TMI Blog2013 (10) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... o write-off the same. The Assessing Officer disallowed the claim of the assessee on the ground that the assessee is not in the business of purchase and sale of movies. On appeal, the CIT(Appeals) reversed the findings of Assessing Officer by following the judgment in the case of Turner Morrison & Co., Ltd., Vs. CIT, (2000 (3) TMI 34 - CALCUTTA High Court) and CIT Vs. Bhagwarprasad (1999 (9) TMI 5 - GUJARAT High Court ). We do not find any infirmity in the findings of the CIT(Appeals) on this issue. Deferred income - assessment year - Held that:- It is not disputed that the income generated by selling the time-slot is offered as income in the year of broadcasting/airing the programme. The monies received are shown as deferred revenue in the year of receipt and are offered as income in the year when programme is aired. We do not find any illegality or irregularity in methodology adopted by assessee in registering the revenue in the year of telecast of programme. There is no merit in this ground of appeal of the Revenue - I.T.A. Nos. 1515, 1516, 1517, 1518, 1519 & 1520/Mds/2013 - - - Dated:- 31-10-2013 - Dr. O.K. NARAYANAN And SHRI VIKAS AWASTHY JJ. For the Respondent : S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Shri Shaji P. Jacob, appearing on behalf of the Revenue vehemently supported the assessment orders for the respective AYs., and prayed for the setting aside of the impugned orders. The ld. DR relied on the grounds of appeal. The ld.DR while making his submission also placed reliance on the following judgments: i. CIT Vs. M. Subramaniam reported as 272 ITR 525 (Mad); ii. Vieshesh Films P. Ltd., Vs. DCIT reported as 26 SOT 64 (Mum); iii. Cheminvest Ltd., Vs. ITO reported as 121 ITD 318 (Del) SB iv. CIT Vs. Ideal Garden Complex P. Ltd., reported as 340 ITR 609 (Mad); v. ACIT Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd., reported as 291 ITR 500 vi. CIT Vs. Usha International Ltd., reported as 348 ITR 485 (Del)(FB) 5. On the other hand, Shri N. Devanathan , Advocate Shri K. Ramakrishnan, CA appearing on behalf of the assessee vehemently supported the order passed by the CIT(Appeals) and prayed for the dismissal of the appeal of the Revenue. The ld. Counsel for the assessee submitted that for the AYs. 2004-05 2005-06, the ld. CIT(Appeals) has rightly held that re-opening has been done in wrongful manner. For the AYs. 2004-05, re-opening proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer after examining the expenditure claimed by the assessee, accepted the same. We are of the considered opinion that the re-opening is merely on the basis of change of opinion. We concur with the findings of the CIT(Appeals) on the issue. The order of the CIT(Appeals) on the issue of re-opening for both the AYs i.e., AY. 2004-05 and 2005-06 is confirmed and this ground of appeal of the Revenue is dismissed. 8. Now, we take up the common issue involved in all the appeals. The assessee is in the business of running satellite television channels. These channels telecast films, serials etc., through satellite channels. The rights over these films are purchased from the producers of the respective films for broadcasting through satellite television. These rights come with an embargo that the films shall not be broadcasted or aired for a specified period from the date of release in theatres depending upon the success at the box office and other factors. Till the time, such films are broadcasted, they are to be treated as stock in trade. Once the films are broadcasted, the purchase value of the films is written-off. The expenditure on purchase of films is claimed in the first year it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., reported as 354 ITR 21 (Del). The ld. DR has not been able to controvert the well reasoned order of the CIT(Appeals) on the issue. Accordingly, the findings of the CIT(Appeals) on the issue are affirmed and this ground of appeal of the Revenue in respect of all the AYs is dismissed. 10. In ITA No. 1518/Mds/2013 relevant to the AY. 2007-08, the Revenue has raised a ground with regard to write-off of advances given for production of films. The AR has pointed out that the amounts claimed as advances written-off, represents, the advances given to producers in the normal course of business, which have subsequently become irrecoverable. The Assessing Officer has accepted the fact that for telecasting the movies and serials it is essential for the assessee to purchase the move and serial rights. In the course of purchasing movie/serial rights, advances are given to the producers/production houses of the serials and the movies. In some of the cases, the amounts given as advance become bad-debt and hence become ir-recoverable. The assessee has no other option but to write-off the same. The Assessing Officer disallowed the claim of the assessee on the ground that the assessee is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that whether the investment have been made for strategic purposes or otherwise, the assessee must have incurred some expenditure on managing the investment portfolio and the dividends earned from the same. Even, if the application of Rule 8D is not automatic but the expenditure incurred on the investments made has to be disallowed. The CIT(Appeals) has held that there is no nexus between the exempted income and the expenditure debited. On the other hand, the Assessing Officer has invoked the provisions of Rule 8D and has dis-allowed `97,30,000/- in the AY. 2007-08 and `1,86,74,250/- in AY. 2009-10. We remit this issue back to the CIT(Appeals) to decide the issue afresh after making reasonable dis-allowance. This ground of appeal of the Revenue is allowed for statistical purposes. 13. The ld. Counsel for the assessee has filed voluminous paper books but none of the documents filed in the paper books were referred to at the time of hearing. Therefore, the documents filed in the form of paper book are not taken on record. In accordance with Rule 18(6) of the ITAT Rules, 1963, the paper books filed are not to be treated as part of the record of Tribunal. 14. In the result, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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