TaxTMI 
TaxTMI 
2020 (7) TMI 506
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....ion business. 3. The ground No.1 raised by the assessee is general in nature and does not require any specific adjudication. 4. The ground Nos.2-4 raised by the assessee is with regard to ld. CIT(A) confirming the action of the ld. AO in disallowing the depreciation on payment of brand license fees. 4.1. We have heard rival submissions and perused the materials available on record. Both the parties accepted to the primary fact that this issue is covered in favour of the assessee by the order of this Tribunal in assessee‟s own case for the A.Yrs. 2011-12 and 2012-13 in ITA No.1901/Mum/2016 and 1048/Mum/2017 dated 01/08/2019 wherein it was held as under:- "57. After hearing both the sides, we noted that the consideration for the payment towards brand license was determined based on valuation of the brand by an independent valuer and the said payment towards brand license was capitalized in the books of accounts and depreciation was claimed under the Act only on yearly basis. The payment for the said consideration was also subjected to RBI approvals. Further, it would be relevant to note that the department has taxed the entire amount received by Star Ltd from ....
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....business under the "STAR" brand nor earn the revenue, taxed by the department, without payment of license fees. It was contended that the affiliation to the 'STAR' name is a significant driver in the Indian television market and in the revenue earning potential of the channels, on account of the fact that the brand 'STAR' has a reputation for quality. Any new channel which is introduced in the market with the Star affiliation suffers lesser entry constraints as compared to other channels, significantly reducing the possible gestation cycle for the channel. The association of a channel with 'STAR' assists in offering channels to the cable operators as a bouquet. Also, the use of a common brand makes marketing exercise more feasible and effective. Thus, SIPL's channels are able to attract loyal Star customers and thereby garner higher Television Rating Points ('TRPs'). Higher TRPs enable the assessee to attract better prices from the sale of its advertisement airtime. 60. The brand is the communication interface between the consumers and the products. Facing the constantly evolving Television market and increasing consumer demands, the STA....
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.... following the aforesaid decision in assessee‟s own case by this Tribunal, we direct the ld. AO to delete the disallowance made on account of depreciation on payment of brand license fees. Accordingly, the ground Nos.2-4 raised by the assessee are allowed. 5. The next issue to be decided in this appeal is with regard to disallowance of property tax amounting to Rs. 31,54,827/- which was reimbursed to Precision Components Pvt. Ltd., (PCPL). 5.1. We have heard rival submissions and perused the materials available on record. We find that during the course of assessment proceedings, the ld. AO observed that assessee company had entered into an addendum to leave and license with PCPL for running of premises "The Masterpiece" situated in Andheri. The assessee had reimbursed to PCPL, the property tax at Rs. 31,54,827/- paid by PCPL. The assessee claimed the said reimbursement of property tax paid on the rental premises as business expenditure u/s.37(1) of the Act. The assessee had filed the following documents to support its claim of deduction:- a) Copy of leave and license agreement with PCPL b) Copy of the letter signed with PCPL c) Copy of the mun....
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....be highly disproportionate and beyond human conduct and probabilities. A tenant, under normal circumstances would not agree to bear such a high cost. Hence there appears to be merit in view taken by tax authorities. However, we notice that they have taken adverse view without conducting any enquiry. The learned A.R. contended the reimbursement of property tax partakes the character of rent only. There is merit in its said contention also. Hence, what is required to be seen is as to whether to aggregate amount of rent plus reimbursements compares well with the earlier years payment. If it does not compare well, then it is the duty of the assessee to justify the payment. In view of the above, this issue required fresh examination at the end of Assessing Officer. Accordingly we set aside the order of learned CIT(A) on this issue and restore this issue to the file of Assessing Officer for fresh examination." 5.3. Respectfully following the aforesaid decision in assessee‟s own case for the A.Y.2006-07 referred to supra, we remand this issue to the file of the ld. AO for fresh adjudication in accordance with law. Accordingly, the ground No.5 raised by the asses....
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....ic explanatory provision in this regard is Explanation 6 to Section 9 of the Act, which states that the expression "process‟ shall be held to have always included down - linking by satellite or cable. The assessee submitted that while explanation 2 (on royalty) to Section 9 of the Act finds mention in Section 40 (a)(ia) of the Act, there is no such mention of explanation 6 to Section 9 of the Act therein. The assessee thus, claimed that it cannot be expected to do the impossible and subject the impugned payments on account of down- linking, to TDS obligations subsequently, when such a provision was earlier not there in the statute. The assessee relied on the decisions of the Hon‟ble Supreme Court in the case of Krishnaswamy S. Pd & Anr. v. Union of India & Ors. (281 ITR 305) and the Hon‟ble Mumbai Tribunal in the case of Channel Guide India Ltd. v. ACIT (139 ITD 49) to support its claim. 7.3. The ld. AO observed that the channel placement fees charges paid by the broadcasters to the Multi System Operator (MSO) for placing their channel on a particular frequency / bandwidth. He observed that these charges are paid to put the channel in prime band so that viewers....
