ASSISTANT COMMISSIONER OF INCOME TAX 16(1), MUMBAI V. UTV NEWS LIMITED (NOW KNOWN AS BUSINESS BROADCAST NEWS PRIVATE LIMITED), MUMBAI

ITA 6941/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6070 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 07-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJIV GUBGOTRA
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTANT MEMBER ITA NO. 6941 / MUM . /2017 ( ASSESSMENT YEAR : 20 1 0 11 ) ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 16(1), MUMBAI . APPELLANT V/S UTV NEWS LTD. (NOW KNOWN AS BUSINESS BROADCAST NEWS PVT. LTD.) PARIJAT HOUSE, 1076, DR. E. MOSES ROAD WORLI NAKA, WORLI, MUMBAI 400 018 PAN AAACU8997R . RESPONDENT REVENUE BY : SHRI RAJIV GUBGOTRA ASSESSEE BY : SHRI JITENDRA SANGHAVI DATE OF HEARING 0 2 . 0 1 .201 9 DATE OF ORDER O R D E R PER SAKTIJIT DEY, J.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE CHALLENGING THE ORDER DATED 4 TH SEPTEMBER 2017, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 6 , MUMBAI, FOR THE ASSESSMENT YEAR 20 1 0 11 . 2 . THE GROUNDS RAISED BY THE REVENUE PERTAIN TO THE SOLITARY ISSUE OF DELETION OF DISALLOWA NCE MADE UNDER SECTION 40(A)(I A) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) IN RESPECT OF CARRIAGE FEES / CHANNEL PLACEMENT FEES. 2 UTV NEWS LTD. 3 . BRIEF FACTS ARE, THE ASSESSEE A COMPANY IS IN THE BUSINESS OF BROADCASTING OF BUSINESS NEWS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 29 TH MAY 2010, DECLARING LOSS OF ` 80,28,81,877, UNDER N ORMAL PROVISIONS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF ` 31,71,14,238, TO THE PROFIT & LOSS ACCOUNT ON ACCOUNT OF PAYMENT OF CARRIAGE FEES. AFTER CALLING FOR THE NECESSARY DETAILS, THE ASSESSING OFFICER NOTICED THAT WHILE MAKING SUCH PAYMENT, THE ASSESSEE HAS DEDUCTED TAX AT SOURCE @ 2% BY APPLYING THE PROVISIONS OF SECTION 194C OF THE ACT. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PAYMENT OF CARRIAGE FEES PAID BEING IN THE NATURE OF FEES FOR TECHNICAL SERVICES / ROYALTY, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX @ 10% AS PER SECTION 194J OF THE ACT. ALLEGING THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE AT THE APPROPRIATE RATE, HE DISALLOWED THE ENTIRE AMOUNT OF ` 31,4 1,07,913 UNDER SECTION 40(A)(I A) OF THE ACT. THE ASSESSEE CHALLENGED THE AFORESAID DISALLOWANCE BEFORE THE LEARNED COMMISSIONER (APPEALS). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND TAKING NOTE OF THE FACT THAT FOLLOWING THE DECISION OF THE TRIB UNAL IN ASSESSEES OWN CASE THE FIRST APPELLATE AUTHORITY HAS DELETED SIMILAR DISALLOWA NCE MADE UNDER SECTION 40(A)(I A) OF THE ACT IN ASSESSMENT YEAR 2011 12 AND 2012 13 , FOLLOWED THE SAME AND DELETED THE DISALLOWANCE IN THE IMPUGNED ASSESSMENT YEAR AS WEL L. 3 UTV NEWS LTD. 4 . WE HAVE HEARD LEARNED COUNSELS APPEARING FOR THE PARTIES AND PERUSED MATERIAL ON RECORD. AT THE OUTSET, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT IN THE IMPUGNED ASSESSMENT YEAR THE ASSESSING OFFICER HAS PASSED AN ORDER UNDER SECTION 201(1) AND 201(1A) OF THE ACT DEMANDING TAX AND INTEREST ON THE REASONING THAT THE PAYMENT TOWARDS CARRIAGE FEES / CHANNEL PLACEMENT FEES IS IN THE NATURE OF FEES FOR TECHNICAL SERVICES, HENCE, THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE @ 10% AS PER SECTIO N 194J OF THE ACT. HE SUBMITTED , WHILE DECIDING THE AFORESAID ISSUE, THE TRIBUNAL IN ITA NO.2697, 2698, 4206, 4207/MUM./ 2012, DATED 16 TH DECEMBER 2015, HAS ACCEPTED THE CLAIM OF THE ASSESSEE THAT THE PAYMENT MADE TOWARDS CARRIAGE FEES / CHANNEL PLACEMENT FEES IS NEITHER IN THE NATURE OF ROYALTY NOR FEES FOR TECHNICAL SERVICES. HENCE, IT WAS HELD THAT THE PROVISIONS OF SECTION 194J OF THE ACT ARE NOT APPLICABLE. HE SUBMITTED , WHILE CONSIDERING IDENTICAL NATURE OF DISPUTE RELATING TO DISALLOWANCE MADE UNDER SECTION 40(A)(I A) OF THE ACT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011 12 AND 2012 13 IN ITA NO.3689 AND 3690/MUM./2017, DATED 15 TH OCTOBER 2017, THE TRIBUNAL HAS DELETED THE DISALLOWANCE BY HOLDING THAT PROVISIONS OF SECTION 194J OF THE ACT ARE NOT APPLICABLE TO SUCH PAYMENT. LEARNED DEPARTMENTAL REPRESENTATIVE CONCEDED THE AFORESAID FACTUAL POSITION. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIES IN THE CONTEXT OF FACTS AND 4 UTV NEWS LTD. MATERIAL ON RECORD, WE FIND THAT THE ISSUE WHETHER CARRIAGE FEES / CHANNEL PLACEMENT FEES PAID BY THE ASSESSEE IS IN THE NATURE OF ROYALTY OR FEES FOR TECHNICAL SERVICES REQUIRING DEDUCTION UNDER SECTION 194J OF THE ACT HAS COME UP FOR CONSIDERATION IN ASSESSEES OWN CASE BEFORE THE TRIBUNAL IN THE ORDER S REFERRED TO ABOVE. THE TRIBUNAL WHILE D ECIDING THE ISSUE IN UNEQUIVOCAL TERMS HAS HELD THAT THE PAYMENT MADE TOWARDS CARRIAGE FEES / CHANNEL PLACEMENT FEES DOES NOT PARTAKE THE CHARACTER OF EITHER ROYALTY OR FEES FOR TECHNICAL SERVICES. THUS, THE ISSUE HAVING BEEN DECIDED IN FAV OUR OF THE ASSESSEE BY THE TRIBUNAL IN ITS OWN CASE, WE DO NOT FIND ANY REASON TO INTERFERE IN THE DECISION OF THE LEARNED COMMISSIONER (APPEALS) ON THE ISSUE. ACCORDINGLY, GROUNDS RAISED ARE DISMISSED. 5 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.01.2019 SD/ - RAMIT KOCHAR ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 23.01.2019 5 UTV NEWS LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI