TaxTMI 
TaxTMI 
2018 (8) TMI 1802
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....to Rs. 2,09,48,337/- holding the same as revenue expenses without appreciating that the expenses incurred are of enduring nature and categorically falls under the head of "capital expenses". 2. Whether on the facts, in the circumstances of the case and as per law, the Ld. CIT(A) has erred in directing to delete the addition of audio right expenses amounting to Rs. 2,09,48,337/- without appreciating that the audio rights acquired by the assessee given it a perpetual right to exploit the same and as such the expenses incurred are of capital in nature." 2. The brief facts of the case are that the assessee company which is engaged in the business of manufacturing and sale of audio cassettes and CDs and also production and distribution of f....
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.... 3. The Ld.AR for the assessee, at the time of hearing, submitted that the issue is squarely covered in favour of the assessee by the decision of ITAT, E-Bench, Mumbai in assessee's own case for AY 2009-10 in ITA No.7222/Mum/2012 wherein under similar circumstances, the ITAT held that expenditure incurred for purchase of master plates is revenue in nature. The Ld.DR fairly accepted that the issue is covered in favour of assessee by the decision of ITAT for earlier years. However, the AO has made addition in the current year to keep open the issue alive as the revenue has preferred appeal before the Hon'ble High Court challenging order of ITAT. 4. We have heard both the parties and perused the materials available on record. The issue of ex....
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....rred on purchase of audio rights, music for which is released [accepted as audio rights] is treated by the assessee as revenue expenditure. The income-tax department has been since assessment year 1990-91, disallowing the claim of the assessee on the ground that the expenditure is capital in nature. The Tribunal for all the earlier assessment years has been deciding the issue in favour of the assessee. The assessing officer made the addition observing at paragraph 3.3 on page 7 that the revenue has not accepted the decision of the Tribunal and has filed an appeal before Hon'ble Bombay High Court and that the addition is made by following the stand of the revenue in the earlier years to keep the issue alive. The first appellate author....