2014 (2) TMI 1352 - AT - Income Tax

Expenditure incurred for purchase of audio and video rights of feature films for production of cassettes and CDs - nature of expenditure - revenue or capital expenditure - HELD THAT - Issue as considered by the Tribunal in assessee s own case for earlier years 2013 (1) TMI 983 - ITAT MUMBAI and after considering relevant facts held that expenditure incurred for purchase of master plates is revenue in nature. - Decided in favour of assessee.

Summary

Issues:
Appeal challenging order on assessment of audio rights expenses.

Analysis:
The appeal was filed by the Revenue against the order passed by the Commissioner (Appeals) regarding the capitalization of audio rights expenses for the assessment year 2009-10. The main issue was whether the expenses of Rs. 2,34,08,629 should be treated as capital or revenue expenditure. The Assessing Officer had consistently treated these expenses as capital in nature in previous years.

The Tribunal noted that the issue had been decided in favor of the assessee in previous years, and the Commissioner (Appeals) followed the same approach for the current assessment year. Both parties agreed that the issue was covered by previous Tribunal decisions. The Tribunal reviewed the findings of the Assessing Officer, the Commissioner (Appeals), and previous Tribunal orders up to the assessment year 2008-09. The Tribunal referred to a specific decision in the assessment year 2008-09 where the Tribunal had upheld the treatment of audio rights expenses as revenue expenditure.

The Tribunal quoted the earlier Tribunal decision, which emphasized that the expenditure on audio rights was revenue in nature and not capital. The Tribunal observed that the Revenue had not presented any new facts to distinguish the current case from previous decisions. Therefore, the Tribunal upheld the judicial precedent and dismissed the Revenue's appeal. The Tribunal concluded that there was no merit in the Revenue's argument, and the appeal was accordingly dismissed.

In summary, the Tribunal upheld the treatment of audio rights expenses as revenue expenditure based on previous judicial precedents and previous Tribunal decisions. The Revenue's appeal challenging the order on assessment of these expenses was dismissed, emphasizing the consistency of decisions in favor of the assessee in similar cases.