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

ITA 5143/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93148 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: L
• Next Hearing Date: 08-07-2015
• Assessment Year: 2013-2014
• Appeal Filed On: 16-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Double taxation relief
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH L, MUMBAI BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.5143/M/2013 ASSESSMENT YEAR: 2013-14 M/S. VIACOM 18 MEDIA PVT. LTD., ZION BIZWORLD, SUBHASH ROAD-A, NEAR GARWARE OFFICE, VILE PARLE (E), MUMBAI 400 057 PAN: AAACM 9164E VS. ASST. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-2(2), MUMBAI. (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI FARROKH V. IRANI, A.R. REVENUE BY : SHRI PANKAJ KUMAR, D.R. DATE OF HEARING : 08.07.2015 DATE OF PRONOUNCEMENT : 08.07.2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 01.04.2013 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2013-14. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS, AND IN THE CIRCUMSTANCES OF THE C ASE, AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - 11, MUMBAI ['CIT(A)'] HAS ERRED IN HOLDING THAT THE PAYMENTS O F TRANSPONDER FEES BY THE APPELLANT TO MEASAT SATELLI TE SYSTEMS SND. BHD, MALAYSIA (MEASAT'), ARE TAXABLE UNDER THE INCOME-TAX ACT, 1961 ('THE ACT'), AND UNDER THE IND IA- MALAYSIA TAX TREATY ('THE TREATY'), AND HENCE, ARE SUBJECT T O TAX WITHHOLDING UNDER SECTION 195 OF THE ACT. ITA NO.5143/M/2013 M/S. VIACOM 18 MEDIA PVT. LTD. 2 2. ON THE FACTS, AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT THE TRANSP ONDER FEES PAYABLE BY THE APPELLANT TO MEASAT ARE IN THE NATUR E OF 'ROYALTY' UNDER THE TREATY AND 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 THAT THE EARTH STATION OF THE UPLINK SERVICE PROVIDER TO THE APPELLANT CONSTITUTE S 'BUSINESS CONNECTION' OF MEASAT IN INDIA UNDER THE ACT. 4. ON THE FACTS, AND IN THE CIRCUMSTANCES OF THE CA SE, AND IN LAW, THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT THE TRANSPON DER FEES PAYABLE BY THE APPELLANT TO MEASAT ARE NOT TAXABLE IN INDIA AND CONSEQUENTLY, NOT SUBJECT TO TAX WITHHOLDING UNDER SECTION 195 OF THE ACT. 3. AT THE OUTSET, THE LD. A.R. OF THE ASSESSEE HAS STATED THAT THE IDENTICAL ISSUES RAISED VIDE GROUND NO.2 OF THE APPEALS HAVE BEEN DECIDED AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE BY THE TRIBUN AL IN ITA NO.1584 & 1585/M/2010 AND ITA NO.1091 & 1092/M/2011. THE LD. D.R. HAS ALSO CONCEDED TO THE SAME. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO CON SIDERED THE ORDERS OF THE LOWER AUTHORITIES AS WELL AS THE TRIBUNALS ORD ER SUBMITTED BY THE LD. A.R. WE FIND THAT THE TRIBUNAL WHILE REJECTING THE CLAIM OF THE ASSESSEE HAS OBSERVED AS UNDER: THE USE OF TRANSPONDER BY THE ASSESSEE FOR TELECAS TING/BROADCASTING THE PROGRAMME INVOLVES THE TRANSMISSION BY THE SATELLIT E INCLUDING UPLINKING, AMPLIFICATION, CONVERSION FOR DOWNLINKING OF SIGNAL S WHICH FALLS IN THE EXPRESSION PROCESS AS PER EXPLANATION 6 OF SECTION 9(1)(VI). HENCE THE PAYMENTS MADE FOR THE RIGHT TO USE OF PROCESS FALLS IN THE AMBIT OF E XPRESSION ROYALTY AS PER DTAA AS WELL AS PROVISIONS OF INCOME TAX ACT. 5. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL AS NOTED ABOVE, WE HOLD THAT THE TRANSPONDER FEE PA ID BY THE ASSESSEE TO MEASAT MALAYSIA WAS IN THE NATURE OF ROYALTY UNDER THE TREATY AS WELL AS ITA NO.5143/M/2013 M/S. VIACOM 18 MEDIA PVT. LTD. 3 UNDER THE INCOME TAX ACT. GROUND NO.2 OF THE APPEA L IS DECIDED ACCORDINGLY AGAINST THE ASSESSEE AND IN FAVOUR OF THE REVENUE. 6. SINCE, WE, FOLLOWING THE DECISION OF THE TRIBUNA L IN THE OWN CASE OF THE ASSESSEE FOR EARLIER ASSESSMENT YEAR, HAVE DECIDED THE ISSUE RELATING TO THE TRANSPONDER FEE AS ROYALTY, THE GRIEVANCE RAISED BY THE ASSESSEE BY REMAINING GROUNDS OF THE APPEAL ARE TREATED AS ACADEMIC IN NA TURE AND DO NOT REQUIRE ANY SEPARATE ADJUDICATION. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.07.2015. SD/- SD/- (B.R. BASKARAN) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 08.07.2015. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.