Madras High Court
The Commissioner Of Income Tax vs M/S.Raj Television Network ... on 17 August, 2022
T.C.A.Nos.926 and 927 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED 17.08.2022
CORAM
THE HON'BLE Mr. JUSTICE R. MAHADEVAN
AND
THE HON'BLE Mr. JUSTICE MOHAMMED SHAFFIQ
Tax Case Appeal Nos.926 and 927 of 2015
The Commissioner of Income Tax
Media Circle-II
Chennai .. Appellant in both T.C.As
Vs.
M/s.Raj Television Network Limited
32, Poes Road, 2nd Street
Teynampet
Chennai 600 018
PAN : AAACR 3580P .. Respondent in both T.C.As
Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961
against the common order dated 17.04.2015 passed by the Income Tax
Appellate Tribunal, 'A' Bench, Chennai, in respective I.T.A.Nos.
1521/Mds/2013 and 1522/Mds/2013.
For Appellant : Mr.M.Swaminathan
in both T.C.As Mrs.V.Pushpa
Standing Counsels
For Respondent : No appearance
in both T.C.As
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T.C.A.Nos.926 and 927 of 2015
COMMON JUDGMENT
(Judgment was delivered by R. MAHADEVAN, J.)
These tax case appeals have been filed by the appellant/Revenue, calling
in question the correctness of the common order dated 17.04.2015 passed by
the Income Tax Appellate Tribunal, 'A' Bench, Chennai, in respective
I.T.A.Nos.1521/Mds/2013 and 1522/Mds/2013, for the respective assessment
years 2004-05 and 2009-10.
2. By order dated 17.11.2015, this Court admitted the aforesaid tax case
appeals on the following substantial questions of law :
T.C.A.No.926 of 2015 :
“1) Whether, on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal was right in holding that
re-opening under section 147 is invalid?
2) Whether, on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal was right in holding that
re-opening is done on the basis of mere change of opinion and
dismissed the appeal of the revenue when the issue of amortization
of cost of film rights has neither been discussed nor an opinion is
formed by the Assessing Officer there is no question of change of
opinion?
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T.C.A.Nos.926 and 927 of 2015
3) Whether, on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal was right in holding that
the copyrights in films 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, when films once broadcasted are not
going out of shelf?
4) Whether, on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal was right, in law, in
reversing the capitalization of the expenses by the Assessing
Officer when the fact remains that as per accounting standards
issued by the Institute of Chartered Accountants of India,
copyrights in films 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 be
principles of accounting standards nor income of law?”
T.C.A.No.927 of 2015 :
“1) Whether, on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal was right in holding that
the copyrights in films are found incapable of sustained
exploitation after the first broadcast and hence considering the
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T.C.A.Nos.926 and 927 of 2015
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, when films once broadcasted are not
going out of shelf?
2) Whether, on the facts and in the circumstances of the
case, the Income Tax Appellate Tribunal was right, in law, in
reversing the capitalization of the expenses by the Assessing
Officer when the fact remains that as per accounting standards
issued by the Institute of Chartered Accountants of India,
copyrights in films 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 be
principles of accounting standards nor income of law?”
3. When these matters were taken up for consideration, the learned
counsel for the appellant/Revenue brought to the notice of this court the
Circular No.17/2019 dated 08.08.2019, issued by the Central Board Direct
Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the
Department before the High Court in cases where the tax effect does not exceed
Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in
these appeals are less than the threshold limit.
4. In the light of the aforesaid submissions made by the learned counsel
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T.C.A.Nos.926 and 927 of 2015
for the appellant/Revenue, the present appeals, wherein, the tax effect is said to
be less than the monetary limit imposed, are dismissed as withdrawn, keeping
open the substantial questions of law for determination in appropriate cases.
No costs.
[R.M.D,J.] [M.S.Q, J.]
17.08.2022
Index : Yes / No
gya
To
1.The Commissioner of Income Tax
Media Circle-II
Chennai
2.The Assistant Commissioner of Income Tax
Media Circle-II
Chennai
3.The Commissioner of Income Tax (Appeals)-VI
Chennai
4.The Income Tax Appellate Tribunal
'A' Bench, Chennai
R. MAHADEVAN, J.
AND
MOHAMMED SHAFFIQ, J.
https://www.mhc.tn.gov.in/judis
T.C.A.Nos.926 and 927 of 2015
gya
T.C.A.Nos.926 and 927 of 2015
17.08.2022
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