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....ncome Tax Appeal No.525/2015 & 732/2015, 741/2015 and 1035/2015 dated 10th & 11th October 2017. The said order of Hon‟ble Jurisdictional High Court is reproduced hereinbelow for the sake of convenience :- "The submissions of the learned counsel appearing for the parties were heard on earlier date. As there is a challenge to the same impugned judgment and order dated 29th October, 2014 in these appeals, for the sake of convenience, we are referring to the facts of the Appeal No.1035 of 2015. 2. With a view to appreciate the submissions made across the bar, it will be necessary to briefly highlight the controversy involved. The respondent is a Public Limited Company carrying on business of broadcasting of Television (TV) channels. It is stated that the respondent operates certain TV entertaining channels. Survey was carried out firstly of the books of accounts of the respondent. The Assessing Officer found that certain amounts were paid by respondent on account of carriage fees, editing expenses and dubbing charges. Tax was deducted on the said amounts as per Section 194C of the Income Tax Act, 1961. 3. The Assessing Officer was of the opinio....
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....e invited our attention to the findings of the fact recorded by the Assessing Officer. He submitted that various substantial questions of law arise in these appeals, which are set out as questions (a) to (e) in the appeal. 8. According to the learned counsel appearing for the appellant, the Appellate Tribunal as well as the Commissioner (Appeals) have committed a gross error by applying Section 194C. He submitted that the payments made by the respondent are not contractual payments and, therefore, Section 194C of the Income Tax Act will not be applicable. His contention is that the activity for which payments were made by the respondent are either for professional or for technical services and, therefore, Section 194J will apply to the present case. His submission is that reasons recorded by the Appellate Tribunal are completely erroneous and need to be interfered with by this Court. The learned counsel for the respondent supported the impugned judgment and order. 9. We have given careful consideration to the submissions. Firstly, it will be necessary to advert to the facts of the case. For that purpose, it will be necessary to make a reference to the order passed....
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....lacement fees in the context of the nature of business carried on by the respondent. 13. The Commissioner (Appeals) has recorded a finding of fact after having perused the copies of the agreements entered into between the respondentassessee and the cable operators/ Multi System Operators (MSOs), that the cable operators pay a fee to the respondent for acquiring rights to distribute the channels. It is pointed out that the cable operators face bandwidth constraints and due to the same, the cable operators are in a state to decide which channel will reach the end viewer at what frequency (placement). Accordingly, broadcasters make payments to the cable operators to carry their channels at a particular frequency. Fee paid in that behalf is known as "carriage fee" or "placement fee". The payment of placement fee leads to placement of channels in prime bands, which in turn, enhances the viewership of the channel and it also leads to better advertisement revenues to the TV channel. 14. The Commissioner (Appeals) has given a finding of fact on the perusal of sample copies of the agreements. The agreements are entered into with the respondent by the cable operators for pl....
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....of the cable operators/ MSOs are the same. When placement fee is received, a channel is placed on a particular prime band. It was found that by an agreement to place the channel on a prime band by accepting placement fee, the cable operator/ MSO does not render any technical service. As far as Appellate Tribunal is concerned, again the definition of work in clause (iv) of the explanation to Section 194C was looked into. We must note here that a grievance was made by the learned counsel appearing for the appellant that there are no detailed findings recorded by the Appellate Tribunal. However, the Commissioner (Appeals) has recorded detailed findings on the basis of material on record and by referring to the findings, the Appellate Tribunal has expressed general agreement with the findings recorded by the first Appellate Authority. While affirming the judgment of the first Appellate Authority, it is open for the Appellate Tribunal to express such general agreement. 15. Now, turning to the second grievance regarding subtitling charges, again the Commissioner (Appeals) has gone into the details of the factual aspects. Subtitles are textual versions of the dialogs in ....
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....oner (Appeals) as regards placement fees/ carriage fees. We have agreed with the findings of fact based on material on record that when the payment is made towards standard fee or placement fee, the activity involved is the same in both cases. As stated earlier, when services are rendered as per the contract by accepting placement fee or carriage fee, the same are similar to the services rendered against the payment of standard fee paid for broadcasting of channels on any frequency. In the present case, the placement fees are paid under the contract between the respondent and the cable operators/ MSOs. Therefore, by no stretch of imagination, considering the nature of transaction, the argument of the appellant that carriage fees or placement fees are in the nature of commission or royalty can be accepted. 18. Thus, as far as both the grounds of challenge are concerned, there are findings of fact recorded by both the authorities. We concur with the view taken by the Appellate Tribunal. In our view, no question of law arises in these appeals. There is no merit in the appeals and the same are dismissed with no order as to costs. 7.6. We also find that the Hon‟ble Jur....