Case Law Details
ACIT Vs BBC World (India) Pvt. Ltd. (ITAT Delhi)
ITAT Delhi held that the pass through cost to the extent which are directly relatable to third parties, namely, advertisement and publicity; business promotion and participation in trade events are to be excluded from the cost base.
Facts-
The assessee, BBC World (India) Private Limited (BWIPL) formerly known as BBC Worldwide (India) Private Limited. During the year, 75% of the shareholding is with BBC World Limited and 25% with Worldwide Channel Investments Limited. The ultimate holding company is BBC Commercial Holding Company. BBC group is engaged in broadcasting international TV Channels throughout the world, production and distribution of TV & Radio programs and other related activities including publication and mercantile.
During the financial year relevant to the assessment year 2004-05, the assessee renegotiated its agreement with BBC World Ltd. and BBC World Distribution Ltd. An amount of Rs.7,03,70,841/- under various heads of accounts were expended by the assessee and they were reimbursed by the contracting parties. TPO examined whether reimbursement of expenses without any mark-up is justified in this case.
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