TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 796
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....he order of the Tribunal dated 05/04/2013, in the case of assessee itself, for Assessment Year 2006-07 (ITA No.1138/Mum/2011). The ld. Counsel provided the copy of the order. The ld. DR, Shri N. Padmanaban, also contended that the impugned issue is covered against the assessee. 2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion from the aforesaid order dated 05/04/2013 for ready reference:- "The appeal is filed by the assessee against the order of Dispute Resolution Panel (DRP), u/s 144C(5) of the Income Tax Act, 1961, dated 09.08.2010, wherein the assessee has raised the following grounds: "1. The Learned Assistant Commissioner of Income Tax, Circle 6(3), Mumbai ('AO') and the Hon'ble Dispute Resolution Panel ('DRP') erred in making an adjustment to the arm's length price to the extent of Rs. 82,78,760/-. 2. Adjustments made by the learned Assistant Commissioner of Income Tax, Transfer Pricing -II), Mumbai ('TPO'), confirmed mechanically: On the facts and in the circumstances of the case and in law, the learned AO and the learned TPO have erred in proposing and the....
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....services like collecting, gathering and collating television news content and supplying the same to its customers in India and Overseas. The functions on day to day basis involve. * Recording and collating news content by various Journalists and procuring the same from outside parties. * After collating the news material it is processed by the technical team by using special broadcasting equipments to make the news content worthy for transmission and broadcasting. * Post processing the news content is presented by the editorial team on the news channels broadcasted by the Assessee Company. 2.1.3. Assessee Company entered into the business of television broadcasting, pursuant to the permission received from the "Ministry of Information & broadcasting, Government of India" on 7 January, 2004 for uplinking of "STAR News" channel after fulfilling all the conditions on 1 March, 2004. At present the assessee Company is the broadcaster of the following News Channels - * Star News - 24x7 Hindi News Channel * Star Ananda - 24x7 Bengali News Channel * Star Majha - 24x7 Marathi News Channel 2.1.4. During the year under consideration assessee has entered into following transactions wit....
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....re available to benchmark the advertisement transaction. Hence, Comparable Uncontrolled Price method was considered to be the most appropriate method to compute the arm's length price of the transaction and AE was considered as tested party for this purpose. 2.2.5. For the purpose of determining whether the price for purchase of ad-spots from AE Es at arm's length, the average rates charged by AE to third parties for ad-space on Star Plus for prime time and non prime time spots were considered. And the average rate charged to third parties has been applied to the prime time and non prime time slot mix availed by the assessee. An analysis of the same is as follows: Slot No. of 30 sec. slots utilized Rate paid for the slot by Amount as per Assessee (INR) Third party (INR) Assessee (INR) Third party (INR) Prime time 4448 180,000 248,850 80,062,000 110,692,000 Non prime time 3327 60,000 35,115 19,960,000 11,682,000 Total 7775 10,00,22,00 0 12,23,74,000 2.2.6. On application of the rates charged to third parties the arm's length price of the above transaction with AE. is Rs. 122,374,000. Since the price paid by the assessee is less tha....
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...., the ALP of the international transaction is determined at Rs. 9,17,44,000/- as against Rs. 10,00,22,760/- shown by the assessee. Therefore, the necessary adjustment in the ALP comes to Rs. 82,78,760/- (Rs. 9,17,44,000 - Rs. 10,00,22,760/-) and computed the adjustment of Rs. 82,78,760/- (Rs. 10,00,22,760 - Rs. 9,17,44,000). 5. The assessee approached the DRP, who vide order u/s 144C(5) sustained the adjustment made by the TPO u/s 92CA(3). 6. The assessee is now aggrieved by the order of the DRP in before the ITAT. 7. The AR, explaining the case of the assessee pointed out that the assessee had purchased additional space in the Star News Channel being telecast by Star TV Network. He submitted that there are two time slots being called as prime time and non prime time slots. Non prime time slot is from 12 midnight to 7.59 p.m. and prime time slot is from 8 p.m. to 11.59 p.m. Accordingly, the rates for per 30 second ad time are Rs. 180,000/- at prime time duration and Rs. 60,000/- at non prime time slot. He submitted that the area of dispute in the adjustment made is on the non prime time advertisement revenue. 8. From the detail extracted by the TPO in the order shown that the a....
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.... company, which the assessee failed to utilize. The DR, therefore, submitted that there cannot be any reason which could lead to the unreasonability of the order. 13. On the facts, the DR pointed out that, as referred to by the AR, the agreement refer to the rate card, which supports two types of slots, i.e. prime time slot and non prime time slot. Hence, on the very basis, the issue in question pertains to two different products, i.e. prime time and non prime time. Hence, they could not be clubbed. To substantiate that different time slots were in fact different products, the DR then referred to the expressions used in the relevant sections, i.e., 92(1) and 92C(1) and Rules 10A(d) and 10B(1), which reads as under: "Section 92(1) Any income arising from an international transaction shall be computed having regard to the arm's length price. Explanation.-For the removal of doubts, it is hereby clarified that the allowance for any expense or interest arising from an international transaction shall also be determined having regard to the arm's length price. Section 92C (1) The arm's length price in relation to an international transaction or specified domestic transacti....
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....es were a part of pre-arranged scheme or agreement so as to constitute a part of the indivisible transactions of purchase. Accordingly, it is held that the AO was within his right to evaluate each transaction separately." In the light of the above discussion and respectfully following the precedents cited, we hereby reject the pleading of learned Authorised Representative through which it was demanded to aggregate the entire transactions with the AE for the whole year." 17. The DR, thereafter, responding to the application of FAR concept, submitted that it is applicable on TNMM and other basis, but not on CUP basis, which has been based by the assessee. The DR, therefore, submitted that FAR analysis has no relevance in the given set of circumstances. 18. The DR, concluding the arguments submitted that on facts, the agreement does not make any mention for off-set in the price paid to the other products and hence the orders of the TPO and DRP does not indicate any infirmity. 19. The AR in the rejoinder, reiterated his submissions. 20. We have heard the arguments in detail and perused the material placed on record. We do not find anywhere either in the agreement or in the submiss....