Madras High Court
Principal Commissioner Of Income vs M/S.Mavis Satcom Ltd on 9 March, 2021
TCA.Nos.151, 156 & 158
of 2021
In the High Court of Judicature at Madras
Dated : 09.3.2021
Coram :
The Honourable Mr.Justice T.S.SIVAGNANAM
and
The Honourable Ms.Justice R.N.MANJULA
Tax Case Appeal Nos.151, 156 and 158 of 2021
& CMP.Nos.2844 and 2964 of 2021
Principal Commissioner of Income
Tax, Central 2, Chennai-34 ...Appellant
Vs
M/s.Mavis Satcom Ltd.,
Chennai-32. ...Respondent
APPEALS under Section 260A of the Income Tax Act, 1961 against
the common order dated 08.1.2019 made respectively in ITA.Nos.
2213, 2212 and 2214/Chny/2018 on the file of the Income Tax
Appellate Tribunal, Chennai 'D' Bench respectively for the assessment
years 2010-11, 2009-10 and 2011-12.
For Appellant: Mr.T.R.Senthilkumar, SSC assisted by
Ms.K.G.Usharani, JSC
https://www.mhc.tn.gov.in/judis/
of 2021
COMMON JUDGMENT
(Judgment was delivered by T.S.Sivagnanam,J)
We have heard Mr.T.R.Senthilkumar, learned Senior Standing
Counsel assisted by Ms.K.G.Usharani, Junior learned Standing Counsel
appearing for the appellant – Revenue.
2. These appeals, filed by the Revenue under Section 260A of the
Income Tax Act, 1961, are directed against the common order dated
08.1.2019 made respectively in ITA.Nos. 2213, 2212 and 2214/Chny/
2018 on the file of the Income Tax Appellate Tribunal, Chennai 'D'
Bench respectively for the assessment years 2010-11, 2009-10 and
2011-12.
3. The Revenue has filed these appeals by raising the following
substantial questions of law :
“i. Whether the Appellate Tribunal was
right in holding that the expenses incurred on
acquisition of copy rights/satellite rights of
films is revenue in nature and the scope of
Accounting Standard AS-26 is not applicable
for such copy rights ?
ii. Whether the Income Tax Appellate
Tribunal was right in law in reversing the
capitalization of the expenses when accounting
standards issued by the Institute of Chartered
https://www.mhc.tn.gov.in/judis/
of 2021
Accountants of India, 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 with
reasonable accuracy, cannot be accepted as it
neither adheres to the principles of Accounting
Standards nor Income Tax Law ? And
iii. Whether the Income Tax Appellate
Tribunal was right 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?”
4. The learned Senior Standing Counsel for the appellant submits
that the above appeals are not pursued by the Revenue on account of
the low tax effect in terms of Circular No.17/2019 dated 08.8.2019
issued by the Central Board of Direct Taxes. By the said Circular, the
monetary limit for filing or pursuing an appeal before the High Court
has been increased to Rs.1 Crore. It is further submitted that the tax
effect in the respective cases is less than the threshold limit.
https://www.mhc.tn.gov.in/judis/
of 2021
T.S.SIVAGNANAM,J
AND
R.N.MANJULA,J
RS
5. In the light of the said submissions, the above tax case appeals
are dismissed on account of the low tax effect. The substantial
questions of law raised are left open. In the event the tax effect in the
respective cases is above the threshold limit fixed in the said circular,
liberty is granted to the Revenue to file a petition before this Court to
restore the appeals to be heard and decided on merits. Consequently,
the connected CMPs are also dismissed.
09.3.2021
To
The Income Tax Appellate Tribunal, Chennai 'D' Bench.
of 2021 & CMP.Nos.2844
and 2964 of 2021
https://www.mhc.tn.gov.in/judis/
