Case Law Details
Star India Pvt. Ltd. Vs ACIT (ITAT Mumbai)
The issue under consideration is whether the disallowance made on account of depreciation on payment of brand license fees is justified in law?
In the present case, the assessee, M/s. Star India Pvt. Ltd. is engaged in producing and promoting television programs, movies, and broadcasting of the same on satellite television channels. The assessee also exports programs to overseas media companies and provides other media services. The assessee also acts as an agent for advertisement as well as for overseas media companies and carries all channel subscription business. The AO disallowed the depreciation on payment of brand license fees and the same was accepted by the CIT(A). The order of the CIT(A) was challenged by the assessee.
ITAT states that once the payments including the amount have been approved by the competent authority (RBI), that had specifically considered the value of the brand license, fees paid for the STAR Mark and there cannot be any disallowance of expenses by the TPO that the assessee has not gained any benefits and no disallowance shall be made. ITAT find that the year under appeal is the third year of the claim of depreciation by the assessee on payment of brand license fees. Respectfully following the aforesaid decision in assessee’s own case by this Tribunal, ITAT direct the L’d. AO to delete the disallowance made on account of depreciation on payment of brand license fees.
FULL TEXT OF THE ITAT JUDGEMENT
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