Appeal details
Counselvise Citation
[2019] 117 COUNSELVISE.COM (IT) 0448 (ITAT-AGRA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
8 year(s) 13 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
16-05-2019
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
01-05-2013
Assessment Year
2007-2008
Appeal Filed On
03-05-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.116/AGRA/2011 AND 61/AGRA/2012 ASSESSMENT YEARS: 2007-08 & 2008-09 INCOME TAX OFFICER (A.O.), VS. SHRI BAL KISHAN GU PTA, WARD-1(4), ALIGARH. PROP. M/S. VARUN CABLE NETW ORK, GALI KALIA, MANIK CHOWK, ALIGARH. (PAN : AHPPG 6681 F). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. D.R. RESPONDENT BY : SHRI PANKAJ GARGH, ADVOCATE DATE OF HEARING : 01.05.2013 DATE OF PRONOUNCEMENT : 24.05.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THESE ARE APPEALS FILED BY THE REVENUE AGAINST TWO DIFFERENT ORDERS DATED 21.02.2011 AND 30.11.2011 PASSED BY THE LD. CIT(A), GHAZIABAD FOR THE ASSESSMENT YEARS 2007-08 & 2008-09 RESPECTIVELY. 2. THE REVENUE HAS RAISED THE FOLLOWING EFFECTIVE G ROUNDS OF APPEAL :- 2 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 ITA NO.116/AGRA/2011 FOR A.Y. 2007-08 1. THE LD. CIT(APPEALS) ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCES MADE BY AO AMOUNTING TO RS.72,72,807/ - STATING THAT NATURE OF TRANSACTION BETWEEN THE ASSESSEE AND THAT OF DIFFERENT CHANNELS PROVIDERS IN MORE AKIN TO MANUFACTURER AND DISTRIBUTORS RATHER THAN CONTRACTOR AND SUBCONTRACTOR. 2. THE LD. CIT(APPEALS) IS ERRED IN LAW AND ON FACT S IN HOLDING THAT THERE WAS NO OBLIGATION ON PART OF THE ASSESSE E TO COMPLY WITH THE PROVISIONS OF SECTION 194C. ITA NO.61/AGRA/2012 FOR A.Y. 2008-09 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE NATURE OF TRANSACTION BETWEEN THE ASSESSEE AND DIFF ERENT CHANNELS IS MORE AKIN TO MANUFACTURE AND DISTRIBUTOR RATHER THA N CONTRACTOR AND SUB-CONTRACTOR, THEREFORE PROVISIONS OF SECTION 194 C IS NOT APPLICABLE. 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) OF THE IT ACT AMOUNTING TO RS.67,90,170/-, STATING THAT THERE WAS NO OBLIGATIO N ON PART OF THE ASSESSEE TO COMPLY WITH THE PROVISIONS OF SECTION 1 94C OF THE IT ACT AND IGNORED THE RATIC LEAD DOWN BY HONBLE PUNJAB A ND HARYANA HIGH COURT IN THE CASE OF KURUKSHETRA DARPANS (P) L TD. VS. COMMISSIONER OF INCOME TAX IN 217 CTR PH 326, WHERE IN IT IS HELD THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOU RCE IN TERMS OF SECTION 194C OF THE IT ACT ON PAYMENTS MADE TO THE LICENSOR FOR OBTAINING TV SIGNALS, CABLE TV NETWORK OWNED BY THE ASSESSEE. 3 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 3. THE GROUNDS OF APPEALS FOR BOTH THE YEARS ARE BA SED ON IDENTICAL SET OF FACTS. THE LD. REPRESENTATIVES OF THE PARTIES SUBMITTED TH AT THE FACTS LEAD IN A.Y. 2007-08 AND THEY MADE THEIR SUBMISSIONS ACCORDINGLY. IN TH E LIGHT OF THE FACTS, WHILE DECIDING THE ISSUE, WE CONSIDER THE FACTS OF THE CA SE FOR A.Y. 2007-08. ITA NO.116/AGRA/2011 FOR A.Y. 2007-08 4. THE BRIEF FACTS OF THE CASE FOR A.Y. 2007-08 ARE THAT THE ASSESSEE ENJOYS INCOME FROM HIS PROPRIETARY CONCERN M/S. VARUN CABL E NETWORK, ALIGARH WHICH IS ENGAGED IN CABLE TV OPERATION. DURING THE ASSESSME NT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS FILED COPIES OF AGREE MENT DEEDS WITH M/S. STAR INDIA PRIVATE LIMITED, M/S ESPN SOFTWARE INDIA PVT. LTD. AND M/S ZEE TURNER LIMITED. REST OF THE AGREEMENT DEEDS HAVE NOT BEEN FURNISHED BY THE ASSESSEE. FROM THE PERUSAL OF THESE AGREEMENT DEEDS, THE A.O. NOTED TH AT THERE IS A WRITTEN CONTRACT BETWEEN THE ASSESSEE AND THE RESPECTIVE CHANNELS UN DER WHICH THE ASSESSEE IS MAKING PAYMENT OF SUBSCRIPTION CHARGES AT THE RATES AND TERMS & CONDITIONS PRESCRIBED IN THE WRITTEN AGREEMENTS. THE A.O. MEN TIONED AS PER CLAUSE (B) OF EXPLANATION III BELOW SUB-SECTION (2) OF SECTION 19 4C OF THE INCOME TAX ACT 1961, WHEREIN IT IS PROVIDED THAT FOR THE PURPOSE OF SUB- SECTION (1) OF SECTION 194C, THE TERM WORK INCLUDES BROADCASTING AND TELECASTING I NCLUDING PRODUCTION OF 4 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 PROGRAMMER