DCIT 8(3)(1), MUMBAI V. TIMES GLOBAL BROADCASTING CO.LTD, MUMBAI

ITA 2522/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0470 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 01-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAI PRATAP SINGH
• Assessee Lawyers: V MOHAN
• Section: 143(3); 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD , JUDICIAL MEMBER ITA NO. 2522 /MUM/ 2015 : (A.Y : 2011 - 12 ) DCIT - 8(3)(1), MUMBAI (APPELLANT) VS. M/S. TIMES GLOBAL BROADCASTING CO. LTD., 1 ST FLOOR, TRADE HOUSE, KAMLA MILL COMPOUND, LOWER PAREL, MUMBAI 400 013 PAN : AACCT2259F (RESPONDENT) APPELLANT BY : SHRI AJAI PRATAP SINGH RESPONDENT BY : SHRI V. MOHAN DATE OF HEARING : 31 / 05 /201 7 DATE OF PRONOUNCEMENT : 31 /0 5 /201 7 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A) - 14 , MUMBAI DATED 25 . 2 .201 5 , PERTAINING TO THE ASSESSMENT YEAR 20 11 - 12 , WHICH IN TURN HAS ARISEN FROM THE ORDER PASSED BY THE ASSESSING OFFICER DATED 28.1.2014 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IN ITS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 2 M/S. TIMES GLOBAL BROADCASTING CO. LTD. ITA NO. 2522/MUM/2015 (I) THE LEARNED CIT(A ) HAS ERRED ON FACTS AND IN LAW IN DELETING DISALLOWANCE MADE BY THE AO OF RS.35,31,11,238/ - , UNDER SECTION 40(A)(IA) OF INCOME TAX ACT, WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. (II) THE LEARNED CIT(A) HAS ERRED ON FACTS AND ON LAW IN DELETING THE DISALLOWANCE MADE BY THE AO U/S 40(A)(IA) FOR SHORT FALL IN TDS WITHOUT APPRECIATING THE FACT THAT PROVISION OF SECTION 194J IS ATTRACTED IN THE CASE OF THE ASS ESSEE INSTEAD OF SECTION 194C OF THE I.T. ACT, 1961. 2. THE LD. CIT(A)S ORDER IS CONTRARY IN LAW AND ON FACTS AND DESERVES TO BE SET ASIDE AND A.OS ORDER MAY BE RESTORED. 3. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE RESPONDENT - ASSESSEE, AT THE OUTSET, POINTED OUT THAT THE ISSUE RAISED IN THIS APPEAL BY THE REVENUE IS NO LONGER RES INTEGRA AND HAS INDEED BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR T HE ASSESSMENT YEARS 2008 - 09, 2009 - 10, 2010 - 11 AND 2011 - 12 VIDE SEPARATE ORDERS DATED 27.3.2015 AND 27.5.2015 VIDE ITA NOS. 669 & 670/MUM/2012 AND 4809 & 4807/MUM/2013 RESPECTIVELY IN PROCEEDINGS ARISING OUT OF ORDERS PASSED BY THE INCOME - TAX AUTHORITIES U/ S 201(1) AND 201(1A) OF THE ACT. THE SAID FACTUAL MATRIX HAS NOT BEEN DISPUTED BY THE LD. DR, BUT HE HAS PLACED RELIANCE ON THE ORDER OF THE ASSESSING OFFICER IN SUPPORT OF THE STAND OF THE REVENUE. 4. IN ORDER TO IMPART COMPLETENESS TO THE ORDER, WE MAY BRIEFLY REFER TO THE CONTROVERSY BEFORE US. THE RESPONDENT - ASSESSEE BEFORE US IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS, INTER - ALIA , ENGAGED IN THE BUSINESS OF PROVIDING AND 3 M/S. TIMES GLOBAL BROADCASTING CO. LTD. ITA NO. 2522/MUM/2015 BROADCASTING NEWS PROGRAMME THROUGH ITS S ATELLITE TELEVISION CHANNEL CALLED TIMES NOW. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD CLAIMED EXPENDITURE OF RS.44,13,89,048/ - UNDER THE HEAD CARRIAGE FEE ON WHICH TAX WAS DEDUCTED AT SOURCE U/S 194C OF THE ACT @ 2%. THE PAYMENT BY WAY OF CARRI AGE FEE WAS MADE TO THE CABLE OPERATORS IN PURSUANCE TO A CONTRACTUAL UNDERSTANDING WITH THEM AND IT WAS TOWARDS THE SERVICES RENDERED BY THEM IN CARRYING THE PROGRAMMES ON VARIOUS FREQUENCIES BY RECEIVING, RE - DISTRIBUTING AND RE - TRANSMITTING THE AUDIO - VIS UAL SIGNALS TO THE TELEVISION VIEWERS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PAYMENT IN QUESTION FELL WITHIN THE SCOPE OF SEC.194J OF THE ACT AND, THEREFORE, TAX OUGHT TO HAVE BEEN DEDUCTED AT SOURCE @ 10%. ACCORDINGLY, THE ASSESSING OFFICER INF ERRED THAT TAX WAS SHORT - DEDUCTED AT SOURCE BY THE ASSESSEE AND, THEREFORE, THE CORRESPONDING EXPENDITURE WAS LIABLE TO BE DISALLOWED IN TERMS OF SEC. 40(A)(IA) OF THE ACT. THEREFORE, OUT OF THE TOTAL EXPENDITURE OF RS.44,13,89,048/ - , THE ASSESSING OFFICE R COMPUTED THE AMOUNT PROPORTIONATE TO THE SHORTFALL IN DEDUCTION OF TAX AT SOURCE AND DISALLOWED THE SAME THEREBY RESULTING IN DISALLOWANCE OF RS.35,31,11,238/ - U/S 40(A)(IA) OF THE ACT. 5. BEFORE THE CIT(A), ONE OF THE POINTS RAISED BY THE ASSESSEE WAS THAT A MERE SHORTFALL IN DEDUCTION OF TAX AT SOURCE WOULD NOT JUSTIFY INVOKING OF SEC. 40(A)(IA) OF THE ACT IN ORDER TO DISALLOW THE EXPENDITURE. THE CIT(A) ACCEPTED THE AFORESAID PLEA AND ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO DELETE THE DISALLOWA NCE MADE U/S 40(A)(IA) OF THE ACT. 4 M/S. TIMES GLOBAL BROADCASTING CO. LTD. ITA NO. 2522/MUM/2015 6. WE FIND THAT THE TRIBUNAL VIDE ITS ORDER DATED 27.3.2015 (SUPRA) WAS CONSIDERING THE STAND OF THE REVENUE THAT PAYMENT MADE TO THE CABLE OPERATORS AS CHANNEL SUBSCRIPTION FEE WAS LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 194J OF THE ACT. THE TRIBUNAL NOTED THE EARLIER DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE DATED 29.10.2014 IN ITA NOS. 2699/MUM/2012, 4204 & 4205/MUM/2012 AND 2700/MUM/2012 FOR ASSESSMENT YEARS 2008 - 09 TO 2011 - 12 AND HELD THAT SUCH PAYMENTS WERE LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S 194C OF THE ACT AND NOT U/S 194J OF THE ACT, AS CANVASSED BY THE REVENUE. THE AFORESAID PRECEDENTS CON TINUE TO HOLD THE FIELD AS THE SAME HAVE NOT BEEN ALTERED BY ANY HIGHER AUTHORITY AND, THEREFORE, IN THIS VIEW OF THE MATTER , IT HAS TO BE HELD THAT THE ASSESSING OFFICER WAS WRONG IN CONCLUDING THAT THERE WAS A DEFAULT ON THE PART OF THE ASSESSEE IN DEDUCTING TAX AT SOURCE ON THE IMPUGNED PAYMENT U/S 194C OF THE ACT SO AS TO TRIGGER SEC. 40(A)(IA) OF THE ACT . TH US, INVOKING OF SEC. 40(A)(IA) OF THE ACT BY THE ASSESSING OFFICER IS MISPLACED. IN THIS VIEW OF THE MATTER, WE DEEM IT FIT AND PROPER TO UPHOLD THE ULTIMATE DECISION OF THE CIT(A) IN DELETING THE ADDITION, ALBEIT ON A DIFFERENT GROUND. 7. RESULTANTLY, APPEAL OF THE REVENUE IS DISMISSED AS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF HEARING ON 31 ST MAY, 2017. SD/ - SD/ - ( RAVISH SOOD ) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 3 1 S T MAY, 201 7 * SSL * 5 M/S. TIMES GLOBAL BROADCASTING CO. LTD. ITA NO. 2522/MUM/2015 COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI