ACIT Vs Eenadu Television Private Limited (ITAT Hyderabad)
The Hyderabad ITAT decided cross appeals arising from the order of the CIT(A), NFAC, for Assessment Year 2022-23.
Revenue’s Appeal: The Revenue challenged the CIT(A)’s directions regarding depreciation on non-compete fee and the treatment of cost of production of TV serials and programmes as revenue expenditure instead of capital expenditure.
On the issue of depreciation on non-compete fee, the Revenue argued that the payment under a non-compete agreement with related parties was not allowable as depreciation under Section 32(1)(ii), that it was a self-serving arrangement, and that the CIT(A) had no power to remand the matter under Section 251. The assessee submitted that the issue had already been decided in its own case and in the case of the parent company, and that the CIT(A) had merely followed earlier Tribunal directions.
The Tribunal noted that in the assessee’s own case for AY 2011-12 it had already directed the Assessing Officer to give consequential effect to earlier Tribunal orders dealing with the same issue. It held that the CIT(A) had only directed the Assessing Officer to implement the earlier Tribunal order and had not remanded the matter for fresh adjudication. The Tribunal found no error or illegality in the CIT(A)’s order and also stated that it was directing the Assessing Officer to consider the issue in terms of the earlier Tribunal directions.
