ACIT-16(1), MUMBAI V. TV18 Home Shopping Network Ltd., Mumbai

ITA 4725/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4431 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 03-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Difference of opinion; TDS
• Section: 40(a)(ia); 194C; 201; 48; 194J; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL , HON'BLE ACCOUNTANT MEMBER ITA NO S . 4725 & 4726 / MUM/201 8 (A.Y S . 201 4 - 15 & 2013 - 14 ) ASST. COMMISSIONER OF INCOME - TAX CIRCLE 16 (1) ROOM NO. 439, AAYAKAR BHAVAN M.K. ROAD , MUMBAI 400 020 V. M/S. TV18 HOME SHOPPING NETWORK LTD., 414, EMPIRE COMPLEX SENAPATI BAPAT MARG, LOWER PAREL MUMBAI 400 013 PAN: AACCT4674N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI JITENDRA JAIN DEPARTMENT BY : SHRI AMIT PRATAP SINGH DATE OF HEARING : 12 .12.2019 DATE OF PRONOUNCEMENT : 19 . 02 .2020 O R D E R PE R C. N. PRASAD (JM) 1. THESE TWO APPEALS ARE FILED BY THE REVENUE AGAINST DIFFERENT ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 4, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 31.05.2018 IN DELETING THE DISALLOWANCE MADE U/S.40(A)(I A ) OF THE ACT FOR THE A.YS. 2 013 - 14 AND A.Y. 2014 - 15 . 2 ITA NO. 4725 & 4726 /MUM/2018 (A.YS. 2014 - 15 & 2013 - 14) M/S. TV18 HOME SHOPPING NETWORK LTD., 2. BRIEFLY STATED THE FACTS ARE THAT DURING THESE TWO ASSESSMENT YEARS THE ASSESSEE INCURRED EXPENSES TOWARDS CHANNEL PLACEMENT FEES ON WHICH ASSESSEE DEDUCTED TDS @2% AS PER PROVISIONS OF SECTION 194C OF THE ACT . HOWEVER, THE ASSESSI NG OFFICER WAS OF THE VIEW THAT THESE EXPENSES WERE IN THE NATURE OF ROYALTY AND TDS IS LIABLE TO BE DEDUCTED @10% U/S . 194J OF THE ACT. THE ASSESSEE WAS REQUIRED TO EXPLAIN AS TO WHY THE PROVISIONS OF S ECTION 194J ARE NOT APPLICABLE. THE ASSESSEE HAS SUBMITTED A DETAILED REPLY AS TO NON - APPLICABILITY OF WHY THE PROVISIONS OF SECTION U/S.194J OF THE ACT. THE ASSESSEE ALSO CONTENDED THAT NO DISALLOWANCE U/S. 40(A)(IA) OF THE ACT SHOULD BE MADE FOR SHO R T DEDUCTION OF TDS. NOT CONVINCED WITH THE REPLY FILED BY THE ASSESSEE THE ASSESSING OFFICER DISALLOWED CHANNEL PLACEMENT FEES OF .10,20,88,270/ - AND . 8,40,82,020/ - FOR THE A.YS. 2013 - 14 & 2014 - 15 RESPECTIVELY U/S. 40(A)(IA) OF THE ACT TREATING THESE PAYMENTS AS ROYALTY. 3. ON APPEAL THE LD.CIT(A) FOLLOW ING THE DECISION OF THE MUMBAI BENCH IN THE CA SE OF DCT V. COX & KINGS (I) LTD & ANR [160 DTR 201] AND DISH TV INDAI LTD V. ACIT [159 DTR 257] DELETED THE DISALLOWANCE MADE U/S.40(A)(IA) OF THE ACT. IN THESE DECISIONS THE COORDINATE BENCH HELD THAT WHEN THERE IS A SHORT DEDUCTION OF TDS THERE CANNOT BE ANY DISALLOWANCE U/S.40(A)(IA) OF THE ACT. 3 ITA NO. 4725 & 4726 /MUM/2018 (A.YS. 2014 - 15 & 2013 - 14) M/S. TV18 HOME SHOPPING NETWORK LTD., 4. LD. DR STRONGLY SUPPORTED THE ORDERS OF THE ASSESSING OFFICER AND THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION S OF THE TRIBUNAL PARTICULARLY IN THE CASE OF ACIT V. HINDUSTAN THOMPSON ASSOCIATED PVT. LTD., IN ITA.NO. 6729/MUM/2014 DATED 13.07.2016 AND ACIT V. M/S. UBJ BRODCASTING PVT. LTD., IN ITA.NO. 1205/MUM/2018 DATED 19.03.2019. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E ORDERS OF THE AUTHORITIES BELOW AND THE CASE LAWS RELIED ON. ON A PERUSAL OF THE DECISIONS OF THE COORDINATE BENCH, WE FIND THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE COORDINATE BENCH WHEREIN IN THE CASE OF ACIT V. HINDUSTAN THOM PSON ASSOCIATED PVT. LTD., (SUPRA) COORDINATE BENCH OBSERVED AS UNDER: - 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISION OF THE CO - ORDINATE BENCH IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2008 - 09 AND 2009 - 10. THE CO - ORDINATE BENCH FOR THE ASSESSMENT YEAR 2009 - 10 IN ITA NO. 746/M/2014 DATED 19.02.2016 CONSIDERED SIMILAR ISSUE AND HELD THAT PROVISIONS OF SEC. 40(A)(IA) HAVE NO APPLICATION WHEN THERE IS SHORT DEDUCTION OF TAX OBSERVING AS UNDER: WE H AVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE HONBLE KERALA HIGH COURT IN THE CASE OF P V S MEMORIAL HOSPITAL(SUPRA), HAS HELD THAT DEDUCTION OF TDS UNDER WRONG PROVISION OF LAW WILL NOT SAVE ASSESSEE FROM DISALLOWAN CE U/S. 40(A)(IA)OF THE ACT. HOWEVER, THE KOLKATA HIGH COURT IN THE MATTER OF SAMIR TEKRIWAL(SUPRA), HAS HELD THAT EXPENSES ARE NOT LIABLE TO BE DISALLOWED U/S.40(A)(IA)ON ACCOUNT OF SHORT DEDUCTION OF TAX. THE HONBLE JURISDICTIONAL HIGH COURT HAS NOT DEC IDED THE ISSUE. THUS, WE ARE FACED WITH TWO DIAGONALLY OPPOSITE VIEWS ABOUT APPLICABILITY OF THE PROVISIONS OF SECTION 40 (A)(IA)OF THE ACT. WE FIND THAT THE HONBLE BOMBAY HIGH COURT HAS IN THE CASE 4 ITA NO. 4725 & 4726 /MUM/2018 (A.YS. 2014 - 15 & 2013 - 14) M/S. TV18 HOME SHOPPING NETWORK LTD., OF ASHOK KUMAR PAREKH (186 IT R212)HAS DEALT WITH THE BI NDING PRECEDENCE OF THE HIGH COURT JUDGMENTS.HERE,WE WOULD ALSO LIKE TO REPRODUCE THE A PORTION OF THE JUDGMENT DELIVERED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SIEMENS INDIA LTD.(156ITR11) AND SAME READS AS UNDER : SO FAR AS THE LEGAL POSITION I S CONCERNED, THE ITO WOULD BE BOUND BY A DECISION OF THE SUPREME COURT AS ALSO BY A DECISION OF THE HIGH COURT OF THE STATE WITHIN WHOSE JURISDICTION HE IS (FUNCTIONING), IRRESPECTIVE OF THE PENDENCY OF ANY APPEAL OR SPECIAL LEAVE APPLICATION AGAINST THAT JUDGMENT. HE WOULD EQUALLY BE BOUND BY A DECISION OF ANOTHER HIGH COURT ON THE POINT, BECAUSE NOT TO FOLLOW THAT DECISION WOULD BE TO CAUSE GRAVE PREJUDICE TO THE ASSESSEE. WHERE THERE IS A CONFLICT BETWEEN DIFFERENT HIGH COURTS, HE MUST FOLLOW THE DECISIO N OF THE HIGH COURT WITHIN WHOSE JURISDICTION HE IS (FUNCTIONING), BUT IF THE CONFLICT IS BETWEEN DECISIONS OF OTHER HIGH COURTS, HE MUST TAKE THE VIEW WHICH IS IN FAVOUR OF THE ASSESSEE AND NOT AGAINST HIM. SIMILARLY, IF THE TRIBUNAL HAS DECIDED A POINT I N FAVOUR OF THE ASSESSEE, HE CANNOT IGNORE THAT DECISION AND TAKE A CONTRARY VIEW, BECAUSE THAT WOULD EQUALLY PREJUDICE THE ASSESSEE. CONSIDERING THE ABOVE, WE ARE TAKING THE VIEW WHICH IS IN FAVOUR OF THE ASSESSEE. WE ARE FOLLOWING THE JUDGMENT OF SAMIR TEKRIWAL (SUPRA)OF THE HONBLE KOLKATA HIGH COURT AS WELL AS THE ORDERS OF THE MUMBAI TRIBUNAL DELIVERED BY IT FOR THE EARLIER YEARS. EFFECTIVE GROUND OF APPEAL IS DECIDE AGAINST THE AO. RESPECTFULLY FOLLOWING THE SAID ORDER, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THIS ISSUE AND DISMISS THE REVENUES APPEAL. 6. SIMILARLY, IN THE CASE OF ACIT V. M/S. UBJ BRODCASTING PVT. LTD., (SUPRA) T HE COORDINATE BENCH HELD AS UNDER: - 5. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND MATERIAL ON RECORD INCLUDING THE DECISIONS CITED BEFORE US. THE UNDISPUTED POSITION THAT EMERGES IS THAT THE ASSESSEE HAS SUFFERED IMPUGNED DISALLOWANCE U/S 40(A)(IA) FOR WANT OF DEDUCTION OF TAX AT SOURCE AT HIGHER RATE I.E. 10%. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS DEDUCTED T AX @2% AND THE ADDITIONS HAVE BEEN MADE FOR SHORT - DEDUCTION OF TAX AS PER SECTION 40(A)(IA). WE FIND THAT THE FACTS OF THE PRESENT CASE ARE SQUARELY COVERED BY THE CITED DECISION OF THIS 5 ITA NO. 4725 & 4726 /MUM/2018 (A.YS. 2014 - 15 & 2013 - 14) M/S. TV18 HOME SHOPPING NETWORK LTD., TRIBUNAL RENDERED IN ACIT VS. M/S T.V.VISION LTD. [SUPRA] WHEREIN THE CO - ORDINATE BENCH, AFTER CONSIDERING VARIOUS DECISIONS, DECIDED THE ISSUE IN ASSESSEES FAVOR, IN THE FOLLOWING MANNER: - 7. WE NOTICE THAT THE LD. CIT(A) HAS DELETED THE DISALLOWANCE IN QUESTION HOLDING THAT CARRIAGE FEES DOES NOT COME WITHIN THE AMBIT OF THE DEFINITION OF ROYALTY. THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO DEDUCT THE TAX AT SOURCE U/S 194J. FURTHER THE LD. CIT(A) HAS HELD THAT IT IS NOT THE CASE OF NO TDS BUT THE CASE OF LESS TDS THEREFORE, THE DISALLOWANCE MADE BY THE AO IS BAD IN L AW. THE LD. CIT(A) HAS RELIED ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT RENDERED IN CIT VS S. K. TEKRIWAL 48 SOT 515 AND THE DECISIONS OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASES OF CIT VS M/S STAR DEN MEDIA SERVICES PVT .LTD( ITA NO 1413/MUM /2014) AND CHANDABHOY & JASSOBHOY VS DCIT 49 SOT 448 (MUMBAI ITAT). AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THIS ISSUE IS COVERED BY THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT DELIVERED IN CIT VS. M/S UTV ENTERTAINMENT TELEVISION LTD. IN INCO ME TAX APPEAL (SUPRA) IN FAVOUR OF THE ASSESSEE. SIMILARLY, THE HONBLE GUJARAT HIGH COURT IN CIT VS. PRAYAS ENGINEERING LTD., (SUPRA) AND THE KARNATAKA HIGH COURT IN CIT VS. KISHORE RAO & OTHERS (HUF) (SUPRA) HAVE HELD THAT IN CASE OF SHORTFALL DUE TO ANY DIFFERENCE OF OPINION AS TO THE TAXABILITY OF ANY ITEM OR THE NATURE OF PAYMENTS FALLING UNDER VARIOUS TDS PROVISIONS, NO DISALLOWANCE CAN BE MADE BY INVOKING PROVISIONS OF 40(A)(IA) OF THE ACT. RESPECTFULLY FOLLOWING THE SAME, WE CONFIRM THE STAND OF FIR ST APPELLATE AUTHORITY IN THE IMPUGNED ORDER. 7. AS COULD BE SEEN FROM THE ABOVE DECISIONS WHEREIN THE COORDINATE BENCHES HAVE HELD THAT WHEN THERE IS A SHORT FALL IN DEDUCTION OF TDS THERE CANNOT BE ANY DISALLOWANCE U/S.40(A)(IA) OF THE ACT . UNDOUBTEDLY IN THE CASE ON HAND THE ASSESSEE DEDUCTED TDS @2% U /S 194C OF THE ACT ON THE CHANNEL PLACEMENT FEES PAID . HOWEVER , THE ASSESSING OFFICER WAS OF THE VIEW THAT PROVISIONS OF SECTION 194J WOULD APPLY AND THEREFORE THE TDS WOULD HAVE BEEN DEDUCTED @10% AS AGAIN ST 2%. THEREFORE, THIS IS A CASE OF SHORT DEDUCTION OF TDS. THUS, RESPECTFULLY FOLLOWING THE SAID 6 ITA NO. 4725 & 4726 /MUM/2018 (A.YS. 2014 - 15 & 2013 - 14) M/S. TV18 HOME SHOPPING NETWORK LTD., DECISIONS , WE UPHOLD THE ORDER OF THE LD.CIT(A) AND REJECT TH E GROUND RAISED BY THE REVENUE. 8. IN THE RESULT APPEAL S OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 19 TH FEBRUARY , 2020 SD/ - SD/ - ( MANOJ KUMAR AGGARWAL ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 19 / 02 / 2020 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM