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TMI Blog2018 (8) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee placed reliance upon the order of the CIT (A). 3. On going through the order of the CIT (A), we find that the CIT (A) followed the ITAT orders in the assessee's own case for the A.Ys 2008-09 and 2011-12 to 2012-13 to decide the issue in favour of the assessee or to remand the issue to the file of the AO. 4. As regards Ground No.1, we find that in the assessee's own case for the A.Y 2012-13, the ITAT had allowed the expenditure by following its own order in the case of assessee's sister concern M/s Prism TV Ltd and the CIT (A) has followed the same for giving relief to the assessee. The relevant portion is reproduced hereunder for the sake of clarity and ready reference: "5. Considered the rival submissions and perused the material on record. Similar issue came up for consideration before the ITAT, Hyderabad in assessee's own case for AY 2012-13 in ITA No. 1245/Hyd/2016, order dated 09/08/2017 wherein the coordinate bench has held as under: "8. The learned Counsel for the assessee submitted that this issue had arisen in the case of M/s. Prism Television (P) Ltd also in the case cited Supra wherein the Coordinate Bench of this Tribunal has considered the issue at l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee does not discard the films but carefully store the same in digital library for airing the same again. Therefore, the assessee gets enduring benefit from the rights acquired in films and serials and they do not expire on the date of first telecast as contemplated by the assessee. The rights are intangible assets within the meaning of Explanation (iii) to Section 32 and do not fall within the purview of Section 37(1). The assessee is entitled to claim depreciation on same. 9. The issue of amortization of cost of movie and serial rights, programme production expenses, consumable and media expenses by treating them as intangible assets u/s.32(1)(ii) has been dealt in detail by the CIT (Appeals) in his order dated 23-02-2013 relevant to the A Y. 2006-07 and 2007-08. We fully agree with the detailed findings and the reasoning given by the CIT(Appeals) in his order allowing this ground of appeal of the assessee. For the sake of brevity, we are not reproducing the findings of CIT (Appeals) in accordance with the judgment of the Hon'ble Supreme Court of India in the case of CIT Vs. K. Y. Pillah & Sons reported as 63 ITR 411 subsequently followed by the Hon'ble Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items as 'intangible assets' for the purpose of invoking the provisions of section 32(ii) of the Act. We rely on the above referred Delhi High Court's Judgment in the case of Television Eighteen India Ltd (supra). Further, we find that the assessee has a declared method of accounting relating to accounting of these transactions. He has been consistently following the same without any change. In fact, the Revenue has consistently allowed the claim in the past. This is for the first time, AO disturbed the claim of the assessee and invoked the provisions of section 32 (ii) of the Act, without any sustainable reasoning. Therefore, considering all the points mentioned above, we are of the firm opinion that the decision of the AO/CIT(A) is unsustainable legally. Hence, the assessee is entitled to claim the purchases of news items/non-fictional items as an allowable expenditure. Accordingly, we direct the AO to delete the relevant addition. b. On the debits relating to the purchases of the TV Programs/Film rights: Assessee amortised the 'inventories' as per the method of accounting consistently followed by him over the years. In fact, the Revenue has consistently a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s value of "news archives" under the head of fixed assets. In the return filed by the assessee for the Assessment Year 1997, the said amount was claimed as revenue expenditure. According to the assessee this expenditure was allocated for the creation of "news achieves", which comprised of its published or telecasted programmes. The AO capitalised this amount holding that the expenditure led to creation of an asset of enduring advantage. The CIT (Appeals) on appeal, however, reversed the findings of the AO. It was noticed that the news archives were not in the nature of plant or income generating apparatus but part of the product. It was also held that the unavailability of any objective basis, to quantify with any decree of accuracy future revenue that were likely to be generated and the proportionate cost of production that could be deferred, led to the conclusion that the 10% of the total expenditure earmarked for creation of "news archives" could not be treated as a capital expenditure. On the revenue's appeal, the ITAT held as follows:- "12. It is admitted that no separate account was maintained wherein any expenditure was debited which could be earmarked towards crea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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