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2018 (11) TMI 1899 - AT - Income TaxAllowable revenue expenditure - Addition towards purchase of movies programme production expenses amortization of film and Broadcast rights consumables and Media expenses - HELD THAT - This issue also subject matter of discussion before this Tribunal in assessee s own case for assessment years 2004-05 to 2009-10 2013 (10) TMI 1368 - ITAT CHENNAI and for the assessment year 2012-13 . 2017 (8) TMI 1661 - ITAT CHENNAI - This Tribunal specifically found that the monies received are shown as deferred revenue in the year of receipt and are offered as income in the year when programme is aired. The ld. CIT(A) in fact followed the order of Tribunal in assessee s own case for assessment years 2004-05 to 2009-10 - Therefore this Tribunal do not find any reason to interfere with the order of ld. CIT(A). Accordingly the order of ld. CIT(A) is confirmed in the departmental appeal. Disallowance u/s 14A r.w.r. 8D - expenditure relating to the exempt income and investments - HELD THAT - We have considered the submissions of the ld. Counsel that the dominant intention in making investments in the subsidiary company is not to earn the dividend income but to control the business of the subsidiary company and therefore the said investments should be excluded for the purpose of computation of disallowance under section 14A r.w. Rule 8D. Similar issue was subject matter in appeal before the Hon ble Supreme Court in the case of Maxopp Investment Ltd. 2018 (3) TMI 805 - SUPREME COURT wherein it is amply clear that any investments made in the subsidiary which is not for the purpose of earning dividend and may be for the purpose of having controlling interest therein shall attract the provisions of section 14A read with Rule 8D. Accordingly we set aside the order of the ld. CIT(A) on this issue and sustain the disallowance made under section 14A r.w. Rule 8D(2)(iii).
Issues:
1. Addition towards purchase of movies, programme production expenses, etc. 2. Deferred revenue expenditure. 3. Disallowance under section 14A read with Rule 8D. Issue 1 - Addition towards purchase of movies, programme production expenses, etc.: The Tribunal considered the appeal by the Revenue against the addition made by the Assessing Officer. The Tribunal noted that a similar issue had been decided in favor of the assessee in previous assessment years. Referring to past Tribunal orders, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) to allow the expenditure as revenue expenditure. Consequently, the Tribunal confirmed the order of the CIT(A) on this issue. Issue 2 - Deferred revenue expenditure: The Tribunal examined the issue of deferred revenue expenditure, which had been previously discussed in the assessee's case for earlier assessment years. Citing past Tribunal decisions, the Tribunal found that the monies received were treated as deferred revenue and offered as income when the program was aired. Following the precedent set in the assessee's case, the Tribunal upheld the order of the CIT(A) without finding any reason to interfere. Issue 3 - Disallowance under section 14A read with Rule 8D: The Tribunal addressed the disallowance made by the Assessing Officer under section 14A read with Rule 8D concerning expenditure related to exempt income and investments. The Assessing Officer had determined a disallowance under Rule 8D(2)(ii) and (iii), which the CIT(A) directed to restrict based on the assessee's submissions. The Tribunal considered the argument that investments in the subsidiary were not primarily for earning dividend income but for controlling the business. Referring to a Supreme Court judgment, the Tribunal concluded that such investments in the subsidiary, not for earning dividends but for control purposes, should be subject to disallowance under section 14A read with Rule 8D. Consequently, the Tribunal set aside the CIT(A)'s order and sustained the disallowance made under Rule 8D(2)(iii). In conclusion, the Tribunal partly allowed the appeal filed by the Revenue, pronouncing the order on the 20th of November, 2018 in Chennai.
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