ACIT, CHENNAI vs. SUN TV NETWORK LIMITED, CHENNAI

PDF · subscribers
ITA 1309/CHNY/2017Status: DisposedITAT Chennai14 August 2017AY 2012-134 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the CIT(A)'s order, allowing the assessee's claims for movie purchases, programme production, amortization, and deferred revenue expenditure. For the Section 40(a)(ia) issue, the Tribunal agreed with the CIT(A)'s direction to allow the claim in the year the tax was paid, especially since the assessee was not liable to deduct tax.

What were the facts?

The Revenue appealed against the CIT(A)'s order concerning assessment year 2012-13. The appeal involved issues of additions for purchase of movies, programme production, amortization of film and broadcast rights, deferred revenue expenditure, and disallowance under Section 40(a)(ia).

What were the issues?

Whether expenses related to movie purchases, programme production, and amortization are revenue expenditures. The treatment of deferred revenue expenditure and the applicability of Section 40(a)(ia) for disallowance were also key issues.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘ C’ BENCH : CHENNAI

Before: SHRI N.R.S. GANESAN & SHRI S.JAYARAMAN

आदेश / O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the Revenue is directed against the order of the Commissioner of Income-tax (Appeals)-14,Chennai dated 24.03.2017 pertaining to assessment year 2012-13.

ITA No.1309/Mds./2017 :- 2 -:

2.

The first issue arises for consideration is addition made by the Assessing Officer towards purchase of movies, programme production expenses, amortization of film and Broadcast rights, consumables and Media expenses at `117.98 crores.

3.

We have heard the submissions of Mr.Sailendra Mamidi, ld. Departmental Representative and Mr.N.Devanathan ld. Authorised Representative of assessee. It is brought to notice of the Bench that an identical issue came before this Tribunal for assessment year 2011-12 in assessee's own case in & 1341/Mds./2015. This Tribunal after considering the earlier decision in assessee's own case in ITA Nos.1515 to 1520/Mds./2013 for assessment years 2004-05 to 2009-10 vide order dated 31.10.2013 found that the similar expenditure incurred by the assessee has to be allowed as a revenue expenditure. The ld. CIT(A) in fact, allowed the claim of assessee by placing reliance on the Order of Tribunal for the earlier assessment years 2004-05 to 2009-10 vide order dated 31.10.2013.

Therefore, this Tribunal do not find any reason to interfere with the order of Ld.CIT(A). Accordingly, the order of Ld.CIT(A) is confirmed in the departmental appeal.

The Second issue arises for consideration is deferred revenue 4. expenditure.

ITA No.1309/Mds./2017 :- 3 -:

5.

We have considered the rival submissions on either side and perused the relevant material available on record. This issue also subject matter of discussion before this Tribunal in assessee's own case for assessment years 2004-05 to 2009-10 vide order dated 31.10.2013 in to 1520/Mds./2013. This Tribunal specifically found that the monies received are shown as deferred revenue in the year of receipt and are offered as income in the year when programme is aired. The Ld.CIT(A), in fact followed the Order of Tribunal in assessee's own case vide order dated 31.10.2013. Therefore, this Tribunal do not find any reason to interfere with the order of Ld.CIT(A). Accordingly, the order of Ld.CIT(A) is confirmed in the departmental appeal.

The last issue arises for consideration is disallowance made 6. by the ld. Assessing Officer u/s.40(a)(ia) of the Act.

7.

The ld.D.R submitted that the Ld.CIT(A) directed the Assessing Officer to allow the claim of assessee in the year in which the tax was deducted. However, the ld. Counsel for the assessee submitted that recipient of the amount has already paid the tax, therefore, it is to be allowed during this year. The fact remains is that the assessee has not deducted the tax. It is not in dispute that the assessee was not liable to deduct tax. When the recipient has paid the money, there may not be any disallowance during the year under consideration. In case, the recipient has not paid the tax during the ITA No.1309/Mds./2017 :- 4 -:

year under consideration, then as rightly directed by the Ld.CIT(A), the claim of assessee is to be allowed in the year in which the tax is paid to the Government exchequer. With the above observation, this Tribunal do not find any reason to interfere with the order of Ld.CIT(A) and accordingly the same is confirmed.

8.

In the result, the appeal of the Revenue is dismissed.

More judgments on Section 40(a)(ia)

All 7,300 judgments and leading authorities on Section 40(a)(ia) →

Recent GST High Court judgments

Search GST case law →