALLOWANCE ON ACCOUNT OF IR RECOVERABLE DEPOSIT WRITTEN OFF AT ` 1,25,00,000. 43. THE ASSESSEE HAD TAKEN A FLAT ON LEAVE & LICENSE FOR PROVIDING ACCOMMODATION TO ITS MANAGING DIRECTOR. UNKNOWN TO THE ASSESSEE, 25 VIACOM 18 MEDIA PVT. LTD. THE LICENSOR HAD CREATED A LIEN/CHARGE ON THE SAID FLAT FOR LOAN TAKEN BY HIM FROM A BANK WHICH, DUE TO HIS DEFAULT, WAS CONFISCATED BY BANK THROUGH APPROPRIATE COURT A CTION AND FINALLY SOLD. THE ASSESSEE HAD INITIATED LEGAL PROCEEDINGS FOR RESTRAINING THE BANK TO SELL THE FLAT, BUT THE DEBT RECOVERY TRIBUNAL, VIDE ORDER DATED 31 ST MAY 2005, HELD THAT THE ASSESSEE MUST VACATE THE FLAT. THE ASSESSEE HAS NOT BEEN ABLE TO R ECOVER BACK THE SECURITY DEPOSIT OF ` 1.25 CRORE FROM THE LESSOR AND HENCE THE AMOUNT WAS WRITTEN OFF AS A LOSS INCURRED IN COURSE OF BUSINESS. 44. AS PER THE ASSESSING OFFICER, WRITE OFF IS NOT ALLOWABLE AS DEDUCTION AS BAD DEBTS AS ANY INCOME IN RESPECT THEREOF HAS NOT BEEN ACCOUNTED FOR IN THE PROFIT AND LOSS ACCOUNT OF THE ASSESSEE FOR EARLIER YEARS. ON THE ALTERNATE CLAIM OF THE ASSESSEE OF ALLO WING THE SAME AS TRADING LOSS, THE ASSESSING OFFICER HELD THAT IT HAS NOT ARISEN IN THE ORDINARY COURSE OF BUSINESS AS THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TELECAST OF VARIOUS PROGRAMS ON ITS TV CHANNELS AND DISTRIBUTION OF SATELLITE CHANNELS VIA CAB LE. 45. THE DRP CONFIRMED THE DISALLOWANCE AS THE ASSESSEE WAS NOT BEEN ABLE TO ESTABLISH THAT HIRING OF RESIDENTIAL UNIT IS INCIDENTAL TO THE BUSINESS OF THE ASSESSEE TO CLAIM IT AS BUSINESS LOSS. 46. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE DEPOSIT FOR THE RESIDENTIAL UNIT WAS GIVEN FOR PROVIDING RESIDENTIAL 26 VIACOM 18 MEDIA PVT. LTD. ACCOMMODATION TO THE MANAGING DIRECTOR AS PER THE TERMS OF HIS APPOINTMENT AND HENCE THE SAME IS FO R THE PURPOSE BUSINESS OF THE ASSESSEE . HE SUBMITTED THAT F ROM THE DETAILED NOTE AND CORRESPONDENCE FOR RECOVERY OF THE DEPOSIT A COPY OF WHICH IS PLACED AT PAGE NO. 328 TO 415 OF THE FPB NO. 2, IT CAN BE SEEN THAT AFTER TAKING ALL NECESSARY LEGAL ACTION, THE ASSESSEE COULD NOT RECOVER THE DEPOSIT AND ALSO HAD TO LET GO OFF THE POSSESSION O F THE FLAT DURING THE YEAR AND HENCE THE LOSS WAS CORRECTLY CLAIMED AS BUSINESS LOSS. 47. HE SUBMITTED THAT T HE HON'BLE JURISDICTIONAL HIGH COURT IN IBM WORLD TRADE CORP . V/S CIT, [1990] 186 ITR 412 (BOM.) HAS IN SIMILAR CIRCUMSTANCES HELD THAT WRITE OFF OF DEPOSIT GIVEN FOR TAKING PREMISES ON LEASE ON LANDLORD BECOMING INSOLVENT, IS AN ALLOWABLE AS BUSINES S LOSS AS THE LEASE WAS TAKEN FOR THE PURPOSE OF BUSINESS. IN SUPPORT OF THESE CONTENTIONS, THE LEARNED A.R. PLACED RELIANCE ON THE FOLLOWING DECISI ONS: I) CIT V ANJANI KUMAR CO . LTD . [2003] 259 ITR 114 (RAJ . ) ; II) P . SATYANARAYANA V/S CIT , [1979] 116 ITR 803 (A . P) ; AND III) CIT V CRESCENT FILMS P . LTD ., [1979] 248 ITR 670 (MAD . ) . 48. IN VIEW OF THE ABOVE, THE LEARNED A.R. SUBMITTED THAT CLAIM OF BUSINESS LOSS OF ` 1,25,00,000 , ON ACCOUNT OF WRITE OFF OF IR RECOVERABLE DEPOSIT SHALL BE ALLOWED. 27 VIACOM 18 MEDIA PVT. LTD. 49. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 50. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICED THAT THE ASSESSEE HAS TAKEN A FLAT ON LEAVE AND LICENSE BASIS FOR PROVIDING ACCOMMODATION TO ITS MANAGING DIRECTOR. PROVIDING ACCOMMODATION TO ITS KEY EMPLOYEES IS PART OF BUSI NESS EXPENDITURE. IT IS NEEDLESS TO SAY THAT THESE FACILITIES WERE CHARGED TO TAX UNDER FRINGE BENEFIT TAX . THE ASSESSEE HAS TAKEN THIS FLAT TO PROVIDE ACCOMMODATION TO ITS MANAGING DIRECTOR AND THE DEPOSIT MADE TO SECURE THIS FLAT IS ALSO FOR THE PURPOSE OF BUSINESS. WHEN THE ASSESSEE UNABLE TO RECOVER THE SAME, IT CAN ONLY BE CONSIDERED AS THE LOSS INCURRED FOR THE PURPOSE OF BUSINESS. THEREFORE, WE ARE INCLINED TO ACCEPT THE SUBMISSIONS OF THE ASSESSEE AND ACCORDINGLY GROUND NO.21, RAISED BY THE ASSESSEE IS ALLOWED. 51. GROUND NO.22, RELATES TO LEVY OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. 52. LEVY OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT IS CONSEQUENTIAL IN NATURE AND HENCE THE ASSESSING OFFICER IS DIRECTED TO GIVE CONSEQUENTIAL EF FECT IN VIEW OF OUR DIRECTIONS AS AFORESAID AND IN ACCORDANCE WITH LAW. 28 VIACOM 18 MEDIA PVT. LTD. 53. THE ISSUE ARISING OUT OF GROUNDS NO.23 AND 24, RELATES TO LACK OF OPPORTUNITY OF HEARING. 54. DURING THE COURSE OF HEARING, THE LEARNED A.R. FOR THE ASSESSEE HAS NOT PRESSED THESE GROUND S. CONSEQUENTLY, THESE GROUNDS ARE DISMISSED AS NOT PRESSED. 55. IN THE RESULT, ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2006 07 IS PARTLY ALLOWED. IT(TP)A NO.7337/MUM./2012 ASSESSEES APPEAL A.Y. 2007 08 56. GROUNDS NO.1 AND 2, RAISED BY THE ASSESSEE BEING CONSEQUENTIAL TO OTHER GROUNDS DECIDED BY US IN THIS APPEAL ELSEWHERE. 57. THE ISSUE RAISED IN GROUND NO.3 TO 9 , BY THE ASSESSEE IS WITH REGARD TO THE A DJUSTMENT RELATING TO C ONTENT S EGMENT OF ` 4,53,39,826. 58. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US THAT THIS ISSUE HAS BEEN DECIDED BY US IN GROUNDS NO.3 TO 12, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, VIDE PARA 13 TO 15 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE . CONSEQUENT UPON THE DECISION TAKEN BY US ON THIS ISSUE AS AFORESAID, 29 VIACOM 18 MEDIA PVT. LTD. WHILE MAINTAINING THE C ONSISTENCY W ITH THE VIEW TAKEN THEREIN, GROUND S NO.3 TO 9 , RAISED BY THE ASSESSEE ARE ALLOWED. 59. THE ISSUE RAISED IN GROUNDS NO.10 AND 11, BY THE ASSESSEE RELATES TO TAXABILITY OF ADVANCE INCOME OF ` 36,46,492. 60. THE ASSESSEE HAD RECEIVED INCOME FROM CERTAIN PARTIES IN ADVANCE. THE INCOME WAS PERTAINING TO MORE THAN 12 MONTHS OF BETWEEN TWO ACCOUNTING YEARS. THE PROPORTIONATE INCOME PERTAINING TO THE ASSESSMENT YEAR 2007 08 WAS OFFERED TO TAX IN ASSESSMENT YEAR 2007 08 AND THE BALANCE INCOME WAS OFFERED TO TAX IN THE SU BSEQUENT ASSESSMENT YEARS AND WAS SHOWN AS RECEIVED IN ADVANCE IN ASSESSMENT YEAR 2007 08 WHICH IS TABULATED BELOW: NAME OF THE PARTY TOTAL PERIOD AMOUNT AS PER INVOICE AMOUNT ACCRUED AND OFFERED TO TAX AMOUNT TREATED AS ADVANCE NATURE OF INCOME GOLD ENTERTAINMENT 01 - 07 - 2006 TO 30 - 06 - 2006 6,00,000 2,25,000 3,75,000 HOME VIDEO AND DVD RIGHTS SET DISCOVERY 01 - 02 - 2007 TO 31 - 07 - 2007 23,28,010 7,76,003 15,52,007 CHANNEL DISTRIBUTION INCOME SET DISCOVERY 01 - 02 - 2007 TO 31 - 07 - 2007 21,33,448 7,11,149 14,22,299 CHANNEL DISTRIBUTION INCOME OTHERS I.E. UNIVERSAL MUSIC, A KLASS FASHIONS AND PYRAMID PLASTICS 2,97,182 MUSIC RIGHTS AND LICENSING INCOME TOTAL 36,46,492 30 VIACOM 18 MEDIA PVT. LTD. 61. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID ADVANCE INCOME SHOUL D HAVE BEEN OFFERED TO TAX IN ASSESSMENT YEAR 2007 - 08 AND ACCORDINGLY MADE ADDITION TO TOTAL INCOME . 62. THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER AS THE RELEVANT DOCUMENTS WERE NOT FILED BEFORE THE ASSESSING OFFICER AND THOUGH FILED B EFORE THE CIT(A), WERE NOT FILED UNDER RULE 46A REQUESTING FOR ADMISSION OF ADDITIONAL EVIDENCES. 63. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE RELEVANT DETAILS COULD NOT BE FILED BEFORE THE ASSESSING OFFICER AS THE BASIC DETAILS WERE FI LED FOR THE FIRST TIME VIDE LETTER DATED 21 ST DECEMBER 2010, AND THEN THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER ON 31 ST DECEMBER 2010. HE SUBMITTED THAT THE RELEVANT DETAILS WERE FILED BEFORE THE LEARNED CIT(A) FOR THE FIRST TIME, WHICH WERE NOT EN TERTAINED BY HIM ON TECHNICAL REASONS. THE ASSESSEE HAS, THEREFORE, FILED APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCES ON 19 TH FEBRUARY 2021, WITH A REQUEST TO ADMIT THE DOCUMENTS TO BE ADMITTED AS ADDITIONAL EVIDENCES. ON MERITS, THE LEARNED A.R. SUB MITTED THE ASSESSEE HAS ALREADY OFFERED THE INCOME ACCRUED DURING THE YEAR AND BALANCE ADVANCE INCOME IS ALREADY OFFERED TO TAX IN SUBSEQUENT ASSESSMENT YEARS . THIS PRACTICE IS CONSISTENTLY FOLLOWED BY THE ASSESSEE AND THE SAME IS ACCEPTED IN OTHER YEARS . 31 VIACOM 18 MEDIA PVT. LTD. 64. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 65. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN VIEW OF THE SUBMISSIONS MADE BY THE LEARNED A.R. FOR THE ASSESSEE, WE SET ASIDE THE IMP UGNED ORDER PASSED BY THE LEARNED CIT(A) AND RESTORE THE ISSUE BACK TO THE ASSESSING OFFICER AND DIRECT HIM TO VERIFY THE ADDITIONAL EVIDENCE FILED BEFORE THE LEARNED CIT(A) AND IF THE INCOME IS ALREADY OFFERED TO TAX IN SUBSEQUENT ASSESSMENT YEAR, THEN THE SAME MAY NOT BE AGAIN TAXED IN ASSESSMENT YEAR 2007 08. THUS, THE GROUND NO.10 AND 11, ARE ALLOWED IN TERMS INDICATED ABOVE. 66. GROUND NO.12, RELATES TO LEVY OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT. 67. LEVY OF INTEREST UNDER SECTION 234B AND 234C OF THE ACT IS CONSEQUENTIAL IN NATURE AND HENCE THE ASSESSING OFFICER IS DIRECTED TO GIVE CONSEQUENTIAL EFFECT IN VIEW OF OUR DIRECTIONS AS AFORESAID AND IN ACCORDANCE WITH LAW. 68. GROUND NO.13, RELATES TO DEDUCTI ON OF DISTRIBUTION EXPENSES. 69. DURING THE COURSE OF HEARING, IT WAS BROUGHT TO THE NOTICE OF THE BENCH THAT THIS CLAIM IS MADE FOR THE FIRST TIME BEFORE THE TRIBUNAL, 32 VIACOM 18 MEDIA PVT. LTD. WHICH IS IN CONSEQUENCE OF RE OPENING OF THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006 07 AN D CONSEQUENTLY THE LEARNED CIT(A) AND TRIBUNAL ORDER RESPECTIVELY PASSED WERE AGAINST THE SAID RE OPENING OF THE ASSESSMENT. 70. FURTHER THE LEARNED A.R. SUBMITTED THAT S UBSEQUENT TO THE COMPLETION OF ASSESSMENT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSMEN T FOR THE ASSESSMENT YEAR 2006 - 07 WAS RE OPENED. IN THE RE ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER DISALLOWED A SUM OF ` 5,55,28,565 , UNDER SECTION 40(A)(IA)OF THE ACT BEING DISTRIBUTION FEES PAID BY THE ASSESSEE TO ITS A.E. FOR NON - DEDUCTION OF TAX A T SOURCE. 71. BEFORE THE LEARNED CIT(A), THE ASSESSEE PLEADED THAT SINCE THE ASSESSEE HAS DEDUCTED TAX AT SOURCE IN SUBSEQUENT YEARS, RELEVANT DEDUCTION SHALL BE ALLOWED IN THE YEAR IN WHICH TAX WAS PAID TO THE GOVERNMENT. ACCORDINGLY, THE ASSESSEE CLAIMED T HAT DIRECTION MAY BE GIVEN TO THE ASSESSING OFFICER TO ALLOW SUM OF ` 3,33,69,334 , IN ASSESSMENT YEAR 2007 08. THE LEARNED CIT(A) , HOWEVER, DID NOT ACCEPT THE PLEA OF THE ASSESSEE . ON APPEAL BEFORE THE TRIBUNAL, VIDE ORDER DATED 26 TH NOVEMBER 2014, THE TRIBUNAL DIRECTED THE LEARNED CIT(A) TO CONSIDER THE ASSESSEES CLAIM AND RESTORED THE ISSUE BACK TO THE FILE OF THE LEARNED CIT(A). 33 VIACOM 18 MEDIA PVT. LTD. 72. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT TILL DATE, NO EFFECT IS GIVEN TO THE DIRECTIONS OF THE TRI BUNAL AND HENCE THIS GROUND IS TAKEN BEFORE THE TRIBUNAL REQUESTING TO ISSUE APPROPRIATE DIRECTIONS AND THE ASSESSING OFFICER / CIT(A) MAY BE DIRECTED TO ALLOW CLAIM OF THE ASSESSEE AFTER VERIFYING FACT OF DEPOSIT OF TAX DEDUCTED AT SOURCE. 73. THE LEARNED DE PARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 74. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE MADE THIS NEW CLAIM BEFORE US WHICH IS BORNE OUT AS A RESULT OF APPELLATE DECISIONS IN THE EARLIER ASSESSMENT YEAR. BY RELYING UPON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD., [2012] 349 ITR 336 (BOM.) , WE CONSIDER THIS NEW CLAIM MADE BY THE ASSESSEE AS FIT AND PROPER FOR ADJUDICATION. NOW, ON MERIT OF THIS NEW CLAIM , W E FIND THAT I DENTICAL ISSUE CAME UP BEFORE THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2008 09 IN VIACOM 18 MEDIA PVT. LTD. V/S ACIT, ITA NO.7336/MUM./2012, ORDER DATED 29 TH OCTOBER 2016, WHEREIN THE ASSESSEE HAD CLAIMED DEDUCTION OF ` 48,70,516 (OUT OF ` 5,55,28,565) ON ACCOUNT OF TDS PAID DURING THE ASSESSMENT YEAR 2008 09. THE TRIBUNAL RESTORED THE MATTER BACK TO THE FILE OF THE LEARNED CIT(A) FOR DECIDING THE ISSUE AFRESH ALONG WITH SIMILAR ISSUES 34 VIACOM 18 MEDIA PVT. LTD. PENDING FOR ASSESSMENT YEAR 2006 07 . THE RELEVANT PORTION OF THE ORDER OF THE TRIBUNAL IS REPRODUCED BELOW FOR BETTER APPREC IATION OF FACTS: 8. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES 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 DISTRIBUTION EXPENSES ARE CONCERNED, AT THE TIME O F HEARING BEFORE THE TRIBUNAL THE ASSESSEE MADE A SPECIFIC CLAIM THAT EITHER THEY HAVE TO BE ALLOWED IN A.Y. 2006 - 07 OR IN A.Y. 2008 - 09. CONSIDERING SUCH CLAIM OF THE ASSESSEE, THE TRIBUNAL REMITTED THE MATTER BACK TO THE FILE OF THE AO FOR DECIDING ASSESS EES CLAIM AFRESH BY CONSIDERING ADDITIONAL EVIDENCE BROUGHT ON RECORD. THE LEARNED A.R. FOR THE ASSESSEE HAD SUBMITTED 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 PROPE R TO REMIT THIS ISSUE TO THE FILE OF THE CIT(A) FOR DECIDING AFRESH ALONG WITH SIMILAR ISSUES PENDING FOR AY 2006 - 07 AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. 75. SINCE THE ISSUE BEFORE US IS IDENTICAL TO THE ISSUE AS AFORESAID, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND DIRECT HIM TO DECIDE THE ISSUE OF DEDUCTION OF ` 3,33,69,334 , AFTER VERIFYING THE FACT OF DEPOSIT OF TAX DEDUCTED AT SOURCE AND IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . THUS, GROUND NO.13, IS ALLOWED FOR STATISTICAL PURPOSES . 35 VIACOM 18 MEDIA PVT. LTD. 76. IN THE RESULT, ASSESSEES APPEAL FOR A.Y. 2007 08 IS PARTLY ALLOWED. ITA NO.7147/MUM./2012 REVENUES APPEAL A.Y. 2007 08 77. GROUND NO.1(I) AND 1(II) RELATES TO A DJUSTMENT RELATING TO CONTENT SEGMENT. 78. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US THAT RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY EITHER PARTY IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUNDS NO.3 TO 12, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, VIDE PARA 13 TO 15 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) BY ALLOWING THE ISSUE RAISED BY THE ASSESSEE. CONSEQUENT UPON THE DECISION TAKEN BY US ON T HIS ISSUE AS AFORESAID, WHILE MAINTAINING THE C ONSISTENCY WITH THE VIEW TAKEN THEREIN, WE DO NOT FIND ANY INFIRMITY WITH THE ORDER OF THE LEARNED CIT(A) WHICH IS UPHELD ON THIS ISSUE BY DISMISSING THE GROUNDS NO.1(I) AND 1(II) RAISED BY THE REVENUE. 79. GROUND NO.2(I) TO 2(IV) RAISED BY THE REVENUE RELATES TO TRANSFER PRICING ADJUSTMENT RELATING TO MARK UP ON REIMBURSEMENT OF EXPENSES AT ` 21,99,60,689. 