FOR SUCH BROADCASTING AND TELECASTING.. HOWEVER, IN THE BILLS OF THE RESPECTIVE CHANNELS THE CLASSIFICATION OF THE SERVI CES AGAINST WHICH THE PAYMENT IS BEING MADE HAS BEEN MENTIONED AS BROADCASTING. T HE A.O. NOTED THAT THE AGGREGATE PAYMENTS MADE TO THESE CHANNELS AMOUNT TO RS.90,64,093/-,. OUT OF THIS AMOUNT THE PAYMENTS RECEIVED FROM THE OWN CUSTOMERS OF THE ASSESSEE IS RS.17,91,286/-. FOR THIS AMOUNT, THERE ARE TWO PAR TIES, ONE IS THE ASSESSEE AS PRINCIPLE PERSON AND THE OTHER IS THE CHANNELS TO W HOM THE ASSESSEE IS MAKING PAYMENT AS PAYMENT TO CONTRACTOR. THE A.O. NOTED T HAT ON THIS AMOUNT THE PROVISIONS OF SECTION 194C OF THE ACT ARE NOT APPLI CABLE. IN RESPECT OF THE BALANCE AMOUNT OF RS.72,72,807/-, THERE ARE THREE PARTIES I N THE PICTURE. THE PRINCIPLE PARTIES ARE THE SUB-CABLE OPERATORS WHO ARE MAKING PAYMENT TO THE ASSESSEE AGAINST THE SERVICES PROVIDED BY IT. THE A.O. NOTED THAT T HIS PAYMENT AND TRANSACTIONS COMES UNDER THE DEFINITION OF PAYMENT TO THE SUB-CO NTRACTOR. UNDER THESE CIRCUMSTANCE, THE A.O. NOTED THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE AT THE PRESCRIBED RATES APPLICABLE FOR THE YEAR UNDER CONSIDERATION. HOWEVER, IN REPLY DATED 20.11.2009 THE ASSESSEE ADMITTED THAT THE ASS ESSEE HAS NOT DEDUCTED ANY AMOUNT OF TAX AT SOURCE ON THE PAYMENTS MADE TO THE SE CHANNELS. THE A.O. NOTED THAT THE PROVISIONS SECTION 40(A)(IA)(IV) IS APPLIC ABLE IN THIS CASE. THUS, THE AMOUNT OF RS.72,72,807/- ON WHICH NO TDS HAS BEEN M ADE IS NOT LIABLE TO BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER T HE HEAD PROFIT & GAINS OF 5 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 BUSINESS OR PROFESSION SHOWN BY THE ASSESSEE. A N OTICE WAS, THEREFORE, SENT TO THE ASSESSEE ON 30.11.2009, REQUIRING THE ASSESSEE TO E XPLAIN AS TO WHY THE ADDITION OF THE SAID AMOUNT MAY NOT BE MADE TO HIS TOTAL INCOME DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE SENT REPLY ON 10.12.20 09 WHICH HAS BEEN REPRODUCED BY THE A.O. IN HIS ORDER AT PAGE NO.8. THE A.O. FR OM THE PERUSAL OF THE REPLY OF THE ASSESSEE FOUND THAT THE REPLY IS TOTALLY FALSE, MIS LEADING, ABSURD AND IRRELEVANT AS IT APPEARS THAT THE ASSESSEE HAS NOT UNDERSTOOD THE IS SUE UNDER CONSIDERATION. THE A.O. HAS INSERTED SOME COPY OF RECEIPTS OF M/S STAR INDIA PVT. LTD. M/S ESPN SOFTWARE INDIA PVT. LTD. AND M/S SET DISCOVERY PVT. LTD. IN HIS ORDER AT PAGE NOS.9 & 10. THE A.O. NOTED THAT ON EACH OF THE THREE REC EIPTS MENTIONED ABOVE THE CLASSIFICATION OF SERVICE HAS CLEARLY BEEN MENTIONE D AS BROADCASTING. THEREFORE, THE A.O. OBSERVED THAT IN THIS ISSUE PROVISION OF S ECTION 40(A)(IA)(IV) IS APPLICABLE. THUS, THE AMOUNT OF RS.72,72,807/- ON WHICH NO TDS HAS BEEN MADE IS NOT LIABLE TO BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE U NDER THE HEAD PROFIT & GAINS OF BUSINESS OR PROFESSION. THE A.O. ACCORDINGLY M ADE ADDITION OF RS.72,72,807/- BY DISALLOWING THIS EXPENDITURE FOR A.Y. 2007-08. ON IDENTICAL SET OF FACTS, SIMILAR ADDITION OF RS.67,90,170/- WAS MADE BY THE A.O. IN A.Y. 2008-09. 5. THE CIT(A) NOTED THE NATURE OF TRANSACTIONS AS U NDER :- (PAGE NOS.26 TO 28) 6 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 CABLE TELEVISION REFERS TO COMMUNITY ANTENNA TELEV ISION (CATV). CATV DOES NOT BROADCAST, BUT PICKS UP SIGNA LS AT A CENTRAL ANTEENA AND DELIVERS THEM TO INDIVIDUAL SUBSCRIBERS VIA COAXIAL OR OPTICAL-FIBRE CABLES. ORIGINALLY DESIGNED FOR AREA S WITH POOR RECEPTION AND NO LOCAL STATION, CABLE TELEVISION, N EARBY PRIVATE FRANCHISE, INCREASINGLY RELAYS SATELLITE TRANSMISSI ON FROM THE CENTRAL ANTENNA. TELEVISION COMPANIES BEAM THESE SIGNALS TO THE SATE LLITE FROM GROUNDS STATIONS. THE SATELLITES TRANSMIT THE SIGNA LS BACK TO VIEWERS' DISH-SHAPED RECEIVING AERIALS, OR TO CABLE-OPERATOR S' LOCAL TRANSMITTING STATIONS, TO BE FURTHER DISTRIBUTED TO THE VIEWERS THROUGH CABLES. THESE DAYS, WITH NEWER TECHNOLOGY, THESE TV PROGRAM S ARE TRANSMITTED EVEN THROUGH PHONE CONNECTIONS. SO, TH E CABLE OPERATORS ARE REPLACED, AS A CONDUIT OR DISTRIBUTOR FOR SUCH TRANSMISSION, BY THE PHONE/INTERNET-PROVIDERS. IT IS COMMONLY KNOWN THAT VARIOUS TV CHANNEL LIKE Z EE, SONI, ESPN ETC. BEAM THEIR PROGRAMS TO THE SATELLITE, FRO M WHERE THESE PROGRAMS ARE DOWNLOADED IN THE PACKAGES BY MULTY-SY STEM OPERATORS, WHO DISTRIBUTE/TRANSMIT THESE PROGRAMS TO GENERAL P UBLIC EITHER DIRECTLY OR THROUGH SUB-DISTRIBUTOR WHICH ARE CALLE D SUB-CABLE OPERATORS. THE PUBLIC PAYS SUBSCRIPTION FEE, PER MO NTH TO THE SUB- CABLE OPERATORS (SCOS), OR TO CABLE OPERATORS (COS) AS THE LINKAGE MAY BE. THESE MONTHLY SUBSCRIPTIONS ARE POOLED TOGE THER FROM VARIOUS HOUSE HOLD OR SCOS IN THE HANDS OF COS/MSOS, AND AR E FORWARDED TO THE VARIOUS PROGRAMS NETWORKS NAMELY ZEE, ESPN, SON I, SET MAX ETC., WHICH ARE CHANNEL OPERATORS, RUNNING MULTIPLE CHANN ELS OF ENTERTAINMENT, NEWS; SPORTS OR OTHER CHANNELS OF KN OWLEDGE AND ENTERTAINMENT. THUS, THIS ENTIRE SYSTEM FOR PROVIDING ENTERTAINMEN T AND KNOWLEDGE, IS LIKE MANUFACTURING AND MARKETING ANY COMMODITY, TO THE PUBLIC, THE PRICE OF WHICH COMMODITY IS COLLECT ED FROM VARIOUS HOUSE HOLD DEPENDING ON WHICH PACKAGE OR HOW MANY C HANNEL ONE SUBSCRIBES TO. THE COLLECTION OF PAYMENTS MADE BY VARIOUS HOUSE HOLD I.E. PUBLIC IS MADE NOT DIRECTLY TO THE CHANNEL OPE RATORS BUT INDIRECTLY 7 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 THROUGH COS AND SCOS. THE PACKAGE OF GOODS/COMMODI TIES IS DETERMINED BY THE CHANNEL OPERATORS, WHO SIGNAL SUC H PROGRAMS INTO THE SATELLITE. THE PUBLIC GETS PROGRAMS OF HIS CHO ICE THROUGH TRANSMISSION NETWORK BEING OPERATED BY MSOS/COS/SCO S. ONCE THE HOUSE HOLD SUBSCRIBES TO A PARTICULAR PACKAGE; IT H AS TO PAY PRESCRIBED MONTHLY FEE, WHETHER IT WATCHES ALL PROG RAMS OR ONLY FEW OF THEM OR, EVEN IF NOT A SINGLE PROGRAM. IN BRIEF, THIS ENTERTAINMENT AND KNOWLEDGE PROGRAMS ARE LIKE COMMODITIES PUT-UP BY THE CHANNEL OPERATORS IN THE MARKET (IN THE AIR) WHICH ARE THEN BROUGHT BY PUBLIC ACCORDING TO THE C HOICE (SUBSCRIPTION OF VARIOUS PACKAGES HAVING DIFFERENT PERMUTATION AND COMBINATION OF CHANNELS). IN THIS MARKET FOR CHANN ELS OR PROGRAMS; THE ASSESSEE IS MERELY THE MEDIATOR, MORE CORRECTLY IDENTIFIABLE AS DISTRIBUTOR ; BECAUSE IT DISTRIBUTES THESE CHANNELS TO VARIOUS HOUSE HOLD THROUGH SET-UP OF INSTRUMENT PROVIDED BY CHANN EL OPERATORS. THE ARRANGEMENT DRAWN BETWEEN CHANNEL OPERATORS AND MSC S/COS LIKE ASSESSEE ESTABLISHES THIS ARRANGEMENT. THEREFORE, I HOLD THAT THE RELATION BETWEEN CHANNEL PROVIDERS AND ASSESSEE IS MORE AKIN TO MANUFACTURE AND DISTRI BUTOR; OR A DISTRIBUTOR (STAR TV, ZEE, SONY ETC., DISTRIBUTING THE VARIOUS CHANNELS/PROGRAMS) AND SUB-DISTRIBUTOR (ASSESSEE TA KING THE TRANSMISSION TO THE DOORSTEPS OF PUBLIC) RATHER THA N CONTRACTOR AND SUB-CONTRACTOR. (3.1) THE ABOVE DESCRIPTION OF THE NATURE OF TRANSA CTION IS EVIDENCED BY THE SAMPLE SUBSCRIPTION AGREEMENT, WHI CH THE ASSESSEE HAS FURNISHED BEFORE THE UNDERSIGNED. THE AGREEMENT IS TITLED AS SUBSCRIPTION AGREEMENT. THIS SAMPLE SUBSCRIPTION AGREEMENT IS BETWEEN STAR INDIA PVT. LTD AND ASSESSEE (VARUN CAB LE NETWORK) 6. THE CIT(A), AFTER EXAMINING VARIOUS CLAUSES OF T HE AGREEMENT, HELD AS UNDER:- (PAGE NOS.31 TO 34) THE ABOVE EXCERPTS OF AGREEMENT CLEARLY ESTABLISHE S THAT ASSESSEE IS A SUB-DISTRIBUTOR/DISTRIBUTOR OF CHANNE L/PROGRAMS WHICH 8 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 ARE MANUFACTURED AND DEEMED BY VARIOUS TV NETWORK T O THE PUBLIC OR SUBSCRIBING AND VIEWING. THE BILLS RAISED BY VARIOUS CHANNEL NETWORK STAR IN DIA, ESPN, FURTHER CORROBORATE THIS VIEW. THESE BILLS CAN BE PERUSED. IT IS LIKE NORMAL SALE BILL, WHEREIN TOTAL SUBSCRIPTION FEE IS MENTIONED ON WHICH SERVICE TAX AND EDUCATION CESS ARE ADDED. THUS, IN MY OPINION, THE ENTIRE NATURE OF TRANSACTI ON IS OF THE SALE CONTRACT; AND IF SO, ANY TDS LIABILITY IS ATTR ACTED AT ALL. (3.2) FROM A DIFFERENT ANGLE THIS TRANSACTION BETWE EN CHANNEL OPERATORS; COS LIKE ASSESSEE, SCOS AND PUBLIC CAN B E TREATED AS A SERVICE CONTRACT WHERE SERVICE OF ENTERTAINMENT AND BROADCASTING ARE PROVIDED BY CHANNEL OPERATORS, THROUGH DISTRIBUTION NETWORK COMPRISING OF COS AND SCOS. IF THAT BE A CASE; THE N ALSO CHANNEL OPERATORS LIKE STAR INDIA OR ZEE TV OR SONI ETC. WO ULD BE THE MAIN CONTRACTOR, WHICH ARE PROVIDING THE CONTRACTED SERV ICE (CHANNEL) TO THE PUBLIC/CONSUMER' THROUGH SUB-CONTRACTORS LIKE A SSESSEE. IN SUCH A CHAIN FOR PROVISION OF TV BROADCASTING SERVICE; THE CHANNEL- DISTRIBUTORS LIKE SONY, SET MAX, STAR, ZEE ETC. ARE CONTRACTORS, WHICH ARE SUB-CONTRACTING THE WORK TO THE COS LIKE ASSESS EE. BUT EVEN IN THIS ALTERNATIVE LINE OF THOUGHT, IT WO ULD BE CHANNEL OPERATORS WHO WOULD BE LIABLE TO DEDUCT TDS ON PAYM ENTS, IF ANY, MADE DIRECTLY OR INDIRECTLY TO THE COS/MSOS LIKE AS SESSEE. IT WOULD NOT BE OTHER WAY ROUND, AS AO IS TRYING TO MAKE A C ASE FOR . AFTER ALL, NO WORK SERVICE IS BEING PROVIDED BY THE CHANNEL NE TWORK TO/ON THE ORDER OF; COS/MSOS!; IT IS ONLY THE OTHER WAY AROUN D. (3.3) ACCORDING TO THE AO (PARA 4.1 OF ASSESSMENT O RDER), SUB-CABLE OPERATOR IS PRINCIPAL; ASSESSEE IS A CONTRACTOR ; AND CHANNEL NETWORKS ARE SUB-CONTRACTOR. THE FALLACY IN THIS VIEW POINT OF THE AO CAN BE UND ERSTOOD AS UNDER: (I) IF AO IS CORRECT, THAT WOULD MEAN THAT SCOS AND COS ARE CONTRACTING TO CHANNEL-OPERATORS, AS TO WHICH PROGR AMS AND 9 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 CHANNELS TO BE PREPARED AND BROADCASTED?! BUT, THI S IS NOT TRUE! (II) IF SUB-COS IS PRINCIPAL AND ASSESSEE IS SUB- CONTRACTING TO VARIOUS CHANNEL NETWORKS; THE AMOUNT OF PAYMENTS MA DE BY SUB COS/PUBLIC TO ASSESSEE WOULD BE A MUCH LARGER AMOUN T ALMOST MAY MULTIPLE OF WHAT ASSESSEE IS PAYING TO CHANNEL- NETWORKS (WHICH WOULD BE ONLY SUB-CONTRACTOR)!! THE REALITY IS JUST OPPOSITE. (III) AS A COROLLARY; THE STATUS LEVEL OF OPERATION OF ASSESSEE SHOULD THEN BE MUCH LARGER THAN THE CHANNEL OPERATORS!! C ERTAINLY THIS IS ALSO NOT TRUE. WHAT ALL ABOVE AMPLIFY, IS THAT THE AO HAS GROSSLY MISUNDERSTOOD AND MISINTERPRETED THE RELATIONSHIP O R NATURE OF TRANSACTION BETWEEN ASSESSEE AND CHANNEL OPERATORS. (3.4) THE MOOT POINT IS THAT THE EXACT NATURE OF T RANSACTION SHOULD FIRST BE ANALYZED AND DECIDED, BY TDS WING. THE CO UNTERPART TDS OFFICER SHOULD BE INTIMATED BY THE AO SO THAT SUCH CASES ARE ANALYZED FROM TDS ANGLE, SO AS TO DECIDE AS TO WHETHER SUCH TRANSACTIONS ATTRACT TDS LIABILITY OR NOT; AND IF YES, (UNDER WH ICH SECTION; AND WHO IS LIABLE TO DEDUCT TDS, AT WHICH RATE , WHICH POINTS OF TRANSACTION AND WHAT AMOUNTS? WHEN THESE PERTINENT QUESTIONS ARE NOT YET DECIDED, I.E. WHEN THE TDS LIABILITY IS STILL VERY MUCH DOUBTFUL; IT WOULD NOT BE APPROPRIATE OR LEGALLY TENABLE TO I NVOKE SECTION 40(A)(IA) . (3.5) IT IS ALSO IMPORTANT TO NOTE THAT MOSTLY COS /MSOS LIKE ASSESSEE ARE NOT DEDUCTING TDS ON SUCH PAYMENTS. THERE ARE OTHER MSOS/COS IN ALIGARH ITSELF AND THOSE HAVE REPORTEDLY NOT DED UCTED ANY SUCH TDS. WITHOUT AN UNIFORM AND CONSISTENT VIEW; IT W OULD TANTAMOUNT TO UNDULY PUNISH THE ASSESSEE, FOR A TDS LIABILITY, WHICH IS ITSELF SHAKY AND SKETCHY. 10 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 (3.6) THE APPELLANT HAS ALSO SUBMITTED LETTERS OF 3 OF THESE CHANNEL- NETWORKS, TO THE EFFECT THAT MOST OF COS/MCOS WERE NOT DEDUCTING ANY SUCH TDS, IN THE RELEVANT TIME PERIOD. (3.7) THE AOS UNDERSTANDING, EVEN REGARDING AMOUN TS OF RS.72,72,807/- AND RS.17,91,286/- IS ALSO ERRONEOUS , PROBABLY GUIDED BY ABOVE MINDSET. ACCORDING TO AO, ASSESSEE HAS RS.17,91,286/- FROM O WN CUSTOMERS, SO HERE ASSESSEE BECOMES PRINCIPAL; WH ILE IN RESPECT OF RS.72,72,807/-, SCO IS PRINCIPAL WHILE ASSESSEE B ECOMES CONTRACTOR!! THE AO FAILS TO UNDERSTAND THAT BOTH THESE AMOUNTS ARE OF SIMILAR NATURE-I.E SUBSCRIPTION FEES . IN SOME HOUSEHOLDS, ASSESSEE HAS SET-UP ITS OWN TRANSMISSION CABLES DIRECTLY AND, HE NCE, FROM SUCH HOUSEHOLDS, SUBSCRIPTION FEES ARE COLLECTED BY ASSE SSEE DIRECTLY, AMOUNTING TO RS.17,91,286/-. IN OTHER MAJORITY OF HOUSEHOLD/VIEWERS; THE ASSESSE E HAS ASSIGNED THE WORK TO SCOS, WHO LAY DOWN THEIR TRANSMISSION CABLES AND COLLECT SUBSCRIPTION FEES. THE ASSESSEE HAS SUB-CONTRACTED THE SERVICE OF TRANSMISSION TO THESE SCOS, FOR ASSIGNED AREAS, ON ESTIMATE BASIS. THE GROSS COLLECTION MADE BY THE ASSESSEE FROM THES E SCOS IS ACTUALLY RS.76,67,604/- AS SHOWN IN P & L A/C; AND NOT RS.72 ,72,807/- AS DEDUCED BY THE AO. THE AMOUNT OF RS.72,72,807/- IS IN FACT, REDUNDANT AND IRRELEVANT. 7. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE CRUX OF THE MATTER UNDER CONSIDERATION WHETHER UNDER THE FACTS AND CIRCUMSTANCES EXPLANATION-(IV)(B) OF SECTION 194C O F THE ACT IS APPLICABLE OR NOT. THE SAID EXPLANATION-(IV)(B) READS AS UNDER :- (AS APPLICABLE FROM 01.06.2008. 11 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 BEFORE 01.06.2008, THE MEANING OF WORKS IS COVERE D BY EXPLANATION-(III)(B) OF THE ACT.) (IV) 'WORK' SHALL INCLUDE (A) .. (B) BROADCASTING AND TELECASTING INCLUDING PRODUC TION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; 8. THE MEANING WORKS FOR THE PURPOSE SECTION 194C OF THE ACT IS APPLICABLE UNDER FOLLOWING CIRCUMSTANCES :- 1) BROADCASTING AND 2) TELECASTING 3) INCLUDING PRODUCTION OF I) BROADCASTING II) TELECASTING 9. NOW, TO EXAMINE THE ISSUE UNDER CONSIDERATION, W E WOULD LIKE TO SEE WHAT IS THE DICTIONARY MEANING OF BROADCASTING AND TELEC ASTING. THE DICTIONARY MEANING AS PER DIFFERENT DICTIONARIES ARE AS UNDER :- I) AS PER HINKHOJ.COM :- BROADCAST ISK DJUK BROADCAST IZLKFJR BROADCAST IZLKFJR DJUK BROADCAST FNVDK CKSVKBZ BROADCAST QSYKUK BROADCAST CKSYUK BROADCAST FC[KJDJ CKSUK 12 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 BROADCAST PKJKSA VKSJ@QSAD DJ BROADCAST IZLKJ.K DJUK BROADCAST IZLKJ.K BROADCAST FNRJK;K GQVK BROADCAST IZPKJ DJUK BROADCAST IZLKFJR DJUK BROADCAST FNVDK CKSVKBZ DJUK BROADCAST QSYK;K GQVK BROADCAST [KSYUK BROADCAST B/KJ&M/KJ FC[KJK;K GQVK BROADCAST FNRJKUK BROADCAST QSYKDKJ BROADCAST DK;ZDZE BROADCAST XKUK BROADCAST IZLKJD BROADCAST IZLKJ.K BROADCAST FROM THE HOUSETOPS [KQYSVKE DGUK MEANING OF BROADCAST IN ENGLISH : - MESSAGE THAT IS TRANSMITTED BY RADIO OR TELEVISIO N - A RADIO OR TELEVISION SHOW; DID YOU SEE HIS PROG RAM LAST NIGHT ? - BROADCAST OVER THE AIRWAVES, AS IN RADIO OR TELEV ISION; WE CANNOT AIR THIS X-RATED SONG TELECAST NWJNKZU IJ IZLKJ.K TELECAST NWJNKZU IJ IZLKJ.K DJUK TELECAST ED IZLKFJR MEANING OF TELECAST IN ENGLISH: - A TELEVISION BROADCAST - BROADCAST VIA TELEVISION; THE ROYAL WEDDING WAS TELEVISED 13 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 II) AS PER ANGREZY HINDI KOSH (AN ENGLISH HINDI DICTIONARY) , BROADCAST. ADJ ., 1 . IZLKFJR IZLKJ 2 (SCATTERED) FNRJK;K GQVK N. 1 (RADIO) IZLKJ.K] IZKSXZKE 2 (SOWING) FNVDK CKSVKBZ V. 1 . IZLKFJR D0] IZLKJ.K DJUK 2 (SPREAD) QSYKUK 3 (SCATTER) FNRJKUK BROADCASTER IZLKJ.KDRKZ] IZLKJD 2 (TRANSMITTER) IZSFKR - BROADCASTING, IZLKJ.K TELECAST. N ., NWJNKZU IZLKJ.K V., NWJNKZU LS IZLKJ.K D0] III) AS PER THE NEW INTERNATIONAL WEBSTERS COMPREHENSIVE DICTIONARY OF THE ENGLISH LANGUAGE BROADCAST : (1) TO SEND OR TRANSMIT (MUSIC, NEWSCASTS, ETC.) BY RADIO OR TELEVISION. (2) TO SCATTER OR CAST, AS SEED, OVE R A WIDE AREA; SOW. (3) TO DISSEMINATE; MAKE PUBLIC, AS GOSS IP. (4) TO SPEAK, SING, ETC., FOR BROADCASTING PROPOSES ADJ. (1) TRANSMITTED BY RADIO. (2) CAST OR SCATTERED ABR OAD, AS SEEDS N. (1) TELECOM (A) THE PROCESS OF TRANSMITT ING A PROGRAM BY RADIO. (B) A RADIO PROGRAM. (C) THE TIME PERIOD OF A BROADCAST. 2 A CASTING OR SCATTERING O F SEED, ETC. OVER THE GROUND ADV. BY SCATTERING ABROAD, OR SO AS TO SCATTER ABROAD OR DISSEMINATE. BROADCASTER : (1) ONE WHO OWNS OR OPERATES A BROADCASTING STATION. (2) ONE WHO MAKES BROADCASTS. TELECAST : TO BROADCAST BY TELEVISION N. A PROGRAM BROADC AST BY TELEVISION. 14 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 TELECOMMUNICATION : (1) THE ART AND SCIENCE OF COMMUNICATING AT A DISTANCE, ESPECIALLY BY MEANS OF ELECTROMAGNETIC IMPULSES, WITH OR WITHOUT WIRES, AS IN RADIO, RADAR, TELEVISION, TELEGRAPHY, TELEPHONY, ETC. ALSO TELECOMMUNICATIONS . (2) ANY MASSAGE SO TRANSMITTED. IV) AS PER JUDICIAL DICTIONARY (THIRTEENTH EDITION) BY SHRI K.J. AIYAR BROADCAST : THE VIDEO FILM MAY BE WATCHED BY A LARGE SECTION OF THE PUBLIC IN THE PRIVACY OF ITS HOME. BUT THIS DOES N OT MAKE IT A PRIVATE COMMUNICATION SO AS TO TAKE IT OUT OF THE DEFINITIO N OF BROADCAST UNDER THE COPYRIGHT ACT 1957. A BROADCAST IS HEARD IN MILLIONS OF PRIVATE HOMES. IT IS NEVERTHELESS A BROADCAST TO T HE PUBLIC. FOR EXAMPLES, IF THE PRESIDENT OF INDIA GIVES A REPUBLI C DAY ADDRESS OVER DOORDARSHAN, IT MAY BE RECEIVED BY MILLIONS OF VIEW ERS OVER THEIR TV SETS IN THEIR HOMES. BUT THIS TV DOES NOT MAKE IT A PRIVATE COMMUNICATION. IT IS VERY MUCH A COMMUNICATION TO THE PUBLIC. THE PRESIDENT IS NOT MAKING A PRIVATE BROADCAST TO EACH VIEWER OR LISTENER. THE AUDIENCE MAY BE SITTING IN THE PRIVACY OF THEIR HOMES. BUT THIS MAKES NO DIFFERENCE TO THE CHARACTER OF THE AUDIENC E. BROADCASTING : AURAL OR VISUAL COMMUNICATION BY WIRELESS TELEGRAPHY. 10. IN THE LIGHT OF THE ABOVE MEANING OF WORDS BROA DCASTING AND TELECASTING, WE WOULD EXAMINE THE NATURE OF PAYMENT MADE IN THE YEA R UNDER CONSIDERATION. ON PERUSAL OF COPY OF AGREEMENT DATED 06.02.2007 BETWE EN STAR INDIA PVT. LTD. AND THE ASSESSEE OF WHICH COPY HAS BEEN PLACED AT PAGE NO.23 TO 24 OF THE ASSESSEES PAPER BOOK, IT IS SEEN THAT THE AGREEMENT IS UNDER THE TITLE OF SUBSCRIPTION 15 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 AGREEMENT. THE ASSESSEE IS CALLED AFFILIATE IN TH E SAID AGREEMENT. THE OTHER PARTY IS STAR INDIA PVT. LTD. IN THE AGREEMENT IT IS STA TED THAT THE AFFILIATE, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DISTRIBUTION OF TELEVISI ON CHANNELS THROUGH THE DISTRIBUTION SYSTEM. FOR THE PURPOSE OF DISTRIBUTI NG SUBSCRIBED CHANNELS, THE ASSESSEE APPROACHED STAR INDIA PVT. LTD. THE DISTR IBUTION SYSTEM AS STATED IN SCHEDULE-I IS AS UNDER :- (PAGE NO.26 OF PAPER BOOK ) SHALL MEAN THE LOCAL GROUND CABLE DISTRIBUTION SYS TEM USED BY THE AFFILIATE TO DISTRIBUTE THE SUBSCRIBED CHANNELS IN THE AREA AND EXCLUDES DISTRIBUTION THROUGH DIGITAL CABLE TELEVIS ION NETWORKS, CONDITIONAL ACCESS SYSTEM. DIRECT TO HOME (KU BAND ), HEADENDS- IN-THE-SKY, MULTIPOINT MICROWAVE DISTRIBUTION SYSTE M/MULTI-CHANNEL MULTI-POINT DISTRIBUTION SYSTEM (MMDS), DIGITAL T ERRESTRIAL TRANSMISSION,, DIRECT-TO-HOME (C BAND), BROADBAND , IP TV, TERRESTRIAL TRANSMISSION, OR ANY OTHER MEDIUM OR TE CHNOLOGY OR DEVICE NOW KNOWN AND/OR INVENTED OR THAT MAY BE INV ENTED, AND THE USE OF WHICH IS PERMITTED BY STAR, IN THE FUTURE. 11. THE EQUIPMENT WHICH IS TO BE USED BY THE ASSESS EE FOR DISTRIBUTION IS AN EQUIPMENT CALLED AS DSR DIGITAL SATELLITE RECEI VER. THE OBLIGATION OF THE AFFILIATE, ASSESSEE PROVIDED IN CLAUSES-5(B), 5 (F) & 5(H) OF THE AGREEMENT WHICH READ AS UNDER :- 5(B) THE AFFILIATE SHALL USE ITS BEST EFFORTS TO M AINTAIN A HIGH QUALITY OF SIGNAL TRANSMISSION FOR THE SUBSCRIBED CHANNELS AND SHALL TAKE ALL OTHER NECESSARY STEPS TO ENSURE THAT; (I) THE SUBSC RIBED CHANNELS ARE 16 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 RECEIVED ONLY BY THE SUBSCRIBERS WHO PAY THE FULL A PPLICABLE FEES FOR SUCH SUBSCRIBED CHANNELS AND (II) THE SUBSCRIBER, W HO HAS NOT PAID THE SUBSCRIPTION/FEE IS NOT CAPABLE OF VIEWING THE SUBS CRIBED CHANNELS. THE AFFILIATE FURTHER AGREES AND UNDERTAKES THAT IT SHALL CAUSE CONTINUOUS DISTRIBUTION OF THE SUBSCRIBED CHANNELS TO ALL ITS SUBSCRIBERS DURING ITS TELECAST WITHOUT BLACKING IT OUT OR INTERFERING WITH IT IN ANY MANNER WHATSOEVER. 5(F) THE AFFILIATE SHALL NOT, DISTRIBUTE THE SUBSC RIBED CHANNELS VIA ANY DISTRIBUTION SYSTEM OR ANY MEDIUM NOT COVERED B Y THE AGREEMENT. FURTHER, THE AFFILIATE SHALL NOT DISTRI BUTE THE SUBSCRIBED CHANNELS TO ANY COMMERCIAL ESTABLISHMENTS LIKE HOTE LS, RESTAURANTS, BARS, HOSPITALS, CINEMA HALLS, THEATERS, PUBS, GUES THOUSES, ANY OTHER PUBLIC VIEWING AREAS OR THE LIKE TO THE AREA. THE AFFILIATE FURTHER UNDERTAKES THAT IT SHALL NOT, EITHER ITSELF OR THRO UGH OTHERS, COPY, TAPE OR OTHERWISE REPRODUCE ANY PART OF THE SUBSCRIBED C HANNELS. THE AFFILIATE FURTHER UNDERTAKES THAT IT SHALL NOT COPY OR TAPE PROGRAMMES FOR RESALE OR DEAL IN ANY COPIED PROGRAMMES AND SHA LL IMMEDIATELY NOTIFY STAR OF ANY UNAUTHORIZED COPYING, TAPING OR USE OF ANY PART OF THE SUBSCRIBED CHANNELS AND SHALL FULLY COOPERATE W ITH ALL REQUESTS BY STAR TO TAKE SUCH STEPS AS ARE REASONABLE AND APPRO PRIATE TO CAUSE SUCH ACTIVITIES TO CEASE. 