Madras High Court
Commissioner Of Income Tax vs M/S. Spi Music Private Limited on 18 August, 2022
T.C.A.Nos.552 to 555 of 2019
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 18.08.2022
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
AND
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
T.C.A.Nos.552 to 555 of 2019
Commissioner of Income Tax,
Non Corporate Circle 20(1),
Chennai 600 034. ... Appellant in all TCAs
Versus
M/s. SPI Music Private Limited,
New No.25, Old No.13, 5th Floor,
Mamatha Complex, Whites Road,
Royapettah, Chennai 600 114,
PAN: AAACZ 2711J
... Respondent in all TCAs
Appeals preferred under Section 260A of the Income Tax Act, 1961,
against the order dated 20.11.2018 passed by the Income Tax Appellate
Tribunal, “A” Bench, Chennai, in I.T.A.Nos. 1886, 1883, 1885 and
1884/Chny/2018.
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T.C.A.Nos.552 to 555 of 2019
For Appellant : Mr.M.Swaminathan
Senior Standing Counsel
M/s.V.Pushpa,
Standing Counsel in all TCAs
For Respondent : Mr.Arun Karthik Mohan in all TCAs
COMMON JUDGMENT
(Judgment of the Court was delivered by R.MAHADEVAN, J.)
These tax case appeals have been filed by the appellant / Revenue,
challenging the common order dated 20.11.2018 passed by the Income Tax
Appellate Tribunal, “A” Bench, Chennai, in I.T.A.Nos. 1886, 1883, 1885
and 1884/Chny/2018, relating to the respective assessment years 2011-12,
2008-09, 2010-11 and 2009-10.
2.By order dated 07.08.2019, this court admitted the aforesaid tax case
appeals on the following substantial questions of law:
“(i) Whether, on the facts and circumstances of the case, the
Income tax Appellate Tribunal was right in holding that the music
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? And
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T.C.A.Nos.552 to 555 of 2019
(ii) 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 by the assessing officer when the fact
remains that as per accounting standards issued by the Institute of
Chartered Accountants of India, copy rights in films/serials are
intangible assets and writing off of entire cost of the acquiring such
right 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?"
3. When the 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 is less than the threshold limit.
4. In the light of the aforesaid submissions made by the learned
counsel for the appellant / Revenue, the present appeals, wherein, the tax
effect is said to be less than the monetary limit imposed, are dismissed as
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T.C.A.Nos.552 to 555 of 2019
withdrawn, keeping open the substantial questions of law for determination
in appropriate cases. No costs.
(R.M.D., J.) (M.S.Q., J.)
18.08.2022
Internet : Yes
Index : Yes / No
av
To
1. The Income Tax Appellate Tribunal,
“A” Bench, Chennai.
2. The Commissioner of Income Tax,
Non Corporate Circle 20(1),
Chennai 600 034.
3. The Assistant Commissioner of Income-tax,
Non Corporate Circle - 20(1),
Chennai.
4. The Commissioner of Income Tax (Appeals)-14,
Chennai.
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T.C.A.Nos.552 to 555 of 2019
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
av
T.C.A.Nos.552 to 555 of 2019
18.08.2022
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