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TMI Blog2013 (5) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee could utilize the basket of ad-slots and aggregate the same for achieving the target. Submissions of the AR cannot be accepted that the aggregation could be allowed because, the payments were being made for same channel and same functions, i.e. ad-space, the difference between them only being prime time slot and non prime time slot. Since there was no justification for higher payment made by the assessee as compared to the third party payments, the adjustment as suggested by the TPO and sustained by the DRP, accordingly is fair and reasonable and does not call for any disturbance. - ITA No. 1138/Mum/2011 - - - Dated:- 5-4-2013 - Shri Rajendra Singh And Shri Vivek Varma,JJ. For the Appellant : Shri Sanjay Parikh For the Respondent : Shri Ajeet Kumar Jain ORDER Per Vivek Varma, JM:- The appeal is filed by the assessee against the order of Dispute Resolution Panel (DRP), u/s 144C(5) of the Income Tax Act, 1961, dated 09.08.2010, wherein the assessee has raised the following grounds: "1. The Learned Assistant Commissioner of Income Tax, Circle 6(3), Mumbai ('AO') and the Hon'ble Dispute Resolution Panel ('DRP') erred in making an adjustment to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , "2.1.1 M/s Media Content Communications Services (India) Pvt. Ltd., the assessee company is a 'Joint Venture (74:26) between ABP Private Limited, part of the ABP Group and STAR News Broadcasting Limited, wholly-owned subsidiary of the STAR Group. 2.1.2. Assessee Company is engaged in the business of providing various services like collecting, gathering and collating television news content and supplying the same to its customers in India and Overseas. The functions on day to day basis involve. Recording and collating news content by various Journalists and procuring the same from outside parties. After collating the news material it is processed by the technical team by using special broadcasting equipments to make the news content worthy for transmission and broadcasting. Post processing the news content is presented by the editorial team on the news channels broadcasted by the Assessee Company. 2.1.3. Assessee Company entered into the business of television broadcasting, pursuant to the permission received from the "Ministry of Information broadcasting, Government of India" on 7 January, 2004 for uplinking of "STAR News" channel after fulfilling all the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber and timing of prime and non prime time slots to be aired was to be at the assessee's discretion. By implication it was upon the assessee to decide what combination of prime and non prime time slots would facilitate it to derive maximum benefit for the payment to be made as per the agreement. 2.2.4. During the period in consideration AE had charged third parties for placing advertisements on Star Plus channel. In the above scenario, the internal comparables were available to benchmark the advertisement transaction. Hence, Comparable Uncontrolled Price method was considered to be the most appropriate method to compute the arm's length price of the transaction and AE was considered as tested party for this purpose. 2.2.5. For the purpose of determining whether the price for purchase of ad- spots from AE Es at arm's length, the average rates charged by AE to third parties for ad-space on Star Plus for prime time and non prime time spots were considered. And the average rate charged to third parties has been applied to the prime time and non prime time slot mix availed by the assessee. An analysis of the same is as follows:- Slot No. of Amount as per 30 sec. slo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the third parties. Therefore, the transaction is not at ALP. In view of above, the ALP of the payment of advertising service charges paid to the AE is determined, by adoption the rate of Rs.35.115 per 30 sec non prime time slots as was sold by the AE to third parties, as under:- S.No. Particulars As per associate (Form 3CEB) ALP determined by department 1 Prime Time Advertisement charges 8,00,62,000 8,00,62,000 2 Non Prime Time Advertisement charges 1,99,60,000 1,16,82,000 3 Total Advertisement cost shown by assessee 10,00,22,760 9,17,44,000 4 Arm Length value of transaction to AE 9,17,44,000 5 International transaction value 10,00,22,760 6 Difference/adjustment to be made (4-5) 82,78,760 Accordingly, the ALP of the international transaction is determined at Rs. 9,17,44,000/- as against Rs. 10,00,22,760/- shown by the assessee. Therefore, the necessary adjustment in the ALP comes to Rs. 82,78,760/- (Rs. 9,17,44,000 - Rs. 10,00,22,760/-) and computed the adjustment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DRP took into account the details and submissions placed by the assessee. 11. The AR, relied on a number of decisions, wherein the coordinate Benches had held that since the order of DRP was non speaking, as it was here in the instant case, the issue must be restored to the DRP for a fresh adjudication:- Cited Decision Covered Case 136 ITD 46 ACIT vs Agility Logistics (P.) Ltd. 134 ITD 546 Evaluserve.com(P) Ltd. vs ITO(Delhi) 16 ITR (TRI) 481 ILJIN Automotive (P) Ltd. vs ACIT (Chennai) 149 ITD 171 Ford India (P) Ltd. vs. DCIT(LTPU)(Chennai) 12. The DR on the other hand strongly objected to the submission made by the AR that the issue be restored to the file of the DRP for fresh adjudication, because, as such there is no ground of this grievance in the GOA before the ITAT and secondly the DRP had given adequate time for representation before it to the assessee company, which the assessee failed to utilize. The DR, therefore, submitted that there cannot be any reason which could lead to the unreasonability of the order. 13. On the facts, the DR pointed out that, as referred to by the AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroversy in respect of the demand of the assessee to aggregate all the transactions has also been addressed by the Tribunal in a cited decision of Asstt. CIT vs. UE Trade Corporation (India) (P) Ltd. (supra), wherein vide para 4.2, it was held as under: "4.2 The second ground is that the position should be seen as a whole with respect to all the transactions and not only with respect to the disputed transactions. In other words, if transfer pricing study is made for all the transactions, the variation made by the AO would be of insignificant amount warranting no addition. On the other hand, the case of the learned Departmental Representative is that purchases by way of import do not constitute a series of connected transactions, but each transaction is a separate transaction. Therefore, the AO was right in examining each transaction separately for this purpose. It is seen that the assessee has not been able to bring anything on record that various purchases were a part of pre-arranged scheme or agreement so as to constitute a part of the indivisible transactions of purchase. Accordingly, it is held that the AO was within his right to evaluate each transaction separately." In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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