Principal Commissioner Ofincome Tax-10 v. Neo Sports Broadcast Pvt. Ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1761 OF 2018 Principal Commissioner ofIncome Tax-10 .... Appellant versus NEO Sports Broadcast Pvt. Ltd.... Respondent ….... Mr.Akhileshkumar Sharma, Advocate for Appellant.Mr.Akhileshkumar Sharma, Advocate for Appellant.•Mr.Rahul Hakani, Advocate for Respondent.Mr.Rahul Hakani, Advocate for Respondent. CORAM : AKIL KURESHI & SARANG V. KOTWAL, JJ.DATE: 23[rd] APRIL, 2019. P.C. : 1. This Appeal is filed by the revenue to challenge the judgment of Income Tax Appellate Tribunal. Following questionsare presented for our consideration; “(a)Whether on the facts and in the circumstances ofthe case and in law, the Hon'ble ITAT erred indeleting the addition towards Satellite SpaceFees/transponder charges relying on the decisionof Hon'ble Delhi High Court in the case of Asiathe case and in law, the Hon'ble ITAT erred indeleting the addition towards Satellite SpaceFees/transponder charges relying on the decisionof Hon'ble Delhi High Court in the case of Asia 2 / 3 06-ITXA-1761-18.odt Satellite Telecommunication 238 CTR (Del) 233,without considering the amendment in section9(1)(vi) w.r.e.f. 01.06.1976 [by Finance Act,2012], wherein the intent of legislature inrespect of 'royalty' has been clarified therebydeeming the said charges to be 'royalty' in nature? (b)Whether on the facts of the case and in law theHon'ble ITAT erred in upholding the decision ofthe Ld. CIT (A) in deleting the addition ofRs.59,60,557/- [Rs.40,73,880/- towards dealersconference and Rs.18,86,757/- towards relaunchof Neo Sports channel], without considering thefacts that by way of incurring these expensestowards dealers conference held in Malaysia andtowards “re-launch” of “New Cricket Channel”the assessee has constitute brand buildingexpenses with enduring benefits and does notconstitute revenue expenditure?Hon'ble ITAT erred in upholding the decision ofthe Ld. CIT (A) in deleting the addition ofRs.59,60,557/- [Rs.40,73,880/- towards dealersconference and Rs.18,86,757/- towards relaunchof Neo Sports channel], without considering thefacts that by way of incurring these expensestowards dealers conference held in Malaysia andtowards “re-launch” of “New Cricket Channel”the assessee has constitute brand buildingexpenses with enduring benefits and does notconstitute revenue expenditure? 2. Question (a) is similar to which we have dealt with in a detailed discussion in Income Tax Appeal No.1487/18involving this very assessee. Without recording separate reasons,such question is therefore not considered.involving this very assessee. Without recording separate reasons,such question is therefore not considered. 3. Question (b) pertains to an expenditure of Rs.59.60 lakhs (rounded of), incurred by the assessee towards dealersconference and relaunching of its TV channel. The revenueargues that such expenditure was capital in nature, resultinginto enduring benefits to the assessee and therefore ought not tohave been disallowed. CIT (Appeals) and Tribunal however heldthat expenditure was revenue in nature. We have perused thediscussion on this issue in such orders. We notice that the largerportion of the expenditure was for dealers conference andtherefore correctly treated as revenue expenditure. Smallportion 18 lakhs was for relaunch of the assessee’s TV channel.We would not like to entertain this Appeal. 4. In the result the Appeal is dismissed. (SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)