Law:

Section:

ORDER 1. In respect of these appeals, the following common questions of law are framed:- "(i) Whether the Income Tax Appellate Tribunal was right in holding that the entire expenditure incurred by the assessee on production of programmes which became part of news archives should be allowed as a revenue expense under Section 37 of the Income Tax Act, 1961 and should not be treated as incurred for creating a capital asset? (ii) Whether the Income tax Appellate Tribunal was correct in holding that the expenditure of Rs. 57,32,689/- incurred on 'CNBC Expansion Project' was allowable as revenue expenditure and not as capital expenditure? (arising out of the assessment year 1998-99)" 2. As far as the first question i.e. whether the expenditure towards creation of the news archives is concerned, the issue is covered by the decision of this Court in ITA 1624/2006 decided on 29.04.2014. Accordingly, this question is answered in favour of the assessee and against the Revenue. 3. So far as the second issue i.e. the expenditure towards the 'CNBC Expansion Project' is concerned, the facts are that the assessee at the relevant time i.e. up to 01.04.1999 was entitled to the airtime of 1.5 'hours each day. The assessee sought to augment this capacity to 12-hours each day by paying required fee/consideration to CNBC by making separate arrangement with the CNBC. This amended expansion of the existing business arrangement was not disputed by the Revenue, however, the expenditure for an amount of Rs. 57,32,689/- incurred in respect of various items i.e. salary, Media professional charges, equipment hire charges and production expenses were disputed by the revenue. The Assessing Officer disallowed the said expenditure and held that this expenditure resulted in a capital advantage of an enduring nature. The CIT (Appeals) set aside the findings of the Assessing Officer and ITAT also rejected the Revenue's Appeal. In this regard, the findings of the ITAT are as follows:- "We have considered the facts of the case and rival submissions. Section 37(1) permits the deduction of expenditure, which is not personal or capital in nature, if it has been incurred wholly and exclusively for the…

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