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TMI Blog2022 (4) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order is also common. The grounds taken by the revenue in AY 2011-12 read as under: - 1. The order of the learned CIT(A) is contrary to facts and circumstances of the case. 2.1 The Ld. CIT(A) erred in deleting the addition of Rs. 135,86,11,615/- on account of deferred income. 2.2 The Ld. CIT(A) erred in holding that the monies received are shown as deferred revenue by the assessee in the year of receipt and are offered as income in the year when programme is aired when the fact remains that the assessee is following Mercantile System of accounting and the impugned revenue has to be offered only in the current year? 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions, oral as well as written and after going through various judicial pronouncements, our adjudication would be as given in succeeding paragraphs. Assessment Proceedings 3.1 The facts in case record for AY 2011-12 are that the assessee being resident corporate assessee is stated to be engaged as 'Direct To Home' (DTH) satellite platform operator and offers DTH services in India. During assessment proceedings, it transpired that the assessee has shown deferred income of Rs. 13586.11 Lacs under the head 'current liabilities'. It was explained that the assessee, as DTH service provider, is engaged in aggregation of various broadcast content and providing DTH services enabling the customers to view channels / services uninterruptedly d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eyond that date. The said accounting treatment was stated to be in line with the requirement of Accounting Standard-9 (AS-9) on 'Revenue Recognition' issued by The Institute of Chartered Accountants of India. This standard provide that the revenue received or billed should be deferred and recognized over a period of time where the items delivered vary in value from period to period. 3.3 Another plea was that the deferred income was unearned revenue. To offer the income, the income should have been accrued to the assessee during the previous year itself. The company's right to receive the revenue arises only when the company is able to provide uninterrupted DTH signal. To ensure the same, the assessee would incur various costs such as conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of Hon'ble ITAT, Chennai. The relevant portion of the said decision is reproduced hereunder: "4.3.1 On identical issue in the appellant's own case for A.Ys 2004-05 to 2009-10, the Hon'ble ITAT, Chennai in its common order in ITA Nos.1515, 1516, 1517, 1518, 1519 & 1520/Mds/2013 dated 31.10.2013 held in favour of the appellant and dismissed the appeal filed by the department. The Hon'ble ITAT held as under: "11. In ITA No.1519 & 1520/2013, for the AYs. 2008-09 & 2009-10 respectively, the Revenue in its appeals has raised an issue with respect to deferred income... 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 mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... my predecessor's decision, the AO is directed to delete the addition made towards "Deferred Revenue''. This ground of appeal is allowed." 3.3.2 In view of the above decision of Hon'ble ITAT, Chennai, followed by the CIT(A), in the case of M/s Sun TV Network Ltd., the appellant's grounds are allowed and the AO's additions are deleted in all four assessment years mentioned above. Aggrieved, the revenue is in further appeal before us. Our findings and Adjudication 7. After due consideration of factual matrix as enumerated by us in the preceding paragraphs, the undisputed fact that emerges are that the assessee provide DTH services to various subscribers. The assessee receives subscription amount on quarterly / half ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this income was nothing but mere advances for rendering of services in future. Therefore, the impugned order could not be faulted with. 8. We find that similar is the view of the co-ordinate bench in the case of ACIT V/s M/s Sun TV Network Ltd. [ITA Nos.1515 & ors/Mds/2013 dated 31.10.2013; as relied on by Ld. CIT(A)]. The coordinate bench dismissed revenue's appeal, under similar factual matrix, by observing that there was no illegality or irregularity in methodology adopted by the assessee in registering the revenue in the year of telecast. This decision has been followed by another coordinate bench in ITA No.1309/Mds/2017 dated 14.08.2017 for AY 2012-13 in the case of same assessee. The same has subsequently been followed in another or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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