UNITED HOME ENTERTAINMENT P.LTD,MUMBAI vs. DCIT 8(3)(1), MUMBAI

In ground no.1, the assessee has challenged the disallowance of dubbing cost amounting to ` 93,49,932. Without prejudice to ground no.1, the assessee has raised ground no.3, claiming amortization of the dubbing cost over the period of license. In ground no.2, the 2 United Home Entertainment Pvt. Ltd. assessee has claimed proportionate deduction of dubbing cost pertaining to assessment year 2009–10 over the period of license. Besides the above, the assessee has raised one more additional ground claiming proportionate deduction of dubbing cost pertaining to assessment year 2011–12 in the succeeding three assessment years. The additional ground raised by the assessee since can be decided on the basis of facts and material already available on record, we admit the additional ground.

Brief facts are, the assessee a company is engaged in the business of broadcasting of television channels. For the assessment year under dispute, the assessee filed its return of income on 29th November 2012, declaring total income of ` 19,28,33,350. During the assessment proceedings, the Assessing Officer finding that the assessee has claimed deduction of ` 1,16,87,415, on account of dubbing cost called upon the assessee to furnish the necessary details and justify its claim. On verifying the details, he found that dubbing cost represents cost incurred by the assessee to translate programs into Indian languages, which are to telecast over a period of time. He, therefore, called upon the assessee to explain why the dubbing charges should not be amortized corresponding to the period of license fees incurred by the assessee. In response to the query raised by the Assessing Officer, though, the assessee justified its claim by stating

Though, the assessee challenged the aforesaid disallowance, however, the learned Commissioner (Appeals) relying upon the decision of the Tribunal in assessee’s own case for earlier assessment years upheld the disallowance.

Learned Counsel for the assessee fairly submitted that in assessee’s own case for preceding assessment years, the Tribunal has decided the issue against the assessee by holding that the dubbing cost has to be amortized over the period of license. In this context, he

Learned Departmental Representative relied upon the observations of the Departmental Authorities.

We have heard rival submissions and perused material on record including the orders passed by the Tribunal in assessee’s own case for earlier assessment years. As could be seen, so far as the issue whether the dubbing cost is to be entirely allowed as a revenue expenditure in a single year, the same has been decided against the assessee by the Tribunal in a series or orders passed in assessee’s own case for assessment years 2008–09 to 2011–12. Therefore, it has to be held that claim of deduction of the entire dubbing cost in the impugned assessment year cannot be allowed. However, so far as assessee’s alternative claim that the dubbing cost should be allowed to be amortized over the period of license we agree with the contention of the learned Authorised Representative. In fact, the Assessing Officer himself in the impugned assessment order has concluded that the dubbing cost has to be amortized over a period of five years. In view

In ground no.2 and additional ground, the assessee has raised the issue of allowance of proportionate deduction of dubbing cost pertaining to assessment years 2009–10 and 2011–12. From the orders of the Tribunal for assessment year 2009–10 and 2011–12, copies of which have been placed on record, it is evident that the Assessing Officer while dealing with assessee’s claim of deduction of entire dubbing cost has held that the dubbing cost has to be amortized over a period of five years. The aforesaid view of the Assessing Officer was ultimately upheld by the Tribunal. Therefore, as per the Assessing Officer’s own decision, the dubbing cost claimed by the assessee in assessment year 2009–10 and 2011–12 have to be amortized over a period of five years. The assessee is directed to furnish a working of proportionate yearly deduction of dubbing cost as claimed in assessment year 2009–10 and 2011–12 before the Assessing Officer and the Assessing Officer is directed to verify the same and allow amortization of the dubbing cost pertaining to these assessment years over the period of the respective licenses. Grounds are disposed off accordingly.

In the result, assessee’s appeal is partly allowed. Order pronounced in the open Court on 18.04.2018