The Commissioner Of Income Tax,Media Circle,Chennai v. M/S.mavis Satcom Limited

T.C.A.Nos.432 and 434 of 2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 30.09.2024 CORAM THE HONOURABLE MR.JUSTICE R.SURESH KUMARandTHE HONOURABLE MR.JUSTICE C.SARAVANAN T.C.A.Nos.432 and 434 of 2015andM.P.Nos.1 and 1 of 2015 The Commissioner of Income Tax,Media Circle,Chennai. ... ...Appellant in both TCAs -Vs- M/s.Mavis Satcom Limited,No.48, N.B.Jawaharlal Nehru Salai,Ekkattuthangal,Chennai - 600 032.PAN:AACCM 2127 K ...Respondent in both TCAs COMMON PRAYER : Tax Case Appeals filed under Section 260 A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal 'D' Bench, Chennai dated 18.03.2014 in I.T.A.No.1663/MDS/2013 and I.T.A.No.1660/MDS/2013 for the assessment years 2008-09 and 2004-05. C O M M O N J U D G M E N T (Judgment of the Court was delivered by R.SURESH KUMAR, J) These Tax Case Appeals have been filed by the Revenue calling in question the correctness of the orders passed by the Income Tax Appellate Tribunal, by raising the following substantial questions of law: i. Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was right in law in holding the reopening u/s.147 as invalid?the Hon'ble Income Tax Appellate Tribunal was right in law in holding the reopening u/s.147 as invalid? ii. Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal right in holding that reopening as invalid when as per Explanation 1 to the provisions of Section 147, production of account or other evidences before the Assessing Officer from which material evidence could with due diligence have been discovered will not necessarily amount to disclosure within the meaning of proviso to Sec.147 of the Act?the Hon'ble Income Tax Appellate Tribunal right in holding that reopening as invalid when as per Explanation 1 to the provisions of Section 147, production of account or other evidences before the Assessing Officer from which material evidence could with due diligence have been discovered will not necessarily amount to disclosure within the meaning of proviso to Sec.147 of the Act? iii. Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was right in holding that reopening u/s.147 as invalid when as per clause (c) of Explanation 2, where assessments have earlier been made and there is escapement of income, reopening can be made to reassess the escaped income?the Hon'ble Income Tax Appellate Tribunal was right in holding that reopening u/s.147 as invalid when as per clause (c) of Explanation 2, where assessments have earlier been made and there is escapement of income, reopening can be made to reassess the escaped income? iv. Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was right in law in holding the reopening u/s.147 as invalid, when the assessee had claimed expenditure as 'revenue' in nature while the benefit of expenditure is enduring in nature and hence the proceedings are valid as per law?the Hon'ble Income Tax Appellate Tribunal was right in law in holding the reopening u/s.147 as invalid, when the assessee had claimed expenditure as 'revenue' in nature while the benefit of expenditure is enduring in nature and hence the proceedings are valid as per law? iv. Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was right in law in holding the reopening u/s.147 as invalid, when the assessee had claimed expenditure as 'revenue' in nature while the benefit of expenditure is enduring in nature and hence the proceedings are valid as per law?the Hon'ble Income Tax Appellate Tribunal was right in law in holding the reopening u/s.147 as invalid, when the assessee had claimed expenditure as 'revenue' in nature while the benefit of expenditure is enduring in nature and hence the proceedings are valid as per law? v. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the rights are found incapable of sustained exploitation after the first broadcast and hence considering the principles of consistency and nature of expenditure, the same has to be treated as revenue in nature, since the assessee does not derive enduring benefit?the Income Tax Appellate Tribunal was right in holding that the rights are found incapable of sustained exploitation after the first broadcast and hence considering the principles of consistency and nature of expenditure, the same has to be treated as revenue in nature, since the assessee does not derive enduring benefit? vi. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in reversing the capitalization of the expenses without the Income Tax Appellate Tribunal was right in law in reversing the capitalization of the expenses without T.C.A.Nos.432 and 434 of 2015 noting that as per accounting standards issued by the Institute of Chartered Accountants of India AS26, copy rights in films / serials are intangible assets and writing off of entire cost of the acquiring such rights at the first broadcast itself on the ground that future revenues are not ascertainable? vii. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in reversing the capitalization of the expenses when the assessee is offering the revenue derived on subsequent telecast in the relevant assessment year, but has chosen to claim the entire expenditure relating to such revenue in the first year of telecast, which is against the mercantile system of accounting followed by the assessee? 2. Mr.Karthick Ranganathan, learned Senior Standing Counsel appearing for the appellant Revenue, on instructions, would submit that, these two appeals are under low tax effect as per recent notification dated 17.09.2024 in Circular No.09 of 2024. 3. Heard Mr.A.S.Sriraman, learned counsel for the respondent assessee. T.C.A.Nos.432 and 434 of 2015 4. In view of the same, these two Tax Case Appeals are dismissed as low tax effect and the substantial questions of law, if any, arising in these cases would be decided at a later point of time. However, there shall be no order as to costs. Consequently, connected miscellaneous petitions are closed. (R.S.K., J.) (C.S.N., J.) 30.09.2024 NCC : Yes / NoIndex : Yes / NoSpeaking Order : Yes / Novji To M/s.Mavis Satcom Limited,No.48, N.B.Jawaharlal Nehru Salai,Ekkattuthangal,Chennai - 600 032.PAN:AACCM 2127 K https://www.mhc.tn.gov.in/judis T.C.A.Nos.432 and 434 of 2015 R.SURESH KUMAR, J.and C.SARAVANAN, J. vji T.C.A.Nos.432 and 434 of 2015 30.09.2024