DCIT (TDS) 1(3), MUMBAI V. MUSIC BROADCAST P.LTD, MUMBAI

ITA 3935/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1330 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2017
• Appeal Filed By: Department
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 24-06-2015
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Section: 201(1)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & C.N. PRASAD (JM) I.T.A. NO. 3935 /MUM/ 2015 (ASSESSMENT YEAR 20 12 - 13 ) DCIT (TDS) - 1(3) ROOM NO. 703 SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING CHARNI ROAD MUMBAI - 400 002. VS. M/S. MUSIC BROADCAST PVT. LTD. 5 TH FLOOR RNA CORPORATE PARK KALANAGAR BANDRA (E) MUMBAI - 400 051. ( APPELLANT ) ( RESPONDENT ) C.O. NO. 20/MUM/2017 (ASSESSMENT YEAR 2012 - 13) M/S. MUSIC BROADCAST PVT. LTD. 5 TH FLOOR RNA CORPORATE PARK KALANAGAR BANDRA (E) MUMBAI - 400 051. VS. DCIT (TDS) - 1(3) ROOM NO. 703 SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING CHARNI ROAD MUMBAI - 400 002. ( APPELLANT ) ( RESPONDENT ) PAN NO . AACCM4036H ASSESSEE BY SHRI MANISH MALIK DEPARTMENT BY MS. ARJU GARODIA DATE OF HEARING 18 . 4 . 201 7 DATE OF PRONOUNCEMENT 18 .4 . 201 7 O R D E R PER BENCH : - THE APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 9.4.2015 PASSED BY THE LEARNED CIT(A) - 59, MUMBAI AND T HEY RELATE TO A.Y. 2012 - 13. 2. THE REVENUE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN DELETING THE DEMAND RAISED BY THE ASSESSING OFFICER U/S. 201(1) AND 201(1A) OF THE ACT FOR NON - DEDUCTION OF TAX AT SOURCE ON DISCOUNT PAID TO THE ADVERTISEME NT M/S. MUSIC BROADCAST PVT. LTD. 2 AGENTS AND ALSO FOR SHORT DEDUCTION OF TAX AT SOURCE ON THE PAYMENTS MADE TO THE RADIO JOCKEYS. 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE - COMPANY IS ENGAGED IN RADIO BROADCASTING BUSINESS BY OPERATING A FM RADIO. ITS MAIN REVENU E IS GENERATED THROUGH ADVERTISEMENTS. WHILE RAISING INVOICES TO WARDS ADVERTISEMENT CHARGES, THE ASSESSEE OFFERED A DISCOUNT OF 15% ON THE BILLS . THE ASSESSEE TREATED THE SAME AS DISCOUNT EXPENDITURE AND HENCE DEDUCTED TAX AT SOURCE. THE ASSESSING OFFICER NOTICED THAT THE ADVERTISEMENTS HAVE BEEN COLLECTED THROUGH THE AGENTS AND ACCORDINGLY HE TOOK THE VIEW THAT THE DISCOUNT, REFERRED ABOVE SHOULD BE CONSIDERED AS COMMISSION PAYMENT S. A CCORDINGLY HE TOOK THE VIEW THAT THE ASSESSEE SHOULD HAVE DEDUCTED TAX A T SOURCE U/S. 194H OF THE ACT. SINCE THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE ON THE DISCOUNTS SO OFFERED, HE TREATED THE ASSESSEE AS ASSESSEE IN DEFAULT AND RAISED DEMAND U/S. 201(1) OF THE ACT AND ALSO CHARGED INTEREST U/S. 201(1A) OF THE ACT FROM 1.4. 2011 TO THE DATE OF ORDER. 4. THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAS ENTERED INTO SERVICE AGREEMENT S WITH PERSONS F OR HOSTING SHOWS ON RADIO, POPULARLY KNOWN AS RADIO JOCKEY. THE ASSESSEE DEDUCTED TAX AT SOURCE U/S. 194J OF THE ACT T REATING THE PAYMENT AS PAYMENT TO PROFESSIONALS . THE ASSESSING OFFICER TOOK THE VIEW THAT THE RELATIONSHIP BETWEEN THE ASSESSEE - COMPANY AND THE RADIO JOCKEYS IS THAT OF THE EMPLOYER - EMPLOYEE. HOWEVER, HE CATEGORIZED THE PAYMENTS MADE TO THE RADIO JOCKEYS IN TWO CATEGORIES, I.E., THOSE WHO RECEIVED LESS THAN RS.3.00 LAKHS IN A YEAR AND THOSE WHO RECEIVED MORE THAN RS.3.00 LAKHS IN A YEAR. THE AO TOOK THE VIEW THAT THE PERSONS WHO RECEIVED LESS THAN ` 3 LAKHS CAN BE CONSIDERED FREELANCERS AND HENCE THE PAYM ENT MADE TO THE M WAS ACCEPTED BY THE AO AS PAYMENTS MADE TO PROFESSIONAL S. HOWEVER, IN RESPECT OF THE PAYMENT S MADE TO PERSONS EXCEEDING ` 3 LAKHS IN A YEAR , THE ASSESSING OFFICER TOOK THE VIEW THAT THE SAME SHOULD BE TREATED AS SALARY PAYMENT S. A CCORDING LY HE TOOK THE VIEW THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX AT SOURCE U/S. 192 OF THE ACT. ACCORDINGLY, HE RAISED THE DEMAND U/S. M/S. MUSIC BROADCAST PVT. LTD. 3 201(1) FOR SHORT DEDUCTION OF TAX AT SOURCE AND ALSO CHARGED INTEREST U/S. 201(1A) OF THE ACT FROM 1.4.2011 TO DATE OF ORD ER. 5. IN THE APPELLATE PROCEEDINGS, THE LEARNED CIT(A) AGREED WITH THE CONTENTIONS OF THE ASSESSEE AND ACCORDINGLY DELETED THE DEMAND RAISED U/S. 201(1) OF THE ACT AND 201(1A) OF THE ACT IN RESPECT OF BOTH THE PAYMENTS DISCUSSED ABOVE. AGGRIEVED, THE REV ENUE HAS FILED THIS APPEAL BEFORE US AND THE ASSESSEE HAS FILED THE CROSS OBJECTION ONLY TO SUPPORT THE ORDER PASSED BY THE LEARNED CIT(A). 6. AT THE TIME OF HEARING, LEARNED AR SUBMITTED THAT IDENTICAL ISSUES WERE CONSIDERED BY THE COORDINATE BENCH OF TH E TRIBUNAL IN ASSESSEES OWN CASE RELATING TO A.Y. 2011 - 12 IN ITA NO. 548/MUM/2015 AND THE TRIBUNAL, VIDE ITS ORDER DATED 7.12.2016 HAS HELD THAT THE DISCOUNT PAID TO THE ADVERTISEMENT AGENTS CANNOT BE CONSIDERED AS COMMISSION PAYMENT S, SINCE THE ADVERTISE MENT AGENCIES CANNOT BE CONSIDERED AS AGENTS OF THE ASSESSEE. IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE COORDINATE BENCH HAS ALSO HELD THAT THE PAYMENTS MADE BY THE ASSESSEE TO THE RADIO JOCKEYS WERE IN THE NATURE OF PAYMENTS TO PROFESSIONALS WHICH ARE LIABLE FOR DEDUCTION OF TAX AT SOURCE U/S. 194J OF THE ACT. 7. SINCE THE VIEW TAKEN BY THE LEARNED CIT(A) ON BOTH THE ISSUES DISCUSSED ABOVE IS CONSONANCE WITH THE VIEW TAKEN BY THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2011 - 12, WE DO NOT FIND ANY REA SON TO INTERFERE WITH THE ORDER PASSED BY THE LEARNED CIT(A). 8. THE C ROSS OBJECTION FILED BY THE ASSESSEE ONLY SUPPORT S THE ORDER PASSED BY THE LEARNED CIT(A) AND HENCE IT DOES NOT REQUIRE ANY ADJUDICATION. M/S. MUSIC BROADCAST PVT. LTD. 4 9. IN THE RESULT, APPEAL FILED BY THE REV ENUE AND CROSS OBJECTION FILED BY THE ASSESSEE STAND DISMISSED. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 18 . 4 . 201 7. SD/ - SD/ - (C.N. PRASAD ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 18 / 4 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR ) PS ITAT, MUMBAI