2017 (8) TMI 1661 - AT - Income Tax

Tribunal confirms assessee's revenue expenditure claims, dismisses Revenue's appeal

The Tribunal upheld the Commissioner of Income-tax (Appeals) order, confirming the assessee's claims regarding various expenses totaling Rs. 117.98 crores ... Allowable revenue expenditure - Addition towards purchase of movies, programme production expenses, amortization of film and Broadcast rights, consumables and Media expenses - HELD THAT:- 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 [2016 (2) TMI 928 - ITAT CHENNAI] found that the similar expenditure incurred by the assessee has to be allowed as a revenue expenditure. 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 [2013 (10) TMI 1368 - ITAT CHENNAI]. 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. Deferred revenue expenditure - HELD THAT:- As decided in own case [2013 (10) TMI 1368 - ITAT CHENNAI] 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. .CIT(A), in fact followed the Order of Tribunal in assessee's own case, 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. Disallowance u/s.40(a)(ia) - assessee submitted that recipient of the amount has already paid the tax, therefore, it is to be allowed during this year - As per DR CIT(A) directed the Assessing Officer to allow the claim of assessee in the year in which the tax was deducted - HELD THAT:- 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 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. Issues involved:1. Addition made by the Assessing Officer towards purchase of movies, programme production expenses, amortization of film and Broadcast rights, consumables, and Media expenses.2. Deferred revenue expenditure.3. Disallowance made by the ld. Assessing Officer u/s.40(a)(ia) of the Act.Issue 1: Addition towards various expenses:The Revenue appealed against the Commissioner of Income-tax (Appeals) order regarding the addition made by the Assessing Officer for expenses totaling Rs. 117.98 crores. The Tribunal noted that a similar issue had been decided in favor of the assessee in previous years. The Tribunal found that the expenditure incurred should be allowed as a revenue expenditure, consistent with previous decisions. The Tribunal upheld the order of the Ld.CIT(A) confirming the claim of the assessee.Issue 2: Deferred revenue expenditure:The second issue concerned deferred revenue expenditure. The Tribunal considered the arguments from both sides and referred to a previous decision in the assessee's case for assessment years 2004-05 to 2009-10. It was observed that monies received were shown as deferred revenue and offered as income when the program was aired. The Tribunal found no reason to interfere with the Ld.CIT(A)'s order, which followed the earlier Tribunal decision. Consequently, the order of Ld.CIT(A) was confirmed in the departmental appeal.Issue 3: Disallowance under section 40(a)(ia) of the Act:The last issue pertained to the disallowance made by the Assessing Officer under section 40(a)(ia) of the Act. The Ld.CIT(A) directed the Assessing Officer to allow the claim in the year when tax was deducted. However, the recipient had already paid the tax, leading to a dispute. The Tribunal clarified that if the tax had not been deducted by the assessee and the recipient had paid the tax, there should be no disallowance. The Tribunal upheld the Ld.CIT(A)'s order, stating that the claim of the assessee should be allowed in the year when tax is paid to the Government exchequer. Consequently, the Tribunal confirmed the order of Ld.CIT(A), resulting in the dismissal of the Revenue's appeal.This detailed analysis of the judgment covers the three main issues involved and the Tribunal's decisions on each, providing a comprehensive understanding of the legal aspects and outcomes of the case.