VIACOM 18 MEDIA P.LTD, MUMBAI V. ADIT (IT) 2(2), MUMBAI

ITA 2910/MUM/2012

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9357 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 04-02-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 30-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK PARAMPURIA
• Assessee Lawyers: F V IRANI
• Keywords: Double taxation relief

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL L BENCH, M UMBAI BEFORE S/SHRI N. K. BILLAIYA, (AM) AND AMIT SHUKL A, (JM) . . , , , ./I.T.A. NO.2910 & 2911/MUM/2012 ( ! ' / ASSESSMENT YEARS 2011-12 AND 2012-13) VIACOM 18 MEDIA PVT. LIMITED, ZION BIZWORLD, SUBHASH ROAD-A, NEAR GARWARE OFFICE, VILE PARLE (E), MUMBAI-400057 / VS. THE ASSTT.DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) 2(2), MUMBAI. ( #$ / APPELLANT) .. ( %&#$ / RESPONDENT) # ./ '( ./PAN/GIR NO. :AAACM9164E #$ ) / ASSESSEE BY SHRI F V IRANI %&#$ * ) / REVENUE BY SHRI VIVEK PARAMPURIA + * , / DATE OF HEARING : 4.2.2015 -.'! * , /DATE OF PRONOUNCEMENT : 4.2.2015 / O R D E R PER BENCH THESE TWO APPEALS BY THE ASSESSEE ARE PREFERRED AG AINST THE VERY SAME ORDER OF THE LD. CIT(A)-11, MUMBAI DATED 31.1.2012 PERTAINING TO THE ASSESSMENT YEARS 2011-12 AND 201 2-13. AS BOTH THE YEARS HAVE COMMON GRIEVANCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON O RDER, FOR THE SAKE OF CONVENIENCE. 2910 & 2911/MUM/2012 2 2. SINCE GROUNDS RAISED BY THE ASSESSEE FOR BOTH TH E YEARS ARE COMMON, FOR THE SAKE OF BREVITY, WE REPRODUCE GROU NDS OF APPEAL TAKEN IN THE APPEAL FOR ASSESSMENT YEAR 2011-2012: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APP EALS) - 11 MUMBAI ['CIT(A)] HAS ERRED IN HOLDING THAT THE PAYMENTS OF TRANSPONDER FEES BY THE APPELLANT TO IN TELSAT CORPORATION. USA, ARE TAXABLE UNDER THE INCOME-TAX ACT, 1961 ('THE ACT') AND UNDER THE INDIA-USA TAX TREATY ('THE TREATY'), AND HENCE ARE SUBJECT TO TAX WITHHOLDING UNDER SECTION 195 OF THE ACT 2. ON THE FACTS, AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE TRANSPONDER FEES PAYABLE BY THE APPELLANT TO INTELS AT CORPORATION, USA ARE IN THE NATURE OF ROYALTY TAXAB LE UNDER SECTION 9(1)(VI) OF THE ACT. 3. ON THE FACTS, AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THA T THE TRANSPONDER FEES PAYABLE BY THE APPELLANT TO INTELS AT CORPORATION, USA ARE ALSO IN THE NATURE OF FEES FOR TECHNICAL SERVICES TAXABLE UNDER SECTION 9(1)(VII) OF THE ACT. 4. ON THE FACTS, AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE EARTH STATION OF THE UPLINK SERVICE PROVIDER TO THE APPELLANT AND THE CABLE/ DTH OPERATORS CARRYING THE APPELLANT S CHANNELS CONSTITUTE 'BUSINESS CONNECTION OF INTELSAT CORPORA TION, USA IN INDIA UNDER THE ACT 5. ON THE FACTS, AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT PAYMENT FOR TRANSPONDER FEES IS FOR TRANSFER OF USE OR RIGH T TO USE AN INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT AND THUS, TAXABLE AS ROYALTY UNDER ARTICLE 12(3)(B) OF THE IN DIA-USA TAX TREATY 3. AT THE VERY OUTSET, THE LD. COUNSEL OF THE ASSES SEE STATED THAT 2910 & 2911/MUM/2012 3 THE TRIBUNAL IN ASSESSEES OWN CASE IN EARLIER YEAR S IN ITA NOS.1584, 1585/MUM/2010 AND 1091?MUM/2011 (AYS-200 9-10- AND 2010-2011) ORDER DATED 28.3.2014 HAS DECIDED ONE OF THE ISSUES AGAINST THE ASSESSEE. THE LD. DR FAIRLY CON CEDED TO THIS. 4. WE HAVE CAREFULLY PERUSED THE ORDER OF THE TR IBUNAL (SUPRA). WE FIND THAT IN THE REFERRED ORDER, THE TRIBUNAL HA D CONSIDERED THE FOLLOWING GRIEVANCE OF THE ASSESSEE: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) - 11, MUMBAI [CIT(A)] HAS ERRED IN HOLDING THAT THE TRANS PONDER FEES PAYABLE BY THE APPELLANT TO INTELSAT CORPORATION AR E IN THE NATURE OF 'ROYALTY' AS PER PROVISIONS OF THE INCOME TAX ACT, 1961 ('THE ACT') AND THE INDIA-USA TAX TREATY ('THE TREA TY') AND IN CONSEQUENTLY UPHOLDING THE ORDER OF THE LEARNED ASS T. DIRECTOR OF INCOME TAX (INTL. TAX)-2(2) ['ADIT'] DIRECTING T HE APPELLANT TO WITHHOLD TAX FROM SUCH PAYMENTS UNDER SECTION 195 O F THE ACT. IT IS PRAYED THAT THE LD. ADIT BE DIRECTED TO CONS IDER THE TRANSPONDER FEES AS NOT SUBJECT TO TAX WITHHOLDING UNDER SECTION 195 OF THE ACT AND THAT CONSEQUENTLY, THE ORDER PAS SED BY THE LEARNED ADIT UNDER SECTION 195 OF THE ACT BE QUASHE D.' AND AFTER CONSIDERING THE FACTS AND THE SUBMISSION S, THE TRIBUNAL AT PARA 15 OF THE ORDER HELD THAT THE PAYMENTS MADE FOR USE/ RIGHT TO USE OF PROCESS FALLS IN THE AMBIT OF EXPRESSION ROY ALTY AS PER DTAA AS WELL AS PROVISIONS OF INCOME TAX ACT . AS NO DISTINGUISHING FACTS/DECISION HAS BEEN BROUGHT ON RECORD BY THE LD .COUNSEL TO CONTROVERT THE DECISION OF THE TRIBUNAL, RESPECTFUL LY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL ( SUPRA), GROUND 2910 & 2911/MUM/2012 4 NO.2 OF BOTH THE YEARS IS DECIDED AGAINST THE ASSES SEE AND IN FAVOUR OR THE REVENUE. 5. BEFORE CLOSING, SINCE IN THE EARLIER YEAR, THE T RIBUNAL HAD CONSIDERED ONLY ISSUE RELATING TO THE TREATMENT AS ROYALTY, WE HAVE FOLLOWED THAT FINDING OF THE TRIBUNAL. THE GRIEVANC E QUA GROUND NOS.3,4, AND 5 OF THE PRESENT APPEALS ARE TREATED A S OF ACADEMIC IN NATURE AND THEREFORE NEEDS NO SEPARATE ADJUDICATION . 6. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED QU A GROUND NO.2. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 4TH FEB, 2015. -.'! / 0 1 4TH FEB, 2015 . * 2+ 3 SD SD ( / AMIT SHUKLA ) ( . . , / N. K. BILLAIYA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER + MUMBAI: 4TH FEB,2015. . . ./ SRL , SR. PS ! '#$% &%'# / COPY OF THE ORDER FORWARDED TO : 1. #$ / THE APPELLANT 2. %&#$ / THE RESPONDENT. 3. ( ) / THE CIT(A)- CONCERNED 4. / CIT CONCERNED 5. 67 2 %8 , , 8! , + / DR, ITAT, MUMBAI CONCERNED 6. 2 9 : + / GUARD FILE. / BY ORDER, TRUE COPY ; ' (ASSTT. REGISTRAR) , 8! , + /ITAT, MUMBAI