New Delhi: The Income-Tax (I-T) department on Tuesday moved the Delhi high court against an order allowing radio channel Red FM to claim licence fee paid by it during phase I of FM radio auctions for broadcasting rights in Delhi, Mumbai and Kolkata.

The licence fee claimed by Red FM, part of Sun TV Group, stood at a total of 40.79 crore with the individual amount for the three regions being: Delhi (12.65 crore), Mumbai (26.37 crore) and Kolkata (1.77 crore).

A bench comprising justices S. Ravindra Bhat and Deepa Sharma, before whom the matter was brought, issued a notice and sought response from the radio channel before the next date of hearing.

The I-T department was appealing against an order passed by the Income Tax Appellate Tribunal (ITAT) on 24 November, 2015 which had allowed the channel to claim the licence fee paid by it. It held that the amount should not be given to the channel at one go but over the tenure of phase II auctions.

It was contended by the I-T department that allowing Red FM to claim licence fee paid by them in phase I after having migrated to phase II was not right as the licence for phase I was no longer in existence.

The tax department also relied on Section 35 ABB of the Income Tax Act, 1961 which holds that licence fee cannot be claimed when the phase it was paid in does not survive.

Red FM is a part of Digital Radio Broadcasting, which belongs to the Kalanidhi Maran-promoted Sun TV Group.

The next hearing in the case is on 19 October.

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