M/s. ADIT (I.T) - 3(2), MUMBAI V. B4U INTERNATIONAL HOLDINGS LTD., MUMBAI

ITA 4095/MUM/2008

• Counselvise Citation: 409519914 RSA 2008
• Duration Of Justice: 3 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 30-04-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 06-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A V SONDE
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH L,MUMBAI BEFORE S/SHRI B.R. MITTAL (JM) & J. SUDHAKAR REDD Y (AM) I.T.A. NO.3829/MUM/2008 (A.Y. 2001-02) B4U INTERNATIONAL HOLDINGS LTD., C/O. B4U TELEVISION NETWORKS (I) P. LTD., B-47, PARAMOUNT BLDG., 1 ST FLOOR, NEW LINK ROAD, ANDHERI (W), MUMBAI-400 053. PAN: AABCB4729M VS. ASSTT. DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-3(2), MUMBAI. APPELLANT RESPONDENT I.T.A. NO.4095/MUM/2008 (A.Y. 2001-02) ASSTT. DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-3(2), MUMBAI. VS. B4U INTERNATIONAL HOLDINGS LTD., C/O. B4U TELEVISION NETWORKS (I) P. LTD., B-47, PARAMOUNT BLDG., 1 ST FLOOR, NEW LINK ROAD, ANDHERI (W), MUMBAI-400 053. PAN: AABCB4729M APPELLANT RESPONDENT I.T.A. NO.3830/MUM/2008 (A.Y. 2002-03) B4U INTERNATIONAL HOLDINGS LTD., C/O. B4U TELEVISION NETWORKS (I) P. LTD., B-47, PARAMOUNT BLDG., 1 ST FLOOR, NEW LINK ROAD, ANDHERI (W), MUMBAI-400 053. PAN: AABCB4729M VS. ASSTT. DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-3(2), MUMBAI. APPELLANT RESPONDENT ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 2 I.T.A. NO.4096/MUM/2008 (A.Y. 2002-03) ASSTT. DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-3(2), MUMBAI. VS. B4U INTERNATIONAL HOLDINGS LTD., C/O. B4U TELEVISION NETWORKS (I) P. LTD., B-47, PARAMOUNT BLDG., 1 ST FLOOR, NEW LINK ROAD, ANDHERI (W), MUMBAI-400 053. PAN: AABCB4729M APPELLANT RESPONDENT I.T.A. NO.3831/MUM/2008 (A.Y. 2003-04) B4U INTERNATIONAL HOLDINGS LTD., C/O. B4U TELEVISION NETWORKS (I) P. LTD., B-47, PARAMOUNT BLDG., 1 ST FLOOR, NEW LINK ROAD, ANDHERI (W), MUMBAI-400 053. PAN: AABCB4729M VS. ASSTT. DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-3(2), MUMBAI. APPELLANT RESPONDENT I.T.A. NO.4097/MUM/2008 (A.Y. 2003-04) ASSTT. DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION)-3(2), MUMBAI. VS. B4U INTERNATIONAL HOLDINGS LTD., C/O. B4U TELEVISION NETWORKS (I) P. LTD., B-47, PARAMOUNT BLDG., 1 ST FLOOR, NEW LINK ROAD, ANDHERI (W), MUMBAI-400 053. PAN: AABCB4729M APPELLANT RESPONDENT ASSESSEE BY SHRI A.V. SONDE. DEPARTMENT BY SHRI M AHESH KUMAR. DATE OF HEARING 04-05-2012 DATE OF PRONOUNCEMENT 28-05-2012 ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 3 O R D E R PER BENCH : THESE CROSS APPEALS ARE FILED AGAINST SEPARATE BUT IDENTICAL ORDERS OF THE ORDERS OF THE COMMISSIONER (APPEALS)-XXXIII, MUMBAI , DATED 10-03-2008 FOR THE ASSESSMENT YEARS 2001-02, 2002-03 AND 2003-04. AS THE ISSUES ARISING IN ALL THESE APPEALS ARE COMMON, FOR THE SAKE OF CONVENIEN CE, THEY ARE HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS COMMON ORDER. 2. THE FACTS ARE BROUGHT AT PARAS 2 TO 2.2 OF THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2002-03. THEY ARE EXTRACTED HEREUND ER FOR READY REFERENCE : 2. THE APPELLANT IS A COMPANY INCORPORATED IN MAURI TIUS. IT WAS ENGAGED IN THE BUSINESS OF TELECASTING OF TV CHANNE LS SUCH AS B4U MUSIC, MCM ETC. FOR THE ASSESSMENT YEAR 2002-03, RE LEVANT TO THE PREVIOUS YEAR ENDED 31 MARCH 2002, THE APPELLANT HA D FILED ITS RETURN OF INCOME DECLARING THE TOTAL LOSS AT RS.24, 37,91,548 ALONG WITH THE TAX AUDIT REPORT UNDER SECTION 44AB OF THE INCOME TAX ACT, 1961 (THE ACT). 2.1 THE ASSESSING OFFICER NOTICED THAT THE APPELLAN T COMPANY HAS NOT DEDUCTED ANY TAX AT SOURCE FOR THE PAYMENT MADE TO NON RESIDENT. THE ASSESSING OFFICER ISSUED NOTICE U/S. 201(1) ON 6/11/2006. 2.2 SUBSEQUENTLY THE APPELLANT HAS RECEIVED AN ORDE R DATED 22/3/2007 UNDER SECTION 201 AND 201(1A) OF THE ACT DETERMININ G THE TAX UNDER SECTION 201 AT RS.8,35,23,220 AND INTEREST UNDER SE CTION 201(1A) AT RS.6,68,18,576 AS PAYABLE BY THE APPELLANT. THE DET AILS OF THE SAME ARE AS UNDER : ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 4 PARTICULARS AMOUNT OF TAX U/S. I NTEREST REMITTANCE 201(1) U/S.201(1A) PAYMENT MADE TO ADVANCE SATELLITE 2,53,13,996 63, 28,499 50,62,799 PAYMENT TO PANAMSAT INC. 4,89,92,646 1,12,48,162 97,98,530 PAYMENT TO LMB HOLDINGS (MAURITIUS LTD.) 8,22,06,636 2, 05,51,659 1,64,41,327 PAYMENT TO LMB HOLDINGS LTD.,ISLE OF MAN 17,75,79,600 4,43,94,9 00 3,55,15,920 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL AND TH E FIRST APPELLATE AUTHORITY GRANTED PART RELIEF. BEING AGGRIEVED, BOTH THE PART IES ARE IN APPEAL BEFORE US. 4. SHRI A.V. SONDE REPRESENTED THE ASSESSEE AND SHR I MAHESH KUMAR REPRESENTED THE REVENUE. BOTH PARTIES SUBMITTED THA T THE ISSUES THAT ARISE IN THESE APPEALS WOULD BE THE SAME AS THE ISSUES THAT ARISE IN ITA NO.880/MUM/2005 FOR ASSTT. YEAR 2001-02, ITA NO.3326/MUM/2006 FOR ASST. YEAR 2002-03, ITA NO.7190/MUM/2008 FOR ASSTT. YEAR 2005-06, ITA NOS. 3866 & 4098/MUM/2008 FOR ASST. YEAR 2003-04 AND ITA NOS.3832 & 3843/MUM/ 2008 FOR ASSTT. YEAR 2004-05. IT WAS SUBMITTED BY BOTH THE PARTIES THAT THE ARGUMENTS ARE THE SAME AND THE DECISIONS TAKEN BY THE BENCH IN THOSE CASE S ARE APPLICABLE TO THE CASE ON HAND. 5. RIVAL CONTENTIONS HEARD. 6. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE AND PERUSAL OF THE PAPERS ON RECORD AND CASE LAW CITED, WE HOLD AS FOLLOWS. ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 5 7. ITA NO.3829/MUM/2008 IS THE ASSESSEES APPEAL FI LED FOR ASSTT. YEAR 2001-02. 8. GROUND NO. 1 IS GENERAL IN NATURE. 