Uday S. Jagtap 950-17-ITXA-101=.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 950 OF 2017 Pr. Commissioner of Income Tax-16 Appellant v/s. M/s. Star Entertainment Media Pvt. Ltd. Respondent Mr. Suresh Kumar for appellant Mr. P.F. Kaka, Senior Counsel a/w Mr. Divesh Chawla i/b Mr. Atul Jasani for respondent CORAM : M.S. SANKLECHA & NITIN JAMDAR, J.J. DATED : 14 th OCTOBER, 2019 P.C. 1. This appeal under Section 260A of Income Tax Act, 1961 (Act) challenge order dated 29 th April, 2016 passed by Income Tax Appellate Tribunal (Tribunal). This appeal relates to Assessment Year 2010-11. 2. Revenue has urged following re-framed questions of law for our consideration :- (a) Whether on facts and in circumstances of case and in law, Tribunal is justified in holding that disallowance of Channel Placement Fee cannot be made under Section 40(a)(ia) of I.T. Act when tax was deducted 1 of 6 ::: Uploaded on - 17/10/2019 ::: Downloaded on - 18/10/2019 17:20:15 ::: Uday S. Jagtap 950-17-ITXA-101=.doc thereon u/s 194C instead of Sec. 194J of I.T. Act? (b) Whether on facts and in circumstances of case and in law, Tribunal has erred in upholding order of DRP to delete disallowance on account of advertising, marketing and publicity expenses incurred by assessee for promotion of its channels without denying fact that foreign sister concern of assessee is benefited by these expenses? (c) Whether on facts and in circumstances of case and in law, Tribunal has erred in holding that deduction of tax at lesser rate would not lead to applications of provision of section 40(a)(ia) of Act without appreciating that Hon ble Kerala High Court in its judgment dated 20.07.2015 in case of CIT-1, Kochi Vs. PVS Memorial Hospital Ltd. (2015) 60 taxmann.com 69 (Kerala) has held that whenever tax was deductible under Section 194J but was deducted under section 194C, such deduction does not satisfy requirement of Section 40(a)(ia) of I.T. Act, 1961? 3. Regarding question no.(a) :- (a) impugned order of Tribunal dismissed Revenue s appeal by holding that amounts paid to cable operators for channel placement fee was subject to tax deduction at source under Section 194C of Act and not under Section 194J of Act as contended by Revenue. This by following decision of its co-ordinate benches in 2 of 6 ::: Uploaded on - 17/10/2019 ::: Downloaded on - 18/10/2019 17:20:15 ::: Uday S. Jagtap 950-17-ITXA-101=.doc case of Star Den Media Services Pvt. Ltd. (ITA No. 1418/M/2014) rendered on 5th August, 2015 and in case of NCG Networks (ITA No. 1525/M/2015) rendered on 12th July, 2016. (b) Mr. Suresh Kumar, learned Counsel appearing for Revenue very fairly states that issue arising in this case is covered by decisions of this Court in CIT Vs. M/s. Star Den Media Services Pvt. Ltd. (Income Tax Appeal No.1237 of 2016) decided on 4th January, 2019 and CIT Vs. M/s. NCG Networks India Pvt. Ltd. (Income Tax Appeal No.397 of 2015). In both orders, this Court held that payments made for channel placement fee are subject to tax deduction at source under Section 194C of Act. No distinguishing feature in this case is shown, which would warrant different view. (c) Therefore, for reasons indicated in above two orders dated 29th January, 2018 and 4th January, 2019 passed by this Court, this question no.(a) does not give rise to any substantial question of law. Thus, not entertained. 3 of 6 ::: Uploaded on - 17/10/2019 ::: Downloaded on - 18/10/2019 17:20:15 ::: Uday S. Jagtap 950-17-ITXA-101=.doc 4. Regarding question no.(b) :- (a) respondent had incurred expenditure of Rs.9.75 crores by way of marketing and publicity expenses for promoting its regional channels Star Pravaha and Star Maza . respondent claimed above marketing and publicity expenses as deduction under Section 37(1) of Act. Assessing Officer held that promotion expenses incurred not only benefited respondent but also resulted in benefit to M/s. Star Ltd. who owned Star brand. In above context, Assessing Officer allowed only 75% of Rs.9.75 crores incurred by way of marketing and publicity expenses under Section 37(1) of Act. Thus, disallowed Rs.2.44 crores being balance 25% of marketing and publicity expenses incurred by respondent. (b) Dispute Resolution Panel (DRP) on application of petitioner, deleted disallowance. (c) On appeal by Revenue, Tribunal held that once it is not disputed that expenses were primarily incurred for purpose of business, incidental benefit to some other party from such expenses, would not reduce allowability of such 4 of 6 ::: Uploaded on - 17/10/2019 ::: Downloaded on - 18/10/2019 17:20:15 ::: Uday S. Jagtap 950-17-ITXA-101=.doc expenditure as deduction. This more particularly when same has been incurred in course of and for purpose of business. impugned order of Tribunal held that 100% expenditure of Rs. 9.75 crores by way of marketing and publicity expenses are allowable as expenses deductible under Section 37(1) of Act. This by following decision of this Court in CIT Vs. NCG Networks India (Income Tax Appeal No.538 of 2012) decided on 13th October, 2014 and decision of this Court in CIT Vs. Star India Pvt. Ltd. (Income Tax Appeal No. 165 of 2019) decided on 24th March, 2009. (c) Revenue has not able to show any distinguishing features in present facts which would make decisions of this Court in NCG Networks India Ltd. (supra) and Star India Pvt. Ltd. (supra) inapplicable to present facts. (d) In view of fact that this issue is concluded by decisions of this Court in favour of respondent, question as proposed does not give rise to any substantial question of law. Thus, not entertained. 5 of 6 ::: Uploaded on - 17/10/2019 ::: Downloaded on - 18/10/2019 17:20:15 ::: Uday S. Jagtap 950-17-ITXA-101=.doc 5. Regarding question no.(c) :- (a) In view of our answer to question (a) above, this question has become academic. (b) In view of fact that this question has become academic, same is not being entertained. 6. In view of above, appeal is dismissed. (NITIN JAMDAR, J.) (M.S. SANKLECHA, J.) 6 of 6 ::: Uploaded on - 17/10/2019 ::: Downloaded on - 18/10/2019 17:20:15 ::: Pr. Commissioner of Income-tax-16 v. Star Entertainment Media Pvt. Ltd