5(H) I SHALL NOT REMOVE OR SHIFT OR ALLOW TO BE RE MOVED OR SHIFTED, THE EQUIPMENT FROM THE INSTALLATION ADDRESS DETAILED IN ARTICLE II HEREOF OR ALLOW ANYBODY ELSE TO DO THE SAME, WITHOUT THE P RIOR WRITTEN PERMISSION OF STAR AND SHALL INDEMNIFY STAR AGAINST ANY DAMAGE, DESTRUCTION, THEFT OR LOSS OF THE EQUIPMENT. 12. THE OTHER RELEVANT IMPORTANT CLAUSES ARE 8(A) A ND 9(C) WHICH READS AS UNDER :- 8(A) THE AFFILIATE AGREES AND UNDERTAKES TO DISTRI BUTE THE SUBSCRIBED CHANNELS IN ITS ENTIRETY AS AND HOW IT IS DELIVERED BY STAR, WITHOUT (I) ANY CUTTING, EDITING, DUBBING, SCROLLING OR TICKER APE, VOICE-OVER, SUB TITLES, SUBSTITUTING OR ANY OTHER MODIFICATION, ALT ERNATION, ADDITION, DELETION OR VARIATION; AND, (II) REPLACING, MODIFYI NG, DELETING, 17 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 IMPOSING OR SUPERIMPOSING OF ADVERTISEMENTS OR OTHE RWISE TAMPERING WITH THE CONTENT OF THE SUBSCRIBED CHANNELS. FURTH ER, THE AFFILIATE UNDERTAKES NOT TO PLACE THE SUBSCRIBED CHANNELS NEX T TO ANY PORNOGRAPHIC OR GAMBLING CHANNEL. ANY VIOLATION OF THIS CLAUSE SHALL ENTITLES STAR TO TERMINATE THE AGREEMENT IN TERMS O F ARTICLE VII OF THE AGREEMENT AND DEACTIVATE/DISCONNECT THE EXISTING SU BSCRIBED CHANNELS OR NEW CHANNEL(S), AS THE CASE MAY BE. TH IS IS WITHOUT PREJUDICE TO THE OTHER LEGAL AND EQUITABLE RIGHTS A ND REMEDIES AVAILABLE TO STAR. 9(C) THE AFFILIATE SHALL NOT ACQUIRE ANY PROPRIETA RY OR OTHER RIGHTS IN THE TRADE NAMES AND MARKS TO WHICH STAR OR ITS ASSO CIATES OR PRINCIPALS (THE OWNERS/BROADCASTERS OF THE SUBSCRIB ED CHANNELS) ASSERT PROPRIETARY OR OTHER RIGHTS, WHICH STAR MAY NOTIFY THE AFFILIATE FROM TIME TO TIME IN WRITING (STAR MARKS), AND AG REES NOT TO USE THE STAR MARKS IN ANY CORPORATE OR TRADE NAME. THE AFFILIATE MAY USE THE STAR MARKS SOLELY FOR THE PURPOSE OF ADVERT ISING AND PROMOTING THE SUBSCRIBED CHANNELS ONLY WITH THE PRI OR WRITTEN CONSENT OF STAR. MARKETING MATERIALS GENERATED BY THE AFFILIATE MAY REFER TO THE STAR MARKS ONLY IF IT IS CLEAR THAT SU CH STAR MARKS REPRESENT TRADEMARKS OR SERVICE MARKS FOR THE SUBSC RIBED CHANNELS, WHICH ARE DISTRIBUTED BY THE AFFILIATE. SUCH MARKE TING MATERIALS SHALL REQUIRE THE PRIOR WRITTEN APPROVAL OF STAR. 13. ON PERUSAL OF VARIOUS CLAUSES OF THE AGREEMENT, WE FIND THAT THE ASSESSEE IS TO DISTRIBUTE THE SUBSCRIBED CHANNELS I N ITS ENTIRETY AS IT IS DELIVERED BY STAR INDIA PVT. LTD. WITHOUT ANY CUTTI NG, EDITING, DUBBING, SCROLLING OR TICKER TAPE, VOICE-OVER, SUB TITLE, SU BSTITUTING OR ANY OTHER MODIFICATION, ALTERNATION, ADDITION, DELETION OR VA RIATION. THE STAR INDIA PVT. LTD. IS THE OWNER/BROADCASTER OF THE SUBSCRIBED CHA NNELS AS IT IS PROVIDED CLEARLY IN CLAUSE 9(C) OF THE AGREEMENT. IN OTHER WORDS, BROADCASTING AND 18 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 TELECASTING WORK WAS TO BE DONE ONLY BY STAR CHANNE LS AND OTHERS AND NOT BY THE ASSESSEE. THE ASSESSEE IS TO DISTRIBUTE THE SI GNALS WITHOUT ANY ALTERATION AND MODIFICATION. THE ASSESSEE IS NOT AUTHORIZED T O PRODUCE ANY PROGRAMME AND NOT TO BROADCAST AND TELECAST ANY PROGRAMME AT THE LEVEL OF THE ASSESSEE. THE ASSESSEE IS NOT AUTHORIZED TO CHANGE EITHER IN PROGRAMME OR CREATE OR PRODUCE ANY PROGRAMME OF HIS OWN. THE A.O. NOTICED THAT THE AGGREGATE PAYMENT MADE TO VARIOUS CHANNELS BY THE ASSESSEE WA S RS.90,64,093/-. THIS AMOUNT WAS COLLECTED AS UNDER :- 1) BY ASSESSEES OWN CUSTOMERS - RS.17,91,286/- 2) BY CABLE OPERATOR - RS.72,72,807/- ------------------ TOTAL - RS.90,64,093/- 14. THE A.O. WAS OF THE VIEW THAT THE ASSESSEE IS N OT LIABLE FOR DEDUCTING TDS IN RESPECT OF PAYMENT OF RS.17,91,286/- ON THE GROUND THAT IN THIS PAYMENT THERE ARE TWO PARTIES, ONE IS THE ASSESSEE AS PRINCIPAL PERSON AND THE OTHER IS CHANNELS. HOWEVER, IN RESPECT OF PAYMENT OF RS.72,72,807/-, THE A.O. WAS OF THE VIEW THAT THERE ARE THREE PARTIES I .E. THE ASSESSEE, CABLE OPERATORS AND CHANNELS. THEREFORE, IN ACCORDANCE W ITH A.O.S VIEW THIS PAYMENTS ARE COVERED UNDER THE MEANING WORKS I.E. BROADCASTING & TELECASTING. THEREFORE, THE ASSESSEE WAS LIABLE T O DEDUCT TAX AT SOURCE UNDER SECTION 194C OF THE ACT AND ACCORDINGLY EXPLANATION -(IV)(B) OF SECTION 194C 19 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 IS APPLICABLE. TO APPRECIATE THE POSITION OF THE A SSESSEE IN THE TRANSACTION, WE WOULD LIKE TO REFER THE FOLLOWING DIAGRAM :- CHANNELS (STAR & OTHERS) L ASSESSEE (LICENSER/DISTRIBUTOR) L OWN CUSTOMERS CABLE OPERATOR L CUSTOMERS 15. THE A.O. DID NOT DISPUTE ABOUT THE NATURE OF PA YMENT IN RESPECT OF OWN CUSTOMERS. THE ISSUE BEFORE US IS ONLY IN RESP ECT OF SEQUENCE OF TRANSACTION I.E. CHANNELS ASSESSEE CABLE OPERAT OR CUSTOMERS. IN THE LIGHT OF ABOVE SEQUENCE OF STAGES OF TRANSACTIONS AND AFT ER CONSIDERING DICTIONARY MEANING OF BROADCASTING AND TELECASTING, WE NOTICE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DISTRIBUTION OF SIGNALS THROUGH HIS EQUIPMENT DSR DIGITAL SATELLITE RECEIVER WHICH TAKES SIGNAL F ROM CHANNELS AND GIVES TO THE CABLE OPERATOR. IT IS IMPORTANT TO NOTE THA T ULTIMATE BROADCASTING IS DONE BY CABLE OPERATOR AS CABLE OPERATOR PROVIDES C ONNECTION TO THE CUSTOMERS. THE SIGNAL TAKEN FROM CHANNELS AND GIVI NG TO CABLE OPERATOR IS IN PACKED FORM. WHEN SIGNAL REMAIN PACKED, UNDER THAT CIRCUMSTANCES, IT CANNOT BE HELD THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF BROADCASTING 20 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 AND TELECASTING. THIS VIEW IS SUPPORTED BY FACT TH AT THE PARTY ENGAGED IN BROADCASTING AND TELECASTING REQUIRES REGISTRATION AND NECESSARY PERMISSION FROM THE MINISTRY OF INFORMATION & BROADCASTING FOR TELECASTING TV CHANNELS. IN THE CASE UNDER CONSIDERATION, THE STA R INDIA PVT. LD. IS HAVING THE SAID PERMISSION AND REGISTRATION WHEREAS THE AS SESSEE IS NOT HAVING REGISTRATION WITH THE MINISTRY. AS STATED ABOVE, R EGISTRATION WAS NOT NECESSARY FOR TRANSMITTING OF DISTRIBUTION OF SIGNA LS. THE STAR INDIA PVT. LTD. IS ALSO REGISTERED UNDER THE SERVICE TAX. THE ASSE SSEE FILED AN INVOICE OF STAR INDIA PVT. LTD. OF WHICH COPY HAS BEEN PLACED AT PA GE NO.15 OF ASSESSEES PAPER BOOK, WHEREIN UNDER THE COLUMN CLASSIFICATIO N OF SERVICE IT IS WRITTEN AS BROADCASTING. THE I.T.A.T. MUMBAI BENCH IN TH E CASE OF ACIT VS. NGC NET WORK (INDIA) (P) LTD. (2011) 10 TAXMANN.COM 140 ACCEPTED ASSESSEES CONTENTION THAT BROADCASTING AND DISTRIB UTION ARE DIFFERENT. THUS, IN THE CASE UNDER CONSIDERATION, BROADCASTING WORK WAS CARRIED OUT BY STAR INDIA PVT. LTD. AND OTHER CHANNELS AND NOT BY THE A SSESSEE. 16. AS REGARDS THE JUDGEMENT OF HONBLE PUNJAB & HA RYANA HIGH COURT IN THE CASE OF KURUKSHETRA DARPANS (P) LTD. VS. COM MISSIONER OF INCOME TAX, 217 CTR 326 (P&H) RELIED UPON THE REVENUE, THE SAME DISTINGUISHABLE ON FACTS AS IN THAT CASE THE CABLE OPERATOR WAS ENG AGED IN BROADCASTING AND 21 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 GIVING SIGNALS TO THE CUSTOMERS WHEREAS IN THE CASE UNDER CONSIDERATION THE ASSESSEE RECEIVED PACKED SIGNAL FROM CHANNELS I.E. STAR TV AND OTHERS AND GIVING TO CABLE OPERATOR WITHOUT MODIFICATION. IT IS A CASE OF SIMPLE USING OF PLANT & MACHINERY I.E. DSR DIGITAL SATELLITE RECEIV ER FOR THE PURPOSE OF DISTRIBUTION AND TRANSMISSION OF SIGNALS AGAINST PA YMENT AND WHILE MAKING SUCH PAYMENT, WE ARE OF THE CONSIDERED VIEW THAT SE CTION 194C OF THE ACT INCLUDING EXPLANATION (IV)(B) OF SECTION 194C IS NO T APPLICABLE. SINCE SECTION 194C IS NOT APPLICABLE, THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE. IN THE LIGHT OF THE FACT, THERE IS NO QUES TION OF DISALLOWANCE OF PAYMENT MADE TO CHANNELS AND THUS WE FIND THAT THE CIT(A) HAS RIGHTLY DELETED THE ADDITION OF RS.72,72,807/-. ORDER OF T HE CIT(A) IS CONFIRMED. ITA NO.61/AGRA/2012 FOR A.Y. 2008-09 17. THE FACTS & GROUNDS OF THIS APPEAL FOR A.Y. 200 8-09 ARE SIMILAR TO THE FACTS AND GROUNDS DECIDED IN A.Y. 2007-08 AS ABOVE. THEREFORE, IN THE LIGHT OF THE DETAILED DISCUSSIONS MADE AS ABOVE IN ITA NO .116-AGR-2011 FOR A.Y. 2007-08, WE FIND THAT THE CIT(A) HAS RIGHTLY DELETE D THE ADDITION OF RS.67,90,170/- FOR A.Y. 2008-09 ALSO. ORDER OF THE CIT(A) IS, THEREFORE, CONFIRMED. 22 ITA NOS.116/AGRA/2011 & 61/AGRA/2012 A.YS. 2007-08 & 2008-09 18. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY
Mehul