TaxTMI 
TaxTMI 
2019 (3) TMI 2088
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.... the case and in law, whether the Ld. CIT(A) has erred in directing to delete the disallowance of 25% or marketing and publicity expenses without denying the fact that these expenses ultimately benefitted the foreign sister concern of the assessee holding the "STAR" brand? "On the facts and circumstances of the case and in law, whether the Ld. CIT(A) was justified in directing to delete the disallowance of 25% of marketing and publicity expenses despite the fact the brand-building exercise carried out by the assessee ultimately benefitted its foreign sister concern and in the absence of it not reimbursing a part of these expenses, the AO had no option than to disallow a part of the marketing and publicity expenses incurred by the a....
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....y the Ld. Representative of the parties and perused the record. Before going further, we deemed it necessary to advert the finding of the CIT(A) on record.: - "4.3 I have considered carefully the findings of the assessing officer and the rival submissions of the appellant. This issue has been decided in the case of other broadcasters as well. The Hon'ble Bombay High Court in the case of Star India Private Limited as well as in the case of NGC Network (India) Private Limited has dealt with the similar issue and has invalidated AO's action of granting only part of the advertisement and marketing expenditure on the ground that it has also benefited the principals. The Hon'ble High Court relying on the decision of Supreme C....
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....nbsp;9.75 crores by way of marketing and publicity expenses and claimed them as deduction u/s 37(1) of the Act for promoting its channels viz. regional channels such as Star Pravah and Star Mazha. However, this promotion as per the AO inter alia resulted also into promotion of the stat brand which is owned by M/s. Star Ltd. to whom the assessee had paid brand royalty for using the star brand where as the royalty agreement did not required the assessee to incur such marketing and publicity expenditure which also benefited M/s. Star Ltd. Under these circumstances, the AO allowed only 75% of the said expenses holding that portion as relating to the assessee's business only was allowable, thereby disallowing the balance 25% of such expenses amo....
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....the Hon'ble Bombay High Court. Incidentally, the Hon'ble Jurisdictional High Court has recently ruled in favour of the assessee in the then pending case of CIT v NGC Net work (India) p. Ltd. then pending 538 of 2012 dated 13.10.2014 copy pieced on record by invalidating the AO action of granting only a third of the advertisement expenditure as it had also benefited the principals of M/s. NGC Network (India P. Ltd. viz NGC Asia and Fox. In these circumstances, respectfully to following the decision of both the Star India and NGC Network the marketing and publicity expenditure is wholly allowed, notwithstanding the fact that it may have resulted in some benefit to M/s. Star Ltd. as well. 5.3 Before us, Ld.Department representative re....