The ITO, Ward-2, Bharuch V. M/s. Insight Channel Net Works Pvt.Ltd., Bharuch

ITA 2878/AHD/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85516 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 15-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 14-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD 0 0 , 0 0 , BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI N.S. SAINI , ACCOUN TANT MEMBER ITA NO. 2878 / AHD/201 0 ASSESSMENT YEAR: 2007 - 08 INCOME TAX OFFICER, WARD - 2, BHARUCH VS M/S. INSIGHT CHANNEL NET WORK PVT LTD, 3 RD FLOOR, NARMADA COMMERCIAL COMPLEX, ABOVE CENTRAL BANK OF INDA, BHARUCH PAN : AABCI 1034 N / APPELLAN T / RESPONDENT REVENUE BY : SHRI B.L. YADAV, SR. DR. ASSESSEE(S) BY : NONE / DATE OF HEARING : 15 / 01 /201 5 / DATE OF PRONOUNCEMENT : 16 / 01 /201 5 / O R D E R PER SHRI N.S. SAINI , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME - TAX (A PPEALS ) - VI, BARODA DATED 21 . 07 .201 0 FOR ASSESSMENT YEAR 2007 - 08 . 2. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APP EAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE U/S 40(A)(IA) OF RS.27,94,559/ - ON ACCOUNT OF NON - DEDUCTION OF TDS ON ROYALTY PAID BY THE ASSESSEE TO VARIOUS NEW CHANNELS IN CONTRAVENTI ON OF THE PROVISIONS OF SECTION 194J OF THE INCOME - TAX ACT, 1961. 3. NOTICE OF HEARING WAS SENT THROUGH THE DEPARTMENTAL REPRESENTATIVE ON 12.12.2014 WHICH WAS SERVED ON THE RESPONDENT - ASSESSEE 31.12.2014 ITA NO 2878 / AHD / 2010 ITO V. INSIGHT CHANNEL NET WORK PVT LTD AY: 2007 - 08 - 2 - FOR WHICH THE INCOME TAX OFFICER, WARD - 1(2), BHA RUCH HAS FILED A SERVICE REPORT VIDE HIS LETTER DATED 31.12.2014 RECEIVED IN THE REGISTRY ON 02.01.2015 WHICH IS PLACED ON RECORD. NONE APPEARED WHEN THE CASE WAS CALLED FOR HEARING AND NEITHER ANY ADJOURNMENT APPLICATION WAS FILED. THEREFORE, THIS APPEAL WAS HEARD EX - PARTE QUA THE RESPONDENT - ASSESSEE AND DISPOSED OF THE SAME AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE DEPARTMENTAL REPRESENTATIVE. 4. WE HAVE HEARD THE DEPARTMENTAL REPRESENTATIVE AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE IS ENGAGED IN CABLE OPERATING BUSINESS. THE ASSESSEE HAS PAID RS.32,42,277/ - TO VARIOUS NEWS CHANNELS. THE ASSESSING OFFICER HAS TREATED THE SAID PAYMENT AS ROYALTY WITHIN THE MEANING OF S ECTION 194J OF THE ACT AS NO DEDUCTION OF TAX AT SOURCE WAS MADE THEREON BY THE ASSESSEE , T HE SAID AMOUNT WAS DISALLOWED BY THE ASSESSING OFFICER BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 5. ON APPEAL, THE CIT(A) DELETED THE ABOVE DISAL LOWANCE BY FINDING THAT THE AMOUNTS PAID BY THE ASSESSEE TO VARIOUS CHANNELS WERE NEITHER ROYALTY WITHIN THE MEANING OF SECTION 194J OF THE ACT NOR FEE FOR TECHNICAL SERVICES WITHIN THE MEANING OF SECTION 194J OF THE ACT. 6. BEFORE US, THE DEPARTMENTAL R EPRESENTATIVE CONTENDED THAT THE PAYMENT IN QUESTION WAS ROYALTY WITHIN THE MEAN ING OF SECTION 194J OF THE ACT AND THEREFORE, THE ASSESSING OFFICER WAS JUSTIFIED IN DISALLOWING THE AMOUNT FOR DEFAULT IN TAX DEDUCTION AT SOURCE THEREON. 7. WE FIND THAT TH E ASSESSEE IS A CABLE OPERATOR. THE ASSESSEE RECEIVES SIGNALS FROM THE VARIOUS BROADCASTERS AND RELAYS THE SIGNALS TO VARIOUS SUBSCRIBERS. THE ASSESSEE MADE PAYMENT FOR SIGNALS RECEIVED AND DISTRIBUTED BY IT. THE ACTIVITY OF THE ASSESSEE IS AKIN TO THE FA CILITY PROVIDED BY TELECOMMUNICATION OPERATOR. THE HONBLE DELHI HIGH COURT IN THE CASE OF ITA NO 2878 / AHD / 2010 ITO V. INSIGHT CHANNEL NET WORK PVT LTD AY: 2007 - 08 - 3 - CIT VS. BHARTI CELLULAR LTD, (2008) 175 TAXMAN 573 (DELHI) AND THE HONBLE MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICATIONS LTD VS. DCIT, (2001) 119 TAXMAN 49 6 (MAD) HAS HELD THAT THE PAYMENT MADE TO TELEPHONE FACILITY PROVIDER IS NOT A PAYMENT FOR TECHNICAL SERVICES U/S 194J OF THE ACT AND THEREFORE, IS NOT SUBJECT TO TDS U/S 194J OF THE ACT. 8. SIMILARLY, IN OUR CONSIDERED VIEW, THE PAYMEN TS MADE BY THE ASS ESSEE TO VARIOUS BROADCASTERS ARE FOR RECEIVING TV SIGNALS AND NO FEE FOR TECHNICAL SERVICES U/S 194J OF THE ACT. FURTHER NO MATERIAL HAS BEEN BROUGHT BEFORE US TO SHOW THAT THE PAYMENT IN QUESTION WAS IN FACT ROYALTY WITHIN THE MEANING OF SECTION 194J OF THE ACT, RATHER THE PAYMENT WAS FOR RECEIVING TV SIGNALS FROM THE BROADCASTERS. THEREFORE, WE DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) WHICH IS HEREBY CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON FRIDAY , THE 16 TH OF JANUARY , 201 5 AT AHMEDABAD. SD/ - SD/ - ( G.C. GUPTA ) VICE PRESIDENT ( N.S. SAINI) ACCOUNTANT MEMBER AHMEDABAD; DATED 16 /01 /201 5 *BIJU T , PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - VI, BARODA 5. , , / DR, ITAT, AHMEDABAD 6. [ / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD