ACIT, Hyderabad V. M/s Ushodaya enterprises, Hyderabad

ITA 1708/HYD/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59349 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-05-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 28-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SIVA KUMAR
• Assessee Lawyers: NIVEDITA BISWAS
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE CHANDRA POOJARI, ACCOUNTANT MEMBER & SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1706/HYD/2008 ASSESSMENT YEAR 2004-05 ITA NO.1707/HYD/2008 ASSESSMENT YEAR 2005-06 ITA NO.1708/HYD/2008 ASSESSMENT YEAR 2006-07 THE ACIT, CIRCLE 15(2), HYDERABAD VS M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD (PAN AAACU 2690P) APPELLANT RESPONDENT ITA NO. 1699/HYD/2008 ASSESSMENT YEAR 2004-05 ITA NO.1700/HYD/2008 ASSESSMENT YEAR 2005-06 ITA NO.1701/HYD/2008 ASSESSMENT YEAR 2006-07 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD (PAN AAACU 2690P) VS THE ACIT, CIRCLE 15(2), HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI V. SIVA KUMAR RESPONDENT BY : SMT. NIVEDITA BISWAS DATE OF HEARING : 16.2.2012 DATE OF PRONOUNCEMENT : 22.3.2012 ORDER PER ASHA VIJAYARAGHAVAN, JM . THESE APPEALS PREFERRED BY THE ASSESSEE AS W ELL AS THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDERS PASS ED BY THE CIT(A)-II, HYDERABAD DATED 29.9.2008 AND THEY ARE PERTAINING TO THE ASSESSMENT YEARS 2004-05, 2005-06 & 2006-07. S INCE ISSUES INVOLVED IN THESE APPEALS ARE COMMON IN NATU RE, THEY ARE ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 2 CLUBBED TOGETHER, HEARD TOGETHER AND DISPOSED OFF V IDE THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. REVENUE APPEALS ITA 1706 TO 1708/HYD/2008 2. THE ASSESSEE COMPANY IS ENGAGED IN PUBLISHI NG OF NEWSPAPER, MANUFACTURE OF FOOD ITEMS, DIARY PRODUCT S, AND ELECTRONIC MEDIA I.E. TV CHANNELS ETC. THE ASSESSI NG OFFICER EXAMINED THE VARIOUS TRANSACTIONS IN THE CASE OF TH E ASSESSEE AND PAYMENTS MADE BY THE ASSESSEE. THE AO WAS OF T HE VIEW THAT THE ASSESSEE DEFAULTED IN DEDUCTING TAX AT SOU RCE FROM VARIOUS PAYMENTS MADE BY IT. THE AO CALLED FOR INF ORMATION AND AFTER CONSIDERING THE SAME AND ALSO THE CLARIFICATI ONS AND EXPLANATIONS FURNISHED BY THE ASSESSEE, THE ASSESSI NG OFFICER HELD THAT THE ASSESSEE IS A DEFAULTER IN RESPECT OF DEDUCTION OF TAX AT SOURCE FROM VARIOUS CATEGORIES OF PAYMENTS. 3. DISCOUNT ON ADVERTISEMENTS: THE ASSESSING OFFICER STATED THAT ADVERTISING AGENT S COLLECT MONEY FROM CLIENTS WHO WANT TO PLACE THEIR ADVERTIS EMENTS IN THE VARIOUS MEDIA PUBLISHED/RUN BY IT AND PASS ON T HE MONEY TO THE ASSESSEE AFTER DEDUCTING THE DISCOUNT/COMMISSIO N AT 15%. THE AO PROPOSED TO TREAT THE ASSESSEE AS DEFAULTER U/S 201. THE ASSESSING OFFICER HELD THAT ASSESSEE IS IN DEFA ULT AND RAISED DEMAND U/S 201(1)( AND 201(1A). 4. IN APPEAL THE CIT (A) HELD THAT THE ASSESSEE CANNOT BE HELD AS AN ASSESSEE IN DEFAULT AFTER DISCUSSING VARIOUS CASES CITED AND RELIED ON BY THE ASSESSEE. ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 3 5. ON FURTHER APPEAL BEFORE US, IT WAS SUBMITT ED BY THE LEARNED COUNSEL THAT THE IMPUGNED AMOUNTS ARE NOTHI NG BUT DISCOUNTS AND ARE RECOGNISED AS SUCH BY THE ENTIRE TRADE. IT WAS SUBMITTED THAT THE ASSESSEE IS NOT UNDER OBLIGATION TO DEDUCT TAX UNDER THE TDS PROVISIONS. 6. IT WAS FURTHER SUBMITTED THAT IT IS OF UTMO ST IMPORTANCE TO NOTE THAT THE ADVERTISING AGENCIES ARE NOT APPOINTE D BY THE ASSESSEE. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI. S HIVA KUMAR RELIED ON THE DECISION IN THE CASE OF UNITED EXPORT S VS. CIT 185 TAXMAN 174 DEL. IT HAS BEEN HELD: THIS PROVISION 40A(2) IN THE ACT PERTAINS TO DISALLOWANCE TO AN EXPENDITURE WHICH IS MADE BY THE ASSESSEE I.E. AN A MOUNT ACTUALLY SPENT BY THE ASSESSEE AS ON EXPENDITURE. THE EXPRESSION USED IN THIS PROVISION IS INCURS ANY EXPENDITURE I N RESPECT OF WHICH PAYMENT HAS BEEN OR IS TO BE MADE TO ANY PERS ON. THE EMPHASIZED WORDS CLEARLY SHOW THAT ACTUAL PAYMENT M UST BE MADE AND THERE HAS TO BE AN EXPENDITURE INCURRED BE FORE THE PROVISION CAN BE SAID TO BE APPLICABLE. A TRADE DI SCOUNT, AND ADMITTEDLY IT IS NOT IN DISPUTE THAT THE SUBJECT MA TTER OF THE CLAIM IS A TRADE DISCOUNT, AND NOT AN EXPENDITURE, CLEARL Y THEREFORE THERE DOES NOT ARISE THE QUESTION OF APPLICABILITY OF SEC TION 40A(2)(B). 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON T HE OTHER HAND RELIED ON THE ORDER OF THE AO AND THE DECISION IN THE CASE OF CIT VS. DIRECTOR, PRASAR BHARTI (325 ITR 205) ( K ER). ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 4 9. WE HEARD BOTH THE PARTIES. WE HAVE PERUSED THE ORDER OF THE DELHI BENCH C WHEREIN IT HAS BEEN DECIDED IN M/S TV TODAY NETWORK LTD. IN ITA NO.3943/DEL./2006 BY THEIR ORD ER DATED 15.7.2011 THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX U/S 194H. THE TRIBUNAL FOLLOWED ANOTHER DECISION OF HO NBLE TRIBUNAL DELHI H BENCH IN THE CASE OF LIVING MEDI A INDIA LTD. IN ITA NO.3807/DEL/2005 DATED 31.5.2007. THE CIT(A) F OLLOWED THE SAID DECISION IN THE CASE OF LIVING MEDIA INDI A LTD. HE ALSO NOTICED THAT THE DEPARTMENTS APPEAL AGAINST THE SA ID OF THE TRIBUNAL WAS DISMISSED VIDE ORDER IN ITA NO.1264 OF 2007, A COPY OF WHICH WAS PLACED BEFORE HIM BY THE ASSESSEE . WE ALSO FIND THAT THE DEPARTMENT CONCEDED BEFORE THE TRIBUN AL AND WHEN THE MATTER REACHED UP TO THE SUPREME COURT AND THE DECISION OF THE TRIBUNAL WAS UPHELD. THEREFORE, WE ARE OF THE OPINION THAT THE ISSUE IS COVERED BY THE DECISION OF THE CO-ORDI NATE BENCH IN THE CASE OF LIVING MEDIA INDIA LIMITED IN ITA NO.3807/DEL./2005. HENCE WE CONFIRM THE ORDER OF T HE CIT (A) ON THIS ISSUE AND HENCE THE DEPARTMENTAL APPEAL IS DISMISSED ON THIS ISSUE. 10. THE NEXT ISSUE IN THE DEPARTMENTAL APPEALS IS PAYMENT OF DATA CIRCUIT RENTALS: THE ASSESSING OFFICER NOTICED THAT IN THE PUBLICATI ON DIVISION AND ETV OTHER CHANNELS DIVISION, THE ASSESSEE MADE PAYMENTS TOWARDS USE OF DATA CIRCUIT LINES TO BSNL AND THAT THE ASSESSEE HAS NOT MADE TDS ON THESE PAYMENTS. 11. THE CIT(A) TOOK NOTE OF THE FACT THAT DATA CIRCUIT LINES WERE TAKEN ON LEASE BY THE ASSESSEE FROM BSNL FOR TRANSM ITTING DATA/NEWS IN ITS OFFICE FROM VARIOUS PLACES WHERE T HE REPORTERS ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 5 OR CONTRIBUTORS COLLECT NEWS FROM VARIOUS EVENTS AC ROSS THE COUNTRY. HE ALSO TOOK INTO ACCOUNT THE CONTENTION OF THE ASSESSEE THAT THE DATA CIRCUIT LINES ARE AKIN TO TE LEPHONE LINES AND HENCE THE PROVISION OF SECTION 194J ARE NOT ATT RACTED SINCE BSNL IS ONLY PROVIDING ONLY THE LINE AND NOT ANY PR OFESSIONAL OR TECHNICAL SERVICES TO THE ASSESSEE. AFTER EXAMININ G THE INVOICES ISSUED BY BSNL TOWARDS RENT FOR CHANNEL AND RENT FO R LOCAL LEAD AT THE END A REFERS TO LOCATION OF THE ASSESSEE A T EENADU COMPLEX, SOMAJIGUDA, HYDERABAD AND END B REFERS T O ASSESSEES LOCATION AT VARIOUS PLACES IN AND OUT OF AP. HE OP INED THAT PAYMENTS FOR OBTAINING CONNECTIVITY, WHICH IS WHAT THE ASSESSEE PAID FOR, DOES NOT COME UNDER THE PURVIEW OF PROFES SIONAL OR TECHNICAL SERVICES. HE HELD THAT THE PAYMENT IS NO THING BUT A STANDARD TARIFF DEPENDING UPON THE SPEED AND USAGE OF THE DEDICATED LEASED LINES. HE RELIED UPON THE DECISIO NS OF THE MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICAT IONS LTD. VS. DCIT 251 ITR 53 MAD AND THE DELHI HIGH COURT DE CISION IN THE CASE OF CIT VS. ESTEL COMMUNICATIONS P LTD. 217 CTR 102 DEL AND HELD THAT PAYMENT MADE TO BSNL FOR TAKING D EDICATED CIRCUIT LINES ON LEASE WILL NOT COME UNDER THE PURV IEW OF SECTION 194J. 12. AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFO RE US. 13. WE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. WE FIND THAT THE DECISION IN THE CASE OF SKYCELL COMMUNICATIONS HAS TAKEN SUPPORT OF IN THE CASE OF CIT VS. BHARATI CELLULAR LTD. (319 ITR 0139) (DEL) WHER EIN IT HAS BEEN HELD THAT INTERCONNECT CHARGES/PORT ACCESS CHA RGES CANNOT BE REGARDED AS FEES FOR TECHNICAL SERVICES. IN THI S DECISION THE MEANING OF TECHNICAL SERVICES WAS EXPLAINED AND IT WAS HELD THAT ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 6 THERE HAD TO BE INVOLVEMENT OF HUMAN INTERFACE FOR A SERVICE TO BE CALLED TECHNICAL SERVICES. 14. FURTHER, THE AUTHORITY FOR ADVANCING RULING HAS HELD IN THE CASE OF INTERTEK TESTING SERVICES INDIA P LTD. (307 ITR 418)( AAR) THAT THE OFFER OF A STANDARD FACILITY TO A NUM BER OF CUSTOMERS SUCH AS TELEPHONE/CELL PHONE USERS DOES N OT AMOUNT TO RENDERING ANY TECHNICAL SERVICE WITHIN THE MEA NING OF THE DEFINITION OF TECHNICAL SERVICE. TECHNICAL OR CONS ULTANCY SERVICE RENDERED SHOULD BE OF SUCH A NATURE THAT IT MAKES AVAILABLE THE TECHNICAL KNOWLEDGE, SKILLS ETC. MUST REMAIN WITH T HE PERSON RECEIVING THE SERVICES EVEN AFTER THE PARTICULAR CO NTRACT COMES TO AN END. IT IS ENOUGH THAT THE SERVICES OFFERED ARE THE PRODUCT OF INTENSE TECHNOLOGICAL EFFORT AND A LOT OF TECHNICAL KNOWLEDGE AND EXPERIENCE OF THE SERVICE PROVIDER HAVE GONE INTO I T. THE TECHNICAL KNOWLEDGE OR SKILLS OF THE PROVIDER SHOUL D BE IMPARTED TO AND ABSORBED BY THE RECEIVER SO THAT THE RECEIVE R CAN DEPLOY SIMILAR TECHNOLOGY OR TECHNIQUES IN THE FUTURE WITH OUT DEPENDING UPON THE PROVIDER. HENCE, WE CONFIRM THE ORDER OF THE CIT(A) THAT TAX IS NOT DEDUCTIBLE ON PAYMENT DATA CIRCUIT RENTALS AND DISMISS THE DEPARTMENTAL APPEAL ON THIS ISSUE. 15. THE NEXT ISSUE RAISED BY THE DEPARTMENT IS PAYMENT OF BAND WIDTH CHARGES : THE ASSESSING OFFICER HELD THAT PAYMENTS MADE TO VA RIOUS COMPANIES TOWARDS BANDWIDTH CHARGES ARE LIABLE FOR TDS U/S 194J. HE BRUSHED ASIDE THE ASSESSEES PLEA THAT TH E PAYMENTS WERE MADE FOR PROVIDING FACILITIES AND NOT ANY SERV ICES. IN APPEAL, THE CIT(A) ACCEPTED THE CONTENTION OF THE A SSESSEE AND HELD THAT THE PAYMENTS ARE IN THE NATURE OF RENT PA ID FOR SPACE ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 7 ALLOTTED IN THE TRANSPONDER AND THE SAME WILL NOT C OME UNDER THE PURVIEW OF SECTION 194J. THE CIT(A) FOLLOWED T HE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF SKYCEL L COMMUNICATIONS LTD. VS. DCIT 251 ITR 53 MAD. THE C IT(A) ALSO RELIED ON THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF SOFTWARE TECHNOLOGY PARKS OF INDIA VS. ITO 3 SOT BANG. THE CIT(A) HELD THAT SECTION 194J WILL NOT BE APPLICABLE TO THE IMPUGNED PAYMENTS. 16. AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFO RE US. 17. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S HIVA KUMAR RELIED ON THE DECISION OF THE TRIBUNAL MUMBAI BENCH IN THE CASE OF PACIFIC INTERNET (INDIA) P LTD. VS. ITO 318 ITR (AT) 0197 MUM WHEREIN IT HAS BEEN HELD THAT PAYMENT MADE FOR USIN G BANDWIDTH AND NETWORK OPERATION ARE NOT TECHNICAL S ERVICES AND TAX NEEDED NOT BE DEDUCTED FROM SUCH PAYMENTS U/S 1 94J. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS NOW SETTLED THAT MERE PROVISION OF FACILITY TO USE EQUIPMENT, W HATEVER MAY BE THE SOPHISTICATION THAT WENT INTO THE CREATION O F SUCH FACILITY, IS NOT TECHNICAL SERVICE. FOLLOWING DECISION OF T HE COORDINATE BENCH IN PACIFIC INTERNET (INDIA) P LTD. VS. ITO 31 8 ITR (AT) 0197 MUM. WE UPHOLD THE ORDER OF THE CIT(A) THAT PAYMEN TS OF BANDWIDTH ARE NOT LIABLE FOR TDS UNDER SECTION 194J AND DISMISS THE DEPARTMENTAL APPEAL ON THIS ISSUE. 18. THE NEXT ISSUE IN DEPARTMENTAL APPEALS IS PAYMENTS OF INTERNET CHARGES. THE ASSESSING OFFICER OPINED THAT PAYMENTS MADE BY THE ASSESSEE TOWARDS INTERNET CHARGES ARE SIMILAR IN NA TURE TO ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 8 BANDWIDTH CHARGES IN RESPECT OF WHICH HE FASTENED L IABILITY U/S 194J. THE AO BRUSHED ASIDE THE EXPLANATION OF THE ASSESSEE THAT INTERNET CHARGES ARE AKIN TO CHARGES FOR USE O F TELEPHONE LINES. THE CIT(A) ANALYSED THE PAYMENTS MADE TO V ARIOUS COMPANIES AS ALSO VSNL AND CONCLUDED THAT THE PAYME NTS IN THE NATURE OF CIRCUIT CHARGES TO VSNL ARE NOT LIABLE FO R TDS FOLLOWING HONBLE MADRAS HC DECISION IN THE CASE OF SKYCELL COMMUNICATIONS LTD. HE ALSO FOUND THAT THE PAYMENT S MADE TO M/S WEB INDIA SERVICES (CHENNAI) P LTD. WERE FOR BA NDWIDTH WHICH DO NOT COME UNDER TDS PROVISIONS. AS REGARDS WEBSITE MAINTENANCE CHARGES TO M/S SCAPE VELOCITY NET SOLUT IONS LTD., U/S 194C. HE HELD THAT THE PAYMENT DOES NOT ATTRAC T TDS U/S 194J. 19. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 20. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED BEFORE US THAT THE ISSUE SHOULD BE DECIDED IN A SIMILAR MANNE R AS IN THE CASE OF PAYMENTS FOR BAND WIDTH CHARGES. HENCE, TH E CASE LAW RELIED ON IN THE CASE OF PAYMENTS FOR BANDWIDTH CHA RGES ARE APPLICABLE TO PAYMENT OF INTERNET CHARGES ALSO. 21. WE HEARD BOTH THE PARTIES. WE UPHOLD THE O RDER OF THE CIT(A) THAT PAYMENTS OF INTERNET CHARGES ARE NOT LI ABLE FOR TDS RELYING ON THE FOLLOWING DECISIONS: 1. SKYCELL COMMUNICATIONS LTD. VS. DCIT 251 ITR 53 MAD . 2. SOFTWARE TECHNOLOGY PARKS OF INDIA VS. ITO 3 SOT 52 9 (BANGALORE) 3. PACIFIC INTERNET (INDIA) PVT LTD. VS. ITO (318 ITR (AT) 0179 (MUM). ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 9 4. HENCE WE UPHOLD THE ORDER OF THE CIT(A) HOLDING THE PROVISIONS OF SECTION 194J ARE NOT APPLICABLE TO TH E IMPUGNED PAYMENTS. 22. HENCE WE DISMISS THE REVENUE APPEAL ON THIS G ROUND. 23. THE NEXT GROUND IS PAYMENT OF DATA CIRCUIT RENTAL CHARGES: THE PAYMENTS RELATE TO DATA CIRCUIT RENTALS CHARGES . IN THE ASSESSMENT ORDER, THE AO HAS OBSERVED THAT THE ASSE SSEE HAS MADE PAYMENTS TO BSNL TOWARDS USE OF DATA CIRCUIT L INES ON WHICH TAX WAS NOT DEDUCTED AT SOURCE. THE AO (TDS) REFERRED TO THE ASSESSMENT ORDER DATED 26.12.2007 PASSED U/S 14 3(3) BY THE JURISDICTIONAL AO WHEREIN IT WAS HELD THAT THE PAYMENTS ARE TOWARDS CONTRACTUAL OBLIGATION AND ARE LIABLE TO TD S. APPARENTLY NO EXPLANATION WAS OFFERED BY THE ASSESSEE EITHER D URING THE ASSESSMENT OR DURING THE TDS PROCEEDINGS. THE AO T HEREFORE HELD THE PAYMENTS TO BE OF THE FEES FOR TECHNICAL S ERVICES AND HELD THAT THE ASSESSEE TO BE AN ASSESSEE IN DEFAULT FOR NON DEDUCTION OF TAX AT SOURCE U/S 194J OF THE IT ACT. 24. IN THE STATEMENT OF FACT THE ASSESSEE SUBMI TTED THAT IT HAS TAKEN DATA CIRCUIT LINE ON LEASE FROM BSNL FOR TRAN SMITTING DATA/NEWS IN ITS OFFICE FROM VARIOUS PLACES WHERE T HE REPORTERS OR CONTRIBUTORS COLLECT NEWS FROM VARIOUS EVENTS AC ROSS THE COUNTRY. THESE DATA CIRCUIT LINES ARE AKIN TO TELE PHONE LINES AND HENCE THE PROVISIONS OF SECTION 194J IS NOT ATTRACT ED SINCE BSNL IS ONLY PROVIDING THE LINE AND NOT ANY PROFESSIONAL OR TECHNICAL SERVICES TO THE ASSESSEE. DURING THE APPELLATE PRO CEEDINGS, THE AR OF THE ASSESSEE REITERATED THE FACT STATED EARLI ER IN THE STATEMENT OF FACT AND RELIED ON THE DECISION IN THE CASE OF CIT VS. ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 10 ESTEL COMMUNICATIONS P LTD. 217 CTR 102 (DEL.) AND THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F SKYCELL COMMUNICATIONS LTD. VS. DCIT. THE AR ALSO FILED CO PIES OF THE INVOICES OF BSNL FOR THE PERIOD 1.7.04 TO 30.9.04 I N RESPECT OF THE CIRCUIT LINES TAKEN ON LEASE. 25. THE CIT(A) HELD THAT THE PAYMENT FOR SUCH C ONNECTIVITY CHARGES WILL NOT COME UNDER THE PURVIEW OF TECHNICA L OR PROFESSIONAL SERVICES AS HELD BY AO SINCE THE PAYME NT IS NOTHING BUT STANDARD TARIFF DEPENDING ON THE SPEED AND USAG E OF THE DEDICATED LEASED LINES. 26. THE CIT(A) RELYING ON THE DECISION OF CIT VS. ESTEL COMMUNICATIONS P LTD. HELD THAT THE PAYMENT MADE TO BSNL FOR TAKING ON LEASE OF DEDICATED CIRCUIT LINES WILL NOT COME UNDER THE PURVIEW OF SECTION 194J AND THEREFORE THE ASSESSEE CANNOT BE HELD TO BE IN DEFAULT U./S 201(1) FOR NON DEDUCTION OF TAX ON SUCH PAYMENTS MADE TO BSNL. 27. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 28. WE HEARD BOTH PARTIES. RELYING ON THE DECI SION OF CIT VS. ESTEL COMMUNICATION P. LTD. 217 CTR 102 DELHI AND T HE MADRAS HIGH COURT DECISION IN THE CASE OF SKYCELL COMMUNIC ATIONS P LTD. VS. DCIT, WE UPHOLD THE ORDER OF THE CIT(A) TH AT THE CONNECTIVITY CHARGES CANNOT COME UNDER THE PURVIEW OF TECHNICAL/PROFESSIONAL SERVICES. IT IS SIMILAR TO TELEPHONE CONNECTION AND THEREFORE, PROVISIONS OF SECTION 194 C ARE INAPPLICABLE. THE REVENUES APPEAL ON THIS ISSUE I S DISMISSED. ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 11 29. THE NEXT GROUND IS PAYMENT OF TRANSPONDER RENT: RELEVANT TO ASSESSMENT YEAR 2004-05: THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH VSNL TO RESERVE SPACE SEGMENT ON THE INTELSAT SATELLITE VIDE AGREEMENT DATED 27.7.99. T HE ASSESSING OFFICER HELD THAT THE SERVICES PROVIDED ARE OF VERY TECHNICAL NATURE REQUIRING HIGHLY SKILLED PROFESSIONALS. IT WAS NOT ONLY THE FACILITY PROVIDED BUT SERVICES ARE ALSO INHERENTLY INCLUDED THEREIN. THE ASSESSEE CANNOT UTILISE OR OPERATE TH E FACILITY AS PER ITS CHOICE. THE ASSESSEE MAKES A PAYMENT FOR THE E NTIRE CONTRACT. HAVING OPINED SO, THE ASSESSING OFFICER BRUSHED ASIDE THE CONTENTIONS OF THE ASSESSEE AND RELIANCE BY THE ASSESSEE ON DECISION OF THE TRIBUNAL IN THE CASE OF DCIT VS. PA N AMSAT INTERNATIONAL SYSTEMS INC. 103 TTJ 861 DELHI. THE AO HELD THAT THE ASSESSEE WAS LIABLE TO MAKE DEDUCTION OF TAX AT SOURCE U/S 194J ON THE TRANSPONDER RENT AND RAISED DEMAND ACCO RDINGLY. 30. ON APPEAL, THE CIT(A) ANALYSED THE NATURE OF FACILITY THAT THE ASSESSEE HAS OBTAINED BY MAKING THE IMPUGNED PA YMENT. BY FOLLOWING THE HONBLE MADRAS HIGH COURT DECISION IN THE CASE OF SKYCELL COMMUNICATIONS LTD. VS. DCIT 251 ITR 53 MAD THE CIT(A) DELETED THE DEMAND RAISED BY THE ASSESSING O FFICER. THE CIT(A) ALSO RELIED ON THE DECISION OF THE TRIBUNAL MADRAS BENCH IN THE CASE OF RAJ TELEVISION NETWORK IN ITA NO.182 7/MDS/98 HOLDING THAT PAYMENT OF TRANSPONDER CHARGES IS NOT FEE FOR TECHNICAL SERVICES. 31. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 12 32. WE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. WE FIND THAT IN THE CASE OF ISRO SATELLITE CENTRE IN 175 TAXMAN 97 AAR, THE ASSESSEE WAS TO MAKE PAYMENT FOR TAKING ON LEASE SPACE SEGMENT CAPACITY CONSISTING OF L-1 AND L-5 TRANSPONDER CENTERED ON AN INMARSAT 4 TH GENERATION SATELLITE WHOSE CAPACITY IS UTILISED THR OUGH DATA COMMANDS SENT FROM A GROUND STATION SET UP BY APPLI CANT. THE ASSESSEE PAID A FIXED ANNUAL CHARGE REGARDLESS OF A CTUAL USE OF TRANSPONDER CAPACITY. THE AAR HELD THAT WHEN BY EA RMARKING A SPACE SEGMENT CAPACITY OF TRANSPONDER FOR ITS USE A SSESSEE DOES NOT GET POSSESSION OR CONTROL OF EQUIPMENT OF IGL AND THE AGENCY THAT RECEIVED THE PAYMENT CHARGES PAID BY AS SESSEE CANNOT BE REGARDED AS PAYMENT FOR USE OF IGLS EQUI PMENT. THE AAR HELD THAT INCOME ARISING TO IGL OUT OF PAYMENTS RECEIVED FROM APPLICANT IS NEITHER IN NATURE OF ROYALTY UN DER ACT NOR IS FEE FOR TECHNICAL SERVICE. WE ARE OF THE OPINION TH AT THE RATIO OF THE DECISION OF THE AAR IS EQUALLY APPLICABLE TO TH E ASSESSEES CASE. HAVING REGARD TO THE FACTS OF THE CASE, THE DECISION OF THE CIT(A) IS UPHELD. THE REVENUES APPEAL IS DISMISSED ON THIS ISSUE. IN THE RESULT, THE REVENUES APPEALS IN ITA NO.1706 TO 1708/HYD/2008 ARE DISMISSED. 33. ASSESSEES APPEAL IN ITA NOS.1699, 1700 & 1701/HYD/2008: 34. THE FIRST ISSUE IS PAYMENTS TO NEWS SERVICE AGE NCIES. THE ASSESSEE DEDUCTED TAX AT SOURCE U/S 194C FROM PAYMENTS MADE TO VARIOUS NEWS SERVICE AGENCIES. TH E ASSESSING ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 13 OFFICER HELD THAT THE PAYMENTS FALL U/S 194J. HE R AISED DEMAND TO THE EXTENT OF DIFFERENCE OF TAX LIABLE TO BE DED UCTED U/S 194J AND THAT DEDUCTED U/S 194C. HE ALSO CHARGED INTERE ST U/S 201(1A) ON THE DIFFERENCE. 35. ON APPEAL THE CIT(A) AGREED WITH THE ASSES SING OFFICER. THE CIT(A) OBSERVED THAT SERVICE RENDERED BY THE NE WS SERVICE AGENCIES IS DEPLOYMENT OF THEIR MAN POWER FOR GATHE RING NEWS REPORTS FROM ACROSS INDIA ULTIMATELY TO BE USED BY THE ASSESSEE AND THAT THE JOB OF THE NEWS REPORTER REQUIRES EFFE CTIVE COMMUNICATION SKILL, PRESENCE OF MIND AND INTERROGA TIVE CAPABILITIES. THE CIT(A) STATED THAT QUITE OFTEN T HE REPORTERS POSSESS PROFESSIONAL QUALIFICATION AND THAT SERVICE S PROVIDED BY THE NEWS SERVICE AGENCIES ARE BASED ON HIGH QUALITY DATA BASE. THE CIT(A) HELD THAT THE SERVICES RENDERED TO THE A SSESSEE ATTRACT TDS U/S 194J. THE CIT(A) HOWEVER, ACCEPTED THE ALT ERNATIVE PLEA OF THE ASSESSEE THAT IF THE ASSESSEE PROVES TH AT THE PAYEES HAVE INCLUDED THE AMOUNTS PAID TO THEM IN THEIR RET URNS, THE DEMAND MAY BE REDUCED TO THAT EXTENT. 36. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 37. IT IS SUBMITTED THAT THE CIT(A) ERRED IN CONSI DERING THE PAYMENTS AS MADE FOR PROFESSIONAL/TECHNICAL SERVICE S. THE CIT(A) ERRED IN HOLDING THAT THE PROFESSIONAL QUALI FICATIONS AND SKILLS REQUIRED TO BE POSSESSED BY NEWS REPORTERS R ESULT IN PROFESSIONAL SERVICES BY THE NEWS SERVICE AGENCIES. THE CIT(A) OUGHT TO HAVE APPRECIATED THAT PROFESSIONAL SERVICE IS TO BE UNDERSTOOD AS THE APPLICATION OF PERSONAL SKILL BY PERSONS WHO IS TRAINED/QUALIFIED AND THE WORD PROFESSIONAL SERVICE ATTACHES TO SERVICES RENDERED BY INDIVIDUALS. THE NEWS SERVICE AGENCIES MAY ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 14 BE UTILISING PROFESSIONAL SERVICES BUT IN THE HANDS OF THE ASSESSEE THE DATA IS RAW DATA WHICH HAS TO UNDERGO PROCESSES FOR BEING CONVERTED INTO NEWS OR FEATURES FIT FOR PUBLICATION/PRESENTATION. THE WORK CARRIED OUT BY NEWS SERVICE AGENCIES IN GETTING THE NEWS GATHERED AND TRANSMITT ED TO THE ASSESSEE IS NOT A TECHNICAL SERVICE IN THE SENSE TH AT ANY PROCESS/SKILL IS MADE AVAILABLE TO THE ASSESSEE. T HE CIT(A) OUGHT TO HAVE DELETED THE DEMAND RAISED BY THE ASSE SSING OFFICER WHO APPLIED PROVISIONS OF SECTION 194J. 38. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 39. THE LEARNED DR RELIED ON THE ORDER OF THE A O & CIT(A). 40. WE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD. WE ARE UNABLE TO APPRECIATE T HAT NO PROFESSIONAL SERVICES ARE RENDERED BY THE REPORTERS IN COLLECTING THE DATA FOR PUBLICATION OF NEWS. THE WORK CARRIED OUT BY NEWS PAPER AGENTS REQUIRES PROFESSIONAL QUALIFICATIONS A ND SKILLS. THOUGH, THE DATA COLLECTED BY SUCH REPORTERS HAS TO BE REVIEWED GLOSSED UP AND MADE FIT TO BE PUBLISHED/PRESENTED. NEVERTHELESS, PROCUREMENT OF THE BASIC DATA CANNOT BE DONE WITHOUT QUALIFIED REPORTERS WHO UTILISE THEIR PROFE SSIONAL SKILLS FOR COLLECTION OF THE SAME. FURTHER, THE NEWSPAPER S EMPLOY REPORTERS WHO HAVE BEEN TRAINED TO HAVE INTERROGATI VE ABILITY, PRESENCE OF MIND AND HAVE SPECIALISED IN A WAY FOR DOING THEIR WORK AND HENCE THEY ARE RENDERING WORK IN THEIR PRO FESSIONAL CAPACITY. HENCE WE AGREE WITH THE CIT(A) IN DEDUCT ING TDS U/S 194J AND NOT UNDER SECTION 194C AND DISMISS THE ASS ESSEES APPEAL ON THIS ISSUE. THE ASSESSEES APPEAL IS DISM ISSED ON THIS ISSUE. ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 15 41. THE NEXT ISSUE IN ASSESSEES APPEAL IS PAYMENT OF SOFTWARE EXPENSES: THE ASSESSING OFFICER TREATED THE ASSESSEE AS DEFAU LTER U/S 201(1) R.W.S. 194C FOR NON DEDUCTION OF TDS ON SOFT WARE EXPENSES PAID BY THE ASSESSEE TO M/S USHA KIRON TEL EVISION, M/S USHA KIRON MOVIES AND OTHER PARTIES HOLDING THA T THE PROVISIONS OF SECTION 194C ARE ATTRACTED TO SUCH PA YMENTS. IN THIS CONNECTION THE ASSESSEE SUBMITTED THAT M/S USH A KIRON TELEVISION IS ENGAGED IN THE BUSINESS OF PRODUCTION OF TV SERIALS. SIMILARLY M/S USHA KIRON MOVIES IS IN THE BUSINESS OF PRODUCTION OF TV SERIALS AND MOVIES. ONE OF THE AC TIVITIES OF THE ASSESSEE IS TELECASTING VARIOUS PROGRAMMES IN ITS T V CHANNELS. THE ASSESSEE ENTERED INTO AN AGREEMENT WITH M/S USH A KIRON TELEVISION, M/S USHA KIRON MOVIES AND OTHER PARTIES FOR TELECASTING THEIR PROGRAMMES THROUGH THE ASSESSEES TV CHANNELS ON AN UNDERSTANDING THAT THE REVENUE GENER ATED ON ADVERTISEMENTS FOR TIME SLOTS DURING TELECASTING OF THE PROGRAMMES SUPPLIED BY THE SAID PARTIES SHALL BE SH ARED BETWEEN THEM. THEREFORE THE ASSESSEE SUBMITTED THA T IT HAD NOT ENTERED INTO ANY AGREEMENT FOR PRODUCTION OF ANY PR OGRAMMES WITH M/S USHA KIRON TELEVISION, M/S USHA KIRON MOVI ES AND OTHER PARTIES. THE ASSESSEE ALSO SUBMITTED THAT T HE SAID PARTIES ARE ABSOLUTE OWNERS OVER THEIR PROGRAMMES, FEATURE FILMS, SERIALS ETC. AND THE ASSESSEE IS NOT OWNING THE RIGHTS OVE R THEIR PROGRAMMES EXCEPT TELECASTING THEIR PROGRAMMES IN I TS TV CHANNELS. THE ASSESSEE ALSO FURTHER SUBMITTED THAT THE REVENUE PAID TO M/S USHA KIRON TELEVISION, M/S USHA KIRON M OVIES AND OTHER PARTIES OUT OF ADVERTISEMENT REVENUE FROM THE TIME SLOTS IN TELECASTING THE PROGRAMMES IS NOT TOWARDS COST OF P ROGRAMMES, ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 16 SERIALS ETC. IN THIS CONNECTION, THE ASSESSEE FURT HER SUBMITTED THAT IT HAD CREDITED THE GROSS REVENUE GENERATED DU RING SAID PROGRAMMES AND DEBITED THE AMOUNT PAID TO THE SAID PARTIES TO P&L ACCOUNT UNDER THE HEAD COST OF TV PROGRAMMES FOR ACCOUNTING PURPOSES. IN FACT IT WOULD HAVE BEEN EN OUGH IF THE ASSESSEE HAD CREDITED ITS SHARES OF REVENUE TO ITS PROFIT AND LOSS ACCOUNT INSTEAD OF PASSING ENTRIES AS STATED ABOVE. 42. IN THE ABOVE CIRCUMSTANCES, THE ASSESSEE SU BMITTED THAT THE PROVISIONS OF SECTION 194C ARE NOT ATTRACTED TO THE TRANSACTION BETWEEN THE ASSESSEE AND M/S USHA KIRO N TELEVISION, M/S USHA KIRON MOVIES AND OTHERS FOR TH E REASON THAT THESE PARTIES DID NOT CARRY OUT ANY WORK FOR T HE ASSESSEE WITHIN THE MEANING OF SECTION 194C OF THE ACT. 43. HOWEVER, THE ASSESSING OFFICER INVOKED SECT ION 194C AND RAISED DEMAND IN RESPECT OF THE AMOUNTS PAID OVER O N SHARING BASIS. HE ALSO LEVIED INTEREST U/S 201(1A). 44. IN APPEAL, THE CIT(A) NOTICED THAT IN RESPE CT OF OUTRIGHT PURCHASES, THE ASSESSEE DEDUCTED TAX AND PAID OVER THE SAME TO GOVT. ACCOUNT. AS REGARDS THE ASSESSEES CONTENTIO N THAT THE ASSESSING OFFICER ERRED IN HOLDING THAT REVENUE PAI D TO M/S USHA KIRON TELEVISION ETC. FROM OUT OF THE ADVERTISEMENT REVENUE IS TOWARDS COST OF PRODUCTION OF THE PROGRAMMES, FEATU RE FILMS, SERIALS ETC. THE CIT(A), AFTER GOING THROUGH THE AG REEMENTS, NOTICED THAT REVENUE SHARING WITH M/S USHA KIRON MO VIES IS 70:30 EXCEPT FEATURE FILMS AND FILM BASED PROGRAMME S. IN RESPECT OF FEATURE FILMS AND FILM BASED PROGRAMMES, THE RATIO IS 50:50. IN THE CASE OF M/S USHA KIRON TELEVISION, T HE SHARING RATIO IS 60:40 UPTO 30.9.2003 AND THEREAFTER IT WAS 70:30. THE ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 17 CIT(A) CONCLUDED THAT THE ASSESSEE IS PARTING WITH A PORTION OF ADVERTISEMENT REVENUE SO AS TO GET THE RIGHT TO RE- TELECAST THE PROGRAMMES ON ITS CHANNELS WHICH IN TURN IS THE SOU RCE FOR GENERATING ADVERTISEMENT REVENUE. THE CIT(A) CONCL UDED THAT THE FEATURES AND THE FURTHER FACT THAT THE ASSESSEE WAS PAYING ADVANCES TO THE PRODUCERS, SHOWED THAT THE ASSESSEE IS HAVING INHERENT INTEREST IN GETTING THE PROGRAMMES PRODUCE D AND OBTAINING TELECAST RIGHTS THEREON. THE CIT(A) ALSO NOTICED AGREEMENTS WITH OTHER PARTIES AND CONCLUDED THAT HE RE ALSO THE ASSESSEE HAS ASSOCIATED ITSELF WITH THE PRODUCERS T O ACT IN CONSORTIUM WITH THEM IN TELECASTING OF SUCH PROGRAM MES ON ETV CHANNEL. RELYING ON EXPLANATION III TO SECTION 194 C THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFICER IN HOLDI NG THAT SECTION 194C IS ATTRACTED IN CASE OF THE IMPUGNED PAYMENTS. 45. THE CIT(A) HOWEVER AGREED WITH ALTERNATE PL EA OF THE ASSESSEE THAT IF THE ASSESSEE PROVES TO THE SATISFA CTION OF THE ASSESSING OFFICER THAT THE PAYMENTS MADE BY THE ASS ESSEE ARE INCLUDED BY THE PAYEES IN THEIR RETURNS OF INCOME, AND TAXES HAVE BEEN PAID BY THEM THEREON, THE ASSESSING OFFIC ER MAY MODIFY THE DEMAND RAISED U/S 201(1). 46. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 47. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI S IVA KUMAR SUBMITTED THAT ITS CASE IS TOTALLY OUTSIDE THE PROV ISIONS OF SECTION 194C FOR THE REASON THAT IT HAS BEEN UNDISPUTEDLY A DMITTED ON RECORD THAT THE PAYMENTS MADE AS PER REVENUE SHARIN G AGREED BY THE CONTRACTING PARTIES, BOTH IN FORM AS WELL A S IN SUBSTANCE, THERE IS NO SCOPE TO HOLD OTHERWISE. THE FACT THAT THE ASSESSEE ADVANCES MONEY TO THE PRODUCERS OF THE PROGRAMMES D OES NOT ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 18 CONVERT THE PAYMENT AS PAYMENT FOR WORK DONE/AGREED TO BE DONE BY THE PAYEE. THE ASSESSEE REITERATED ITS REL IANCE ON THE DECISIONS IN THE CASES OF ACIT VS. NIIT 112 TTJ 800 DEL AND HFCL INFOTEL LIMITED VS. ITO 99 TTJ 440 CHD. 48. WE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD. FROM THE PROFIT AND LOSS ACCO UNT IT WAS SEEN THAT IN THE ETV TELUGU DIVISION AND ETV OTHER CHANNEL DIVISION, THE ASSESSEE HAS MADE PAYMENTS TOWARDS SO FTWARE EXPENSES. THESE PAYMENTS ARE FURTHER SUBDIVIDED IN TO REVENUE SHARE. OTHER PROGRAMMES AND DIRECT PURCHASES. EXPENSES TOWARDS REVENUE SHARES ARE TOWARDS THE AGREED COST FOR PRODUCTION OF TV SERIALS/PROGRAMMES. FROM THE AGR EEMENTS WITH OTHER PARTIES, IT CAN BE CONCLUDED THAT THE AS SESSEE IS ASSOCIATING ITSELF WITH THE PRODUCERS FOR GETTING T HE PROGRAMMES TELECASTED ON ETV CHANNEL AND THEREBY THE ASSESSEE GETS A SOURCE FOR GENERATING ADVERTISEMENT REVENUE. HENCE THE ASSESSEE IS MAKING PAYMENTS TO VARIOUS AGENCIES ON REVENUE SHARING BASIS FROM THE INCOME GENERATED THROUGH ADVERTISEMENTS BY WAY OF TELECASTING THE SERIALS OR PROGRAMMES PRODUCED BY THE AGENCIES. THE MODE OF PAYMENT IS N OTHING BUT A PAYMENT FOR CONTRACT OF WORK AND IS SQUARELY CO VERED BY EXPLANATION III TO SECTION 194C WHICH SAYS WORK S HALL INCLUDE PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING. I N VIEW OF THE SAME, WE HOLD THAT THE NATURE OF PAYMENTS FALL WITH IN THE PURVIEW OF SECTION 194C. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE. ITA NOS.1699 TO 1701/H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYDERABAD 19 49. IN THE RESULT, THE APPEALS OF THE ASSESSEE AS WELL AS THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT: 2 2. 3.2012 SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER DATED THE 22 ND MARCH, 2012 COPY FORWARDED TO: 1. M/S USHODAYA ENTERPRISES PVT. LTD., 6-3-570, SOMAJI GUDA, HYDERABAD 2. THE ACIT, CIRCLE 15(2), HYDERABAD 3. THE CIT(A)-II, HYDERABAD 4. THE CIT, HYDERABAD 5. THE DR, ITAT, HYDERABAD NP/