36 VIACOM 18 MEDIA PVT. LTD. 80. HAVING HEARD BOTH THE PARTIES AND HAVING PERUSED THE MATERIAL ON RECORD , WE FIND THAT RELATED FACTS AN D CIRCUMSTANCES OF THE ISSUE RAISED BY THE REVENUE IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUNDS NO. 17 TO 1 9 , RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, VIDE PAR A 33 AND 34 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) BY ALLOWING THE ISSUE RAISED BY THE ASSESSEE. CONSEQUENT UPON THE DECISION TAKEN BY US ON THIS ISSUE AS AFORESAID, WHILE MAINTAINING THE C ONSISTENCY WITH T HE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF THE LEARNED CIT(A) ON THIS ISSUE AND DISMISS THE GROUNDS NO. 2 (I) AND 2 (I V ) RAISED BY THE REVENUE. 81. GROUND NO.3, RAISED BY THE REVENUE RELATES TO DISALLOWANCE OF ADVERTISEMENT AND SALE PROMOTION EXPENSES UNDER SECTION 37(1) OF THE ACT AT ` 4,11,60,573. 82. DURING THE COURSE OF HEARING, BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES CONCEDED THAT RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY EITHER PARTY IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUND NO.20, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSES SMENT YEAR 2006 07, VIDE PARA 40 AND 41 OF THIS ORDER, WHEREIN WE HAVE SET 37 VIACOM 18 MEDIA PVT. LTD. ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) BY ALLOWING THE ISSUE RAISED BY THE ASSESSEE. CONSEQUENT UPON THE DECISION TAKEN BY US ON THIS ISSUE AS AFORESAID AND CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER OF THE LEAR NED CIT(A) ON THIS ISSUE AND DISMISS GROUNDS NO.3 RAISED BY THE REVENUE. 83. GROUNDS NO.4 AND 5, BEING GENERAL IN NATURE, HENCE NO SEPARATE ADJUDICATION IS CONTEMPLATED. 84. IN THE RESULT, REVENUES APPEAL FOR A.Y. 2007 08 IS DISMISSED. ITA NO.2055/MUM./2014 ASSESSEES APPEAL A.Y. 2009 10 85. GROUNDS NO.1 AND 2, BEING INTER CONNECTED TO OTHER GROUNDS RAISED IN THIS APPEAL, HENCE THESE GROUNDS ARE LEFT UN ADJUDICATED. THESE ISSUES WILL BE DECIDED IN SUCCEEDING GROUNDS OF APPEAL. 86. GROUND NO.3, RELATES TO TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF PAYMENT MADE FOR DISTRIBUTION OF T.V. CHANNELS OF ` 87,55,370, UNDER THE OLD BUSINESS MODEL. 87. HAVING CONSIDERED THE SUBMISSIONS OF BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES IN THE LIGHT OF THE DECISIONS RELIED UPON , WE FIND TH E RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY EITHER PARTY IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUNDS NO.13 TO 16, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSE SSMENT YEAR 2006 07, 38 VIACOM 18 MEDIA PVT. LTD. VIDE PARA 23 & 24 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY ALLOWING THE ISSUE RAISED BY THE ASSESSEE. CONSEQUENT UPON THE DECISION TAKEN B Y US ON THIS ISSUE AS AFORESAID AND CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING GROUND NO.3, RAISED BY THE ASSESSEE. 88. GROUND NO.4, RELATES TO TRANSFER PRICING ADJUSTMENT AT ` 50,29,119, ON ACCOUNT OF REIMBURSEMENT OF EXPENSES BY A .E. TOWARDS MARKETING AND OTHER EXPENSES UNDER OLD BUSINESS MODEL. 89. HAVING HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF THE DECISIONS RELIED UPON , WE FIND THAT THAT RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY EITHER PARTY IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUNDS NO.17 TO 19, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, VIDE PARA 33 & 34 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY ALLOWING THE ISSUE RAISED BY THE ASSESSEE. CONSEQUENT UPON THE DECISION TAKEN BY US ON THIS ISSUE AS AFORESAID AND CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON TH IS ISSUE BY ALLOWING GROUND NO.4, RAISED BY THE ASSESSEE. 39 VIACOM 18 MEDIA PVT. LTD. 90. GROUND NO.5, RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 52, 9 5,875, ON ACCOUNT OF PAYMENT FOR USE OF TRADEMARK AND PROGRAMMING CONTENT UNDER NEW BUSINESS MODEL. 91. FACTS OF THIS ISSUE ARE, U NDER THE NEW BUSINESS MODEL, THE ASSESSEE RECEIVED RIGHT TO USE TRADEMARK OF THE CHANNELS OWNED BY THE A . ES AND THE PROGRAMMING CONTENT OWNED BY THE A.E. THE ASSESSEE PAID 7% OF THE RELEVANT REVENUE TO THE A . ES AS A CONSIDERATION FOR THE SAME. THE ASSESSEE BENCHMARKED THE SAID TRANSACTION USING CUP METHOD. THE ASSESSEE USED LEXIS DATABASE AND ARRIVED AT SET OF THREE COMPARABLE AGREEMENT S HAVING AVERAGE PAY OUT OF 7.27% AND CONSIDERED THE TRANSACTION AT ARMS LENGTH. 92. DURING THE PROCEEDINGS BEFORE THE TRANSFER PRICING OFFICER, THE ASSESSEE UNDERTOOK ADDITIONAL SEARCH CONSIDERING LEXIS DATABASE AND ARRIVED AT A SET OF EIGHT COMPARABLE WITH AVERAGE ROYALTY RATE OF 10.42%. THE TPO PICKED UP THREE COMPARABLE AFTER CONSIDERING BOTH THE COMPARABLE SEARCH DONE BY THE ASSESSEE AS UNDER: SR. NO LICENSOR AND LICENSEE RATE OF ROYALTY 1. PLAYBOY ENTERTAINMENT GROUP INC AND PLAYBOY CHANNEL JAPAN INC (FROM FIRST SEARCH AS PER TP STUDY USING ROYALTY STAT DATABASE) 2.50% 2 . TELEVISA S.A. DE C.V. AND UNIVISION COMMUNICATIONS INC (FROM ADDITIONAL SEARCH FURNISHED DURING TP ASSESSMENT USING LEXIS DATABASE) 9.36% 3 . VENEVISION INTERNATIONAL CORPORATION AND UNIVISION COMMUNICATIONS INC (FROM ADDITIONAL SEARCH FURNISHED DURING TP ASSESSMENT USING LEXIS DATABASE) 7.50% AVERAGE 6.45% 40 VIACOM 18 MEDIA PVT. LTD. 93. CONSIDERING AVERAGE RATE OF ROYALTY OF 6.45% VERSUS ROYALTY PAID BY ASSESSEE @ 7%, THE TRANSFER PRICING OFFICER MADE ADJUSTMENT OF ` 52,95,875. 94. THE DRP UPHELD THE ACTION OF THE TRANSFER PRICING OFFICER. 95. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE C OMPARABLE SHOWN AT SR. NO.1 IN THE ABOVE TABLE I.E. , PLAYBOY ENTERTAINMENT GROUP INC . WAS REJECTED BY ASSESSEE IN TRANSFER PRICING STUDY AS THE TRANSACTION WAS BETWEEN RELATED PARTIES AND NO T BETWEEN INDEPENDENT PARTIES. HENCE , THE SAME CANNOT BE TAKEN AS COMPARABLE. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS ALSO FILED SCREEN SHOT FROM ROYALTY STAT DATABASE, WHICH SHOWS THE MARK UP OF RELATED PARTY AGREEMENT. ONCE THIS COMPARABLE IS REMOVED FROM THE SET OF THE TRANSFER PRICING OFFICER , AVERAGE RATE OF ROYALTY FOR BALANCE TWO COMPARABLE IS 8.43% AND ACCORDINGLY THE ASSESSEE S RATE OF ROYALTY @ 7% IS AT ARMS LENGTH. HE SUBMITTED THAT THE TRANSFER PRICING OFFICER HAS NOT GIVEN ANY SPECIFIC REAS ON TO REJECT ANY OF THE COMPARABLE S SELECTED BY THE ASSESSEE AND HENCE A SET OF COMPARABLE SUBMITTED DURING THE ASSESSMENT PROCEEDINGS SHALL BE ACCEPTED AND ACCORDINGLY, ROYALTY PAID BY THE ASSESSEE SHALL BE TREATED AS AT ARMS LENGTH. 96. THE LEARNED DEPARTM ENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND HE RAISED A DOUBT THAT THE SERVICE CHARGES 41 VIACOM 18 MEDIA PVT. LTD. REMITTED BY THE ASSESSEE CAN ALSO BE REIMBURSEMENT OF SERVICE REVENUE WHICH HAS TO BE INVESTIGATED. 97. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT THE TRANSFER PRICING OFFICER HAS SELECTED PLAYBOY ENTERTAINMENT AS COMPARABLE COMPANY TO THE ASSESSEE COMPANY. BEFORE US, THE LEARNED A.R. BROUGHT TO OUR NOTICE THAT THE ASSESSING OFFICER HAS SELECTED THIS COM PARABLE WITHOUT CONSIDERING THE FACT THAT IT IS BETWEEN TWO RELATED PARTY TRANSACTIONS. FOR TRANSFER PRICING STUDY, THE TRANSACTION HAS TO BE WITH INDEPENDENT PARTIES. THEREFORE, THE SELECTION HAS TO BE WITH INDEPENDENT PARTIES. THEREFORE, THE SELECTION CR ITERIA ADOPTED BY THE TRANSFER PRICING OFFICER IS BAD AND THIS RELATED PARTY COMPARABLE IS NOT PROPER COMPARABLE. ACCORDINGLY, WE DIRECT THE TRANSFER PRICING OFFICER TO DELETE THIS COMPANY FROM LIST OF COMPARABLE COMPANIES AND DETERMINE THE ARM'S LENGTH PR ICE ADJUSTMENT WITH THE AVAILABLE COMPARABLE COMPANIES AFRESH. THEREFORE, THE GROUND NO.5, RAISED BY THE ASSESSEE IS ALLOWED. 98. GROUND NO.6, RELATES TO TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF COMMISSION PAID TO THE A.E. FROM INCOME FROM ADVERTISEMENT SALES AT ` 15,23,923, AND ADVERTISEMENT SALES WEBSITE AT ` 75,881 TOTALING TO ` 15,99,804, UNDER THE NEW BUSINESS MODE. 42 VIACOM 18 MEDIA PVT. LTD. 99. UNDER THE NEW BUSINESS MODEL, THE ASSESSEE AVAILED CERTAIN MARKETING AND SALES SUPPORT SERVICES FROM ITS A.ES VIZ., VIACOM INC, MTV NETWORKS EUROPE AND MTV ASIA LDC FOR ITS T.V. CHANNELS AND WEBSITE AND ONLINE SERVICES I.E., MTV, VH1 AND NICKELODEON FOR THE TERRITORIES OUTSIDE INDIA. UNDER THE SERVICE AGREEMENT, THE A.ES RETAINED 15% OF THE RELEVANT NET REVENUE. THE ASSESSEE BENCHMARKED THE TRANSACTION CONSIDERING RUN ON DAY PART (RODP) RATES WHEREBY THE ADVERTISEMENT SLOTS SALES RATE IN ASIA - PACIFIC REGION BY THE A.E. WERE HIGHER THAN THE RATES AT WHICH THE ASSESSEES SALES TEAM SELLS THE SLOTS IN INDIA. 100. THE TRANSFER PRICING OFFICER ERRONEOUSLY INTERPRETED THE CBDT CIRCULAR NO.742 R/W CIRCULAR NO.765, AND WAS OF THE OPINION THAT THE COMMISSION SHOULD HAVE BEEN PAID @ 10% AND ACCORDINGLY, THE TRANSFER PRICING OFFICER MADE ADJUSTMENT @ 5%. 101. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT UNDER OLD BUSINESS MODEL, THE ASSESSEE WAS ALSO EARNING 15% COMMISSION FROM A.ES WHICH WAS ACCEPTED BY THE TRANSFER PRICING OFFICER. HE SUBMITT ED THAT T HE ADVERTISEMENT POLICY OF GOVERNMENT OF INDIA RECOMMENDS 15% AGENCY COMMISSION. THE CBDT CIRCULAR NO.742, R/W CIRCULAR NO.765 PROVIDES FOR 15% COMMISSION EARNED BY INDIAN AGENT OF FOREIGN TELECASTING COMPANY WHICH CAN BE CONSIDERED AS CUP FOR BEN CHMARKING THIS TRANSACTION. HE SUBMITTED THAT T HE TRANSFER PRICING 43 VIACOM 18 MEDIA PVT. LTD. OFFICER HAS MISREAD SAID CIRCULAR AND RELIED ON THE OTHER PART WHICH EXPLAINS PRESUMPTIVE PROFIT RATE OF 10% OF GROSS RECEIPTS IN HANDS OF FOREIGN TELECASTING COMPANIES IN INDIA. HE SUBMITTED THAT THE TRANSFER PRICING OFFICER DID NOT PROVIDE ANY REASON FOR REJECTION OF BENCHMARKING DONE BY THE ASSESSEE UNDER CUP FOLLOWING RUN ON DAY PART (ROPD) RATES. WHILE CONCLUDING HIS ARGUMENTS, THE LEARNED A.R. SUBMITTED THAT THE BENCHMARKING APPROACH OF THE ASSESSEE SHOULD BE UPHELD AND THAT BENCHMARKING DONE BY TRANSFER PRICING OFFICER ON ERRONEOUS READING OF THE CBDT CIRCULAR SHOULD BE REJECTED. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER PASSED BY THE LOW ER AUTHORITIES. 102. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICED THAT THE TRANSFER PRICING OFFICER RELYING ON THE CBDT CIRCULAR NO.742, DATED 2 ND MAY 1996, HE BENCHMARKED THE COMMISSION PAYMENT TO THE A.E. FOR THE INCOME FRO M ADVERTISEMENT SALES AND ADVERTISEMENT SALES WEBSITE @ 10% BY RELYING ON THE CBDT CIRCULAR CITED SUPRA. ON CAREFUL READING OF THIS CBDT CIRCULAR, WE NOTICED THAT THE CBDT ACKNOWLEDGED THAT OUT OF THE GROSS AMOUNT RAISED BY FOREIGN TELECASTING COMPANY, THE ADVERTISEMENT AGENTS RETAINS COMMISSION @ 15%. SIMILARLY, THE INDIAN AGENTS ALSO RETAINS SIMILAR COMMISSION. FROM PARA 4 OF THE AFORESAID CBDT CIRCULAR, WE NOTICE THAT ONLY IN THE ABSENCE OF COUNTRYWISE ACCOUNT AND KEEPING IN 44 VIACOM 18 MEDIA PVT. LTD. VIEW THE SUBSTANTIAL CAPITAL COST, OTHER RECURRING EXPENSES, ETC., IN THE INITIAL YEAR OF OPERATION, IT WOULD BE FAIR AND REASONABLE IF THE TAXABLE INCOME IS COMPUTED @ 10% OF THE GROSS RECEIPT MEANT FOR REMITTANCE ABROAD. THE ASSESSING OFFICER SHALL COMPUTE THE INCOME IN THE CASES OF THE FOREIGN TELECASTING COMPANIES WHICH ARE NOT HAVING ANY BRANCH OFFICE OR P.E. IN INDIA OR PROFIT RATE OF 10% OF THE GROSS RECEIPTS MEANT FOR REMITTANCE ABROAD. IN VIEW OF THE AFORESAID CBDT CIRCULAR, THE ASSESSING OFFICER HAS TO ADOPT THE ABOVE PRESUMP TIVE RATES ONLY IN THE CASE WHERE THE FOREIGN TELECASTING COMPANIES DO NOT HAVE COUNTRY WISE ACCOUNTS OR DO NOT HAVE BRANCH OR P.E. ONLY IN THE SPECIAL CIRCUMSTANCES, THE PRESUMPTIVE RATES CAN BE ADOPTED. THE TRANSFER PRICING OFFICER IN THE GIVEN CASE ADOP TED THE ABOVE RATE IN ORDER TO BENCHMARK THE COMMISSION RATE ADOPTED BY THE ASSESSEE WHEREAS THE ASSESSEE HAS ALL THE DETAILS LIKE COUNTRYWISE ACCOUNT OF THE A.E . THEREFORE, THE ADOPTION OF PRESUMPTIVE BASIS TO BENCHMARK OF TRANSFER PRICING ADJUSTMENT AS COMMISSION REMITTANCE IS NOT PROPER. ACCORDINGLY, THE METHOD ADOPTED BY THE ASSESSEE BASED ON CUP IS PROPER. THEREFORE, THE GROUND NO.6, RAISED BY THE ASSESSEE IS ALLOWED. 103. GROUND NO.7, RAISED BY THE ASSESSEE RELATES TO TRANSFER PRICING ADJUSTMENT ON ACC OUNT OF INCOME FROM AT ` 65,84,986, UNDER THE NEW BUSINESS MODEL. 45 VIACOM 18 MEDIA PVT. LTD. 104. UNDER THE NEW BUSINESS MODEL, THE ASSESSEE HAD ENTERED INTO AGREEMENT WITH ITS AES TO DISTRIBUTE ITS TV CHANNELS IN NEIGHBOURING COUNTRIES AS UNDER: NAME OF AE FUNCTION REMUNERATION FORMULAE AMOUNT MTV ASIA DISTRIBUTION OF MTV INDIA AND VH1 CHANNELS IN PAKISTAN, BANGLADESH, NEPAL, SRI LANKA ETC. A SHARE OF 50:50 OF THE GROSS PROCEEDS FROM SUBSCRIBERS IN THE MARKET AND USD 50,000 LUMPSUM 41,87,364 MTV NETWORKS, EUROPE DISTRIBUTION OF MTV INDIA CHANNEL IN THE USA 80:20 OF THE NET REVENUE, WHEN CALCULATED ON GROSS, THE APPELLANT EARNS APPROXIMATELY 50% 96,56,202 NICK ASIA DISTRIBUTION OF NICK CHANNEL IN BANGLADESH, NEPAL, SRI LANKA ETC USD 50,000 LUMPSUM 17,09,976 105. THE TRANSFER PRICING OFFICER COMPARED THE DISTRIBUTION ARRANGEMENT OF THE ASSESSEE WITH ONE OF ITS A.ES (MTV ASIA) WITH THE DISTRIBUTION ARRANGEMENT OF THE ASSESSEE WITH OTHER A . ES FOR DIFFERENT CHANNELS THEREBY COMPARING ONE CONTROLLED TRANSACTION WITH ANOTHE R CONTROLLED TRANSACTION. 106. THE TRANSFER PRICING OFFICER DETERMINED THE ARM'S LENGTH PRICE AND MADE AN ADJUSTMENT OF ` 65,84,986 , BY FOLLOWING INTERNAL CUP METHOD WHEREIN THE TRANSFER PRICING OFFICER COMPARED THE DISTRIBUTION MECHANISM BETWEEN THE ASSESSEE AND MTV ASIA WITH THE ARRANGEMENT BETWEEN THE ASSESSEE AND MTV NETWORKS AND NICK ASIA. WHILE DOING SO, HE ALSO CONSIDERED EXCHANGE RATE BETWEEN RUPEE AND USD AS AT 46 VIACOM 18 MEDIA PVT. LTD. YEAREND EXCHANGE RATE INSTEAD OF THE ACTUAL EXCHANGE RATE AT WHICH THE INCOME WAS BOOKED. 107. THE DRP CONFIRMED THE TRANSFER PRICING OFFICER S ACTION. 108. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE TRANSFER PRICING OFFICER FAILED TO APPRECIATE THAT THE ARM'S LENGTH PRINCIPLE IS BASED ON COMPARISON OF THE CONDITIONS IN A CONTROLLED TRANSACTION WITH THE CONDITIONS IN TRANSACTION BETWEEN TWO INDEPENDENT ENTERPRISES I.E. , UNCONTROLLED TRANSACTION. HE FURTHER SUBMITTED THAT THE TRANSFER PRICING OFFICER USED CONTROLLED PRICE TO BENCHMARK THE TRANSACTION AND ON THIS COUNT, ITSELF, THE ACT ION OF THE TRANSFER PRICING OFFICER FAILS. FOR THIS PROPOSITION, THE LEARNED A.R. PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) TECNIMONT ICB (P.) LTD. V. ACIT , [2012] 24 TAXMANN.COM 28 (MUM . TRIB .) ; AND II) DCB INDIA PVT . LTD . ( 2009) 121 ITD 131 (MUM . TRIB . ) . 109. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE NON CHARGING OF INTEREST TO NON A.E. ARE IRRELEVANT. THE UNDUE ADVANTAGE PASSED ON TO THE A.E. IS NOT ACCEPTABLE AND THE TRANSFER PRICING PROV ISION IS APPLICABLE. 47 VIACOM 18 MEDIA PVT. LTD. 110. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICED THAT IN THE GIVEN CASE, THE TRANSFER PRICING OFFICER COMPARED THE DISTRIBUTION ARRANGEMENT OF THE ASSESSEE WITH ONE OF THE ASSESSEES A.ES (MTV ASIA) WITH THE DISTRIBUTION ARRANGEMENT OF THE ASSESSEE WITH OTHER A.ES FOR DIFFERENT CHANNELS. IT CERTAINLY AMOUNTS TO COMPARING ONE CONTROLLED TRANSACTION WITH ANOTHER CONTROLLED TRANSACTION THE TRANSFER PRICING OFFICER COMPARED TO THE DISTRIBUTION MECHANISM BETWE EN THE ASSESSEE AND MTV ASIA VENTURES INDIA PVT. LTD., WITH THE ARRANGEMENT BETWEEN THE ASSESSEE AND MTV NETWORKS INDIA PVT. LTD. AND NICK ASIA. THEREFORE, THE TRANSFER PRICING OFFICER COMPARED THE CONTROLLED ARRANGEMENTS WITH ANOTHER CONTROLLED ARRANGEMENT WITH THE A.E. MTV ASIA VENTURES INDIA PVT. LTD. AND CONTROLLED ARRANGEMENT ENTERED BY THE ASSESSEE WITH THE OTHER A.ES I.E., MTV NETWORKS INDIA PVT. LTD. AND NICK ASIA. IT IS APTLY BROUGHT TO OUR NOTICE BY THE LEARNED A.R. THAT SIMILAR ISSUE H AS ALREADY BEEN CONSIDERED BY THIS TRIBUNAL (THIRD MEMBER CASE) IN TECNIMONT ICB P VT . LTD. V/S ACIT, [2012] 24 TAXMANN.COM 28 (MUM. ) ( TRIB.) , WHEREIN THE TRIBUNAL OBSERVED AS FOLLOWS: 12. IN FACT, THE ENTIRE SCHEME OF DETERMINING ALP OF AN INTERNATIONAL TRANSACTION IS BASED ON MAKING COMPARISON WITH CERTAIN COMPARABLE UNCONTROLLED TRANSACTIONS. IT IS MORE GLARING FROM THE COMMAND OF RULE 10B GIVEN IN ALL THE METHODS WHICH HAVE BEEN PRESCRIBED U/S 92C(1) FOR DETERMINING ALP. THE FIRST METHOD IS 'COMPARABL E UNCONTROLLED PRICE METHOD'. PROCEDURE FOR DETERMINING ALP UNDER THIS METHOD IS GIVEN IN RULE 10B(A). AS THE VERY NAME OF THE METHOD ITSELF SUGGESTS THAT THE PRICE CHARGED OR 48 VIACOM 18 MEDIA PVT. LTD. PAID FOR THE PROPERTY 'IN A COMPARABLE UNCONTROLLED TRANSACTION' IS IDENTIFIED. SUCH PRICE IN A COMPARABLE UNCONTROLLED TRANSACTION IS ADJUSTED ON ACCOUNT OF DIFFERENCES, IF ANY. THE CONSEQUENTIAL PRICE IS TAKEN AS BENCHMARK FOR CONSIDERING THE ASSESSEE'S INTERNATIONAL TRANSACTIONS WITH ITS AES. THE SECOND METHOD IS 'RESALE PRICE METH OD'. THE PROCEDURE FOR DETERMINING PRICE UNDER THIS METHOD IS GIVEN IN RULE 10B(B). UNDER THIS METHOD, THE PRICE AT WHICH PROPERTY PURCHASED OR SERVICES OBTAINED BY THE ENTERPRISE FROM AN AE IS RESOLD OR ARE PROVIDED TO 'AN UNRELATED ENTERPRISE' IS IDENTIF IED. THIS METHOD ALSO COMPARES THE GROSS PROFIT MARGIN IN A CONTROLLED TRANSACTION WITH THE GROSS PROFIT MARGIN IN AN UNCONTROLLED TRANSACTION BASED ON SPECIFIC FUNCTIONS PERFORMED. NEXT IS 'COST PLUS METHOD'. THE MODUS OPERANDI FOR DETERMINING OF ALP UNDE R THIS METHOD IS PROVIDED IN SECTION 10B(C) WHICH AGAIN REFERS TO MAKING COMPARISON WITH 'UNCONTROLLED TRANSACTION'. 13. A BRIEF OVERVIEW OF VARIOUS METHODS PRESCRIBED FOR DETERMINING ALP CLEARLY DIVULGES THAT THE COMPARISON IS ALWAYS SOUGHT TO BE MADE OF THE ASSESSEE'S INTERNATIONAL TRANSACTIONS WITH COMPARABLE 'UNCONTROLLED TRANSACTIONS'. ONE COMMON FACTOR PERMEATING THROUGH VARIOUS METHODS FOR DETERMINING ALP IS COMPARISON OF THE ASSESSEE'S INTERNATIONAL TRANSACTIONS WITH THOSE OF THIRD PARTIES SIMILARL Y SITUATED. THE ESSENCE IS THAT THE COMPARISON IS SOUGHT WITH 'UNCONTROLLED TRANSACTION'. THE TRANSACTIONAL NET MARGIN METHOD IS NO EXCEPTION IN THIS REGARD. IT ALSO CONTEMPLATES COMPARISON OF NET PROFIT REALIZED BY AN ENTERPRISE WITH THE NET PROFIT REALIZ ED FROM A COMPARABLE UNCONTROLLED TRANSACTION. 14. WHAT IS AN 'UNCONTROLLED TRANSACTION' HAS BEEN CLEARLY DEFINED UNDER RULE 10A(A) TO MEAN 'A TRANSACTION BETWEEN ENTERPRISES OTHER THAN ASSOCIATED ENTERPRISES WHETHER RESIDENT OR NON - RESIDENT'. A PLAIN READING OF THE MEANING GIVEN TO THE EXPRESSION 'UNCONTR OLLED TRANSACTION' LEAVES NO ROOM FOR ANY DOUBT THAT IT IS A TRANSACTION BETWEEN TWO NON - ASSOCIATED ENTERPRISES. IF THE TRANSACTION IS BETWEEN TWO ASSOCIATED ENTERPRISES, IT GOES OUT OF THE AMBIT OF 'UNCONTROLLED TRANSACTION' UNDER RULE 10A. WHEN SECTION 9 2C IS READ ALONG WITH RULES 10B(E), AND 10A, IT BECOMES ABUNDANTLY CLEAR THAT IN COMPUTING ALP UNDER THE TRANSACTIONAL NET MARGIN METHOD, A COMPARISON OF THE ASSESSEE'S NET PROFIT MARGIN FROM INTERNATIONAL TRANSACTIONS WITH ITS AES HAS NECESSARILY TO BE MA DE WITH THAT OF THE NET PROFIT MARGIN REALIZED BY THE SAME ENTERPRISE OR AN UNRELATED ENTERPRISE FROM A COMPARABLE BUT DEFINITELY UNCONTROLLED TRANSACTION I.E., A TRANSACTION BETWEEN NON - ASSOCIATED ENTERPRISES. THERE IS NO STATUTORY SANCTION FOR ROPING IN A COMPARABLE CONTROLLED TRANSACTION FOR THE PURPOSES OF BENCHMARKING. WHEN IT HAS BEEN CLEARLY MANDATED IN ALL THE RELEVANT METHODS FOR DETERMINING ALP THAT THE COMPARISON HAS TO BE MADE BY THE ENTERPRISE'S INTERNATIONAL TRANSACTION WITH 49 VIACOM 18 MEDIA PVT. LTD. COMPARABLE UNCONTR OLLED TRANSACTION, BY NO SHEER LOGIC A COMPARABLE CONTROLLED TRANSACTION CAN BE EMPLOYED FOR THE PURPOSES OF MAKING COMPARISON. THERE IS NO WARRANT FOR DILUTING THE PRESCRIPTION GIVEN BY THE STATUTE OR RULES WHEN SUCH PRESCRIPTION ITSELF SERVES THE ENDS OF JUSTICE PROPERLY AND IS INFALLIBLE. IF THE VIEW OF THE REVENUE THAT A CONTROLLED TRANSACTION SHOULD NOT BE SHUNTED OUT FOR THE PURPOSES OF BENCHMARKING, IS ACCEPTED, THEN ALL THE RELEVANT PROVISIONS CONTAINED IN CHAPTER X IN THIS REGARD, WILL BECOME OTIOS E. IF SUCH A CONTENTION OF MAKING COMPARISON WITH A COMPARABLE CONTROLLED TRANSACTION IS TAKEN TO ITS LOGICAL CONCLUSION, THEN THERE WILL NEVER ARISE ANY NEED TO TAKE UP ANY CASE FOR TRANSFER PRICING SCRUTINY. THE REASON IS OBVIOUS. ALP IS DETERMINED FOR A PPLICATION IN RESPECT OF TRANSACTIONS BETWEEN TWO AES SO THAT THE PROFIT LIKELY TO ARISE FROM SUCH TRANSACTIONS IS NOT UNDER - REPORTED VIS - A - VIS FROM SIMILAR TRANSACTIONS WITH THIRD PARTIES. IF THE COMPARISON IS MADE AGAIN WITH NET PROFIT MARGIN REALIZED FR OM TRANSACTIONS BETWEEN TWO AES, INSTEAD OF THIRD PARTIES, IT MAY DEMONSTRATE THE SAME COOKED RESULTS IN BOTH THE SITUATIONS, THEREBY LEAVING NO SCOPE FOR ANY ADJUSTMENT. IN THIS EVENTUALITY, THE VERY OBJECT OF SUCH PROVISIONS WILL BE FRUSTRATED. THUS IT F OLLOWS THAT THE ALP CAN BE DETERMINED ONLY BY MAKING COMPARISON WITH A COMPARABLE UNCONTROLLED TRANSACTION AND NOT A COMPARABLE CONTROLLED TRANSACTION. 15. THERE IS ONE MORE DIMENSION OF THIS CASE. THE TRANSACTIONS BETWEEN ICB AND JTS ARE NOT ONLY CONTROL LED, BUT THE PROFIT MARGIN OF ICB ALSO PASSED THROUGH THE EXAMINATION BY THE TPO, WHO DECLARED IT AT ARM'S LENGTH. THE LD. DR CONTENDED THAT ONCE CONTROLLED TRANSACTIONS ARE VERIFIED BY THE TPO AND FOUND AT ALP, THEN THE DIFFERENCE BETWEEN CONTROLLED AND C ONTROLLED TRANSACTIONS IS OBLITERATED. CANVASSING THIS POINT FURTHER, HE ACCENTUATED THAT EVEN THOUGH THE TRANSACTIONS BETWEEN ICB AND JTS WERE CONTROLLED, STILL THEY CONSTITUTED A GOOD BASIS FOR COMPARISON AS THE TPO FOUND THEM AT ARM'S LENGTH. 16. THIS CONTENTION OF THE ID. DR ALBEIT SOUNDS ATTRACTIVE AT THE FIRST BLUSH, BUT ON CLOSER EXAMINATION, FAILS TO ENDURE. THE BASIC PURPOSE BEHIND THE TRANSFER PRICING PROVISIONS IS TO ENSURE THAT THE MULTINATIONAL COMPANIES DO NOT ARRANGE THEIR INTRA GROUP CROSS BORDER TRANSACTIONS IN SUCH A WAY AS TO REDUCE THE INCIDENCE OF TAX IN INDIA. A MULTINATIONAL COMPANY, HAVING CONCERNS ACROSS THE WORLD, MAY RESORT TO PRICING THE INTRA GROUP TRANSACTIONS IN SUCH A MANNER THAT LOWER INCOME GETS OFFERED IN COUNTRIES WITH HI GH TAX RATES AND HIGHER INCOME GETS REFLECTED IN COUNTRIES WITH LOWER TAX RATES, SO THAT ITS OVERALL TAX LIABILITY IS SHRINKED. IF THE TAX RATES IN INDIA ARE RELATIVELY HIGHER VIS - A - VIS THE OTHER COUNTRY, SAY A, AND THE INTERNATIONAL TRANSACTION IS BETWEEN THE CONCERNS IN INDIA AND COUNTRY A, THERE MAY BE AN ATTEMPT ON THE PART OF MULTINATIONAL COMPANY TO VALUE THE TRANSACTION IN SUCH A WAY THAT THE INCOME 50 VIACOM 18 MEDIA PVT. LTD. TO BE OFFERED IN INDIA GETS SLICED AWAY AND CORRESPONDING INCOME IS INCREASED IN THE HANDS OF THE COMP ANY SITUATED IN COUNTRY A. THERE MAY A CONVERSE SITUATION AS WELL. IT MAY ALSO HAPPEN THAT THE TAX RATES IN INDIA ARE LOWER THAN THE OTHER COUNTRY, SAY B, AND THE INTERNATIONAL TRANSACTION IS BETWEEN THE CONCERNS IN INDIA AND COUNTRY B. IN SUCH A SITUATION , THE MULTINATIONAL COMPANY MAY ATTEMPT TO VALUE THE TRANSACTION IN SUCH A MANNER THAT THE INCOME TO BE OFFERED IN INDIA IS SWELLED, THEREBY REDUCING THE CORRESPONDING INCOME IN THE HANDS OF THE COMPANY SITUATED IN COUNTRY B. IT IS PALPABLE THAT IN BOTH SU CH SITUATIONS, THE VALUE OF TRANSACTION BETWEEN THE ASSOCIATED ENTERPRISES IS TAILOR - MADE TO SUIT THE OVERALL INTEREST OF THE MULTINATIONAL COMPANY. IT DOES NOT REPRESENT THE TRANSACTION AT ITS TRUE VALUE. IN THE FIRST SITUATION, THE RECEIPT FROM THE TRANS ACTION RECORDED IN INDIA WILL BE LOWER AND ITS ALP WILL BE HIGHER. IN THE SECOND SITUATION, THE RECEIPT FROM THE TRANSACTION RECORDED IN INDIA WILL BE HIGHER BUT THE BENCHMARK PRICE WILL BE LOWER. WHEREAS THE FIRST SITUATION WILL NECESSITATE THE MAKING OF AN ADDITION ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT IN THE HANDS OF INDIAN COMPANY, THE SECOND SITUATION WILL NOT PERMIT ANY DEDUCTION IN THE DECLARED INCOME OF THE SUCH INDIAN CONCERN TO THAT EXTENT. IT IS SO BECAUSE IF THE ALP IS HIGHER THAN THE VALUE OF THE TRANSACTION RECORDED IN THE BOOKS OF ACCOUNT, IT REQUIRES MAKING ADDITION ON ACCOUNT OF TRANSFER PRICING ADJUSTMENT. HOWEVER, IN THE OPPOSITE SITUATION, THERE IS NO MANDATE FOR REDUCING THE INCOME. IN SUCH A SECOND SITUATION, THE RECEIPT FROM THE TR ANSACTION RECORDED SHALL BE CONSIDERED AT ALP, NOTWITHSTANDING THE FACT THAT IT IS AT EXAGGERATED FIGURE WHEN COMPARED WITH A COMPARABLE UNCONTROLLED TRANSACTION. THIS IS WHAT HAS BEEN LAID DOWN IN SUB - SECTION (3) OF SECTION 92. WHEREAS SUB - SECTION (1) OF SECTION 92 PROVIDES THAT ANY INCOME ARISING FROM AN INTERNATIONAL TRANSACTION SHALL BE COMPUTED HAVING REGARD TO THE ARM'S LENGTH PRICE, SUB - SECTION (3) PROVIDES THAT : 'THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN A CASE WHERE THE COMPUTATION OF INCO ME UNDER SUB - SECTION (1) OR THE DETERMINATION OF THE ALLOWANCE FOR ANY EXPENSE OR INTEREST UNDER THAT SUB - SECTION, OR THE DETERMINATION OF ANY COST OR EXPENSE ALLOCATED OR APPORTIONED, OR, AS THE CASE MAY BE, CONTRIBUTED UNDER SUB - SECTION (2), HAS THE EFFE CT OF REDUCING THE INCOME CHARGEABLE TO TAX OR INCREASING THE LOSS, AS THE CASE MAY BE, COMPUTED ON THE BASIS OF ENTRIES MADE IN THE BOOKS OF ACCOUNT IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE INTERNATIONAL TRANSACTION WAS ENTERED INTO.' FROM THE ABOVE D ISCUSSION IT IS VIVID THAT WHEREAS IN THE FIRST SITUATION, THE ALP REPRESENTS THE TRUE VALUE OF TRANSACTION OR, PROFITABILITY AS WILL BE THERE IN THE ORDINARY COURSE WITHOUT HAVING ANY REGARD TO THE RELATIONSHIP BETWEEN THE CONCERNS, IT IS NOT SO IN THE SE COND SITUATION. IN THE LATER CASE, EVEN THOUGH THE VALUE OF TRANSACTION OR PROFITABILITY WILL BE AT MORE THAN HIGHER LEVEL, STILL IT WILL BE DESCRIBED AS THE ALP. IN SUCH LATER CASE, THE ALP OF THE TRANSACTION OR THE ARM'S LENGTH PROFIT CANNOT BE CONSIDERE D AS 51 VIACOM 18 MEDIA PVT. LTD. BENCHMARK FOR THE PURPOSES OF MAKING COMPARISON IN OTHER CASES. THAT APPEARS TO BE THE PROBABLE REASON FOR WHICH THE LEGISLATURE HAS IGNORED THE CONTROLLED TRANSACTIONS, EVEN THOUGH AT ALP, AND RESTRICTED THE AMBIT ONLY TO UNCONTROLLED TRANSACTIONS FO R COMPUTING ALP IN RESPECT OF INTERNATIONAL TRANSACTIONS BETWEEN TWO AES. 17. I, THEREFORE, ANSWER THE QUESTION REFERRED TO ME U/S 255(4) IN NEGATIVE BY HOLDING THAT THE NET PROFIT MARGIN REALIZED FROM A TRANSACTION WITH AN AE CANNOT BE TAKEN AS A COMPARA BLE BEING INTERNAL COMPARABLE FOR COMPUTATION OF ALP OF AN INTERNATIONAL TRANSACTION WITH ANOTHER AE EVEN THOUGH THE NET MARGIN FROM A TRANSACTION WITH AE IS FOUND AND ACCEPTED AT ALP. 111. SINCE THE ISSUE FOR OUR CONSIDERATION IS SQUARELY COVERED BY THE AFOR ESAID THIRD MEMBER DECISION, RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY ALLOWING THE GROUND NO.7, RAISED BY THE ASSESSEE I.E., TWO CONTROLLED TRANSACTIONS CANNOT BE CONSIDERED FOR THE PURPOSE OF COMPUTATION OF ARM 'S LENGTH PRICE. 112. GROUND NO.8, RELATES TO T RANSFER PRICING ADJUSTMENT ON ACCOUNT OF F INANCE COST ON REIMBURSEMENT RECEIPTS OF CARRIAGE EXPENSES, MARKETING & OTHER EXPENSES AND TRAVELLING & OTHER EXPENSES AT ` 99,81,739 (UNDER BOTH BUSINESS MODELS). 113. DURING THE TRANSFER PRICING PROCEEDINGS, THE TRANSFER PRICING OFFICER ASKED TIME LAG IN RECEIPT OF THE REIMBURSEMENT OF EXPENSES FROM THE A . ES. THE ASSESSEE SUBMITTED THAT THE REIMBURSEMENTS ARE IN THE NATURE OF CARRIAGE FEES PAID TO CABLE OPERATORS FOR DI STRIBUTION OF CHANNELS, ADVERTISEMENT AND MARKETING EXPENSES FOR THE PROMOTION OF 52 VIACOM 18 MEDIA PVT. LTD. CHANNELS (VIZ., MTV, VH1 AND NICK) DISTRIBUTED BY THE ASSESSEE ; AND OTHER THIRD PARTY COST LIKE TRAVEL COST, HOTEL COST, FOOD & BEVERAGE COST, OFFICE SUPPLIES ETC. THESE EXPE NSES WERE INCURRED BY THE ASSESSEE ON BEHALF OF THE A . E . AND W ERE LATER CHARGED TO THE A . E . ON COST TO COST BASIS. THE INTER - COMPANY DEBIT NOTE WAS RAISED IN OCTOBER 2008. ALL THE DEBIT NOTES RAISED FOR THE REIMBURSEMENT WERE OUTSTANDING AS ON 31 ST MARCH 2 009. AS REQUESTED BY THE LEARNED TPO , THE ASSESSEE HAS CALCULATED THE AVERAGE PLR AS ON 1 ST JANUARY 2009 AT 12.25%. 114. THE TRANSFER PRICING OFFICER PROPOSED AN ADJUSTMENT OF ` 99,81,739 VIS - - VIS THE INTEREST COST FOR THE TIME LAG IN RECEIPT OF THE REIMBURSEMENT BY ADOPTING THE PLR RATE OF THE BANKS TO THE TOTAL INCOME OF THE ASSESSEE . 115. THE DRP CONFIRMED THE ACTION OF ASSESSING OFFICER / TRANSFER PRICING OFFICER. 116. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMIT TED THAT THE TRIBUNAL IN ITS ORDER PASSED FOR THE ASSESSMENT YEAR 2005 - 06 IN ASSESSEES OWN CASE STATED THAT THE SAID EXPENSES ARE INCURRED FOR BUSINESS PURPOSE AND BENEFITS OF ASSESSEES BUSINESS AND STIL L PART OF EXPENSES RECOVERED. HENCE , NO FINANCE COST ADJUSTMENT TO BE MADE. THE LEARNED A.R. FURTHER SUBMITTED THAT THE ASSESSEE HAS NEVER CHARGED INTEREST ON OVERDUE PAYMENTS FROM NON - AES AS WELL AND 53 VIACOM 18 MEDIA PVT. LTD. H ENCE, THE QUESTION OF ADJUSTMENT SHOULD NOT ARISE IN T HE INSTANT CASE. FOR THIS PROPOSITION, THE LEARNED A.R. PLACED RELIANCE ON FOLLOWING DECISIONS: I) CIT V. M/S. INDO AMERICAN JEWELLERY LTD. (ITA (L) NO. 1053 OF 2012) ; AND II) CIT V. M/S. LIVINGSTONE (ITA NO. 887 OF 2014) . 117. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT W ITHOUT PREJUDICE, CONSIDERING THAT THE TRANSACTION IS AN INTERNATIONAL TRANSACTION, LIBOR RATE SHOULD HAVE BEEN USED TO BENCHMARK THE TRANSACTION AND NOT PRIME LENDING RATE AND REASONABLE CREDIT PERIOD OF 90 DAYS SHALL BE ALLOWED BEFORE COMPUTING THE ADJUSTMENT . IN SUPPORT OF THESE SUBMISSIONS, THE LEARNED A.R. PLACED RE LIANCE ON THE DECISION OF THE HON'BLE RAJASTHAN HIGH COURT IN CIT V/S VAIBHAV GEMS LTD. , [2017] 88 TAXMANN.COM 12 (RAJ.) WHICH WAS DECIDED AGAINST THE REVEN UE AND IN FAVOUR OF THE ASSESSEE. SUBSEQUENTLY, THIS DECISION WAS AGAIN CHALLENGED BY THE REVENUE BEFORE THE HON'BLE SUPREME COURT BY FILING AN SLP WHICH ALSO ATTAINED FINALITY IN FAVOUR OF THE ASSESSEE. 118. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE NON CHARGING OF INTEREST TO NON A.E. ARE IRRELEVANT. THE UNDUE ADVANTAGE PASSED ON TO THE A.E. IS NOT ACCEPTABLE AND THE TRANSFER PRICING PROVISION IS APPLICABLE. 54 VIACOM 18 MEDIA PVT. LTD. 119. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ISSUE ARIS ING OUT OF THE AFORESAID GROUND OF APPEAL HA S BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ACIT V/S M/S. VIACOM 18 MEDIA PVT. LTD., ITA NO. 8406/MUM./2010, ORDER DATED 8 TH FEBRUARY 2019, WHEREIN THE TRIBUNAL DECIDED THE ISSUE AGAINST THE REVENUE BY OBSERVING AS UNDER: 20. WE FIND THAT AS PER AGREEMENT BETWEEN THE ASSESSEE AND HIS AE IN RESPECT OF ADVERTISING SALE AGENCY, IT KEEPS 15% OF GROSS SALE REVENUE AND FOR THIS INCOME, THE ASSESSEE BEARS THE NORMAL ADVERTISING AND SALES PROMOTION COSTS. FURTHER, IN CASE OF CERTAIN MAJOR MARKETING COSTS INCURRED BY IT AT THE INSTANCES OF ITS AE IT IS ENTITLED TO REIMBURSEMENT OF THE SAME. DUR ING THE FINANCIAL YEAR, THE ASSESSEE INCURRED CERTAIN MAJOR ADVERTISEMENT AND SALES PROMOTION COSTS AMOUNTING TO RS. 86,43,476/ - ON BEHALF OF ITS AE NICKELODEON THE SAME WAS REIMBURSED BY NICKELODEON AS PER TERMS OF AGREEMENT. IN REGARD TO EXPORT OF CONTEN TS TO ITS AE, THE ASSESSEE RECEIVES ADVANCE PAYMENT FROM THE ASSOCIATE ENTERPRISES BASED ON ESTIMATES AND FINAL PAYMENT WAS RECEIVED BASED ON INVOICES WITHIN 30 DAYS. FOR THE ADVERTISEMENT AND DISTRIBUTION, THE ASSESSEE GIVES CREDIT PERIOD OF AROUND 30 TO 90 DAYS TO ITS CUSTOMERS AND THE PAYMENT TO BE MADE TO THE AE WHICH MADE ONLY AFTER THE SAME ARE RECEIVED FROM THE CUSTOMERS. BUT THE ASSESSEE HAS NOT AVAILED ANY SPECIFIC MANPOWER FOR THIS PURPOSE AND EXISTING MANPOWER OF THE ASSESSEE HAS CARRIED OUT FOR THE INCIDENTAL ACTIVITY. IN THIS PROCESS, THE ASSESSEE ALSO RECEIVED INDIRECT BENEFIT IN THE SHAPE OF INCREASED MARKET DEVELOPMENT, AS A RESULT OF MAJOR ADVERTISEMENT AND SALES PROMOTION COSTS. SUCH COSTS WILL INCREASE THE VIEWERSHIP OF THE CHANNEL WHICH W ILL IN TURN RESULT IN HIGHER INCOME FOR THE ASSESSEE IN TERM OF INCREASE SALES AND DISTRIBUTION OF ADDS RECEIPT ON THE CHANNELS. HENCE, ACCORDING TO US, NO FURTHER EXPENDITURE HAS BEEN INCURRED BY ASSESSEE AND CONSEQUENTLY NO FURTHER REIMBURSEMENT WAS MADE BY THE ASSESSEE AND HENCE, NO MARKUP CAN BE ADDED. HENCE, WE CONFIRM THE ORDER OF CIT(A) DELETING THE ADDITION. THIS APPEAL OF REVENUE IS DISMISSED . 120. THE ISSUE BEFORE US BEING COVERED BY THE AFORESAID DECISION OF THE TRIBUNAL RENDERED IN ASSESSEES OWN C ASE CITED SUPRA IN AN APPEAL 55 VIACOM 18 MEDIA PVT. LTD. FILED BY THE REVENUE WHEREIN THE CO ORDINATE BENCH HAS DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE, CONSISTENT WITH THE FINDINGS GIVEN AS AFORESAID, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND ALLOW THE GROUND OF APPEAL NO. 8, RAISED BY THE ASSESSEE. INSOFAR AS ADOPTION LIBOR, AS AN ALTERNATE PLEA OF THE ASSESSEE, IS CONCERNED, SINCE WE HAVE ALLOWED THE MAIN ISSUE AROSE OUT OF GROUND NO.8, RAISED BY THE ASSESSEE, HENCE THE ALTERNATE PL EA TAKEN BY THE LEARNED A.R. BEING ACADEMIC IN NATURE AND CONSEQUENTLY THIS ALTERNATE PLEA OF THE LEARNED A.R. IS KEPT OPEN AND NOT ADJUDICATED. 121. GROUND NO.9, RELATES TO DISALLOWANCE OF MARKETING AND ADVERTISEMENT EXPENSE UNDER SECTION 37(1) OF THE ACT. 122. A FTER HEARING BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES, WE FIND THAT IDENTICAL ISSUE HAS BEEN DECIDED BY US IN THIS ORDER IN ASSESSEES OWN CASE VIDE GROUND NO.20, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT Y EAR 2006 07, VIDE PARA 40 & 41 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE ORDER OF THE LEARNED CIT(A) BY ALLOWING THE CLAIM OF THE ASSESSEE FOR THE REASONS STATED THEREIN. SINCE THE TRIBUNAL HAS BEEN MAINTAINING THE CONSISTENCY IN VIEW OF THE DECISION RE NDERED IN ASSESSEES OWN CASE CITED SUPRA AND RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT AS AFORESAID, WE SET ASIDE THE IMPUGNED ORDER 56 VIACOM 18 MEDIA PVT. LTD. PASSED BY THE DRP BY ALLOWING THE GROUND OF APPEAL NO.9, RAISED BY THE ASSESSEE. 123. GROUN D NO.10, RELATES TO DISALLOWANCE OF ENTERTAINMENT EXPENSES UNDER SECTION 37(1) OF THE ACT AT ` 4,75,686. 124. IT IS NOTICED THAT THE ASSESSEE HAD INCURRED CERTAIN ENTERTAINMENT EXPENDITURE ON CLIENTS AND FOR ITS STAFF. THE EXPENDITURE IS TOWARDS FOOD AND REFRESHMENT (I.E., IN THE NATURE OF STAFF WELFARE) AND ENTERTAINMENT EXPENDITURE FOR SOLICITING CLIENTS AND CU STOMERS FOR ITS MARKETING AND DISTRIBUTION BUSINESS IN THE NORMAL COURSE OF ITS BUSINESS. THE ASSESSING OFFICER MADE AD HOC DISALLOWANCE OF ` 13,17,931 BEING 1/3 RD OF TOTAL EXPENSES OF ` 39,53,793, BY STATING THAT IT IS CLEAR AS TO HOW MUCH OF THE ENTERTAI NMENT EXPENSES HAS BEEN ADJUSTED AGAINST ASSESSEES OVERSEAS INCOME AND HOW MUCH HAS BEEN ADJUSTED AGAINST THE INDIAN ARM. 125. THE DRP, A FTER GOING THROUGH THE DETAILS FILED BY THE ASSESSEE AND CONSIDERING THAT HISTORICALLY, THE DRP/CIT(A) HAVE DELETED THE AD HOC DISALLOWANCE MADE IN PAST, THE DRP PICKED UP ONE ITEM OF EXPENSES OF ` 9,51,373 AND HELD THAT IN ABSENCE OF DETAILS OF THE SAME, 50% OF THE SAME I.E. , ` 4,75,686 NEEDS TO BE DISALLOWED. AGGRIEVED AGAINST THE SAID DISALLOWANCE, ASSESSEE HAS FILED APP EAL BEFORE THE TRIBUNAL. 57 VIACOM 18 MEDIA PVT. LTD. 126. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE AND PERUSED THE MATERIAL ON RECORD. AD HOC DISALLOWANCE MADE BY THE ASSESSING OFFICER WITHOUT PROPER JUSTIFICATION IS NOT SUSTAINABLE IN THE EYES OF LAW. THE DRP WAS NOT JUSTIFIED IN PI CKING UP ONE ITEM AND DISALLOWING THE SAME HOLDING THAT IN THE ABSENCE OF DETAILS 50% OF THE SAME IS DISALLOWED. EVEN OTHERWISE ALSO, WE HAVE NOTED THAT IN THE PRECEDING ASSESSMENT YEAR I.E., 2006 07 IN ASSESSEES OWN CASE, WHEREIN THE DRP HAS DELETED THE AD HOC DISALLOWANCE BY DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. CONSEQUENT UPON SUCH DECISION OF THE DRP/LEARNED CIT(A), THE REVENUE HAS ACCEPTED THE DECISION BY NOT FILING ANY APPEAL BEFORE THE TRIBUNAL ON THE SAME ISSUE. A COPY OF DRPS ORDER PASSED FOR ASSESSMENT YEAR 2006 07 DELETING THE AD HOC DISALLOWANCE IS PLACED AT PAGE 676 TO 699 OF FPB. IN THIS VIEW OF THE MATTER, WE DO NOT FIND ANY COGENT REASON TO TAKE A VIEW OTHER THAN THE VIEW TAKEN BY THE AUTHORITIES BELOW. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP AND ALLOW THE CLAIM OF THE ISSUE. ACCORDINGLY, GROUND NO.10, IS ALLOWED. 127. GROUND NO.11, RELATES TO THE DISALLOWANCE ON ACCOUNT OF DEPRECIATION ON GOODWILL AMOUNTING TO ` 15,21,044. 128. DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2008 09, THE ASSESSEE HAD ACQUIRED THE STUDIO 18 DIVISION OF NETWORK 18 5 8 VIACOM 18 MEDIA PVT. LTD. MEDIA & INVESTMENTS PVT. LTD. (FORMERLY NETWORK 18 FINCAP LTD.) (NETWORK 18) ON A GOING CONCERN BASIS UNDER SLUMP SALE. BY ENTERING INTO A BUSINESS TRANSFER AGREEMENT, THE ASSESSEE HAD ACQUIRED THE STUDIO 18 DIVISION ALONG WITH TANGIBLE ASSETS AND INTANGIBLE ASSETS OF STUDIO 18 DIVISION VIZ. THE BUSINESS CONTRACTS, EMPLOYEES, BUSINESS ASSETS, BUSINESS PROPERTIES, BUSINESS GOODWILL , BUSINESS INTELLECTUAL PROPERTY RIGHTS (IPR), STUDIO 18 TRADEMARK, ETC. FOR THE ACQUISITION OF STUDIO 18 DIVISION, THE ASSESSEE HAS PAID A TOTAL CONSIDERATION OF ` 4,13,53,652 TO NETWORK 18, WHICH IS COMPUTED AS UNDER: 129. THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION CLAIMED BY THE ASSESSEE ON GOODWILL FOLLOWING ITS ORDER FOR ASSESSMENT YEAR 2008 - 09 WHEREIN THE DEPRECIATION WAS CLAIMED FOR THE FIRST TIME. THE DEPRECATION OF ` 15,21,044 [COMPUTED AT 25% ON THE WRITTEN DO WN VALUE (AS ON 1 ST APRIL 2008) OF ` 60,84,175 OF THE ORIGINAL GOODWILL OF ` 69,53,343]. PARTICULARS AMOUNT (RS) AMOUNT (RS) FIXED ASSETS 1,07,36,157 INTANGIBLE ASSETS (REFLECTED AS GOODWILL IN BOOKS) 69,53,343 LUMPSUM CONSIDERATION (USD 4,50,000)[1 USD = INR 39.31] 1,76,89,500 NET CURRENT ASSETS VALUE 2,36,64,152 TOTAL 4,13,53,652 59 VIACOM 18 MEDIA PVT. LTD. 130. THE FIRST APPELLATE AUTHORITY CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 131. BEFORE US, THE ASSESSEE SUBMITTED THAT THE TRIBUNAL, MUMBAI BENCH, IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008 - 09 (THE FIRST YEAR OF CLAIM FOR DEPRECIATION ON AFORESAID GOODWILL ARISING ON ACCOUNT OF STUDIO18 DIVISION) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE TRIBUNAL, VIDE ITS ORDER DATED 29 TH JANUARY 2016, HAS UPHEL D THE ASSESSEES CLAIM FOR DEPRECIATION ON THE AFORESAID GOODWILL. THE LEARNED A.R. FURTHER SUBMITTED THAT THE DEPARTMENT HAS NOT FILED ANY APPEAL AGAINST THE SAID ORDER OF THE TRIBUNAL. THIS FACT IS CONFIRMED BY THE ASSESSING OFFICER IN THE FINAL ASSESSME NT ORDER FOR ASSESSMENT YEAR 2012 - 13 WHEREIN PURSUANT TO THE DIRECTIONS OF THE DRP, VIDE PARA 8.2 AT PAGE NO.18 OF THE ORDER DELETED THE DISALLOWANCE ON ACCOUNT OF DEPRECIATION ON GOODWILL FOLLOWING THE ORDER OF THE TRIBUNAL RENDERED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008 09. 132. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 133. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. BOTH THE PARTIES AGREED BEFORE US THAT THE ISSUE FOR OUR ADJUDICATION IS COVERED BY THE DECISION OF THE CO ORDINATE BENCH OF THE 60 VIACOM 18 MEDIA PVT. LTD. TRIBUNAL RENDERED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008 09 IN VIACOM 18 MEDIA PVT. LTD. V/S ACIT, ITA NO.7336/MUM./ 2012, ETC., ORDER DATED 29 TH JANUARY 2016, WHEREIN TH E CO ORDINATE BENCH HAS DECIDED SIMILAR ISSUE IN FAVOUR FOR THE ASSESSEE AND AGAINST THE REVENUE. THE RELEVANT EXTRACT OF THE ORDER OF THE TRIBUNAL IS REPRODUCED BELOW FOR BETTER APPRECIATION OF FACTS. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE ISSUE WHETHER GOODWILL IS AN CAPITAL 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 INTERPRETING 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 CON SIDERED 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 LTD. (SUPRA). IN VIEW OF THE LAW LAID DOWN BY THE HONBLE SUPREME COURT WE CANNOT ACCEPT THE CONTENTION OF THE DEPARTMENTAL AUTHORITIES THAT GOODWILL IS NOT AN ASSET OR FOR THAT MATTER IS NOT AN INTANGIBLE ASSET. 6. HAVING HELD SO, WE WILL PROCEED TO EXAMINE ALLOWABILITY 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 ASSESSEES CLAIM OF DEPRECIATION IS THAT THE ASSESSEE HAS NOT ACTUALLY PAID ANY AMOUNT TOWARDS GOODWILL BUT IS A BALANCING FIGURE. IN THIS CONTEXT, ON A REFERENCE TO THE BUSINESS TRANSFER AGREEMENT IT IS SEEN THAT THE ASSESSEE HAS ACQUIRED BUSINESS FROM NETWORK 18 AS A GOING CONCERN. AS PER THE MEANING OF BU SINESS UNDER THE BUSINESS TRANSFER AGREEMENT IT WILL ALSO INCLUDE BUSINESS GOODWILL AND BUSINESS IPR. SIMILARLY, 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 T HE CASE WITH REFERENCE TO THE TERMS OF BUSINESS TRANSFER AGREEMENT IT IS TO BE SEEN THAT THE NET CURRENT ASSET 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 BALA NCE AMOUNT OF RS.69,53,343/ - OUT OF THE TOTAL CONSIDERATION PAID BY THE ASSESSEE OF RS.4,13,56,352/ - IS OBVIOUSLY ON ACCOUNT OF 61 VIACOM 18 MEDIA PVT. LTD. GOODWILL. EVEN ACCEPTING THAT SUCH AMOUNT IS A BALANCING FIGURE BUT STILL IT BEING IN THE NATURE OF GOODWILL, THE ASSESSEE IS EL IGIBLE TO CLAIM DEPRECIATION. FURTHER IT IS ALSO IN ACCORDANCE WITH THE ACCEPTED ACCOUNTING PRINCIPLE AND ACCOUNTING STANDARD AS BROUGHT ON RECORD BY THE LEARNED A.R. FOR THE ASSESSEE. EVEN OTHERWISE, IN THE DECISION REFERRED TO ABOVE, THE HONBLE COURTS H AVE HELD THAT SUCH BALANCING FIGURE IS ON ACCOUNT OF GOODWILL. THUS, THE ASSESSEE 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 CANNOT BE ACCEPTED, WE CANNOT AGREE WITH THE SAME IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. V/S CIT (2006) 157 TAXMAN 1 AND HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. (SUPRA). I N VIEW OF THE AFORESAID DECISIONS, WE DIRECT THE AO TO ALLOW ASSESSEES CLAIM OF DEPRECIATION ON THE AMOUNT OF RS 69,53,343/ - . THIS GROUND IS ALLOWED. 134. IT IS PERTINENT TO NOTE HERE THAT SUBSEQUENT TO THE ORDER PASSED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008 09, THE REVENUE HAS ACCEPTED THE TRIBUNALS ORDER FOR THE ASSESSMENT YEAR 2008 - 09 AND NO FURTHER APPEAL IS FILED BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT AND THE ISSUE ATTAINED FINALITY . IN THIS VIEW OF THE MATTER, WE UPHOL D THE ORDER PASSED BY THE DRP AND DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE ON ACCOUNT OF DEPRECIATION ON GOODWILL. GROUND NO.11, RAISED BY THE ASSESSEE IS HEREBY ALLOWED . 135. GROUND NO.12, RELATES TO DISALLOWANCE OF LEGAL AND PROFESSIONAL FEES FOR REGISTRATION OF TRADEMARK OF ` 41,42,063. 136. DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2009 10, THE ASSESSEE INCURRED EXPENSES OF ` 55,22,750 , IN RELATION TO REGISTRATION / RENEWAL OF VARIOUS TRADEMARKS / BRAND NAMES OF THE 62 VIACOM 18 MEDIA PVT. LTD. ASSESSEE IN VARIOUS JURISDICTION ACROSS THE WORLD. THE ASSESSEE SUBMIT TED THAT THE SAID EXPENDITURE IS INCURRED IN CONNECTION WITH ITS BUSINESS AND IS REVENUE IN NATURE. HENCE, THE SAME SHOULD BE ALLOWED A S DEDUCTION TO THE ASSESSEE IN ASSESSMENT YEAR 2009 - 10. 137. THE ASSESSING OFFICER TREATED THE SAME AS ONE TIME EXPENDITURE INCURRED FOR REGISTRATION OF TRADEMARK WHICH WILL GIVE BENEFIT TO THE ASSESSEE FOR MORE THAN A YEAR AND IT BEING ONE TIME EXPENDITURE TR EATED IT AS CAPITAL IN NATURE AND GRANTED DEPRECIATION ON THE SAME @ 25%. THEREBY HE MADE NET ADDITION OF ` 41,42,062 (T OTAL EXPENDITURE OF ` 55,22,750 LESS D EPRECIATION @ 25% OF ` 13,80,688) TO THE TOTAL INCOME OF THE ASSESSEE . 138. THE DRP CONFIRMED THE DISALLOWANCE AS IN ITS VIEW, THE REGISTRATION WILL CREATE INTANGIBLE RIGHTS AND HENCE THE EXPENSE S CANNOT BE TREATED AS REVENUE IN NATURE. 139. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE HAS MADE PAYMENT TO LEGA SOLVE FOR PROVIDING SERVICES IN CONNECTION WITH REGISTRATION OF VARIOUS TRADEMARKS AND TRADE NAMES IN VARIOUS JURISDICTIONS ACROSS THE WORLD. HE SUBMITTED THAT THE ASSESSEE IS ALREADY OWNER OF THE TRADEMARK AND TRADE NAMES, AND MERE REGISTRATION THEREOF, DOES NOT BRING INTO EXISTENCE ANY NEW ASSET. THE LEARNED A.R. FURTHER SUBMITTED THAT BY REGISTRATION, THE OWNER IS 63 VIACOM 18 MEDIA PVT. LTD. ABSOLVED FROM THE OBLIGATION TO PROVE ITS OWNERSHIP OF TRADEMARK. HE SUBMITTED THAT I T THUS MERELY SAVES THE ASSESSEE THE TROUBLE OF LEADING EVIDENCE, IN THE EVE NT OF A SUIT, IN A C OURT OF LAW, TO PROVE I TS TITLE TO THE TRADEMARK. THE LEARNED A.R. FURTHER SUBMITTED THAT THERE IS NO ALTERATION IN THE TRADEMARK ALREADY OWNED BY THE ASSESSEE BY MERE REGISTRATION THEREOF, HENCE, THE EXPENDITURE IS REVENUE IN NATURE. T HE LEARNED A.R. FURTHER SUBMITTED THAT THE ISSUE IS NO LONGER RES INTEGRA AND THE SUPREME COURT HAS CATEGORICALLY HELD THAT EXPENSES FOR REGISTRATION OF TRADEMARK DOES NOT BRING IN ANY NEW CAPITAL ASSETS AND SUCH EXPENSES ARE REVENUE IN NATURE. IN SUPPORT OF HIS ARGUMENTS, HE RELIED UPON THE FOLLOWING DECISIONS: I) CIT V/S FINLAY MILLS L TD., 20 ITR 475 (SC) ; II) PCIT V. ZYDUS WELLNESS LTD. , 247 TAXMAN 397 (GUJ) ; III) CADIA HEALTHCARE LTD (AHD . ) ; IV) ALEMBIC CHEMICAL WORKS CO . LTD ., 177 ITR 377 (SC) ; V) EMPIRE JUTE CO LTD V/S CIT 124 ITR 1 (SC) ; AND VI) USV LTD V/S DCIT , 24 TAXMANN.COM 218 (MUM . TRIB . ) . 140. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 141. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL O N RECORD IN THE LIGHT OF THE DECISIONS RELIED UPON. WE FIND THAT THE ISSUE FOR OUR ADJUDICATION IS COVERED BY THE DECISION OF THE HON'BLE SUPREME 64 VIACOM 18 MEDIA PVT. LTD. COURT IN FINLAY MILLS LTD. (SUPRA), WHEREIN THE HON'BLE SUPREME COURT BY DISMISSING THE APPEAL OF THE REVENUE OBSERVED AS FOLLOWS: HELD THE CONTENTION OF THE REVENUE WAS FALLACIOUS. THE MACHINERY WHICH ACQUIRES A GREATER PRODUCTIVE CAPACITY BY REASON OF ITS IMPROVEMENT BY INCLUSION OF SOME NEW INVENTION NATURALLY BECOMES A NEW AND ALTERED ASSET BY THAT PROCESS. SO LONG AS THE MACHINERY LASTS, THE IMPROVEMENT CONTINUES TO THE ADVANTAGE OF THE OWNER OF THE MACHINERY. THE REPLACEMENT OF A DILAPIDATED ROOF BY A MORE SUBSTANTIAL ROOF STANDS ON THE SAME FOOTING. THE RESULT HOWEVER OF THE TRADE MARKS ACT IS ONL Y TWO - FOLD. BY REGISTRATION, THE OWNER IS ABSOLVED FROM THE OBLIGATION TO PROVE HIS OWNERSHIP OF THE TRADE MARK. IT IS TREATED AS PRIMA FACIE PROVED ON PRODUCTION OF THE REGISTRATION CERTIFICATE. IT THUS MERELY SAVES HIM THE TROUBLE OF LEADING EVIDENCE, IN THE EVENT OF A SUIT, IN A COURT OF LAW, TO PROVE HIS TITLE TO THE TRADE MARK. THE REGISTRATION IS IN THE NATURE OF COLLATERAL SECURITY FURNISHING THE TRADER WITH A CHEAPER AND MORE DIRECT REMEDY AGAINST INFRINGERS. THIS IS NEITHER AN ASSET NOR AN ADVANTAG E SO AS TO MAKE PAYMENT FOR ITS REGISTRATION A CAPITAL EXPENDITURE. THE ADVANTAGE DERIVED BY THE OWNER OF THE TRADE MARK BY REGISTRATION FALLS WITHIN CLASS OF REVENUE EXPENDITURE. THE FACT THAT A TRADE MARK AFTER REGISTRATION COULD BE SEPARATELY ASSIGNED, AND NOT AS A PART OF THE GOODWILL OF THE BUSINESS ONLY, DOES NOT ALSO MAKE THE EXPENDITURE FOR REGISTRATION A CAPITAL EXPENDITURE. THAT IS ONLY AN ADDITIONAL AND INCIDENTAL FACILITY GIVEN TO THE OWNER OF THE TRADE MARK. IT ADDS NOTHING TO THE TRADE MARK I TSELF. THE APPEAL, THEREFORE, FAILED AND WAS DISMISSED. 142. SINCE THE ISSUE BEFORE US IS SQUARELY COVERED BY THE AFORESAID DECISION OF THE HON'BLE SUPREME COURT CITED SUPRA, THERE IS NO ADDITIONAL ADVANTAGE FOR THE ASSESSEE BY GETTING THE TRADEMARK REGISTER ED. R ESPECTFULLY FOLLOWING THE AFORESAID OBSERVATIONS, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP AND ALLOW THE GROUND NO.12, RAISED BY THE ASSESSEE. 65 VIACOM 18 MEDIA PVT. LTD. 143. GROUND NO.13, RELATES TO DISALLOWANCE OF UP LINKING CHARGES UNDER SECTION 40(A)(IA) OF THE ACT AT ` 5,68,97,341. 144. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BROADCASTING AND TELECASTING OF TELEVISION CHANNELS. ACCORDINGLY, IT INCURS UP LINKING CHARGES IN CONNECTION WITH ITS BROADCASTING BUSINESS. FOR THE ASSESSMENT YEAR 2009 - 10, THE ASSESSEE PAID ` 5, 68,97,341, TOWARDS UP LINKING FEES TO TELEVISION EIGHTEEN INDIA LTD. ON WHICH IT WITHHELD TAX AT SOURCE @ 2% UNDER SECTION 194C OF THE ACT. ACCORDING TO THE ASSESSING OFFICER, IN VIEW OF THE RETROSPECTIVE AMENDMENT, THE PAYMENT OF UP LINKING CHARGES WOULD QUALIFY AS ROYALTY BEING PAYMENT MADE FOR USE OF PROCESS AND THE ASSESSEE IS REQUIRED TO WITHHOLD TAX @ 10% UNDER 194J OF THE ACT. SINCE THE ASSESSEE HAS NOT DEDUCTED TAX THEREON AT 10%, THE SAME IS LIABLE FOR DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. 145. THE DRP CONFIRMED THE DISALLOWANCE STATING THAT THE PROCESS OF UP LINKING INVOLVES OPERATION OF COMPLEX EQUIPMENT AT THE UPLINK CENTRE AND PAYMENT WILL FALL UNDER THE CATEGORY OF ROYALTY ESPECIALLY CONSIDERING THE RETROSPECTIVE AMENDMENT IN THE ACT. 146. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE PAYMENT OF UP LINKING CHARGES IS FOR A STANDARD FACILITY PROVIDED BY THE SERVICE PROVIDER AND NOT FOR USE OR RIGHT TO USE ANY RIGHT, PROPERTY OR 66 VIACOM 18 MEDIA PVT. LTD. INFORMATION OR PATENT, INVENTION, MODEL, DESIGN, SECRET FORMULA OR PROCESS OR TRADEMARK OR SIMILAR PROPERTY. HE FURTHER SUBMITTED THAT IT IS AN ARRANGEMENT FOR AVAILING STANDARD FACILITY FROM UP LINKING SERVICE PROVIDER AND NOT FOR AVAILING OR USING ANY PROCESS OF THE UP LINKING SERVICE PROVIDER. THE PROCESS IF ANY IS USED BY THE SERVICE PROVIDER IN PROVIDING ITS FACILITY OR SERVICE TO THE ASSESSEE. ACCORDINGLY, THE CONSIDERATION PAID FOR UP LINKING CHARGES SHOULD NOT FALL WITHIN THE PURVIEW OF DEFINITION OF ROYALTY OR THE MEANING OF TERM PROCESS, HAVING REGARD TO THE AMENDMENT MADE BY FINANCE ACT, 2012 , SO AS TO ATTRACT TAX WITHHOLDING UNDER SECTION 194J OF THE ACT @ 10%. 147. THE LEARNED A.R. F URTHER SUBMITTED THAT THE EXPLANATION (IV) TO SECTION 194C OF THE ACT SPECIFICALLY COVERS THE TERM BROADCASTING AND TELECASTING WITHIN THE MEANING OF THE TERM WORK AND HENCE THE PAYMENT OF UP LINKING CHARGES SHOULD BE SUBJECT TO TDS UNDER SECTION 194C OF THE ACT . 148. WITHOUT PREJ UDICE, THE ASSESSEE SUBMIT TED THAT IT HAS DEDUCTED AND PAID TAXES AT SOURCE UNDER SECTION 194C OF THE ACT AS PER THE LAW PREVALENT AT THE TIME OF THE CAPTIONED ASSESSMENT YEAR 2009 - 10. THUS, THE ASSESSEE CANNOT BE SUBJECT TO AN IMPOSSIBLE ACT OF DEDUCTING THE TAXES UNDER S ECTION 194J OF THE ACT HAVING REGARD TO A LATER AMENDMENT MADE IN THE LAW BY THE FINANCE ACT, 2012. IN THIS RESPECT, RELIANCE IS PLACED ON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN 67 VIACOM 18 MEDIA PVT. LTD. THE CASE OF CIT V/S NGC NETWORKS (INDIA) PVT LT D ., ITA NO. 397 OF 2015 , WHEREIN THE HIGH COURT HAS HELD THAT DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT CANNOT BE MADE WHERE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE AT HIGHER RATE ONLY ON ACCOUNT OF SUBSEQUENT RETROSPECTIVE AMENDMENT MADE IN THE ACT. THE LEARNED A.R. FURTHER SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 10 , A COPY OF WHICH IS PLACED AT PAPER BOOK P A G E NO. 668 675. 149. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 150. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE FOR OUR ADJUDICATION IS COVERED BY THE DECISION OF THE CO ORDINATE BENCH OF THE TRIBUNAL RENDERED IN ASSE SSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 10 PASSED IN ITA NO.3515/MUM./2012, ETC., ORDER DATED 14 TH OCTOBER 2015, WHEREIN THE TRIBUNAL HAS HELD THAT ASSESSEE HAS RIGHTLY DEDUCTED TAX AT SOURCE UNDER S ECTION 194C OF THE ACT. WE ALSO FIND THAT THE REVENU E HAD CHALLENGED THE AFORESAID ORDER OF THE TRIBUNAL BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT AND THE HONBLE COURT HAS CONFIRMED / UPHELD THE SAID DECISION OF THE TRIBUNAL BY OBSERVING AS FOLLOWS: 68 VIACOM 18 MEDIA PVT. LTD. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL ON RECORD. THE DECISION OF MUMBAI BENCH IN THE CASE ASST. CIT VS. SANSKAR INFO. T.V.P. LTD (SUPRA), RELIED UPON BY THE LD. DR ARE NOT APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS THE PAYMENT MADE IN THAT CASE WAS MADE TO A NON - RESIDENT WHEREAS IN THE PRESENT CASE THE PAYMENT HAS BEEN MADE TO INDIAN RESIDENT. IN THE LIGHT OF THE PROPOSITION LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. PRASAR BHARATI (SUPRA), THE SPECIFIC PROVISIONS OF S ECTION 194J ARE APPLICABLE IN CASE OF UPLINKING FEES BEING INTEGRAL PART OF THE BROADCASTING AND TELECASTING. FOLLOWING THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. PRASAR BHARATI, AND OTHER DECISIONS RELIED UPON BY THE LD. AR, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT (A) ON THIS ISSUE AND THE SAME IS HEREBY AFFIRMED. THUS THE GROUND NO 6 IS DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 151. SINCE THE ISSUE BEFORE US IS COVERED BY THE AFORESAID DECISION OF T HE CO ORDINATE BENCH OF THE TRIBUNAL CITED SUPRA IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 10, AS WELL AS RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT AS AFORESAID, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BL E JURISDICTIONAL HIGH COURT AS WELL AS CONSISTENT WITH THE VIEW TAKEN BY THE CO ORDINATE BENCH DECISION REN D ERED IN ASSESSEES OWN CASE , WE SET ASIDE THE IMPUGNED ORDER OF THE DRP AND DELETE THE DISALLOWANCE OF UP LINKING CHARGES UNDER SECTION 40(A)(IA) OF THE ACT AT ` 5,68,97,341. GROUND NO.13, RAISED BY THE ASSESSEE IS ALLOWED. 152. GROUND NO.14, RELATES TO DISALLOWANCE OF ` 36,67,82,832, ON ACCOUNT OF AGENCY COMMISSION UNDER SECTION 40(A)(IA) OF TH E ACT. 69 VIACOM 18 MEDIA PVT. LTD. 153. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BROADCASTING OF TELEVISION CHANNELS. FOR THE ASSESSMENT YEAR 2009 - 10, THE ASSESSEE HAS EARNED ADVERTISING REVENUES OF ` 262,25,49,780, FROM THE SALE OF ADVERTISING AIRTIME ON THE TELEVISION CHANNELS. THE ASSESSEE SELLS THE ADVERTISING AIR - TIME SLOTS TO VARIOUS ADVERTISING AGENCIES ON A PRINCIPAL TO PRINCIPAL BASIS. THE ADVERTISING AGENCIES IN - TURN SELL THE AIR - TIME SLOTS TO ADVERTISERS (I.E., CUSTOMERS) AT A MARK - UP NOT KNOWN TO THE ASSESSEE. THE ASSESSEE HAS NOT SOLD THE ADVERTISING AIR - TIME SLOTS ON ITS CHANNELS IN INDIA THROUGH THE AGENT. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE SOLD THE ADVERTISEMENT AIRT IME THROUGH ADVERTISING AGENCIES WHO ACT AS AGENT OF THE ASSESSEE. HENCE, ON COMMISSION PAID TO THE ADVERTISEMENT AGENTS, THE ASSESSEE SHOULD HAVE DEDUCTED TAX AT SOURCE UNDER SECTION 194H. SINCE THE ASSESSEE FAILED TO DEDUCT TAX AT SOURCE, DISALLOWANCE UN DER SECTION 40(A)(IA) OF THE ACT AT ` 39,67,82,832, WAS MADE BY THE ASSESSING OFFICER. 154. THE DRP RELIED ON THE CBDT CIRCULAR NO.618 OF 1991 AND 715 OF 1993 AND UPHELD THE DISALLOWANCE MADE. 155. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT IT DOES NOT CONTROL/MANAGE THE ADVERTISING AGENCIES. THE ADVERTISING AGENCY IS NOT AN AGENT OF THE ASSESSEE. THE ASSESSEE DOES NOT DICTATE THE ADVERTISERS TO WHOM THE ADVERTISING AGENCIES CAN SELL THE ADVERTISING AIRTIME. THE ASSESSEE IS ALSO NOT AWARE OF THE MARK - UP WHICH IS 70 VIACOM 18 MEDIA PVT. LTD. CHARGED BY THE ADVERTISING AGENCIES TO THE ADVERTISERS. THUS, THE ASSESSEE IS NOT AWARE OF THE RATE AT WHICH THE AIRTIME SLOTS ARE SOLD BY THE ADVERTISING AGENCIES TO ADVERTISERS. 156. THE TRANSACTION BETW EEN THE ASSESSEE AND THE ADVERTISING AGENCIES ARE ON PRINCIPAL TO PRINCIPAL BASIS AND THE SAME IS CONFIRMED THE ADVERTISING AGENCIES. THE ADVERTISING AGENT HAS ALSO CONFIRMED THAT WHEN THEY RECEIVE PAYMENT FROM ADVERTISERS, THE ADVERTISER WITHHOLDS APPROPR IATE TAX AT SOURCE ON THE ENTIRE COST OF ADVERTISEMENT INCLUDING THEIR REMUNERATION. I) THE CLARIFICATION ISSUED BY THE CBDT VIDE ITS LETTER DATED 12 SEPTEMBER 1995 A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGE NO.629 WITH RESPECT TO DEDUCTION OF TAX AT SO URCE BY THE BROADCASTERS WHEREIN CBDT HAS CLARIFIED THAT BROADCASTER / MEDIA COMPANY IS NOT REQUIRED TO DEDUCT TAX AT SOURCE UNDER SECTION 194C FOR PAYMENT RETAINED BY THE ADVERTISING AGENTS. II) FURTHER, CBDT CIRCULAR NO. 5 OF 2016 DATED 29.02.2016 (COPY ATT ACHED AT PG. NO. 129 130 OF FPB) CLARIFIED THAT NO TDS IS ATTRACTED ON PAYMENT MADE TO ADVERTISING AGENCIES FOR BOOKING / PROCURING / CANVASSING FOR ADVERTISEMENTS BY THE TELEVISION CHANNEL UNDER SECTION 194C OR SECTION 194H OF THE ACT. III) SIMILAR VIEW IS TA KEN BY THE HONBLE ALLAHABAD HIGH COURT IN CASE OF JAGRAN PRAKASHAN LTD V DCIT 245 ITR 288 (COPY AT PG NO. 131 - 171 OF LPB) (SLP DISMISSED BY SC ON 5 MAY 2014) AND DELHI HIGH COURT IN CASE OF CIT V/S LIVING MEDIA LTD (ITA NO 1264 OF 2007 DATED 6 TH MAY 2008) (SLP DISMISSED BY SC ON 11 TH FEBRUARY 2009) . 157. ACCORDINGLY, THE LEARNED A.R. SUBMITTED THAT NO DISALLOWANCE UNDER SE CTION 40(A)(IA) OF THE ACT CAN BE MADE AS THE ASSESSEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE. 71 VIACOM 18 MEDIA PVT. LTD. 158. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE LEARNED CIT(A). 159. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD IN THE LIGHT OF THE DECISIONS RELIED UPON. WE FIND THAT THE ISSUE RAISED BY THE ASSESSEE IS COVERED BY THE DECISION THE HONBLE ALLAHABAD HIGH C OURT IN JAGRAN PRAKASHAN LTD. V/S DCIT, [2012] 345 ITR 288 (ALL.), WHEREIN THE HONBLE COURT HELD AS UNDER: 97. THERE CANNOT BE ANY DISPUTE TO THE PROPOSITION AS LAID DOWN BY THE APEX COURT IN THE AFORESAID CASE. IN THE AFORESAID CASE, THE RIGHTS WERE A LREADY ADJUDICATED IN THE SUIT WHICH WAS DECREED. IN THE SAID CIRCUMSTANCES, THE APEX COURT OBSERVED THAT PETITION UNDER ARTICLE 227 OUGHT NOT TO HAVE BEEN ENTERTAINED AND THE GUARANTOR SHOULD HAVE BEEN RELEGATED TO TAKE RECOURSE TO THE APPEAL. THE PRESENT IS A CASE WHERE THE PROCEEDINGS HAVE BEEN CHALLENGED ON THE GROUND THAT THERE WAS NO JURISDICTIONAL FACTS ON THE BASIS OF WHICH THE INCOME TAX AUTHORITIES COULD HAVE ASSUMED JURISDICTION UNDER SECTION 201 AND FURTHER THERE WAS NO JURISDICTION TO DIRECT FO R RECOVERY OF TAX WHICH ACCORDING TO THE RESPONDENT WAS SHORT DEDUCTED BY THE DEDUCTOR. THUS, THE PRESENT CASE IS CLEARLY DISTINGUISHABLE. IT IS FURTHER RELEVANT TO NOTE THAT IN THE PRESENT CASE, THE ASSESSING AUTHORITY HAS RELIED ON AN ARTICLE PUBLISHED I N THE NEWSPAPER NAMELY; 'BUSINESS STANDARD' WHICH ARTICLE QUOTED THE OPINION OF CBDT THAT THE NEWS AGENCY IS LIABLE TO DEDUCT TAX AT SOURCE WHILE MAKING PAYMENT TO ADVERTISING AGENCY FOR ADVERTISEMENT. ALTHOUGH THERE ARE NO MATERIAL BROUGHT ON THE RECORD B Y THE DEPARTMENT TO INDICATE AS TO WHEN AND IN WHAT CIRCUMSTANCES, THE CBDT HAS EXPRESSED THE SAID OPINION. AS NOTED ABOVE, DELHI HIGH COURT IN ITS JUDGMENT IN THE CASE OF LIVING MEDIA INDIA LTD. ( SUPRA ) HAS ALREADY TURNED DOWN THE STAND OF THE DEPARTMENT THAT SECTION 194H IS APPLICABLE WITH REGARD TO PAYMENT TO ADVERTISING AGENCY BY THE NEWS AGENCY AND THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THE DIVISION BENCH JUDGMENT OF DELHI HIGH COURT HAS BEEN DISMISSED ON 11.2.2009. NO DISTINGUISHIN G FEATURE COULD BE POINTED OUT BY THE DEPARTMENT AS TO WHY THE SAID VIEW OF THE DELHI HIGH COURT SHOULD NOT BE FOLLOWED BY THE DEPARTMENT . WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE IN WHICH THE PETITIONER BE RELEGATED TO REMEDY OF APPEAL. [ EMPHASIS SUP PLIED ] 72 VIACOM 18 MEDIA PVT. LTD. 98. FURTHER MORE, AS SUBMITTED BY LEARNED A.R. FOR THE PETITIONER, HUGE LIABILITY RUNNING IN SEVERAL CRORES HAVE BEEN FASTENED ON THE PETITIONER AND ON THE BASIS OF THE ASSESSMENT ORDER, REASSESSMENT NOTICE DATED 30.3.2012 HAS BEEN ISSUED BY THE DEPARTMENT FOR REOPENING THE ASSESSMENT FOR THE YEARS 20 05 - 06, 2006 - 07, 2007 - 08, 2008 - 09 AND 2009 - 10, WHICH WILL AGAIN EXPOSE THE PETITIONER, WHICH PROCEEDINGS WOULD BE NOTHING BUT MULTIPLICITY OF PROCEEDINGS TO BE FACED BY THE PETITIONER WHICH MAY PROLONG YEARS INCREASING THE SUFFERINGS OF THE PETITIONER, WHER EAS UNDER LAW SECTION 194 H OF THE ACT IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. TAKING INTO CONSIDERATION OVER ALL FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, AND THE ANSWERS GIVEN BY US, WHILE DECIDING THE ISSUES NO. 2 TO 10, WE ARE OF THE VIE W THAT THE PETITIONER HAS RIGHTLY INVOKED THE JURISDICTION OF THIS COURT UNDER ARTICLE 226 AND THE PETITION CANNOT BE THROWN OUT ON THE GROUND OF ALTERNATIVE REMEDY. 160. WE ALSO FIND THAT THE CBDT VIDE ITS CIRCULAR NO.F.NO.133/119/95 TPL III, DATED 12 TH SEPTEMBER 1995, HAS CLARIFIED THAT BROADCASTER / MEDIA COMPANY IS NOT REQUIRED TO DEDUCT TAX AT SOURCE UNDER SECTION 194C FOR PAYMENT RETAINED BY THE ADVERTISING AGENTS. THE CBDT VIDE ITS CIRCULAR NO.5 OF 2016 DATED 29 TH FEBRUARY 2016 CLARIFIED THAT NO TD S IS ATTRACTED ON PAYMENT MADE TO ADVERTISING AGENCIES FOR BOOKING / PROCURING / CANVASSING FOR ADVERTISEMENTS BY THE TELEVISION CHANNEL UNDER SECTION 194C OR SECTION 194H OF THE ACT. IN VIEW OF THESE FACTS AND CIRCUMSTANCES ON THE ISSUE, RESPECTFULLY FOLL OWING THE AFORESAID JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT AS WELL THE CBDT CIRCULARS CITED SUPRA, WE HOLD THE DRP WAS NOT JUSTIFIED IN CONFIRMING THE DISALLOWANCE OF ` 36,67,82,832, ON ACCOUNT OF AGENCY COMMISSION UNDER SECTION 40(A)(IA) OF THE ACT. CONSEQUENTLY, WE SET ASIDE THE 73 VIACOM 18 MEDIA PVT. LTD. IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND DELETE THE DISALLOWANCE ACCORDINGLY. GROUND NO.14, IS HEREBY ALLOWED. 161. IN THE RESULT, ASSESSEES APPEAL FOR A.Y. 2009 10 IS ALLOWED. ITA NO.1383/MUM./2014 REVENUES APPEAL A.Y. 2009 10 162. GROUNDS NO.1 AND 2, RELATES TO DISALLOWANCE OF ` 2,66,06,294, ON ACCOUNT OF ADVERTISEMENT AND MARKETING EXPENSES PERTAINING TO THE PERIOD WHEN THE ASSESSEE WAS THE SOLE SUB AGENT OF ITS A.E. 163. HAVING HEARD THE LEARNED A.R. APPEARING FOR THE PA RTIES AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THE RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY THE REVENUE IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUND NO.20, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, WHICH WE HAVE DECIDED VIDE PARA 35 AND 36 OF THIS ORDER, WHEREIN FOR THE REASONS STATED THEREIN, WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY ALLOWING THE ISSUE RAISED BY THE ASSESS EE. CONSEQUENT UPON THE DECISION TAKEN BY US THEREIN, SINCE THE ISSUE RAISED, FACTS AND CIRCUMSTANCES ARE MATERIALLY IDENTICAL, WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE ORDER PASSED BY THE DRP 74 VIACOM 18 MEDIA PVT. LTD. ON THIS ISSUE AND REJECT THE CLAIM OF THE REVENUE AS AFORESAID. THUS, GROUND NO.8, R AISED BY THE ASSESSEE IS DISMISSED . 164. GROUND NO.3, RELATES TO D ISALLOWANCE ON ACCOUNT OF PAYMENT OF CHANNEL PLACEMENT FEES OF ` 117,82,55,629 , UNDER SECTION 40(A)(IA). 165. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, DEBITED A SUM OF ` 117,82,55,629 , ON ACCOUNT OF PAYMENTS MADE TO VARIOUS MULTI SERVICE OPERATORS (MSOS) / CABLE OPERATORS (COS) FOR PLACING THE CHANNELS ON PREFERRED BANDS. WHILE MAKING THESE PAYMENTS, IT WITHHELD TAX AT SOURCE @ 2% UNDER SECTION 194C OF THE ACT. 166. ACCORDING TO THE ASSESSING OFFICER , IN VIEW OF THE RETROSPECTIVE AMENDMENT, THE PAYMENT OF PLACEMENT FEES WOULD QUALIFY AS ROYALTY BEING PAYMENT MADE FOR USE OF PROCESS AND THE ASSESSEE IS REQUIRED TO WITHHOLD TAX @ 10% UNDER 194J OF THE ACT. SINCE ASSESSEE HAS NOT DEDUCTED TAX THEREON @ 10%, THE SAME IS LIABLE FOR DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT. 167. THE DRP DELETED THE DISALLOWANCE AND AGREED WITH THE ORDER PASSED BY THE CIT(A) UNDER 201 PROCEEDINGS THAT THE ASSESSEE RIGHTLY DEDUCTED TAX AT SOURCE UNDER SECTION 194C. AGGRIE VED AGAINST THE DIRECTIONS OF THE DRP, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 75 VIACOM 18 MEDIA PVT. LTD. 168. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE PLACEMENT FEE IS A CHARGE PAID FOR OBTAINING A PRIVILEGE / BENEFIT OF PLACING THE CHANNEL ON A PREFERRED BAND. THE PLACEMENT FEES IS NOT IN THE NATURE OF ROYALTY AS DEFINED IN SECTION 9(1)(VI) OF THE ACT AS THE SAME IS NOT PAID FOR RIGHT TO USE ANY, RIGHT, PROPERTY OR INFORMATION, MODEL, DESIGN, SECRET FORMULA OR PROCESS OR TRADEMARK OR SIMILAR PROPERTY. HE SUBMITTED THAT I N ASSESSEES CASE THE ARRANGEMENT WITH MSOS / COS IS FOR PLACEMENT OF CHANNELS ON THE PRE - DETERMINED BAND/FREQUENCY AND NOT FOR ANY TRANSMISSION OF SIGNALS, SO AS TO FALL WITHIN THE MEANING OF THE TERM PROCESS AS AMENDED BY THE FINANCE A CT, 2012. THE LEARNED A.R. FURTHER SUBMITTED THAT T HE PLACEMENT FEE IS NOT A CHARGE FOR ANY SERVICE BEING RENDERED BY THE MSOS/COS TO THE ASSESSEE , LEAVE ASIDE A TECHNICAL SERVICE. HE SUBMITTED THAT M ERELY BECAUSE AS PART OF PROVIDING THE PRIVILEGE / FA CILITY, IT REQUIRES THE MSOS / COS TO PUT THE CHANNEL ON A PARTICULAR BAND USING TECHNICAL EQUIPMENT DOES NOT MEAN ANY TECHNOLOGY OR TECHNICAL SERVICE IS PROVIDED BY THE MSOS / COS TO THE ASSESSEE . ACCORDINGLY, THE PAYMENT OF PLACEMENT FEE FOR AVAILING THE STANDARD FACILITY/ PRIVILEGE SHOULD NOT ALSO CONSTITUTE FEES FOR TECHNICAL SERVICES (FTS) UNDER THE ACT. THE LEARNED A.R. FURTHER SUBMITTED THAT THE EXPLANATION (IV) TO SECTION 194C OF THE ACT SPECIFICALLY COVERS THE TERM BROADCASTING AND TELECASTING WITHIN THE MEANING OF THE TERM WORK AND HENCE THE PAYMENT OF PLACEMENT CHARGES SHOULD BE SUBJECT TO TDS UNDER SECTION 76 VIACOM 18 MEDIA PVT. LTD. 194C OF THE ACT. HE SUBMITTED THAT W ITHOUT PREJUDICE, THE ASSESSEE SUBMITS THAT IT HAS DEDUCTED AND PAID TAXES AT SOURCE UNDER SECTION 1 94C OF THE ACT AS PER THE LAW PREVALENT AT THE TIME OF THE CAPTIONED ASSESSMENT YEAR 2009 - 10. THUS, THE ASSESSEE CANNOT BE SUBJECT TO AN IMPOSSIBLE ACT OF DEDUCTING THE TAXES UNDER S ECTION 194J OF THE ACT, HAVING REGARD TO A LATER AMENDMENT MADE IN THE LAW BY THE FINANCE ACT, 2012. THE LEARNED A.R. IN SUPPORT OF HIS ARGUMENTS, PLACED RELIANCE ON THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S NGC NETWORKS (INDIA) PVT . LTD ., ITA NO. 397 OF 2015, WHEREIN THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THAT DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT CANNOT BE MADE WHERE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE AT HIGHER RATE ONLY ON ACCOUNT OF SUBSEQUENT RETROSPECTIVE AMENDMENT MADE IN THE ACT. THE LEARNED A.R. SUBMITTED THAT THE ISSUE IS CO VERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2009 10 (TDS PROCEEDINGS . FURTHER, THE HONBLE BOMBAY HIGH COURT HAS CONFIRMED / UPHELD THE SAID DECISION OF THE TRIBUNAL. 169. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 170. HAVING CONSIDERED THE RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THAT SIMILAR ISSUE CAME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 10 IN AN 77 VIACOM 18 MEDIA PVT. LTD. APPEAL FILED BY THE REVENUE BEING ACIT V/S VIACOM 18 MEDIA PVT. LTD., ITA NO.3515/MUM./2012, ETC., ORDER DATED 14 TH OCTOBER 2015, WHEREIN THE TRIBUNAL REJECTED THE ISSUE RAISED BY THE REVENUE HOLDING THAT THE ASSESSEE HAS RIGHTLY DEDUCTED TAX AT SOURCE UND ER SECTION 194C. THE RELEVANT PORTION OF THE FINDINGS OF THE TRIBUNAL IS REPRODUCED BELOW FOR BETTER APPRECIATION OF FACTS: 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, DECISIONS REFERRED TO ABOVE AND CAREFULLY PERUSED THE MATERIALS ON RECORD . WE FIND THAT THE ISSUE REGARDING DEDUCTION OF TAX AT SOURCE FOR THE PAYMENT MADE TO CABLE OPERATORS AS PLACEMENT CHARGES IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE VARIOUS DECISIONS AND ALSO BY THE CIRCULAR NO. 720 OF 30.08.1995. THE HON BLE DELHI HIGH COU RT IN THE CASE OF CIT VS. PRASAR BHARATI [2007] 292 ITR 580 (DEL.) ON A SIMILAR ISSUE HAS HELD AS UNDER: - WE ARE UNABLE TO AGREE WITH THIS SUBMISSION. WE OBSERVE THAT EXPLANATION III, WHICH WAS INTRODUCED SIMULTANEOUSLY WITH SECTION 194J, IS VERY SPECIFIC IN ITS APPLICATION TO NOT ONLY BROADCASTING AND TELECASTING BUT ALSO INCLUDE PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING AND TELECASTING IF, ON THE SAME DATE, TWO PROVISIONS ARE INTRODUCED IN THE ACT, ONE SPECIFIC TO THE ACTIVITY SOUGHT TO BE T0061ED AND THE OTHER IN MORE GENERAL TERMS RESORT MUST BE HAD TO THE SPECIFIC PROVISIONS WHICH MANIFESTS THE INTENTION OF THE LEGISLATURE. IT IS NOT, THEREFORE, POSSIBLE TO ACCEPT THE CONTENTION OF THE REVENUE THAT PROGRAMMES PRODUCED FOR TELEVISION, INC LUDING COMMISSIONED PROGRAMMES, WILL FALL OUTSIDE THE REALM OF SECTION 194C, EXPLANATION III OF THE ACT. IN THIS VIEW OF THE MATTER WE HOLD THAT THESE APPEALS DO NOT INVOLVE ANY SUBSTANTIAL QUESTION OF LAW. THE APPEALS ARE ACCORDINGLY DISMISSED WITH NO O RDER AS TO COSTS . 10. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. PRASAR BHARATI (SUPRA), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A) QUA THIS ISSUE AND THE SAME IS HEREBY AFFIRMED. ACCORDINGLY, THE GROUNDS NO. 1 TO 5 ARE DISMISSED. 78 VIACOM 18 MEDIA PVT. LTD. 170.1 WE FURTHER FIND THAT HON'BLE JURISDICTIONAL HIGH COURT HAS CONFIRMED THE SAID DECISION OF TRIBUNAL BY DISMISSING THE APPEAL FILED BY THE REVENUE . SINCE THE ISSUE, FACTS A ND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN , C ONSISTENT WITH THE VIEW TAKEN AS AFORESAID, WE UPHOLD THE ORDER PASSED BY THE DRP BY DISMISS ING THE GROUND 3, RAISED BY THE REVENUE. 171. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.1741/MUM./2015 ASSESSEES APPEAL A.Y. 2010 11 172. GROUNDS NO.1 AND 2, RAISED BY THE ASSESSEE BEING INTER CONNECTED TO OTHER GROUNDS R AISED IN THIS APPEAL, HENCE THESE GROUNDS ARE LEFT UN ADJUDICATED. THESE ISSUES WILL BE DECIDED IN SUCCEEDING GROUNDS OF APPEAL. 173. GROUND NO.3, RAISED BY THE ASSESSEE RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 1,16,74,083, ON ACCOUNT OF PAYMENT FOR USE OF TRADEMARK AND PROGRAMMING CONTENT. 174. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US THAT RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY EITHER PARTY IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US 79 VIACOM 18 MEDIA PVT. LTD. VIDE GROUNDS NO.5, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 97 OF THIS ORDER, WHEREIN WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST T HE REVENUE. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN, C ONSISTENT WITH THE VIEW TAKE N THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A), AND ALLOW THE GROUND NO.3, RAISED BY THE ASSESSEE. 175. GROUND NO.4, RAISED BY THE ASSESSEE RELATES TO TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF COMMISSION PAID TO THE A.E. FROM INCOME F ROM ADVERTISEMENT SALES OF ` 13,00,318. 176. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US THAT RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY EITHER PARTY IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUNDS NO.6, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 102 OF THIS ORDER, WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR O F THE ASSESSEE AND AGAINST THE REVENUE. SINCE THE ISSUE, FACTS AND C IRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID , WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN , C ONSISTENT WITH THE 80 VIACOM 18 MEDIA PVT. LTD. VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) AND ALLOW THE GROUND NO.4, RAISED BY THE ASSESSEE. 177. GROUND NO.5, RAISED BY THE ASSESSEE RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 1,19,54,747, ON ACCOUNT OF INCOME FROM CHANNEL DISTRIBUTION . 178. UNDER THE NEW BUSINESS MODE L, THE ASSESSEE HAD ENTERED INTO AGREEMENT WITH ITS A.ES TO DISTRIBUTE ITS T.V. CHANNELS IN NEIGHBOURING COUNTRIES AS UNDER: NAME OF THE AE FUNCTION REMUNERATION FORMULAE AMOUNT ( ` ) MTV NETWORKS, EUROPE DISTRIBUTION OF MTV INDIA AND VH1 CHANNELS IN PAKISTAN, BANGLADESH, NEPAL, SRI LANKA ETC . A SHARE OF 50:50 OF THE GROSS PROCEEDS FROM SUBSCRIBERS IN THE MARKET AND USD 50,000 LUMPSUM FOR MTV CHANNEL A SHARE OF 10:90 OF THE GROSS PROCEEDS FROM SUBSCRIBER FOR VH1 CHANNEL 53,37,785 5,22,242 MTV NETWORKS, DISTRIBUTION OF MTV INDIA CHANNEL IN THE USA 80:20 OF THE NET REVENUE, WHEN CALCULATED ON GROSS, THE APPELLANT EARNS APPROXIMATELY 50% 1,77,92,502 MTV NETWORKS BV DISTRIBUTION OF NICK CHANNEL IN BANGLADESH, NEPAL, SRILANKA ETC . A SHARE OF 1 0:90 OF GROSS PROCEEDS AND USD 50,000 LUMPSUM 42,12,498 179. THE TRANSFER PRICING OFFICER COMPARED THE DISTRIBUTION ARRANGEMENT OF THE ASSESSEE WITH ONE A.E. (MTV NETWORKS EUROPE) WITH THE DISTRIBUTION ARRANGEMENT OF THE ASSESSEE WITH OTHER A.E S FOR 81 VIACOM 18 MEDIA PVT. LTD. DIFFERENT CHANNELS THEREBY COMPARING ONE CONTROLLED TRANSACTION WITH ANOTHER CONTROLLED TRANSACTION. 180. THE TRANSFER PRICING OFFICER DETERMINED THE ARM'S LENGTH PRICE AND MADE AN ADJUSTMENT OF ` 1,19,54,747 BY FOLLOWING INTERNAL CUP METHOD WHEREIN THE TRANS FER PRICING OFFICER COMPARED THE DISTRIBUTION MECHANISM BETWEEN THE ASSESSEE AND MTV NETWORK EUROPE WITH THE ARRANGEMENT BETWEEN ASSESSEE AND MTV NETWORKS AND MTV NETWORKS B . V. WHILE DOING SO, HE ALSO CONSIDERED EXCHANGE RATE BETWEEN RUPEE AND USD AT YEARE ND AS EXCHANGE RATE INSTEAD OF THE ACTUAL EXCHANGE RATE AT WHICH THE INCOME WAS BOOKED. 181. THE DRP CONFIRMED THE TRANSFER PRICING OFFICER S ACTION . 182. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT T HE TRANSFER PRICING OFFICER USED CONTROLLED PRICE TO BENCH MARK THE TRANSACTION AND ON THIS COUNT ITSELF THE ACTION OF THE TRANSFER PRICING OFFICER FAILS. FOR THIS PROPOSITION, HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) TECNIMONT ICB (P.) LTD. V. ACIT 24 TAXMANN.COM 28 (MUM .) ; AND II) DCB INDIA PVT LTD . [2009] 121 ITD 131 (MUM .) . 183. THE LEARNED A.R. FURTHER SUBMITTED THAT THE TRANSFER PRICING OFFICER HAS RELIED ENTIRELY ON THE TRANSFER PRICING ORDER/ DIRECTIONS OF THE DRP FOR THE ASSESSMENT YEAR 2009 - 10 WHILE COMPUTING THE ADJUSTMENT, THEREBY DISREGARDING THE DOCU MENTATION MAINTAINED UNDER 82 VIACOM 18 MEDIA PVT. LTD. S ECTION 92D OF THE ACT R /W RULE 10D OF THE RULES. HE SUBMITTED THAT I N VIEW OF THE ABOVE, THE ADJUSTMENT MADE BY THE TRANSFER PRICING OFFICER CONSIDERING CONTROLLED TRANSACTION AS COMPARABLE MAY BE DELETED. 184. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE AUTHORITIES BELOW. 185. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT T HIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO. 3 , RAISED BY THE REVENUE IN ITS APPEAL BE ING ITA NO. 1383 /MUM./20 14 , FOR THE ASSESSMENT YEAR 200 9 10 , VIDE PARA 170 AND 17 0. 1 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN, CONSISTENT WITH THE VIEW T AKEN THEREIN, WE SET ASIDE THE ORDER PASSED BY THE DRP AND ALLOW GROUND NO.5, RAISED BY THE ASSESSEE. 186. GROUND NO.6, RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 1,42,82,133, ON ACCOUNT OF CHANNEL DISTRIBUTION EXPENSES FOR THE PERIOD OF SEPTEMBER 2008 TO DE CEMBER 2008. 187. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD PAID ITS A.E. AN AMOUNT OF ` 2,26,28,475, FOR THE UP LINKING OF CHANNEL FACILITY RENDERED BY THE A.E. THE TRANSFER PRICING OFFICER HAD REQUESTED THE 83 VIACOM 18 MEDIA PVT. LTD. ASSESSEE TO PROVIDE ITS SUBMISSION REGAR DING THE EVIDENCE OF THE RECEIPT OF SERVICE AND THE QUANTIFICATION OF THE COSTS IN THIS REGARD. WHILST THE UP LINKING WAS BEING DONE FROM INDIA, FOR AN INITIAL PERIOD (UP TO DECEMBER 31, 2008) TILL THE TIME THE UP LINKING FROM INDIA WAS PROPERLY OPERATIONA LISED, SIMULTANEOUS UP LINKING WAS ALSO BEING REQUIRED TO BE DONE FROM SINGAPORE. IN ORDER TO DEMONSTRATE THAT THE SERVICES WERE ACTUALLY RECEIVED, THE ASSESSEE HAD PROVIDED A COPY OF AN EMAIL CONVERSATION WITH THE A.E. WHICH CLEARLY SHOWED THAT THE A.E. P ROVIDED THE REQUIRED SUPPORT IN RELATION TO THE UP LINKING OF CHANNELS. THE SAID SERVICES RECEIVED FROM THE A.E. BENEFITED THE ASSESSEE IN A SENSE THAT WHILE THE UP LINKING OF CHANNELS WAS BEING FROM A.ES LOCATION I.E., SINGAPORE, THE REVENUE IN THIS REGA RD WAS BEING BOOKED IN INDIA TO THE CREDIT OF THE ASSESSEE. THE ASSESSEE FURTHER SUBMITTED BEFORE THE TRANSFER PRICING OFFICER THAT THE SERVICES OF THE A.E. WERE SOUGHT JUST TO ENABLE THE ASSESSEE TO CONDUCT ITS BUSINESS EFFICIENTLY WITHOUT ANY DISRUPTION IN THE TRANSMISSION OF THE CHANNELS AND THE A.E. FOR PROVIDING THE SERVICE CROSS - CHARGED THE EXPENSES INCURRED BY IT ON THIS ACCOUNT WITHOUT ANY MARK - UP. THE TRANSFER PRICING OFFICER IGNORED ALL THE SUBMISSIONS OF THE ASSESSEE AND BENCHMARKED ITS INTERNAT IONAL TRANSACTION BY COMPARING THE CHARGES PAID BY THE ASSESSEE TO TV18 FOR UP - LINKING THE CHANNELS IN INDIA WITH THAT CHARGES PAID BY THE ASSESSEE TO ITS A.E. FOR THE RENDERING THE SAME SERVICES OUTSIDE INDIA. HOWEVER, WHILE DOING SO, THE TRANSFER PRICING OFFICER ALLOWED ONLY A 84 VIACOM 18 MEDIA PVT. LTD. PROPORTIONATE EXPENSE INCURRED BY THE ASSESSEE FOR THE PERIOD 12 TH JULY TO 31 ST AUGUST, 2008, THEREBY NOT APPRECIATING THAT THE SERVICES WERE ACTUALLY RENDERED BY THE A.E. FOR THE PERIOD 12 TH JULY, 2008 TO 31 ST DECEMBER, 2008. THE TRANSFER PRICING OFFICER ASSUMED THAT PAYMENT OF ` 2,26,28,475 WAS MADE FOR A PERIOD OF LESS THAN TWO MONTHS WHEREAS COMPARABLE PAYMENT TO TV18 WAS ` 52,16,464 PER MONTH. APPLYING THE SAME RATE, AS PER THE TRANSFER PRICING OFFICER , THE PAYMENT TO A.E. SHOULD HAVE BEEN ONLY ` 83,46,342 AND ACCORDINGLY, THE TRANSFER PRICING OFFICER MADE AN ADJUSTMENT OF ` 14,282 ,133 TO THE TOTAL INCOME OF THE ASSESSEE BEING EXCESSIVE PAYMENT MADE. 188. THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT I T IS A ONE - OF THE TRANSACTION S FOR PAYMENT OF UP LINKING CHARGES UP TO AUG UST 2008 AND THEN PAYMENT FOR STAND BY FACILITY UP TO DEC EMBER 2008 TO ENSURE SMOOTH TELECASTING OF THE TV CHANNELS . HE SUBMITTED THAT I F COMPARED WITH PAYMENT MADE TO TELEVISION 18, IT IS AT A RM'S L ENGTH AS THE ASSESSEE 'S PAYMENT PER MONTH TO A.E. IS ` 41.14 LAKH (I.E. , FROM 12 TH JULY 2008 TO 31 ST DECEMBER 2008) WHEREAS TV18 HAS CHARGED ` 52.16 LAKH P ER MONTH. HE SUBMITTED THAT I N VIEW OF THE ABOVE, NO ADJUSTMENT IS WARRANTED. 189. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDER OF THE LEARNED CIT(A). 85 VIACOM 18 MEDIA PVT. LTD. 190. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE NOTICED THAT THE TRANSFER PRICING OFFICER CONSIDERED THE INFORMATION OF TV18 TO BENCHMARK THE PAYMENT TOWARDS UP LINKING OF CHANNEL FACILITY TO ITS A.E. WE ALSO NOTICED THAT THE PAYMENT MADE BY TV18 FOR THE SAME ACTIVITY IS @ ` 52.16 PER MONTH WHEREAS THE ASSESSEE HAS TAKEN THE SERVICES OF THE A.E. FROM 12 TH JUL Y TO 31 ST DECEMBER 2008 I.E., FOR FIVE MONTHS AND 21 DAYS. IN CASE, WE CONSIDER THE COMPARABLE RATE OF TV18, THE ASSESSEE MAY HAVE TO INCUR THE EXPENDITURE OF ` 297 LAKH, WHEREAS, THE ASSESSEE HAS PAID ` 226 LAKH. THEREFORE, THE UP LINKING CHARGES INCURRED BY THE ASSESSEE ARE WITHIN THE BENCHMARK SELECTED BY THE TRANSFER PRICING OFFICER. CONSEQUENTLY, WE DIRECT THE ASSESSING OFFICER / TRANSFER PRICING OFFICER TO DELETE THE ADJUSTMENT MADE. ACCORDINGLY, THE GROUND NO. 6 , RAISED BY THE ASSESSEE IS ALLOWED. 191. GROUND NO.7, RELATES TO TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF FINANCE COST ON REIMBURSEMENT RECEIPTS OF MARKETING, TRAVELLING AND OTHER EXPENSES OF ` 2,79,804. 192. DURING THE HEARING, THE TRANSFER PRICING OFFICER ASKED TIME LAG IN RECEIPT OF THE REIMBURSEMENT OF EXPENSES FROM THE A.ES. THE ASSESSEE SUBMITTED THAT THE REIMBURSEMENT IN THE NATURE OF CARRIAGE FEES PAID TO CABLE OPERATORS FOR DISTRIBUTION OF CHANNELS; AD VERTISEMENT AND MARKETING EXPENSES FOR THE PROMOTION OF CHANNELS VIZ., MTV, VH1 AND 86 VIACOM 18 MEDIA PVT. LTD. NICK DISTRIBUTED BY THE ASSESSEE AND OTHER THIRD PARTY COST LIKE TRAVEL COST, HOTEL COST, FOOD & BEVERAGE COST, OFFICE SUPPLIES ETC., WERE INCURRED BY THE ASSESSEE ON BEHAL F OF THE A.E. AND WAS LATER CHARGED TO THE A.E. ON COST TO COST BASIS. THERE WAS SMALL DELAY IN RECOVERY OF PART OF THE COST, BUT IT WAS PART OF REGULAR BUSINESS AND HENCE NO INTEREST WAS CHARGED. 193. THE TRANSFER PRICING OFFICER HELD THAT THERE IS DELAY BEY OND NORMAL CREDIT PERIOD FOR RECOVERY OF SUM OF ` 49,99,631, AND ACCORDINGLY CONSIDERING THE PLR OF 12.25%, HE COMPUTED INTEREST ADJUSTMENT OF ` 2,79,804. 194. THE DRP CONFIRMED THE ACTION OF THE TRANSFER PRICING OFFICER. 195. BEFORE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT THE TRIBUNAL IN ITS ORDER PASSED FOR ASSESSMENT YEAR 2005 - 06 STATED THAT THE SAID EXPENSES ARE INCURRED FOR BUSINESS PURPOSE AND BENEFITS ASSESSEES BUSINESS AND STILL PART OF EXPENSES RECOVERED. HENCE, NO FINANCE COST ADJUSTMENT T O BE MADE. HE SUBMITTED THAT THE ASSESSEE NEVER CHARGED INTEREST ON OVERDUE PAYMENTS FROM NON - A.ES AS WELL. HENCE, QUESTION OF ADJUSTMENT SHOULD NOT ARISE IN THE INSTANT CASE. FOR THIS PROPOSITION, THE LEARNED A.R. PLACED RELIANCE ON FOLLOWING DECISIONS: 87 VIACOM 18 MEDIA PVT. LTD. I) CIT V. M/S. INDO AMERICAN JEWELLERY LTD. (ITA (L) NO. 1053 OF 2012, ORDER DATED 08.01.2013; AND II) CIT V. M/S. LIVINGSTONE, ITA NO.887 OF 2014, ORDER DATED 28.11.2016. 196. WITHOUT PREJUDICE, CONSIDERING THAT THE TRANSACTION IS AN INTERNATIONAL TRANSACTION, LI BOR RATE SHOULD HAVE BEEN USED TO BENCHMARK THE TRANSACTION AND NOT PLR AND REASONABLE CREDIT PERIOD OF 90 DAYS SHALL BE ALLOWED BEFORE COMPUTING THE ADJUSTMENT. THE LEARNED A.R. PLACED RELIANCE ON THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN CIT V/S VAIBHAV GEMS LTD. [2017] 88 TAXMANN.COM 12 (RAJ.), AGAINST WHICH A SPECI AL LEAVE PETITION WAS FILED BY THE REVENUE WHICH WAS DISMISSED BY THE HON'BLE SUPREME COURT IN CIT V/S VAIBHAV GEMS LTD., [2018] 259 TAXMANN 130 (SC). 197. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 198. HAVING CONSIDERED THE SUBMISSIONS OF THE LEARNED A.R. APPEARING FOR THE PARTIES , WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO. 8 , RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 1 19 AND 120 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY 88 VIACOM 18 MEDIA PVT. LTD. THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO. 7 , RAISED BY THE ASSESSEE. 199. GROUND NO.8, RELATES TO DISALLOWANCE OF MARKETING AND ADVERTISEMENT EXPENSES UNDER SECTION 37(1) OF THE ACT. 200. HAVING HEARD THE LEARNED A.R. APPEARING FOR THE PARTIES AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THE RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY THE ASSESSEE IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUND NO.20, RAISED BY THE A SSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, WHICH WE HAVE DECIDED VIDE PARA 35 AND 36 OF THIS ORDER, WHEREIN FOR THE REASONS STATED THEREIN, WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY ALLOWING THE ISSU E RAISED BY THE ASSESSEE. CONSEQUENT UPON THE DECISION TAKEN BY US THEREIN, SINCE THE ISSUE RAISED, FACTS AND CIRCUMSTANCES ARE MATERIALLY IDENTICAL, WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATE D THEREIN, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE AND ALLOW THE CLAIM OF THE ASSESSEE AS AFORESAID. THUS, GROUND NO.8, RAISED BY THE ASSESSEE IS ALLOWED. 201. GROUND NO.9, RELATES TO THE DISALLOW ANCE ON ACCOUNT OF DEPRECIATION ON GOODWILL AMOUNTING TO ` 11,40,783. 89 VIACOM 18 MEDIA PVT. LTD. 202. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THE RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY THE ASSESSEE IS MUTATIS MUTANDIS AND MATERIALLY I DENTICAL TO THE ISSUE DECIDED BY US VIDE GROUND NO.11, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2010, FOR THE A.Y. 2009 10, WHICH WE HAVE DECIDED VIDE PARA 124 AND 125 OF THIS ORDER, WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE AS SESSEE AND AGAINST THE REVENUE FOR THE REASON STATED THEREIN. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELETE THE DISALLOWANCE ON ACCOUNT OF DEPRECIATION ON GOODWILL. THUS, GROUND NO.9 , RAISED BY THE ASSESSEE IS ALLOWED. 203. GROUND NO.10, RELATES TO DISALLOWANCE OF LEGAL AND PROFESSIONAL FEES FOR REGISTRATION OF TRADEMARK OF ` 3,50,626. 204. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO.12, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 141 AND 1 42 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN, 90 VIACOM 18 MEDIA PVT. LTD. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE OR DER PASSED BY THE DRP AND ALLOW GROUND NO.10, RAISED BY THE ASSESSEE. 205. GROUND NO.11, RELATES TO DISALLOWANCE OF ` 8,48,025,002, ON ACCOUNT OF UP LINKING CHARGES UNDER SECTION 40(A)(IA) OF THE ACT. 206. HAVING HEARD THE LEARNED A.R. APPEARING FOR THE PARTIES AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THE RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY THE ASSESSEE IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUND NO.13, RAISED BY THE A SSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, WHICH WE HAVE DECIDED VIDE PARA 150 & 151 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY DELETING THE DISALLOWANCE ON ACCOUNT OF U P LINKIN G CHARGES UNDER SECTION 40(A)(IA) OF THE ACT. CONSEQUENT UPON THE DECISION TAKEN BY US THEREIN, SINCE THE ISSUE RAISED, FACTS AND CIRCUMSTANCES ARE MATERIALLY IDENTICAL, AND THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE AND DELETE THE DISALLOWANCE ON ACCOUNT OF UP LINKING CHARGES UNDER SECTION 40(A)(IA) OF THE ACT THUS, GROUND NO. 11 , RAISED BY THE ASSESSEE IS ALLOWED. 91 VIACOM 18 MEDIA PVT. LTD. 207. GROUND NO.12, RELATES TO THE DISALLOWANCE OF ` 124,64,11,465, ON ACCOUNT OF AGENCY COMMISSION UNDER SECTION 40(A)(IA) OF THE ACT. 208. HAVING HEARD THE LEARNED A.R. APPEARING FOR THE PARTIES AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THE RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY THE ASSESSEE IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUND NO.14, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, WHICH WE HAVE DECIDED VIDE PARA 159 & 160 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP BY DELETING THE DISALLOWANCE ON ACCOUNT OF AGENCY COMMISSION UNDER SECTION 40(A)(IA) OF THE ACT. CONSEQUENT UPON THE DECI SION TAKEN BY US THEREIN, SINCE THE ISSUE RAISED, FACTS AND CIRCUMSTANCES ARE MATERIALLY IDENTICAL, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE AND DELETE THE DISALLOWANCE MADE ON ACCOUNT OF AGENC Y COMMISSION UNDER SECTION 40(A)(IA) OF THE ACT. ACCORDINGLY, GROUND NO.12, RAISED BY THE ASSESSEE IS ALLOWED. 209. GROUND NO.13, RELATES TO THE DISALLOWANCE OF ` 46,26,001, ON ACCOUNT OF BAD DEBT. 210. THE ASSESSEE D URING THE YEAR UNDER CONSIDERATION, HAS WRITTEN O FF BAD DEBTS OF ` 46,26,001 , IN ITS BOOKS OF ACCOUNTS. THE PARTY - WISE 92 VIACOM 18 MEDIA PVT. LTD. DETAILS OF THE SAME ALONG WITH THE YEAR IN WHICH THE SAME WERE OFFERED TO TAX WAS PROVIDED TO THE ASSESSING OFFICER VIDE LETTER DATED 20 TH MARCH 2014. THE ASSESSEE SUBMITTED THE DETAI LS AND DRPS DIRECTION TO VERIFY, THE ASSESSING OFFICER DISALLOWED THE ENTIRE EXPENDITURE OF ` 46,26,001 , MERELY ON THE BASIS THAT LEDGER COPIES OF VARIOUS PARTIES, CORRESPONDING TO THE YEAR IN WHICH THE INCOME WAS OFFERED TO TAX, WERE NOT SUBMITTED . 