SET SATELLITE ( SINGAPORE ) PTE LTD ( NOW KNOWN AS MSM SATELLITE ( SINGAPORE) P. LTD), MUMBAI V. DDIT (IT) 2(1), MUMBAI

CO 133/MUM/2010

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 6887 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 17-01-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 21-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL LALA
• Keywords: Business income; Rule of consistency

Judgement Text

SET SATELLITE (SINGAPORE) PTE LTD IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI MUMBAI MUMBAI MUMBAI L LL L BENCH BENCH BENCH BENCH MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI MUMBAI BENCHES, MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI J SUDHAKAR REDDY, J SUDHAKAR REDDY, J SUDHAKAR REDDY, J SUDHAKAR REDDY, AM AM AM AM & SHRI & SHRI & SHRI & SHRI VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM VIJAY PAL RAO, JM ITA NO. ITA NO. ITA NO. ITA NO. 3445/MUM/2008 3445/MUM/2008 3445/MUM/2008 3445/MUM/2008 (ASST YEAR (ASST YEAR (ASST YEAR (ASST YEAR 2001 2001 2001 2001- -- -02 0202 02 ) )) ) & && & CROSS OBJECTION NO. 133/MUM/2010 CROSS OBJECTION NO. 133/MUM/2010 CROSS OBJECTION NO. 133/MUM/2010 CROSS OBJECTION NO. 133/MUM/2010 THE DY DIRECTOR INCOME TAX(IT)2(1), MUMBAI VS SET SATELLITE (SINGAPORE) PTE LTD RSM & CO, AMBIT RSM HOUSE 449 SENAPATI BAPAT MARG, LOWER PAREL MUMBAI 13 (APPELLANT (APPELLANT (APPELLANT (APPELLANT/RESPONDENT /RESPONDENT /RESPONDENT /RESPONDENT ) )) ) (RESPONDENT (RESPONDENT (RESPONDENT (RESPONDENT/CROSS OBJECTOR /CROSS OBJECTOR /CROSS OBJECTOR /CROSS OBJECTOR) )) ) PAN NO. PAN NO. PAN NO. PAN NO. AABCS9229H AABCS9229H AABCS9229H AABCS9229H ASSESSEE BY SH SUNIL LALA REVENUE BY MRS MALATHI SRIDHARAN DT.OF HEARING 17 TH JAN 2012 DT OF PRONOUNCEMENT 20 TH ,JAN 2012 ORDER ORDER ORDER ORDER PER PER PER PER VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO, , , , JM JMJM JM THIS APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 29 TH FEB 2009 OF THE CIT(A) FOR THE ASSESSMENT YEAR 2001-02. 2 THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE GR OUND IN THIS APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A SSESSING OFFICER ON ACCOUNT OF DISTRIBUTION REVENUES WITHOUT APPRE CIATING THAT THE ASSESSEE HAD THE RIGHT TO RECEIVE THE SUBSCRIPTION REVENUE AND THE FACT THAT THE SAME WAS FOREGONE IN FAVOUR OF SET IN DIA PVT LTD DOES NOT CHANGE THE CHARACTER OF TAXABILITY OF THE INCOM E IN THE HANDS OF THE ASSESSEE. SET SATELLITE (SINGAPORE) PTE LTD 2 3 WE HAVE HEARD THE LD DR AS WELL AS THE LD AR OF T HE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ISSUE RAISED BY THE REVENUE HAS BEEN CONSIDERED AND DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSE SSMENT YEAR 2002-03. HE HAS POINTED OUT THAT THE TRIBUNAL WHILE DECIDING THE APPEAL FOR THE ASSESSMENT YEAR 2002-03 AFTER TAKING INTO CONSIDERATION THE F ACT THAT THE SAME AMOUNT COULD NOT BE TAXED IN THE HANDS OF BOTH THE SET IND IA PVT LTD AS WELL AS THE ASSESSEE DECIDED THE ISSUE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. HE HAS ALSO FILED A COPY OF THE ORDER OF THE TRIBUN AL FOR THE ASSESSMENT YEAR 2002-03 IN THE CASE OF M/S SET INDIA PVT LTD AND SU BMITTED THAT THE SAID INCOME HAS BEEN ASSESSED TO TAX IN THE HANDS OF SET INDIA PVT LTD., WHICH HAS BEEN CONFIRMED BY THE TRIBUNAL VIDE ORDER DATED 30.4.201 0 IN ITA NO.5212/MUM/2005. 4 AFTER CONSIDERING THE RIVAL CONTENTION AS WELL A S THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT AN IDENTICAL ISSUE HAS BEEN CO NSIDERED AND ADJUDICATED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 2002-03 VIDE ORDER DATED 28.1.2011 IN ITA NO.5352/MUM/2005 IN WHICH BO TH OF US ARE PARTIES TO THE ORDER. IN PARA 22 OF THE SAID ORDER, THE TRIBUNAL H AS ADJUDICATED THE ISSUE AS UNDER: 22. COMING TO GROUND NO.3, THE ISSUE WHETHER THE S UBSCRIPTION INCOME IN QUESTION IS BUSINESS INCOME OR ROYALTY IS NOT IN DISPUTE AS THE REVENUE HAS NOT DISPUTED THE SAME. THE FIRST AP PELLATE AUTHORITY HAS TREATED THE INCOME AS BUSINESS INCOME. WHILE SO , THE ALTERNATIVE CONTENTION OF THE ASSESSEE THAT IF THIS AMOUNT IS TAKEN AS INCOME OF THE ASSESSEE THEN THE AMOUNT PAID TO S ET INDIA IS TO BE TREATED AS EXPENDITURE, RESULTING IN NIL INCOME IS RIGHT AND HAS TO BE ACCEPTED. IN ANY EVENT, THE SAME AMOUNT COULD NO T BE TAXED BOTH IN THE HANDS OF THE SET INDIA AS WELL AS IN TH E HANDS OF THE ASSESSEE. FOR THIS REASON, WE UPHOLD THE ORDER OF T HE FIRST APPELLATE AUTHORITY AND DISMISS GROUND NO.3 OF THE REVENUE. SET SATELLITE (SINGAPORE) PTE LTD 3 5 SINCE NOTHING HAS BEEN BROUGHT BEFORE US TO SHOW THAT EITHER THE SAID ORDER HAS BEEN REVERSED OR THE STAYED; THEREFORE, T O MAINTAIN THE PRINCIPLE OF CONSISTENCY, WE DECIDE THIS ISSUE AGAINST THE REVEN UE AND IN FAVOUR OF THE ASSESSEE IN VIEW OF THE EARLIER ORDER OF THE TRIBUN AL IN ASSESSEES OWN CASE. CROSS OBIECTION NO.133/MUM/2010 (BY THE ASSESSEE) CROSS OBIECTION NO.133/MUM/2010 (BY THE ASSESSEE) CROSS OBIECTION NO.133/MUM/2010 (BY THE ASSESSEE) CROSS OBIECTION NO.133/MUM/2010 (BY THE ASSESSEE) 6 THE ID AR OF THE ASSESSEE HAS SUBMITTED THAT IN CASE THE REVENUES APPEAL IS DISMISSED, THEN THE CROSS OBJECTION FILED BY THE ASSESSEE WOULD BECOME INFRUCTUOUS AND MAY BE DISMISSED. 7 SINCE NO SEPARATE ISSUE HAS BEEN RAISED IN THE CROSS OBJECTION; ACCORDINGLY, IN VIEW OF OUR FINDING IN REVENUES AP PEAL, THE CROSS OBJECTION FILED BY THE ASSESSEE HAS BECOME INFRUCTUOUS AND ACCORDIN GLY, DISMISSED. 8 IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS THE CROSS OBJECTION BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THE 20 TH ,DAY OF JAN 2012. SD/ SD/- ( (( ( J SUDHAKAR REDDY J SUDHAKAR REDDY J SUDHAKAR REDDY J SUDHAKAR REDDY ) )) ) ACCOUNTANT MEMBER ( (( ( VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO VIJAY PAL RAO ) )) ) JUDICIAL MEMBER PLACE: MUMBAI : DATED:20 TH ,JAN 2012 RAJ* RAJ* RAJ* RAJ* SET SATELLITE (SINGAPORE) PTE LTD 4 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI