ACIT 16(1), MUMBAI V. STAR DEN MEDIA SERVICES P.LTD, MUMBAI

ITA 7439/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7383 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R MANJUNATHA SWAMY
• Assessee Lawyers: MANISH KUNTH
• Keywords: Retrospective amendment; Question of law
• Section: 40(a)(ia); 194C; 6

Judgement Text

1 IN THE INCOME-TAX APPELLATE TRIBUNAL E BENCH MUMB AI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO. 7439/MUM/2016 (ASSESSMENT YEAR 2012-13 ) ACIT-16(1) ROOM NO. 439, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S STAR DEN MEDIA SERVICES P. LTD., STAR HOUSE, URMI ESTATE, 95, GANPATRAO KADAM MARG, LOWER PAREL (W), MUMBAI-400013. PAN: AACCD7658Q APPELLANT RESPONDE NT CROSS OBJECTION NO. 94/MUM/2018 (ASSESSMENT YEAR 20 12-13 ) M/S STAR DEN MEDIA SERVICES P. LTD., STAR HOUSE, URMI ESTATE, 95, GANPATRAO KADAM MARG, LOWER PAREL (W), MUMBAI-400013 . PAN: AACCD7658Q VS. ACIT-16(1) ROOM NO. 439, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 APPELLANT RESPONDE NT APPELLANT BY : SHRI R. MANJUNATHA SWAMY (DR) RESPONDENT BY : SHRI MANISH KUNTH (AR) DATE OF HEARING : 09.07.2019 DATE OF PRONOUNCEMEN T : 17.07.2019 ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDE R OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-4 [THE LD. CIT (A)], MUMBAI DATED 29.09.2016 FOR ASSESSMENT YEAR 2012-13. AT TH E OUTSET OF HEARING, THE LD. AUTHORIZED REPRESENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT THE GROUNDS OF APPEAL RAISED BY REVENU E ARE COVERED IN ITA NO . 7439 MUM 2016 & C.O. 94 MUM 2018 M/S STAR DEN MEDIA SERVICES P. LTD. 2 FAVOUR OF ASSESSEE BY THE DECISION OF TRIBUNAL IN A SSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12 AND FURTHER BY THE DECI SION OF TRIBUNAL IN ITA NO. 1311/MUM/2016 DATED 08.06.2018. THE LD. AR OF THE ASSESSEE ALSO FILED THE COPY OF ORDER OF TRIBUNAL I N ITA NO. 1311/MUM/2016 DATED 08.06.2018. 2. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE (DR) FOR THE REVENUE AFTER GOING THROUGH THE CONTENTS OF DECISIO N OF TRIBUNAL FOR ASSESSMENT YEAR 2010-11 CONCEDED THAT THE GROUNDS O F APPEAL RAISED BY ASSESSEE IS COVERED. THE LD. DR FOR THE REVENUE FURTHER SUBMITS THAT HE RELIED UPON THE ORDER OF ASSESSING OFFICER. 3. WE HAVE CONSIDERED THE SUBMISSION OF BOTH THE PARTI ES AND HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES AND THE ORD ER OF PASSED BY TRIBUNAL FOR ASSESSMENT YEAR 2011-12. WE HAVE NOTED THAT ON SIMILAR GROUND OF APPEAL RELATED TO THE DISALLOWANCE UNDER SECTION 40(A)(IA) R.W.S. 194J IN RESPECT OF CHANNEL FEES/CARRIAGE FEE S PASSED THE FOLLOWING ORDER: 6. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FO R BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT OUR INDULGENCE IN THE PRESENT APPEAL HAS BEEN SOUGHT BY THE REVENUE FOR ADJUDICATING AS TO WHETHER THE LOWE R AUTHORITIES WERE RIGHT IN LAW IN CONCLUDING THAT AS THE ASSESSEE WAS NOT LIAB LE FOR DEDUCTION OF TAX AT SOURCE IN RESPECT OF THE CHANNEL PLACEMENT FEES UND ER SEC.194J OF THE ACT, AND HAD RIGHTLY SUBJECTED THE SAME FOR DEDUCTION UN DER SEC.194C, THEREFORE, ITA NO . 7439 MUM 2016 & C.O. 94 MUM 2018 M/S STAR DEN MEDIA SERVICES P. LTD. 3 NO DISALLOWANCE UNDER SEC. 40(A)(IA) OF THE ACT WAS CALLED FOR IN ITS HANDS. WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CO NSIDERATION AND ARE OF THE CONSIDERED VIEW THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE HIGH COURT O F BOMBAY IN THE CASE OF THE COMMISSIONER OF INCOME TAX-11, VS. M/S NGC N ETWORKS (INDIA) PVT. LTD. (ITA NO. 397/MUM/2015; DATED 29.01.2018). THE HONBLE HIGH COURT IN ITS AFORESAID ORDER, NOT FINDING ANY INFIR MITY WITH THE VIEW TAKEN BY THE TRIBUNAL THAT AS THE CHANNEL PLACEMENT FEES WAS TO BE SUBJECTED TO DEDUCTION OF TAX AT SOURCE UNDER SEC.194C AND NOT S EC. 194J OF THE ACT, THUS NO DISALLOWANCE OF THE SAME WAS CALLED FOR UNDER SE C. 40(A)(IA) OF THE ACT IN THE HANDS OF THE ASSESSEE, HAD UPHELD THE ORDER OF THE TRIBUNAL, OBSERVING AS UNDER: (D) WE FIND THAT VIEW TAKEN BY THE IMPUGNED ORDER DATED 9TH JULY, 2014 OF THE TRIBUNAL THAT A PARTY CANNOT BE CALLED UPON TO PERF ORM AN IMPOSSIBLE ACT I.E. TO COMPLY WITH A PROVISION NOT IN FORCE AT THE RELEVANT TIME BUT INTRODUCED LATER BY RETROSPECTIVE AMENDMENT. THIS I S IN ACCORD WITH THE VIEW TAKEN BY THIS COURT IN CIT V/S. CELLO PLAST (2 012) 209 TAXMANN 617- WHEREIN THIS COURT HAS APPLIED THE LEGAL MAXIM LEX NON COGIT AD, IMPOSSIBILIA (LAW DOES NOT COMPEL A MAN T O DO WHAT HE CANNOT POSSIBLY PERFORM). (E) IN THE PRESENT FACTS, THE AMENDMENT BY INTRODUC TION OF EXPLANATION-6 TO SECTION 9(1)(VI) OF THE ACT TOOK P LACE IN THE YEAR 2012 WITH RETROSPECTIVE EFFECT FROM 1976. THIS COULD NOT BE HAVE BEEN CONTEMPLATED BY THE RESPONDENT WHEN HE MADE THE PAY MENT WHICH WAS SUBJECT TO TAX DEDUCTION AT SOURCE UNDER SECTION 194C OF THE ACT DURING THE SUBJECT ASSESSMENT YEAR, WOULD R EQUIRE DEDUCTION UNDER SECTION 194J OF THE ACT DUE TO SOME FUTURE AMENDMEN T WITH RETROSPECTIVE EFFECT. (F) FURTHER, WE ALSO NOTICE THAT UNDER SECTION 40(A )(I) OF THE ACT, UNDER WHICH THE EXPENDITURE HAS BEEN DISALLOWED BY THE REVENUE, MEANING OF ROYALTY AS DEFINED THEREIN, IS THAT AS PROVIDED IN EXPLANATION 2 TO SECTION 9(1)(VI) OF THE ACT AND NOT EXPLANATIO N 6 TO SECTION 9(1)(VI) OF THE ACT. THUS, THE DISALLOWANCE OF EXPE NDITURE UNDER SECTION 40(A)(I) OF THE ACT CAN ONLY BE IF TH E PAYMENT IS ROYALTY IN TERMS OF EXPLANATION 2 TO SECTION 9 (1 )(VI) OF THE ACT. UNDISPUTEDLY, THE PAYMENT MADE FOR CHANNEL PLACEMEN T AS A FEE, IS NOT ROYALTY IN TERMS OF EXPLANATION 2 TO SECTION 9(1)(V I) OF THE ACT. THEREFORE, NO DISALLOWANCE OF EXPENDITURE UNDER SECTION 40(A)( I) OF THE ACT, CAN BE MADE IN THE PRESENT FACTS. (G) IN THE ABOVE VIEW, AS IT IS A SELF EVIDENT POS ITION FROM THE READING SECTION 40(A)(I) OF THE ACT, NO SUBSTANTIAL QUESTION OF LAW. THUS, QUESTION (A) NOT ENTERTAINED. ITA NO . 7439 MUM 2016 & C.O. 94 MUM 2018 M/S STAR DEN MEDIA SERVICES P. LTD. 4 WE ALSO FIND THAT THE ISSUE THAT CHANNEL PLACEMENT FEES WAS LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER SEC. 194C OF THE A CT, HAD ALSO BEEN LOOKED INTO AND APPROVED BY THE COORDINATE BENCHES OF THE TRIBUNAL IN THE ASSESSEES OWN CASE, VIZ. ACIT-11(1), MUMBAI VS. M/ S STAR DEN MEDIA SERVICES PVT. LTD. (ITA NO. 1413/MUM/2014; DATED 05 .08.2015) FOR A.Y 2009-10 AND ACIT-16(1), MUMBAI VS. M/S STAR DEN MED IA SERVICES PVT. LTD.(ITA NO. 1553/MUM/2015; DATED 12.01.2016) FOR A .Y 2010-11. 7. WE THUS, RESPECTFULLY FOLLOWING THE ORDER OF THE HONBLE HIGH COURT OF BOMBAY AND FINDING NO REASON TO TAKE A VIEW DIFFERE NT FROM THAT ARRIVED AT BY COORDINATE BENCHES OF THE TRIBUNAL IN THE ASSESS EES OWN CASE FOR A.YS 2009-10 AND 2010-11, FOLLOW THE SAME. WE THUS FINDI NG NO INFIRMITY IN THE ORDER OF THE CIT(A), UPHOLD THE SAME. 8. THE APPEAL FILED BY THE REVENUE IS DISMISSED. 4. CONSIDERING THE DECISION OF TRIBUNAL ON SIMILAR GRO UND OF APPEAL AND RESPECTFULLY FOLLOWING THE SAME, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY REVENUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. C.O. 94/.MUM/2018 6. WE HAVE NOTED THAT THE ASSESSEE HAS RAISED GROUND O F APPEAL IN ITS C.O. TO SUPPORT THE ORDER OF LD. CIT(A). CONSIDERING THE FACT THAT WE HAVE DISMISSED THE APPEAL OF REVENUE. THEREFORE, DISCUSS IONS ON THE GROUNDS OF APPEAL RAISED IN C.O. BY REVENUE HAVE BECOME ACA DEMIC. 7. IN THE RESULT, C.O. FILED BY ASSESSEE IS ALSO DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17/07/2019. SD/- SD/- G. MANJUNATHA PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 17.07.2019 ITA NO . 7439 MUM 2016 & C.O. 94 MUM 2018 M/S STAR DEN MEDIA SERVICES P. LTD. 5 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR E BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI