TaxTMI 
TaxTMI 
2017 (5) TMI 911
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....xpenditure to the extent of 75.70% instead of 67.58% as apportioned by AO. 3. Rival contentions have been heard and record perused. 4. Facts in brief are that the assessee filed its original return of income on 31-10-2005 declaring total income at Rs. Nil. The said income was assessed by the AO after issuance of notice u/s. 143(2) and 142(1) of the IT. Act, 1961 determining the total business income at Rs. 8,79,55,593/- vide order dt. 27-12-2007. Subsequent to the aforesaid assessment, the assessee's case was re-opened by the AO through issuance of notice u/s. 148 of the I.T. Act dt. 29-3-2010. The AO has observed that while drawing the final statement of the Indian Operation in comparison to the Global Revenue that the expenses appor....
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.... Further to that the appellant's submission also establishes to the fact that the transfer pricing authority had accepted the appellant's international transactions between Taj and Taj India at arm's length price. After considering the FAR analysis of both the assesses. The appellant has disclosed its income in the current AY based on its past practice as it was disclosed in earlier year. Thus, I find that the appellant has disclosed its income in a consistent manner which was accepted by the department in all preceding AYs in the appellant's case. Taking note of all these facts as enumerated above, I am of the considered view that the re-opening of the assessment was not justified and correct on the part of the AO and hence....
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....d for all these years and the same has been audited by the auditors as well as accepted by the tax authorities (including Honorable CIT(A) for earlier years as well as for the captioned assessment year. 2.0 The gross revenues as per the global operations for the year ended 31 March 2005 based on the global audited financial statements (audited by KPMG Mauritius) is tabulated as under: Revenue US$ Remarks relevant to Indian Operations Advertisement Sports Sales 9,902,181 Global revenue apportioned between 3 territories based on the actual revenues derived from each of the territories. Cable distribution 3,140,572 Global revenue apportioned between 3 territories based on the actual revenues derived from each of the....
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....ount US$ Global Revenue as per Audited Global Financial Statements 19,035,454 Less: Operating Income which has been reduced from operating costs (the balance operating costs have been apportioned in the ratio of direct revenue i.e. 75.70%) 1,054,428 Less: Syndication Sales which has been reduced from Programming costs (the balance programming costs have been apportioned in the ratio of direct revenue i.e.75.70%) 1,088,253 Less: Sale of Decoders which has been reduced from cost of decoders (Entirely attributable to operations other than India) (25,020) Add: Difference in Advertisement Spot Sales i.e. Reversal of revenue arising from Pakistan Territory (100% outside India and Snot been considered for allocation) 125,001 Global Reve....
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....decoders were sold in the region other than India and hence allocated to particular territory on actual basis. Similarly, there are no decoder costs debited to India operations since none of the decoders were sold to Indian distributors during the captioned year. Accordingly, the aforesaid aspects does not have bearing on the Indian operations. 7.0 Explanatlon as regards Advertisement Spot Sales not considered for determining allocation ratio.  During the audit of global financial statements, it was identified that there was difference of US$ 125,000 in the advertising revenue from Pakistan territory which had been reversed. Since the same was pertaining to 100% outside India, it has not been considered for determining allocation ra....
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.... has already reduced operating income, receipt for sale of decoders and receipt from syndication of Broadcast rights from the Global revenue, because such receipt were not in relation to India's operation of appellant company. Even I find that the appellant's financial statement was accepted by the AO in all earlier assessment year's. In view of the same, the comparison carried out by the AO, which has restricted the expenses to the appellant company was completely unjustified and incorrect in view of the aforesaid detailed submission of the appellant. Hence, in my considered view, the action of the AO was unjustified even as per the accounting Principle also. In the result, the addition so made by the AO is held to be incorrect....