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This amount also includes fees received by the Assessee for providing services in connection with sale of advertisement airtime, distribution of channels and syndication of content, including services relating to pre-production, post production, playout, uplinking and transmission of the channels owned by the associated enterprises.
3.2.6 The assessee had benchmarked its international transactions entered into with its associated enterprises situated in India (Indian AE‟s) using the Indian AEs as tested parties. With respect to the international transactions relating to availing services in connection with sale of advertisement airtime, distribution of channels and syndication of content , including services relating to pre-production , post production , playout , uplinking and transmission of the channel of the assessee, it was submitted that similar to the past years, the transfer pricing analysis was done under Profit Split Method and TNMM with reference to the revenue generated from India. Out of the above said international transactions mentioned above, the TPO observed that transactions at nos. 1, 2,3, 6 and 7 are mirror transactions with Indian AEs and the same had been discussed in TP assessment of those Indian AEs by TPO-4(1), Mumbai. The TPO observed that transactions related to nos. 4 and 5 are covered under PSM method adopted by the assessee. The TPO observed that assessee has adopted Profit Split Method to be the most appropriate method(MAM) and consolidated global Page | 8 I.T.A. No.1519 & 1637/Mum/2016 profitability of channel companies were applied to the India revenues generated by the Channel Companies for the 12 month period from 1st April 2010 to 31st March 2011.

6. Aggrieved by an assessment framed by the AO vide assessment order dated 14.01.2016 passed u/s 144C(13) read with Section 143(3) of the 1961 Act , in pursuance to Directions issued by learned DRP u/s 144C(5) of the 1961 Act, the assessee has now filed an appeal before the tribunal. At the outset Ld. Senior Counsel for the assessee submitted that both the appeals filed by different assessee‟s before the tribunal raises identical issues as facts are similar and these appeals can be heard together and decided vide common order. It was submitted that there are two effective grounds being ground no. 5 and ground no. 7 raised by the assessee in memo of appeal filed with tribunal with respect to appeal number ITA no/ 1519/M/2016 , while rest of the grounds are inter-related to these two grounds of appeals and if these two grounds are adjudicated on merits in accordance with law, then the assessee grievances before the tribunal will be resolved. It was submitted that rest of the grounds be dismissed as not been pressed. It was submitted that the impugned assessment year before the tribunal is AY 2011-12. It was explained that the assessee is a non-resident limited liability partnership firm and is a tax resident of Hong Kong belonging to Star Television group of cases. The assessee owned satellite television „Channel‟ being Channel V. The assessee also owned the content broadcast on this Channel. It was submitted that assessee has adopted Profit Split method to benchmarking its international transactions with AE‟s , which is not under dispute as it is accepted by Revenue. It was explained that the same methodology was adopted for earlier years also. The ld. Senior Counsel for the assessee drew our attention to order passed by the TPO. It was submitted that profit attributable to the assessee by adopting Profit Split Method was to the tune of 15.81%. It was submitted that while applying PSM method, all intra group transactions are eliminated and thereafter based on contribution of each entity in the group profitability attributable to each entity is worked out. The learned Senior Counsel for the assessee argued that , iner-alia, two comparables viz. IBN18 Broadcast Limited and Raj Television Limited, were rejected by the authorities below on the ground that these are persistent loss making companies and it was brought to our notice that IBN18 Broadcast Ltd., had an operating margin of 4.33% and it Page | 31 I.T.A. No.1519 & 1637/Mum/2016 was not a persistent loss making company and Revenue erred on excluding this entity as a comparable while computing ALP. Our attention was drawn to page 370 of the paper book filed with tribunal, wherein assessment order in the case of Star Ltd. ( Fox International Channels Asia Pacific Limited) , dated 29.01.2016 passed u/s. 144C(13) r.w.s. 143(3) of the 1961 Act for AY 2011-12 by its AO is placed and it was brought to our notice that DRP directed AO in this case to accept IBN18 Broadcast Ltd as a comparable, if the assessee is able to demonstrate that the said company IBN18 has earned profit for F.Y. under consideration, which was accepted by AO while framing aforesaid assessment order dated 29.01.2016 passed u/s 143(3) read with Section 144C(13) of the 1961 Act based on the report of the TPO agreeing with a view of leaned DRP that this comparable is to be included while computing ALP as IBN18 Braodcast Limited is not a persistent loss making company. Our attention was drawn to page no. 392 and 393 of the paper book, wherein in vide said assessment order , the AO accepted the directions of DRP , by holding as under:-

6.4 It was also submitted by learned counsel for assessee that for AY 2011- 12 , the assessee had computed ALP @ 15.81% by following Profit Split Method and to compute profit arising out of transactions with non AE @ 28% is not justified as it defies all logics. It was submitted that no benchmarking is to be separately done for non-AE transactions as based on law and facts, it is illegal to compute ALP in the case of non AE. Our attention was also drawn to para 4.5 of tribunal order for AY 2007-08 and it was submitted that Rule 10 is not applicable in the instant case. It was submitted that assessees case will fall within limit of (+)(-)5% if the comparables namely IBN18 and Raj TV are included and hence no TP adjustments are required , in case aforesaid contentions of the assessee stood accepted by Bench . It was also submitted that with respect to other appeal in ITA no. 1637/Mum/2016 for AY 2011-12 in the case of Star International Movies Limited, facts are similar to appeal in ITA no. 1519/Mum/2016 and similar contentions shall apply .

This amount also includes fees received by the Assessee for providing services in connection with sale of advertisement airtime, distribution of channels and syndication of content, including services relating to pre-production, post production, playout, uplinking and transmission of the channels owned by the associated enterprises.
7.6 The assessee had benchmarked its international transactions entered into with its associated enterprises situated in India (Indian AE‟s) using the Indian AEs as tested parties. The transfer pricing analysis was done under Profit Split Method and TNMM with reference to the revenue generated from India. Out of the above said international transactions mentioned above, the TPO observed that transactions at nos. 1, 2,3, 6 and 7 are mirror transactions with Indian AEs and the same had been discussed in TP assessment of those Indian AEs by TPO-4(1), Mumbai. The TPO observed that transactions related to nos. 4 and 5 are covered under PSM method adopted by the assessee. The TPO observed that assessee has adopted Profit Split Method to be the most appropriate method(MAM) and consolidated global profitability of channel companies were applied to the India revenues generated by the Channel Companies for the 12 month period from 1st April 2010 to 31st March 2011.