The Commissioner Of Income Tax – 11, Mumbai v. M/S.viacom 18 Media Private Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.4599 OF 2010 The Commissioner of Income Tax – 11, Mumbai..Appellant. Versus M/s.Viacom 18 Media Private Limited..Respondent. Mr.D.K. Kamwal for the appellant.Mr.Percy J. Pardiwala, Senior Advocate with Mr.Atul K. Jasani for the respondent. CORAM : J.P. Devadhar &A.R. Joshi, JJ. DATE : 25[th] November 2011 P.C. : 1.Whether the Income Tax Appellate Tribunal was justified in allowing the advertisement and sale promotion expenses incurred by the assessee as business expenditure is the question raised in this appeal. 2.The assessment year involved herein is AY 2003-2004. 3.Pursuant to a Sales Agency Agreement entered into with MTV Asia and Nickelodeon Asia, Singapore, the assessee was to promote MTV brand in India for which the assessee was paid commission at 15%. In the assessment year in question, the assessee claimed advertisement and sales promotion expenses which were disallowed on the ground that the assessee was not obliged to incur such expenses under the agreement. 4.The Income Tax Appellate Tribunal relying upon its decision in the case of Star India Private Limited, held that the assessee was in the business of acting as advertising sales agent in India and as the assessee was to receive a percentage of advertising revenue received in India as its commission, it was in the business interests of the assessee to incur advertisement and sales promotion expenditure so that there is increased advertisement revenue which in turn would entitle the assessee to receive increased commission. Accordingly, the expenditure claimed by the assessee was allowed as business expenditure. It is brought to our notice that the appeal filed by the Revenue against the decision of the Income Tax Appellate Tribunal in the case of Star India Private Limited being Income Tax Appeal No.165 of 2009 has been dismissed by this Court on 24[th] March 2009. 5.In this view of the matter, we see no reason to entertain this appeal. The appeal is accordingly dismissed with no order as to costs. (A.R. Joshi, J.) (J.P. Devadhar, J.)