ITO (TDS), Ward-58(3), Kolkata, Kolkata V. M/S. Media Worldwide Pvt. Ltd., Kolkata

ITA 2057/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1738 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 10-11-2014
• Court: TRIBUNAL
• Department Lawyers: R K KUREEL
• Assessee Lawyers: GIRISH SHARMA
• Section: 133A; 194C; 201(1)

Judgement Text

I.T.A. NO. 2057/KOL./2014 ASSESSMENT YEAR: 2011-2012 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 2057/KOL/ 2014 ASSESSMENT YEAR: 2011-2012 INCOME TAX OFFICER (TDS),.......................... ...........................APPELLANT WARD-58(3), KOLKATA, 10B, MIDDLETON ROW, KOLKATA-700 071 -VS.- M/S. MEDIA WORLDWIDE PVT. LIMITED,................. .................RESPONDENT 54/1, RAFI KIDWAI ROAD, KOLKATA-700 016 [PAN: CALMO 9342 E] APPEARANCES BY: SHRI R.K. KUREEL, JCIT, D.R., FOR THE DEPARTMENT SHRI GIRISH SHARMA, FCA, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : APRIL 11, 2017 DATE OF PRONOUNCING THE ORDER : MAY 12, 2017 O R D E R PER SHRI P.M. JAGTAP, A.M. .: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA DAT ED 14.07.2014 AND IN THE SOLITARY SUBSTANTIVE GROUND RAISED THEREIN, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN CO NSIDERING THAT THE PAYMENT MADE FOR THE SERVICES RENDERED BY THE ASSES SEE IN THE NATURE OF CHANNEL CARRIAGE FEES, UP-LINKING CHARGES AND BANDW IDTH CHARGES WERE NOT COVERED UNDER SECTION 194J OF THE INCOME TAX ACT, 1 961. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF MEDIA BROADCASTING. A SURVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT IN ITS BUSINESS PREMISES ON 20. 06.2011. AS FOUND DURING THE COURSE OF SURVEY, THE ASSESSEE-COMPANY W HILE MAKING THE I.T.A. NO. 2057/KOL./2014 ASSESSMENT YEAR: 2011-2012 PAGE 2 OF 6 PAYMENT TOWARDS CHANNEL CARRIAGE FEES, UP-LINKING C HARGES AND BANDWIDTH CHARGES TO THE VARIOUS PARTIES HAD DEDUCT ED TAX AT SOURCE AT 2% AS PER THE PROVISIONS OF SECTION 194C. ACCORDING TO THE ASSESSING OFFICER, THE SAID PAYMENTS MADE BY THE ASSESSEE WER E COVERED BY SECTION 194J AND THE ASSESSEE, THEREFORE, WAS REQUIRED TO D EDUCT TAX AT SOURCE AT 10% INSTEAD OF 2%. HE, THEREFORE, ISSUED A NOTICE U NDER SECTION 201(1) OF THE ACT REQUIRING THE ASSESSEE TO SHOW-CAUSE AS TO WHY IT SHOULD NOT BE TREATED AS AN ASSESSEE IN DEFAULT FOR SHORT DEDUCTI ON OF TAX FROM THE PAYMENTS MADE ON ACCOUNT OF CHANNEL CARRIAGE FEES, UP-LINKING CHARGES AND BANDWIDTH CHARGES. IN REPLY, IT WAS SUBMITTED O N BEHALF OF THE ASSESSEE THAT THE PAYMENT OF CHANNEL CARRIAGE FEES, UP-LINKING CHARGES AND BANDWIDTH CHARGES WERE NOT IN THE NATURE OF PAY MENT FOR ANY TECHNICAL SERVICES AND THE SAME BEING IN THE NATURE OF CONTRACTUAL PAYMENT, TAX AT SOURCE WAS DEDUCTIBLE AT 2% AS PER THE PROVISIONS OF SECTION 194C. RELIANCE IN SUPPORT OF THIS CONTENTIO N WAS PLACED BY THE ASSESSEE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS.- ESTEL COMMUNICATIONS PVT. LIMITED REPORTED IN 318 ITR 185. THE ASSESSING OFFICER, HOWEVER, FOUND THE SAID CASE LAW RELIED UPON BY THE ASSESSEE TO BE DISTINGUISHABLE ON FACTS. ACCORDING TO HIM, THE PROVISIONS OF SECTION 194C WERE GENERAL IN NATURE, WHILE THE P ROVISIONS OF SECTION 194J BEING SPECIAL COVERING SPECIFIC SITUATION, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE AT 10% INSTEAD OF 2%. HE, T HEREFORE, TREATED THE ASSESSEE AS IN DEFAULT IN RESPECT OF SHORT DEDUCTIO N OF TAX UNDER SECTION 201(1) OF THE ACT AND ALSO CHARGED INTEREST UNDER S ECTION 201(1A) OF THE ACT. ACCORDINGLY, TOTAL DEMAND OF RS.1,68,08,795/- WAS RAISED BY THE ASSESSING OFFICER AGAINST THE ASSESSEE VIDE AN ORDE R DATED 22.03.2013 PASSED UNDER SECTION 201(1)/201(1A) OF THE ACT. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 201(1)/201(1A), AN APPEAL WAS PREFERRED BY THE ASSE SSEE BEFORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEE DINGS BEFORE THE LD. CIT(APPEALS), VARIOUS SUBMISSIONS WERE MADE BY THE ASSESSEE IN SUPPORT OF ITS CASE THAT THE AMOUNT IN QUESTION PAID TOWARD S CHANNEL CARRIAGE I.T.A. NO. 2057/KOL./2014 ASSESSMENT YEAR: 2011-2012 PAGE 3 OF 6 FEES, UP-LINKING CHARGES AND BANDWIDTH CHARGES WAS NOT IN THE NATURE OF TECHNICAL SERVICES AS ENVISAGED IN SECTION 194J AND THE SAME BEING CONTRACTUAL PAYMENTS, TDS WAS RIGHTLY DEDUCTED AT 2 % AS PER THE PROVISIONS OF SECTION 194C. VARIOUS JUDICIAL PRONOU NCEMENTS WERE ALSO CITED ON BEHALF OF THE ASSESSEE IN SUPPORT OF THIS CONTENTION. THE SUBMISSIONS MADE BY THE ASSESSEE WERE FORWARDED BY THE LD. CIT(APPEALS) TO THE ASSESSING OFFICER SEEKING REMAN D REPORT AND AFTER CONSIDERING THE REMAND REPORT FILED BY THE ASSESSIN G OFFICER, THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS OTHER M ATERIAL AVAILABLE ON RECORD, THE LD. CIT(APPEALS) CANCELLED THE DEMAND R AISED BY THE ASSESSING OFFICER ON THE ASSESSEE VIDE AN ORDER PASSED UNDER SECTION 201(1)/201(1A) FOR THE FOLLOWING REASONS GIVEN IN H IS IMPUGNED ORDER:- IT IS CLEAR THAT FIRSTLY THESE SERVICES IN THE NAT URE OF CHANNEL CHARGES, BANDWIDTH CHARGES AND UPLINKING CHARGES PAID BY THE APPELLANT WERE NOT SPECIFICALLY COVERED U/S 194J, PRIOR TO AMENDMENT INTRODUCED BY FINANCE ACT, 2012 BY INTRODUCTION OF EXPLANATION 6 TO SECTION 9(1)(VI) AND FURTHER THAT THESE PROVISIONS DID NOT APPLY RETROSPECTIVELY ON LIABILITY TO DEDUCT TDS, A S THE PERIOD IN QUESTION FOR THE APPELLANT WAS FINANCIAL YEAR 2010-11. THEREFORE, THE SUBMISSIONS OF THE APPELLAN T ARE FOUND TO BE VALID IN THIS CONTEXT AND THE DEMAND RA ISED BY THE A.O. ON GROUNDS THAT TDS WAS TO BE DEDUCTED UND ER SECTION 194J IS HELD TO BE NOT JUSTIFIED AND THE SA ME IS DELETED. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS AGREED BY THE LD. REPRESENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLV ED IN THIS APPEAL OF THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESS EE BY THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE IMMEDI ATELY PRECEDING YEAR, I.E. AY 2010-11 RENDERED VIDE ITS ORDER DATED 29.08 .2014 IN ITA NO. 1422/KOL/2012, WHEREBY THE ORDER PASSED BY THE LD. CIT(APPEALS) CANCELLING THE DEMAND RAISED BY THE ASSESSING OFFIC ER AGAINST THE I.T.A. NO. 2057/KOL./2014 ASSESSMENT YEAR: 2011-2012 PAGE 4 OF 6 ASSESSEE UNDER SECTION 201(1)/201(1A) FOR THE ALLEG ED SHORT DEDUCTION OF TAX AT SOURCE FROM THE SIMILAR PAYMENTS MADE BY THE ASSESSEE WAS UPHELD BY THE TRIBUNAL VIDE PARAGRAPH NO. 8 OF ITS ORDER, WHICH READS AS UNDER:- '8. UPON CAREFUL CONSIDERATION OF THE SUBMISSIONS, WE FIND THAT IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF M/S. SRISTI TELEVISION (REFERRED TO SUPRA). WE FIND THAT THE TRIBUNAL HAS ADJUDICATED THE ISSUE AS UNDE R- 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD WE CAN GAINFULLY REFER TO THE PROVISIONS OF SECTIONS 194C AND 194J, WHICH ARE REPRODUCED AS UNDER:- '194C-PAVMENTS TO CONTRACTORS: ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A SPECIFIED PERSON SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER , DEDUCT AN AMOUNT EQUAL TO'. '194J-FEES FOR PROFESSIONAL OR TECHNICAL SERVICES: (1) ANY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING RESIDENT ANY SUM BY WAY OF - (A) FEES FOR PROFESSIONAL SERVICES, OR (B) FEES FOR TECHNICAL SERVICES, (C) ROYALTY, OR (D) ANY SUM REFERRED TO IN CLAUSE (VA) OF SECTION 2 8, SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO PER CENT, OF SUCH SUM AS INCOME TAX ON INCOME COMPRISED THEREIN. WE FIND THAT THE ASSESSEE PRODUCED VARIOUS TYPES OF PROGRAMMES/SERIALS AND NEWS AND THESE WERE TELECASTED/BROADCASTED THROUGH MULTI SYSTEM OPERATORS FOR WHICH PAYMENTS WERE MADE TO THEM I.T.A. NO. 2057/KOL./2014 ASSESSMENT YEAR: 2011-2012 PAGE 5 OF 6 UNDER THE HEAD 'CARRIAGE CHARGES'. THE ASSESSEE HAS DULY DEDUCTED AND PAID TAX UNDER SECTION J94C OF THE ACT. WE AGREE WITH THE ID CIT(APPEALS) THAT NO TECHNICAL SERVICES WERE INVOLVED IN PAYMENT OF CARRIAGE CHARGES MADE BY THE ASSESSEE FOR BROADCASTING OF THE PROGRAMMES PRODUCED BY THE ASSESSEE. THE ASSESSEE PRODUCED VARIOUS TYPES OF PROGRAMMES/SERIALS AND NEWS AND THESE WERE TELECASTED/BROADCASTED THROUGH MULTI SYSTEM OPERATORS. PAYMENTS IN THIS REGARD WERE MADE AS CARRIAGE CHARGES FOR WHICH PAYMENT OF TAX WAS DEDUCTIBLE UNDER SECTION 194C OF THE INCOME TAX ACT. AS PER DEFINITION OF TECHNICAL SERVICES GIVEN IN EXPLANATION TO SECTION 9 OF THE ACT, THE DEDUCTEE SHOULD HAVE RENDERED MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES. IN THIS CASE, WE FIND THAT THERE IS NO SUCH FINDING OF THE ASSESSING OFFICER. THE DEDUCTEE HAS ONLY TELECASTED THE PROGRAMMES PRODUCED BY THE ASSESSEE. IN THIS CASE LAW REFERRED TO BY THE LD.CIT'(APPEALS) DECISION IN THE CASE OF DCIT -VS- NNM SECURITIES LIMITED, ITAT HELD THAT IF THE ASSESSEE IS USING ANY FACILITY OF ANYONE THE SAME IS NOT TECHNICAL SERVICES. HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KARUKSHETRA DARPAN (P) LTD -VS- CIT [217 CTR 326J HAS HELD THAT TELECASTING ON THE PROGRAMME WAS COVERED UNDER SECTION 194C OF THE ACT . 9. IN THE BACKGROUND OF THE ABOVE DISCUSSION AND FO LLOWING THE PRECEDENT AS ABOVE, WE DO NOT FIND ANY REASON T O INTERFERE WITH THE ORDER OF THE ID. CIT(APPEALS). ACCORDINGLY, WE UPHOLD THE SAME. SINCE THE FACTS IN THE CASE BEFORE US ARE IDENTICAL , RESPECTFULLY FOLLOWING THE ABOVE PRECEDENT, WE UPHO LD THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. ACCORDINGLY, THIS APPEAL OF THE REVENUE STANDS DISMISSED. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2010-11 ON A SIMILAR ISSUE, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) D ELETING THE DEMAND RAISED BY THE ASSESSING OFFICER FOR THE ALLEGED SHO RT DEDUCTION OF TAX AT SOURCE BY THE ASSESSEE FROM THE PAYMENTS MADE TOWAR DS CHANNEL CARRIAGE I.T.A. NO. 2057/KOL./2014 ASSESSMENT YEAR: 2011-2012 PAGE 6 OF 6 FEES, UP-LINKING CHARGES AND BANDWIDTH CHARGES AND DISMISS THIS APPEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON MAY 12, 2017. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 12 TH DAY OF MAY, 2017 COPIES TO : (1) INCOME TAX OFFICER (TDS), WARD-58(3), KOLKATA, 10B, MIDDLETON ROW, KOLKATA-700 071 (2) M/S. MEDIA WORLDWIDE PVT. LIMITED, 54/1, RAFI KIDWAI ROAD, KOLKATA-700 016 (3) COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKA TA; (4) COMMISSIONER OF INCOME TAX ,KOLKAT A (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/DDO INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.