Transfer Pricing Adjustment under the Income Tax Act

This case involves appeals by both the Revenue and the assessee, BBC World Service India Private Limited, concerning transfer pricing adjustments for the assessment year 2009-10. The assessee, primarily involved in producing program content for radio and websites, had its income assessed at a significantly higher figure than initially declared, leading to additions made by the tax authorities. The appeals stem from the decision of the Commissioner of Income Tax (Appeals).

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘I-1’ NEW DLEHI

BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER
AND
SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER

 ITA No. 3152/Del/2016
Assessment Year: 2009-10

BBC World Service India Private
Limited, 5th floor, Hindustan
Times house, Kasturba Gandhi
Marg,
New Delhi 110001.
PAN No. AADCB2298P
Assessee/Appellant 

Vs.

 DCIT
Circle-2(1),
New Delhi.
Revenue/Respondent

ITA No. 3492/Del/2016
Assessment year: 2009-10

ACIT,
circle 4 (1),
New Delhi
Revenue/Appellant 

 Vs. 

BBC World Service India Private
Limited,
5th floor,
Hindustan Times house, Kasturba
Gandhi Marg,
New Delhi 110001.
PAN No. AACCA3104G
Assessee/Respondent

C.O. No. 275/Del/2016
(IN ITA No. 3492/Del/2016)
Assessment Year: 2009-10

BBC World Service India Private
Limited, 5th floor, Hindustan
Times house, Kasturba Gandhi
Marg,
New Delhi 110001.

 Vs. 

ACIT,
circle 4 (1),
New Delhi
PAN No. AADCB2298P
Assessee/Appellant Revenue/Respondent

Assessee by Sh. Atul Jain, AR
Ms Priyanka Nagpal, AR
Revenue by Sh. Dheeraj Jain, Sr. DR

Date of hearing: 1/7/2021
Pronouncement on 1/7/2021

ORDER

PER BENCH

ITA No. 3492/del/2016 is filed by Revenue whereas ITA No.3152/del/2016 and C.O. No. 275/del/2016 are filed by the assessee and all these matters emanate from the order dated 16/3/2016 passed by learned Commissioner of Income Tax (Appeals)-42, New Delhi (“Ld. CIT(A)”) in appeal No. 77/15-16/CIT (A)-42 in the case of BBC World Service India Private Limited (“the assessee”), for the assessment year 2009-10.

2. Brief facts of the case, relevant for the disposal of these appeals and cross objections, are that the assessee is a company primarily engaged in the business of producing program content for radio and website (on shortwave and FM frequencies) under contractual agreements with parent and other group  of companies; and that the main source of Revenue of the company is derived from its parent and other group companies and also from direct sale of programs, originally created for its parent and other group companies.

3. For the assessment year 2009-10, the assessee filed the return of income on 30/9/2009 declaring an income of Rs. 48,53,220/-, but subsequently on 31/3/2011 revised the same at an income of Rs. 72,92,419/-. Assessment under section 143(3) of the Income Tax Act, 1961 (for short “the Act”), was however, completed at Rs. 4,71,10, 092/- by making addition of Rs. 3, 98, 17, 673/-. Since the assessee got relief in appeal before the Ld. CIT(A), Revenue preferred this appeal, namely, ITA 3492/del/2016. 

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