9. GROUND NO. 2 IS ON THE ISSUE WHETHER AN ORDER U/ S. 201 CAN BE PASSED BEYOND THE PERIOD OF 4 YEARS FROM THE END OF THE RE LEVANT FINANCIAL YEAR AND HENCE IS NOT WITHIN REASONABLE TIME AND THUS BARRED BY LIMITATION. ADMITTEDLY, THE ISSUE IS COVERED AGAINST THE ASSESSEE AND IN FA VOUR OF THE REVENUE BY THE JUDGMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S. BHURA EXPORTS LTD. VS. ITO REPORTED IN 202 TAXMANN 88 (CAL). 10. GROUND NO. 3 IS ALSO GENERAL IN NATURE AND DOES NOT NEED SEPARATE ADJUDICATION. 11. GROUND NO. 4 IS ON THE ISSUE AS TO WHETHER THER E IS AN OBLIGATION TO DEDUCT TAX IN RESPECT OF PAYMENT MADE BY ONE NON-RESIDENT TO ANOTHER NON-RESIDENT. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F VODAFONE REPORTED IN 341 ITR 1. THE LD. DR ARGUED THAT THE AMENDMENT TO THE BUDGET WOULD RESULT IN THE DECISION OF THE HONBLE SUPREME COURT BEING NO MORE GOOD LAW. AS THE AMENDMENT DOES NOT AFFECT THE DOUBLE TAXATION AVOID ANCE AGREEMENT, WE APPLY THE DECISION OF THE HONBLE SUPREME COURT AND ALLOW THIS GROUND. ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 6 12. GROUND NO. 5 IS ON THE ISSUE OF LIABILITY TO D EDUCT TAX FROM PAYMENTS MADE TO ADVANCED SATELLITE INTERNATIONAL LTD. IN I TA NO.3326/MUM/2006 FOR ASSTT. YEAR 2002-03 AND OTHER CASES, WHILE DISPOSIN G OF GROUND NO. 4, WE HAVE HELD THAT THE ASSESSEE HAS NO LIABILITY TO DEDUCT T AX ON PAYMENTS MADE TO ADVANCED SATELLITE AND ADVANCED BROADCAST. CONSISTE NT WITH THE VIEW TAKEN THEREIN, WE UPHOLD THE CONTENTION OF THE ASSESSEE. 13. GROUND NO. 6 IS ON THE ISSUE OF DEDUCTION OF TA X IN RESPECT OF PAYMENTS MADE TO LMB HOLDINGS (MAURITIUS). CONSISTENT WITH T HE VIEW TAKEN WHILE DISPOSING OF GROUND NO. 5 IN ITA NO.3326/MUM/2006 FOR ASST. YEAR 2002-03, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. 14. GROUND NO. 7 IS ON THE ISSUE OF DEDUCTION OF TA X ON PAYMENTS MADE TO LMB HOLDINGS LTD. (ISLE OF MAN). CONSISTENT WITH TH E VIEW TAKEN BY US WHILE DISPOSING OF GROUND NO. 6 FOR ASSESSMENT YEAR 2002- 03 IN ITA NO.3326/MUM/2006, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE. 15. GROUND NO. 8 IS ON THE LEVY OF INTEREST U/S.201 (1A). LEVY OF INTEREST IS CONSEQUENTIAL AND REQUIRES NO SEPARATE ADJUDICATION . 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. 17. ITA NO.4095/MUM/2008 IS REVENUES APPEAL. ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 7 18. THE SOLE GROUND IS ON THE ISSUE OF DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE TO PANAMSAT TOWARDS TRANSPONDER HIRE CHARGES. WHILE DISPOSING OF GROUND NO. 3 IN THE ASSESSEES APPEAL IN ITA NO. 3 326/MUM/2006 FOR ASSTT. YEAR 2002-03, WE HAVE FOLLOWED THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF ASIA SATELLITE COMMUNICATION CO. LTD. REPORTED IN 3 32 ITR 340 AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. CONSISTENT WITH TH E VIEW TAKEN THEREIN, WE DISMISS THIS GROUND OF REVENUE. 19. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 20. ITA NO. 3830/MUM/2008 IS AN APPEAL BY THE ASSES SEE FOR THE ASSESSMENT YEAR 2002-03. 21. GROUND NOS. 1 & 3 ARE GENERAL IN NATURE. 22. GROUND NO. 2 IS THE SAME AS GROUND NO. 2 FOR TH E ASSESSMENT YEAR 2001-02 IN ITA NO.3829/MUM/2008. CONSISTENT WITH THE VIEW T AKEN THEREIN, WE DECIDE THE ISSUE AGAINST THE ASSESSEE. 23. GROUND NO. 4 IS SIMILAR TO GROUND NO. 4 IN ITA NO.3829/MUM/2008 FOR ASSESSMENT YEAR 2001-02. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 8 24. GROUND NOS. 5, 6 AND 7 ARE ALSO IDENTICAL TO GR OUND NOS. 5, 6 AND 7 OF ITA NO. 3829/MUM/2008 FOR ASSTT. YEAR 2001-02. CONSISTE NT WITH THE VIEW TAKEN THEREIN, WE DECIDE ALL THESE GROUNDS IN FAVOUR OF T HE ASSESSEE. 25. GROUND NO. 8 IS CONSEQUENTIAL IN NATURE. 26. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. 27. ITA NO.4096/MUM/2008 IS A DEPARTMENTAL APPEAL F OR ASSESSMENT YEAR 2002-03. 28. THE ONLY ISSUE IN APPEAL IS IDENTICAL TO THE ISSUE RAISED BY THE REVENUE IN ITA NO.4095/MUM/2008. CONSISTENT WITH THE VIEW TAKE N THEREIN, WE DISMISS THIS GROUND OF REVENUE. 29. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. 30. ITA NO. 3831/MUM/2008 IS AN APPEAL BY THE ASSES SEE FOR ASSESSMENT YEAR 2003-04. 31. GROUND NOS. 1 & 2 ARE GENERAL IN NATURE. 32. GROUND NO. 3 IS THE SAME AS GROUND NO. 4 FOR TH E ASSESSMENT YEAR 2001-02 IN ITA NO. 3829/MUM/2008. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 9 33. GROUND NOS. 4, 5 & 6 ARE IDENTICAL TO GROUND N OS. 5, 6 & 7 OF THE ASSESSEE APPEAL IN ITA NO. 3829/MUM/2008. CONSISTENT WITH TH E VIEW TAKEN THEREIN, WE ALLOW THESE GROUNDS OF THE ASSESSEE. 34. GROUND NO. 7 IS ON THE LEVY OF INTEREST. THIS I S CONSEQUENTIAL IN NATURE. 35. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED IN PART. 36. ITA NO.4097/MUM/2008 IS REVENUES APPEAL AND TH E ONLY GROUND INVOLVED IS SIMILAR TO THE GROUND TAKEN BY THE REVE NUE IN ITA NO.4095/MUM/2008 AND IN ITA NO.4096/MUM/2008 FOR THE ASSESSMENT YEARS 2001-02 AND 2002-03 RESPECTIVELY. CONSISTENT WITH T HE VIEW TAKEN IN THOSE YEARS, WE UPHOLD THE ORDER OF CIT(A) AND DISMISS TH E GROUND OF REVENUE. 37. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THE 28TH DAY OF MAY, 2012. SD/- SD/- (B.R. MITTAL) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 28TH MAY , 2012. NG: COPY TO : ITA 3829, 4095, 3830, 4096, 3831 & 4097/MUM/2008 B4U INTERNATIONAL HOLDINGS LTD. 10 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-XXXIII, MUMBAI. 4 DIT (INTL. TAXN.),MUMBAI. 5.DR,L BENCH, MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER, ASST. REGISTRAR, ITAT, MUMBAI.