211. BEFO RE US, THE LEARNED A.R. FOR THE ASSESSEE SUBMITTED THAT D EBTS ARE WRITTEN OFF AND DETAILS OF INCOME OFFERED TO TAX IN EARLIER YEARS ARE FILED. HE SUBMITTED THAT A LETTER DATED 1 ST MARCH 2021 WAS FILED TO SUBSTANTIATE THE DETAILS OF INCOME OFFERED TO TAX IN THE ASSESSMENT YEAR 2009 - 10, WHEREIN INCOME FROM SALE OF HOME VIDEO RIGHTS TO MOSER BAER OF ` 40,00,000 , AND TO MEDIAWAY SP ZOO OF ` 3,31,877 , OFFERED TO TAX IN ASSESSMENT YEAR 2009 - 10. THE LEA RNED A.R. FURTHER SUBMITTED THAT O UT OF THE SAME, ` 40,00,000 , COULD NOT BE RECOVERED FROM MOSER BAER AND ` 65,048 , COULD NOT BE RECOVERED FROM MEDIAWAY SP ZOO. ACCORDINGLY, THE SAME WERE WRITTEN OFF IN THE ASSESSMENT YEAR 2010 - 11 AND CLAIMED AS BAD DEBTS. HE SUBMITTED THAT IN VIEW OF THE ABOVE, WITHOUT PREJUDICE TO ENTIRE CLAIM OF BAD DEBTS OF ` 46,26,001 , BEING ALLOWABLE AS DEDUCTION, A DEDUCTION OF ` 40,65,048 , MUST BE GRANTED AS CORRESPONDING INCOME HAVE BEEN OFFERED TO TAX IN THE ASSESSMENT YEAR 2009 - 1 0. 93 VIACOM 18 MEDIA PVT. LTD. 212. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 213. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE LEARNED A.R. BROUGHT TO OUR NOTICE PAGE 309 AND 310 OF THE PAPER BOOK AND EXPLAINED THE LIST OF PARTIES AND THE AMOUNT OF MONEY WHICH COULD NOT BE RECOVERED FROM THE PARTIES. HE ALSO SUBMITTED THAT THE OUTSTANDING AMOUNT OF MONEY WHICH ARE WRITTEN OFF ARE THE OUTSTANDING FOR WHICH THE ASSESSEE HAS ALREADY DECLARED THE INCOME AND OFFERED TO TAX. THESE ARE TRADE OUTSTANDING WHICH ARE NOT RECOVERABLE. HE ALSO SUBMITTED THAT THE LEDGER EXT RACTS WERE SUBMITTED BEFORE TAX AUTHORITIES, WHICH THEY HAVE NOT CONSIDERED. HE BROUGHT TO OUR NOTICE THE RELEVANT EXTRACT FILED IN THE PAPER BOOK. WE DEEM IT FIT AND PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO VERIFY THE SAME AND ALLOW THE CLAIM OF THE ASSESSEE TO THE EXTENT THE ASSESSEE HAS ALREADY DECLARED THE INCOME FOR TAXATION AND ALSO IF THERE IS ANY OUTSTANDING WHICH RELAT S TO THE BUSINESS CARRIED ON BY THE ASSESSEE. ACCORDINGLY, GROUND NO.13, RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 214. IN THE RESULT, ASSESSEES APPEAL FOR THE A.Y. 2010 11 IS PARTLY ALLOWED. 94 VIACOM 18 MEDIA PVT. LTD. IT(TP)A NO.1735/MUM./2015 REVENUES APPEAL A .Y. 2010 11 215. GROUND S NO.1 AND 2 , RELATES TO DISALLOWANCE OUT OF ADVERTISEMENT AND MARKETING EXPENSES. 216. AFTER HEARING BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES, WE FIND THE RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY THE REVENUE IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUND NO.20, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, WHICH WE HAVE DECIDED VIDE PARA 40 & 41 OF THIS ORDER, WHEREIN WE HAVE SET A SIDE THE IMPUGNED ORDER PASSED BY THE DRP BY ALLOWING THE ISSUE RAISED BY THE ASSESSEE. CONSEQUENT UPON THE DECISION TAKEN BY US THEREIN, SINCE THE ISSUE RAISED, FACTS AND CIRCUMSTANCES ARE MATERIALLY IDENTICAL, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE D O NOT FIND ANY COGENT REASON TO INTERFERE WITH THE ORDER OF THE DRP WHICH WE UPHELD ON THIS ISSUE BY DISMISSING THE GROUND S NO.1 AND 2 , RAISED BY THE REVENUE. 217. GROUND NO. 3 , RELATES TO DISALLOWANCE OF ` 115,76,52,055 , ON ACCOUNT OF PAYMENT OF CHANNEL PLACEM ENT FEES U /S 40(A)(IA) OF THE ACT. 218. BOTH THE PARTIES AGREED BEFORE US THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO. 3 , RAISED BY THE REVENUE IN ITS APPEAL 95 VIACOM 18 MEDIA PVT. LTD. BEING ITA NO. 1383 /MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 170 AND 170.1 , OF THIS ORDER WHEREIN WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN . SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TA KEN THEREIN, WE UPHOLD THE ORDER OF THE DRP ON THIS ISSUE BY DISMISSING THE GROUNDS NO.3, RAISED BY THE REVENUE. 219. IN THE RESULT, REVENUES APPEAL FOR THE A.Y. 2010 11 IS DISMISSED. ITA NO.791/MUM./2016 ASSESSEES APPEAL A.Y. 2011 12 220. GROUNDS NO.1 , 2 AND 3, ARE CONSEQUENTIAL TO OTHER GROUN DS DECIDED BY US IN THIS APPEAL ELSEWHERE. 221. GROUND NO.3 .1 , RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 97,51,307, ON ACCOUNT OF PAYMENT FOR USE OF TRADEMARK AND PROGRAMMING CONTENT. 222. BOTH THE LEARNED A.R. APPEARING FO R THE PARTIES AGREED BEFORE US THAT RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY EITHER PARTY IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUNDS NO.5, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2 014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 97 OF THIS ORDER, WHEREIN WE HAVE SET ASIDE THE IMPUGNED ORDER OF THE 96 VIACOM 18 MEDIA PVT. LTD. DRP FOR THE REASON STATED THEREIN. SINCE THE ISSUE RAISED BY THE ASSESSEE IS MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US IN ASSESSEES OWN CASE AS AFORESAID, CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP AND ALLOW THE GROUND NO.3, RAISED BY THE ASSESSEE. 223. GROUND NO.4, RELATES TO TRANSFER PRICING ADJUSTMENT ON ACCOUNT OF COMMISSION PAID TO THE A.E. FROM INCOME FROM ADVER TISEMENT SALES AND ADVERTISEMENT SALES WEBSITES OF ` 6,47,706. 224. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US THAT THIS ISSUE HAS BEE N DECIDED BY US VIDE GROUND NO.20 , RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754 /MUM./201 0 , FOR THE ASSESSMENT YEAR 200 6 07 , VIDE PARA 40 & 41 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON T HIS ISSUE BY ALLOWING THE GROUND NO.4, RAISED BY THE ASSESSEE. 225. GROUND NO.5, RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 1,22,29,769, ON ACCOUNT OF INCOME FROM CHANNEL DISTRIBUTION. 226. BEFORE US, BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES CONCEDED THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO. 3 , RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO. 1383/MUM./2014 , FOR THE ASSESSMENT YEAR 20 09 10, VIDE PARA 170 & 17 0. 1 , OF THIS ORDER 97 VIACOM 18 MEDIA PVT. LTD. WHEREIN WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY DISMISSING THE GROUND RAISED BY THE REVENUE . SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSU E BY ALLOWING THE GROUND NO.5, RAISED BY THE ASSESSEE. 227. GROUND NO.6, RELATES TO T RANSFER PRICING ADJUSTMENT ON ACCOUNT OF FINANCE COST ON REIMBURSEMENT RECEIPTS OF CARRIAGE EXPENSES, MARKETING & OTHER EXPENSES AND TRAVELLING AND OTHER EXPENSES AT ` 74,878. 228. BEFORE US, BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES CONCEDED THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO.8, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 119 & 120 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO.6, RAISED B Y THE ASSESSEE. 229. GROUND NO.7, RELATES TO DISALLOWANCE OF ` 4,49,17,458, ON ACCOUNT OF MARKETING AND ADVERTISEMENT EXPENSES UNDER SECTION 37(1) OF THE ACT. 98 VIACOM 18 MEDIA PVT. LTD. 230. HAVING CONSIDERED RIVAL SUBMISSIONS AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THAT THE ISSU E IN HAND IS IDENTICAL TO THE ISSUE WHICH HAS BEEN DECIDED BY US VIDE GROUND NO.20, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, VIDE PARA 40 & 41 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCE S BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO.7, RAISED BY THE ASSESSEE. 231. GROUND NO.8, RELATES TO DISALLOWANCE OF ` 8,55,587, ON ACCOUNT OF DEPRECIATION ON GOODWILL. 232. BEFORE US, BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES CONCEDED THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO.11, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 133 & 134 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO.8, RAISED BY THE ASSESSEE. 233. GROUND NO.9, RELATES TO DIS ALLOWANCE ON ACCOUNT OF LEGAL AND PROFESSIONAL FEES FOR REGISTRATION OF TRADEMARK. 99 VIACOM 18 MEDIA PVT. LTD. 234. HEARD BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AND PERUSED THE MATERIAL ON RECORD. BOTH THE PARTIES CONCEDED THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO.12 , RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 141 & 142 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE V IEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO.9, RAISED BY THE ASSESSEE. 235. GROUND NO.10, RELATES TO DISALLOWANCE OF ` 124,53,81,565, ON ACCOUNT OF PAYMENT OF PLACEMENT FEES UNDER SECTION 40(A)(I A). 236. HAVING CONSIDERED THE SUBMISSIONS OF THE LEARNED A.R. APPEARING FOR THE PARTIES, WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUNDS NO. 3 , RAISED BY THE REVENUE IN ITS APPEAL BEING ITA NO. 1383 /MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 170 & 170.1 OF THIS ORDER , WHEREIN FOR THE REASONS STATED THEREIN, WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO. 10 , RAISED BY THE ASSESSEE. 100 VIACOM 18 MEDIA PVT. LTD. 237. GROUND NO.11, RELATES TO DISALLOWANCE OF ` 9,71,79,623, O N ACCOUNT OF UP LINKING CHARGES UNDER SEC TION 40(A)(IA) OF THE ACT. 238. BEFORE US, BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUNDS NO.13, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2500/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 150 & 151 OF THIS ORDER, WHEREIN THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, W E SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A) ON THIS ISSUE BY ALLOWING THE GROUND NO.11, RAISED BY THE ASSESSEE. 239. GROUND NO.12, RELATES TO DISALLOWANCE OF ` 154,62,88,245, ON ACCOUNT OF AGENCY COMMISSION UNDER SECTION 40(A)(IA) OF THE ACT. 240. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO.14, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2500/MUM./ 2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 159 & 160 OF THIS ORDER , WHEREIN THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN 101 VIACOM 18 MEDIA PVT. LTD. THEREIN, WE SET ASIDE THE IMPUGNED ORDE R PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO.12, RAISED BY THE ASSESSEE. 241. IN THE RESULT, ASSESSEES APPEAL FOR A.Y. 2011 2012 IS ALLOWED. ITA NO.1641/MUM./2016 REVENUES APPEAL A.Y. 2011 12 242. THE ONLY ISSUE AROSE OUT OF GROUNDS NO.1 AND 2, RAISED BY THE REVENUE IS, WHETHER OR NOT THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING THE DISALLOWANCE OUT OF ADVERTISEMENT AND MARKETING EXPENSES. 243. AFTER HEARING BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES, WE FIND THAT WE HAVE DECIDED THIS ISSUE VIDE GROUND NO.20, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754/MUM./2010, FOR THE ASSESSMENT YEAR 2006 07, VIDE PARA 40 & 41 , OF THIS ORDER, WHEREIN FOR THE REASONS STATED THEREIN, THE ISSUE RAISED BY THE ASSESSEE WAS DECIDED IN FAVOUR OF THE ASSESS EE AND AGAINST THE REVENUE. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE DO NOT FIND ANY COGENT REASON TO TAKE A VIEW OTHER THAN THE VIEW TAKEN BY US AS AFORESA ID. ACCORDINGLY, THE ORDER OF THE DRP IS HEREBY UPHELD BY DISMISSING THE GROUNDS RAISED BY THE REVENUE. 244. IN THE RESULT, REVENUES APPEAL FOR A.Y. 2011 12 IS DISMISSED. 102 VIACOM 18 MEDIA PVT. LTD. ITA NO.2131/MUM./2017 ASSESSEES APPEAL A.Y. 2012 13 245. GROUNDS NO.1, 2 AND 3, ARE CONSEQUENTIAL TO OTHER GROUNDS DECIDED BY US IN THIS APPEAL ELSEWHERE. 246. GROUND NO.3.1, RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 51,20,167, ON ACCOUNT OF PAYMENT FOR USE OF TRADEMARK AND PROGRAMMING CONTENT. 247. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US THAT RELATED FACTS AND CIRCUMSTANCES OF THE ISSUE RAISED BY EITHER PARTY IS MUTATIS MUTANDIS AND MATERIALLY IDENTICAL TO THE ISSUE DECIDED BY US VIDE GROUNDS NO.5, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA N O.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 97 O F THIS ORDER, WHEREIN WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORE SAID, C ONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP AND ALLOW THE GROUND NO.3.1, RAISED BY THE ASSESSEE. 248. GROUND NO.4, RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 12,80,338, ON ACCOUNT OF COMMISSION PAID TO THE A .E. FROM INCOME FROM ADVERTISEMENT SALES AND ADVERTISEMENT SALES WEBSITE. 103 VIACOM 18 MEDIA PVT. LTD. 249. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AGREED BEFORE US , WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO.6, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO. 2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 102 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO.4, RAISED BY THE ASSESSEE. 250. GROUND NO.5, RELATES TO TRANSFER PRICING ADJUSTMENT OF ` 1,29,75,235, ON ACCOUNT OF INCOME FROM CHANNEL DISTRIBUTION. 251. HAVING HEARD BOTH THE LEARNED A.R. APPEARING FOR THE PARTI ES AGREED BEFORE US , WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO. 1 5 , RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.8754 / MUM./2010 , FOR THE ASSESSMENT YEAR 20 06 07 , VIDE PARA 23 AND 24 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING GROUND NO. 5 , RAISED BY TH E ASSESSEE. 252. GROUND NO.6, RELATES TO DISALLOWANCE OF ` 36,19,552, ON ACCOUNT OF LEGAL AND PROFESSIONAL FEES FOR REGISTRATION OF TRADEMARK. 104 VIACOM 18 MEDIA PVT. LTD. 253. BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES CONCEDED BEFORE US THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO.12, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR 0 THE ASSESSMENT YEAR 2009 10, VIDE PARA 141 AND 142 , OF THIS ORDER. SINCE THE ISSU E, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO.6, RAISED BY THE ASSESSEE. 254. GROUND NO.7, R ELATES TO DISALLOWANCE OF ` 12,43,11,762, ON ACCOUNT OF UP LINKING CHARGES UNDER SECTION 40(A)(IA) OF THE ACT. 255. HAVING CONSIDERED BOTH THE LEARNED A.R. APPEARING FOR THE PARTIES AND HAVING PERUSED THE MATERIAL ON RECORD, WE FIND THAT THIS ISSUE HAS BEEN DECIDED BY US VIDE GROUND NO.13, RAISED BY THE ASSESSEE IN ITS APPEAL BEING ITA NO.2055/MUM./2014, FOR THE ASSESSMENT YEAR 2009 10, VIDE PARA 150 AND 151 , OF THIS ORDER. SINCE THE ISSUE, FACTS AND CIRCUMSTANCES BEING IDENTICAL TO THE ISSUE DECIDED BY US AS AFORESAID WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FOR THE REASONS STATED THEREIN, CONSISTENT WITH THE VIEW TAKEN THEREIN, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE DRP ON THIS ISSUE BY ALLOWING THE GROUND NO.6, RAISED BY THE ASSESSEE. 105 VIACOM 18 MEDIA PVT. LTD. 256. IN THE RESULT, ASSESSEES APPEAL FOR A.Y. 2012 13 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3.9.21 SD/ - C.N. PRASAD JUDICIAL MEMBER SD/ - S. RIFAUR RAHMAN ACCOUNTANT MEMBER MUMBAI, DATED: 3.9.21 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI