COMMISSIONER OF INCOME TAX vs. M/S.SPI MUSIC PRIVATE LTD

T.C.A.Nos.552 to 555 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 18.08.2022 CORAM : THE HONOURABLE MR. JUSTICE R. MAHADEVAN AND THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.Nos.552 to 555 of 2019 Commissioner of Income Tax, Non Corporate Circle 20(1), Chennai 600 034. ... Appellant in all TCAs Versus M/s. SPI Music Private Limited, New No.25, Old No.13, 5th Floor, Mamatha Complex, Whites Road, Royapettah, Chennai 600 114, PAN: AAACZ 2711J ... Respondent in all TCAs Appeals preferred under Section 260A of the Income Tax Act, 1961, against the order dated 20.11.2018 passed by the Income Tax Appellate Tribunal, “A” Bench, Chennai, in I.T.A.Nos. 1886, 1883, 1885 and 1884/Chny/2018. Page 1/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.552 to 555 of 2019 For Appellant : Mr.M.Swaminathan Senior Standing Counsel M/s.V.Pushpa, Standing Counsel in all TCAs For Respondent : Mr.Arun Karthik Mohan in all TCAs

COMMON JUDGMENT (Judgment of the Court was delivered by R.MAHADEVAN, J.) These tax case appeals have been filed by the appellant / Revenue, challenging the common order dated 20.11.2018 passed by the Income Tax Appellate Tribunal, “A” Bench, Chennai, in I.T.A.Nos. 1886, 1883, 1885 and 1884/Chny/2018, relating to the respective assessment years 2011-12, 2008-09, 2010-11 and 2009-10.

2.By order dated 07.08.2019, this court admitted the aforesaid tax case appeals on the following substantial questions of law: “(i) Whether, on the facts and circumstances of the case, the Income tax Appellate Tribunal was right in holding that the music rights are found incapable of sustained exploitation after the first broadcast and hence considering the principles of consistency and nature of expenditure, the same has to be treated as revenue in nature? And Page 2/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.552 to 555 of 2019 (ii) Whether, on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in reversing the capitalization of the expenses by the assessing officer when the fact remains that as per accounting standards issued by the Institute of Chartered Accountants of India, copy rights in films/serials are intangible assets and writing off of entire cost of the acquiring such right at the first broadcast itself on the ground that future revenues are not ascertainable with reasonable accuracy, cannot be accepted as it neither adheres to the principles of accounting standards nor income tax law?" 3. When the matters were taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in these appeals is less than the threshold limit. 4. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as Page 3/5 https://www.mhc.tn.gov.in/judis T.C.A.Nos.552 to 555 of 2019 withdrawn, keeping open the substantial questions of law for determination in appropriate cases. No costs. (R.M.D., J.) (M.S.Q., J.) 18.08.2022

Internet : Yes

Index : Yes / No av To 1. The Income Tax Appellate Tribunal, “A” Bench, Chennai. 2. The Commissioner of Income Tax, Non Corporate Circle 20(1), Chennai 600 034.