JUDGMENT judgment of court was delivered by A. K. Menon J.- This appeal seeks to challenge order of Income-tax Appellate Tribunal dated July 29, 2011, being confirmatory order recording formation of majority view pursuant to order passed by Third Member dismissing appeal filed by Revenue. appellant seeks to raise following questions: "(a) Whether, in facts and in circumstances of case and in law, hon'ble Income-tax Appellate Tribunal is justified in confirming order of Commissioner of Income-tax (Appeals) deleting disallowance of Rs. 4,14,20,843 made by Assessing Officer out of advertisement and publicity expenses incurred by assessee? (b) Whether, in facts and in circumstances of case and in law, hon'ble Income-tax Appellate Tribunal was justified in not taking cognizance of transfer pricing provisions because expenditure incurred by assessee by way of advertisement and publicity expenses, substantially benefited two foreign principals and assessee did not receive any compensation on that account from foreign principals and whether upon aforesaid consideration, hon'ble Income-tax Appellate Tribunal was justified in not upholding order of Assessing Officer? (c) Whether, in facts and in circumstances of case and in law, hon'ble Income-tax Appellate Tribunal was justified in rejecting alternative claim of Revenue that huge advertisement and publicity expenses should be treated as deferred revenue expenditure since benefit of expenditure spread over future years?" It will be convenient to narrate few facts which led up to present appeal. respondent-assessee is company incorporated in India and engaged in business of distribution of T. V. channels popularly known as National Geographic and History Channel. assessee-NGC Network (India) P. Ltd. also acts as airtime advertising sales representative for its principals NGC Network Asia LLC ("NGC Asia") which operates National Geographic Channel and Fox International Channels (US) Inc. ("FOX") which owns and operates "the History channel". assessee has paid fixed fees to "NGC Asia" and "FOX" in consideration for being appointed as distributor of two channels. distribution fees are paid by way of lump sum amounts. assessee being distributor was entitled to enter into agreements with re- distributors, cable networks and other media distributors (collecting operators) to ensure that contents of channels are viewed by consumers. assessee collects subscription fees for such re-distributors. consumer would pay subscription fees to view such channels. "advertising sales representation agreements" (Ad-sales agreement) under which respondent-assessee was appointed as advertising sales agents came into effect on July 1, 2004. Under ad-sales agreements, assessee would solicit advertisers, who wish to advertise "on air" during telecast of aforesaid channels in their capacity as agents of principals, namely, N. G. C. Asia and FOX. By way of agency commission assessee would earn 15 per cent. of net billed advertising charges collected by respondent and balance 85 per cent. was remitted by assessee to foreign principals. assessee filed return of income during 2005-06 on October 30, 2005, declaring total income of Rs. 4,85,16,730 and also filed Form 3CEB in view of there being international transactions with associated enterprises, namely, foreign principals. items mentioned in Form 3CEB were referred to Transfer Pricing Officer, who by his order dated October 23, 2008, passed under section 92CA(3) of Income-tax Act accepted arm's length price declared by assessee. During assessment proceedings, Assessing Officer observed that assessee's expenditure under head "advertising and publicity expenses" of Rs. 6,21,31,262 was claimed as deduction under section 37(1) of Income- tax Act. On being queried about said expenses respondent-assessee sought to justify expenses by reiterating need for, vide publicity to ensure channel's recall in minds of viewers which would lead to increased demand and viewership and, therefore, higher subscription fees for enhancing and maintaining existing level of subscription revenues. assessee contended that promotion of programmes of channel by way of such advertising and publicity increases popularity of programme which would result in higher demand for advertising spots on channel resulting in high advertising revenue and consequent increase in commission of assessee. Thus, assessee contended that there is direct nexus between advertising and promotions of channels and increase in advertising revenue and entailing increased commission. Assessing Officer, it appears, noted that respondent had incurred expenses towards advertising and publicity which benefited not only assessee but also foreign principals, i.e., aforesaid "NGC Asia" and "FOX". That assessee did not disclose such benefit to members as part of Form 3CEB. Accordingly, it was held that entire expenditure under head "advertising and promotion" amounting to Rs. 6,21,31,262 was not allowable as deduction under section 37(1) of Act. He restricted allowable deduction under section 37(1) to only 33.33 per cent. of total amount of Rs. 6,21,31,262 which is to sum of Rs. 2,07,10,419. Being aggrieved by order dated December 11, 2008, passed by Assessing Officer respondent-assessee preferred appeal before Commissioner Income-tax (Appeals) on January 13, 2009. Commissioner Income-tax (Appeals) allowed appeal holding that entire expenditure is allowable under section 37(1). Commissioner of Income-tax (Appeals) observed that since expenses were made to Indian residents they were not covered in Form 3CEB as section 92 covers only international transactions. Being aggrieved by order of Commissioner of Income-tax (Appeals) appellant filed appeal before Appellate Tribunal. Two Members of Tribunal passed separate orders, one allowing appeal and other dismissing it. Accountant Member upheld order of Commissioner of Income-tax (Appeals) and whereas Judicial Member allowed appeal of Revenue. matter was, therefore, referred by President to Third Member. Third Member, vide order dated June 17, 2011, concurred with Accountant Member and thereby upheld decision of Commissioner of Income-tax (Appeals). Pursuant to that confirmatory order was passed by Income-tax (Appeals). Pursuant to that confirmatory order was passed by Appellate Tribunal on July 29, 2011. Revenue is in appeal against this order. Mr. Chottaray, learned counsel appearing on behalf of appellants, submits that order of Tribunal is unsustainable by reason that respondent-assessee did not disclose in Form 3CEB fact that respondent's principal "NGC Asia" and "FOX" would derive benefit from expenditure towards advertisement and publicity claimed as deduction under section 37(1). That, it had been so disclosed, Transfer Pricing Officer would have taken different view and assessee should have offered test of arm's length price and, therefore, enabled proper decision to be taken by Transfer Pricing Officer. He submitted that in case of Star India (P) Ltd. Assessing Officer had disallowed 100 per cent. of advertisement expenses for assessment year 1999-2000 since expenses were incurred for and on behalf of Star Hong Kong and Commissioner of Income- tax (Appeals) had upheld disallowance to extent of 80 per cent. two Members of Tribunal were not divided in their judgments. In that case Judicial Member granted relief to appellant relying on Supreme Court decision in case of Sassoon J. David and Co. P. Ltd. v. CIT [1979] 118 ITR 261 (SC) whereas Accountant Member supported contention of Revenue relying upon decision of Supreme Court in Sassoon J. David (supra). Mr. Chottaray further submitted that assessee had not expended any amount under head "advertisement and promotion of NGC Asia" but are still deriving benefit therefrom. In circumstances, according to Mr. Chhotaray, it is not permissible to allow deduction. Firstly, because benefit accruing to foreign principals was not disclosed in Form 3CEB and, secondly, because despite such benefit foreign principal had not contributed towards costs of advertising, publicity and promotion. Mr. Chhotaray relied upon order of Transfer Pricing Officer pertaining to assessment year 2008-09 to show that expenses have been debited under head "advertising and publicity in profit and loss account of assessee without disclosing benefits to foreign principals which, according to him, ought to have been disclosed. This was fourth year of assessment under section 92CA(3) of Act. first one was assessment year 2004- 05 followed by 2005-06 with which we are presently concerned. At page 2 of order of Transfer Pricing Officer it records that assessee has recorded international transactions with two of its associates, namely, principal "NGC Asia" and "FOX". transactions recorded did not disclose benefit accruing to foreign principals. He then relied upon decision of Delhi High Court in Maruti Suzuki India Ltd. v. Addl. CIT/TPO [2010] 328 ITR 210 (Delhi) in support of his submission that arm's length price has to be determined and relied upon conclusion at item (viii). said judgment observes that expenditure incurred by domestic entity, which is associated enterprise of foreign entity on advertising, promotion and marketing of its products using foreign trade mark logo does not require any payment or compensation by owner of foreign trade mark/logo to domestic entity on account of use of foreign trade mark/logo in promotion, advertising and marketing undertaken by it, so long as expenses incurred by domestic entity do not exceed expenses incurred by similarly situated and comparable independent domestic entities. Further, that expenses incurred by domestic entity which is associated enterprise of foreign entity similarly situated and comparable independent domestic entity needs to suitably compensate domestic entity in respect of advantage obtained by it in form of brand building and increased awareness of its brand in domestic market. facts in this case largely arise out of change of logo which amounted to sell of brand to domestic entity. In that case, Transfer Pricing Officer observed that Maruti has paid royalty to Suzuki in year 2004-05 whereas no compensation had been paid by Maruti to Suzuki on account of deemed sale of that trade mark. Later, order of Transfer Pricing Officer was under challenge and court came to conclusion that order passed by Transfer Pricing Officer was not based on any evidence and it is in this context that court came to conclusion set out above. conclusion in said judgment cannot be applied to facts of present case. In any event as rightly pointed out by Shri Kaka, this judgment is set aside by hon'ble Supreme Court. Mr. Chhotaray then relied upon judgment of Gujarat High Court in CIT v. Navsari Cotton and Silk Mills Ltd. [1982] 135 ITR 546 (Guj) in support of his contention that in order to qualify for deduction under section 37(1) certain conditions must be satisfied which included positive and negative tests inasmuch as expenditure must be in nature of Revenue and not capital expenditure. It must be laid out or expended wholly and for purpose of business and it must not be of nature described in section 30 to section 36 and section 80VV. One of negative tests, according to judgment, which is relied upon by Mr. Chhotaray is that expenses must not be unreasonable and out of proportion. In this respect he submits that in case at hand sum expended on publicity and promotions exceeded amount of revenue earned, therefore, same cannot be allowed as deduction. This submission of Mr. Chhotaray cannot be accepted for simple reason that amount of expenses incurred may be at times larger than actual revenue. Mr. Chhotaray also relied upon decision of Supreme Court in case of D. B. Madan v. CIT [1991] 192 ITR 344 (SC) to support his submission that it is always open to High Court to follow its earlier decision and answer question of law one way or other according as whether view taken in earlier commends itself to court or whether in its opinion earlier view needs to be re-considered. It is not necessary that similar question of law is to be answered in particular way. Mr. Chhotaray, therefore, submits that questions of law may be answered in favour of Revenue. Mr. Kaka, learned senior counsel appearing on behalf of respondentassessee, submitted that contentions of appellant are misconceived. He submitted that respondent-assessee has acquired distribution rights of two channels on exclusive basis after paying due consideration and that it is entitled to thereafter earn profits in its business of distribution. He submitted that in business of TV channels it is necessary to promote channels in order to ensure higher viewership and that higher viewership alone brings in advertising interest. He submitted that apart from business of distributing channels, respondent-assessee was also engaged in selling of advertising time on channels. sale proceeds of which are required to be shared with foreign principals, who are owners/controllers of channel and channel content. He submitted that as consideration for selling airtime to advertisers/other advertising agencies respondents earned commission at 15 per cent. of value of advertising time sold. After retaining 15 per cent. commission, sum equivalent to 85 per cent. is paid over to foreign principals. In order to generate sales of advertising time, it is necessary for respondents to publicise and promote channel and its contents thereby ensuring higher viewership which then brings in advertise interest in channels. Mr. Kaka further submitted that amount spent towards advertising and publicity of channels is for benefit of assessee who holds distribution rights for channels. But for promotion of channel, distribution rights will not generate sufficient returns since promotion and publicity alone help garner higher viewership which would entail higher distributor interest which in turn will ensure higher distribution income from operators who are end subscriber/viewer. Operator who are assured of higher viewership would be willing to pay higher fees to acquire distribution rights and promotion and publicity help generate better viewership. He further contended that expression "wholly and exclusively" used in section 37 does not mean "necessarily". He submitted that if somebody else other than assessee is also benefited from expenditure, deduction under section 37 should not be affected. He relied upon decision of Supreme Court in Sassoon J. David (supra) and submitted that merely because foreign principal was benefited by advertising, promotion and publicity it will not prevent respondentassessee from claiming benefit of deduction under section 37(1). Mr. Kaka also relied upon decision in Maruti Suzuki India Ltd. v. Addl. CIT in Civil Appeal No. 8457 of 2010 reported in [2011] 335 ITR 121 (SC); [2011] 198 Taxman 102 (SC), wherein it was held that compensation of arm's length price that Transfer Pricing Officer had decided issue pursuant to directions of High Court in that case and that findings of Transfer Pricing Officer were conclusive. assessee had not challenged order of Transfer Pricing Officer. High Court further directed Transfer Pricing Officer to decide matter in accordance with law and directed Transfer Pricing Officer who has already issued fresh show-cause notice to proceed with matter in accordance with law uninfluenced by observations/directions given by High Court in impugned judgment. Thus, Supreme Court found it to be conclusive. In instant case, order of Transfer Pricing Officer is not under challenge. question of law raised did not relate to order of Transfer Pricing Officer which is final. In circumstances, Mr. Kaka submits that there is no warrant for interference and questions must be answered in favour of assessee. Having considered rival contentions we are in agreement with Mr. Kaka. main grounds on which Revenue has questioned order of Tribunal are (a) non-disclosure in Form 3CEB of fact that principal is also beneficiary of advertising expenses; (b) that advertising and promotional expenses are not wholly for benefit of assessee but it also benefited principal who was associated enterprise; (c) that advertising and publicity expenses were far higher than amount of revenue earned and, lastly, that although foreign principals, i.e., associated enterprise benefited from advertising and publicity no compensation was paid by foreign principals to assessee to avail of such benefits. It is not possible to accept Revenue's contentions for following reasons: Firstly, contention that there was no proper disclosure of benefit before Transfer Pricing Officer cannot now be reason to entertain questions and order of Transfer Pricing Officer is final. It was admitted position that assessee is agent of foreign principal and would naturally benefit from advertising carried on by agent in India. However, these benefits were not ascertainable. contention of assessee that benefits were not ascertainable or taxable in view of extra territory appears to be correct and justified. In instant case we find that assessee has not suppressed any information. It has offered to tax its income from both business, namely, distribution business as well as advertisement and promotion business. In assessment year in question, Assessing Officer has proceeded to grant 33.33 per cent. of total advertising expenses as allowable deduction. We do not find any justification for such restriction of same. Furthermore, appellant's case during argument that fact of foreign principal benefiting had been disclosed in Form 3CEB and Transfer Pricing Officer "could" have taken different view. Admittedly, therefore, Transfer Pricing Officer had followed possible view which cannot now be faulted. contention that expenditure should have been wholly and exclusively for purpose of business of assessee under section 37(1) read with provisions of section 40A(2) as being excessive and unreasonable does not appeal to us. There can be no doubt, in instant case, that in view of decision of Supreme Court in Sassoon David (supra) it cannot be said that expenditure was not wholly or exclusively for benefit of assessee. mere fact that foreign principals also benefited does not entail right to deny deduction under section 37(1). Furthermore, it is seen that all amounts earned by assessee were brought to tax, especially in view of fact that payment of expenses were made to Indian residents and there payments were not required to be included in Form 3CEB since section 92 which governs effect of Form 3CEB covers only international transactions. Furthermore, it is seen that respondent's income from subscription fee is variable and through commission received on advertising sales is 15 per cent. of value of ad- sales. Assessing Officer's contention that assessee received fixed income is not justified and there is certainly, in our view, direct nexus between amount spent on advertising and publicity and appellant's revenue. Advertisers who advertise on these channels act through media houses and advertising agencies and they work to media plans designed in manner so as to maximise value for advertiser. They will evaluate expenditure with channel penetration in market place inasmuch as only channels with high viewership would justify higher advertising rates which is normally sold in seconds. Merely having high quality content will not ensure high viewership. This content has to be publicised. great reach of publicity, higher chances of larger viewership. larger viewership, better chances of obtaining higher advertisement revenue. higher advertisement revenue, higher will be commission earned by respondent-assessee. Accordingly, we have no doubt that there is direct nexus between advertising expenditure and revenue doubt that there is direct nexus between advertising expenditure and revenue albeit fact that there may be lean period before revenue picks up notwithstanding high amount spent on such publicity. This justifies higher expenditure vis-a-vis revenue noticed by Department. It is also not necessary that foreign enterprises must compensate Indian agent for benefit it receives or it may receive from advertisement and promotion of its channels by agent in India. agent in India earns commission from ad-sales and distribution revenue, both of which have sufficiently compensated assessee. We would not expect Revenue to determine sufficiency of compensation received by agent and as such we do not find any justification in this ground either. In circumstances we answer questions of law (a), (b) and (c) in affirmative in favour of assessee and against Revenue. In result appeal is dismissed. No order as to costs. *** Commissioner of Income-tax v. N. G. C. Network (India) P. Ltd