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2018 (9) TMI 705 - AT - Income TaxCost of production of TV serials and programmes relating to the year under consideration claimed as revenue expenditure - Held that:- As relying on case of Prism TV Pvt. Ltd. [2016 (6) TMI 419 - ITAT HYDERABAD] AO directed to treat the expenditure incurred by the assessee on cost of production of TV programmes as revenue expenditure as the future likelihood of these resources being a possible source of revenue, cannot in the opinion of this Court justify its inclusion in the capital stream. Excess depreciation claimed on ‘film software library' - AO observed that since the assessee is in the business of satellite television and the film software library forms an important apparatus of its business which squarely fall within the definition of ‘plant and machinery and accordingly allowed depreciation @ 15% and disallowed excess deprecation @ 25% - Held that:- This issue is squarely covered in assessee’s own case for AY 2007-08 [2016 (3) TMI 820 - ITAT HYDERABAD] as held that the films and TV programmes are essential for the assessee company to carry on its business of telecasting of films and other programmes, but there is no caveat that the assessee company has to telecast only these films and programmes and none other for assessee’s business. Further, not only the films and programmes in the ‘Film Software Library’, but the assessee may also telecast any other programmes or films on its channels. By purchasing the library, the assessee is gaining exclusive right over the asset but this library cannot be held as a tool for carrying on of its business as assessee can carry on its business even without the ‘Film Software Library’. Therefore, we hold that the asset which consists of ‘Copyrighted Films and Programmes’ is an ‘Intangible Asset’ eligible for depreciation at the rate of 25%. - Decided against revenue TDS u/s 194H - non deduction of tds on commission amount - Held that:- As decided in assessee's own case [2014 (1) TMI 250 - ITAT HYDERABAD] TDS is not required to be made on payments made by TV channels/News paper companies to the advertising agency for booking or procuring or canvassing for advertisement. In view of that, we do not see any reason to defer from the findings. Disallowance of part of depreciation claim on computers/peripherals - Held that:- Similar issue came up for consideration in assessee’s own case for AY 2002-03 and 2003-04 [2013 (10) TMI 1376 - ITAT HYDERABAD] decide this issue in favour of the assessee by holding that depreciation claimed at 60% on printers, scanners, modems, switches, hubs, cables/cards and software etc., should not be disallowed as these devices are used along with the computer and their functions are integrated with the computer. Depreciation claimed on non-compete fee - assessee submitted that non-compete fee rights acquired by it are ‘intangible assets’ u/s 32(1)(ii) of the Act eligible for depreciation @ 25% - Held that:- As decided in assessee's own case [2014 (12) TMI 7 - ITAT HYDERABAD] - Neither the AO nor the CIT(A) has examined the effect of acquisition of 39% of equity shares by another entity - without examining the impact of investment made in equity shares to the extent of 39% by the domestic investor and condition imposed by it, the conclusion drawn by the CIT(A) that there is no necessity of payment of non-compete fee as the same person is controlling the assessee company as well as UKT and UKM is without proper appreciation of facts and evidences brought on record cannot be sustained - as the impact of acquisition of 39% of equity shares by M/s Equator Trading Enterprises Pvt. Ltd. has not at all been examined by AO at the time of assessment proceeding or by the CIT(A) while disposing of assessee's appeal and further as the additional evidences produced before us were not examined either by the AO or by CIT(A), which certainly have a crucial bearing on the issue as to whether the payment of non-compete fee is genuine and necessary – the matter is to be remitted back to the AO for fresh adjudication – Decided in favour of assessee for statistical purposes..
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