ACIT 16(1), MUMBAI V. STAR ENTERTAINMENT MEDIA P. LTD, GURGAON

ITA 7454/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6769 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2019
• 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: MANJUNATHA SWAMY
• Assessee Lawyers: MANISH KUNTH
• Keywords: Bonafide belief; Retrospective amendment; TDS; Set aside
• Section: 40(a)(ia); 37(1); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER I.T.A. NO.7454/MUM/2016 (ASSESSMENT YEAR: 2012-13) ACIT,- 16(1), ROOM NO. 439, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S. STAR ENTERTAINMENT MEDIA PVT. LTD., STAR HOUSE, URMI ESTATE, 95, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI-400013 PAN: AAJCS6315G APPELLANT RESPONDENT CROSS OBJECTION NO.95/MUM/2018 (ASSESSMENT YEAR: 20 12-13) M/S. STAR ENTERTAINMENT MEDIA PVT. LTD., STAR HOUSE, URMI ESTATE, 95, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI-400013 PAN: AAJCS6315G VS. ACIT,- 16(1), ROOM NO. 439, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 APPELLANT RESPONDENT I.T.A. NO.7441/MUM/2016 (ASSESSMENT YEAR: 2011-12) ACIT,- 16(1), ROOM NO. 439, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S. STAR ENTERTAINMENT MEDIA PVT. LTD., STAR HOUSE, URMI ESTATE, 95, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI-400013 PAN: AAJCS6315G APPELLANT RESPONDENT CROSS OBJECTION NO.96/MUM/2018 (ASSESSMENT YEAR: 20 11-12) M/S. STAR ENTERTAINMENT MEDIA PVT. LTD., STAR HOUSE, ACIT,- 16(1), ROOM NO. 439, 5 TH ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 2 URMI ESTATE, 95, GANPATRAO KADAM MARG, LOWER PAREL, MUMBAI-400013 PAN: AAJCS6315G VS. FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 APPELLANT RESPONDENT APPELLANT BY : SHRI MANJUNATHA SWAMY (DR) RESPONDENT BY : SHRI MANISH KUNTH (AR) DATE OF HEARING : 09.07.2019 DATE OF PRONOUNCEMENT : 09.07.2019 O R D E R PER BENCH: 1. THESE TWO APPEAL BY REVENUE AND CROSS OBJECTIONS TH EREIN ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER (APPEALS)-4 MUMBA I DATED 30 TH OF SEPTEMBER 2016 FOR ASSESSMENT YEAR 2011- 12 & 2012- 13. THE REVENUE AS WELL AS ASSESSEE HAS RAISED COMMON GROUNDS OF APPEA L. THEREFORE, BOTH THE APPEAL AND CROSS OBJECTIONS THEREIN WERE HEARD TOGETHER AND ARE DECIDED BY A COMMON ORDER. WITH THE CONSENT OF PART IES, THE APPEAL FOR ASSESSMENT YEAR 2011-12 IS TREATED AS LEAD CASE. TH E REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND AS PER LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE DISALLO WANCE U/S. 40(A)(IA) RWS 194J IN RESPECT OF 'CARRIAGE FEES/ CHANNEL PLACEMEN TS FEES' AND FAILING TO APPRECIATE THAT THE PAYMENTS MADE FOR USE/RIGHT TO USE OF 'PROCESS' ARE 'ROYALTY' AS PER EXPLANATION 6 TO SECTION 9(1)(VI) HENCE SUCH PAYMENTS ARE COVERED VI] S. 194J OF THE INCOME TAX ACT, 1961. ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 3 2) WHETHER ON THE FACTS, IN THE CIRCUMSTANCES OF TH E CASE AND AS PER LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE DIS ALLOWANCE U/S. 40(A)(IA) RWS 194J OF 'CARRIAGE FEES/CHANNEL PLACEMENT FEES. 3) WHETHER ON THE FACTS, IN THE CIRCUMSTANCES OF TH E CASE AND AS PER LAW, THE LD. CIT(A) HAS ERRED IN RELYING ON THE ORDER OF HON 'BLE DELHI HIGH COURT IN THE CASE OF CIT V / S PRASAR BHARTI (292 ITR 580) W ITHOUT REALIZING THAT THE SAID DECISION APPLIES TO AN ENTITY MAKING PAYMENTS TO OUTSIDE PRODUCERS FOR MAKING CERTAIN PROGRAMS FOR IT WHEREAS IN THE INSTA NT CASE THE PAYMENT WAS MADE BY THE ASSESSEE WHO IS BROADCASTER TO VARIOUS MSOS OR CABLE OPERATORS FOR PLACING ITS CHANNEL ON A PARTICULAR FREQUENCY/B ANDWIDTH. 4) WHETHER ON THE FACTS, IN THE CIRCUMSTANCES OF TH E CASE AND AS PER LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE DIS ALLOWANCE U/S. 40(A)(IA) PLACING RELIANCE ON THE DECISION OF CALCUTTA HIGH C OURT DATED 10.12.2012 IN CIT VS S.K. TEKRIWAL [2014] WITHOUT APPRECIATING TH AT THE HON'BLE KERALA HIGH COURT IN ITS JUDGEMENT DATED 20.07.2015 IN THE CASE OF CIT-L, KOCHI V/S PVS MEMORIAL HOSPITAL LTD. [2015] 60 TAXMANN.COM 69 [KERALA] HAS DECIDED THE ISSUE IN FAVOUR OF THE DEPARTMENT AFTER DISCUSSING IN DETAIL THE JUDGEMENT IN THE CASE OF CIT VS S.K. TEKRIWAL (SUPR A). 5) WHETHER ON THE FACTS, IN THE CIRCUMSTANCES OF TH E CASE AND AS PER LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE DIS ALLOWANCE OF 25% OF MARKETING AND PUBLICITY EXPENSES WITHOUT DENYING TH E FACT THAT THESE EXPENSES ULTIMATELY BENEFITTED THE FOREIGN SISTER C ONCERN OF THE ASSESSEE HOLDING THE 'STAR' BRAND. 6) WHETHER ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LD. CIT( ) HAS ERRED IN DIRECTING TO DELETE THE DIS ALLOWANCE OF 25% OF MARKETING AND PUBLICITY EXPENSES DESPITE THE FACT T HE BRAND BUILDING EXERCISE CARRIED OUT BY THE ASSESSEE ULTIMATELY BENEFITTED I TS FOREIGN SISTER CONCERN AND IN THE ABSENCE OF IT IS NOT REIMBURSING A PART OF T HESE EXPENSES, THE AO HAD NO OPTION THAN TO DISALLOW A PART OF THE MARKETING AND PUBLICITY EXPENSES INCURRED BY THE ASSESSEE COMPANY AS THOSE EXPENSES WHICH WERE NOT INCURRED EXCLUSIVELY FOR ITS OWN BUSINESS. 7) THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED . ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 4 2. THE ASSESSEE IN ITS CROSS OBJECTION HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX-16(1) ['ASSESSING OFFICE R'] HAS- DISALLOWANCE OF CHANNEL PLACEMENT FEES/ CARRIAGE FE ES 1. ERRED IN CHALLENGING THE FINDINGS OF THE COMMISS IONER OF INCOME TAX (APPEALS) ['CIT(A)'] THAT THE PAYMENT OF CHANNEL PL ACEMENT FEES IS NOT SUBJECT TO TAX DEDUCTION AT SOURCE UNDER SECTION 19 4J OF THE INCOME-TAX ACT, 1961 ('ACT') WITHOUT APPRECIATING THE FACT THAT THE RESPONDENT HAS CORRECTLY DEDUCTED TAX AT SOURCE UNDER SECTION 194C OF THE AC T; 2. ERRED IN CHALLENGING THE FINDING OF THE CIT(A)TH AT THE CHANNEL PLACEMENT FEES/ CARRIAGE FEES IS NOT IN THE NATURE OF 'ROYALT Y' AS PER SECTION 9(1)(VI) OF THE ACT READ WITH EXPLANATION 6 TO SECTION 9(1)(VI) OF THE ACT AND THEREFORE, THE PROVISIONS OF SECTION 194J OF THE ACT ARE NOT A PPLICABLE AND HENCE, THERE CANNOT BE ANY DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT; THE RESPONDENT PRAYS THAT THE PAYMENT OF CHANNEL PL ACEMENT FEES/ CARRIAGE FEES IS NOT IN THE NATURE OF 'PROCESS ROYALTY' AS P ER EXPLANATION 6 TO SECTION 9(1)(VI) OF THE ACT. 3. ERRED IN NOT APPRECIATING THAT NO DISALLOWANCE U NDER SECTION 40(A)(IA) OF THE ACT CAN BE MADE IN RESPECT OF CHANNEL PLACEMENT FEES/ CARRIAGE FEES BY HOLDING THE SAME AS 'ROYALTY' IN LIGHT OF THE RETRO SPECTIVE AMENDMENT TO THE PROVISIONS OF SECTION 9(1)(VI) OF THE ACT. THE RESPONDENT PRAYS THAT THE PAYMENT OF CHANNEL PL ACEMENT FEES/ CARRIAGE FEES IS NOT IN THE NATURE OF 'PROCESS ROYALTY' BASI S THE RETROSPECTIVE AMENDMENT TO THE PROVISIONS OF SECTION 9(1)(VI) OF THE ACT. 4. WITHOUT PREJUDICE TO THE ABOVE, ERRED IN NOT APP RECIATING THAT THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT CAN NOT BE MADE IN CASE OF ALLEGED SHORT DEDUCTION OF TDS; ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 5 5. WITHOUT PREJUDICE TO ABOVE, ERRED IN NOT APPREC IATING THE FACT THAT THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT IF ANY, SHOULD BE PROPORTIONATELY REDUCED TO THE EXTENT OF COMPLIANCE BY THE RESPONDENT; 6. WITHOUT PREJUDICE TO ABOVE, ERRED IN NOT APPRECI ATING THAT THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT SHOULD BE RESTRI CTED TO THE AMOUNT OUTSTANDING (PAYABLE) AT THE END OF THE CAPTIONED A SSESSMENT YEAR (' A Y') AND NOT THE AMOUNT PAID DURING THE CAPTIONED A Y; 7. WITHOUT PREJUDICE TO ABOVE, ERRED IN NOT APPRECI ATING THAT THE DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT SHOULD BE RESTRI CTED TO 30 PERCENT OF THE AMOUNT OF CHANNEL PLACEMENT FEES; 8. WITHOUT PREJUDICE TO THE ABOVE, ERRED IN NOT APP RECIATING THAT THE RESPONDENT WAS UNDER THE BONAFIDE BELIEF THAT THE C HANNEL PLACEMENT FEES COULD AT BEST BE CONSIDERED TO BE COVERED UNDER SEC TION 194C OF THE ACT; 9. ERRED IN PLACING RELIANCE ON VARIOUS JUDICIAL PR ECEDENTS WITHOUT APPRECIATING THE FACT THAT THE SAME CAN BE DISTINGU ISHED FROM THE FACTS OF THE RESPONDENT; AND DISALLOWANCE OF EXPENDITURE PERTAIN ING TO MARKETING AND PUBLICITY 10. ERRED IN NOT APPRECIATING THE DIRECTIONS OF THE CIT(A) THAT THAT 25 PERCENT OF THE EXPENDITURE ON MARKETING AND PUBLICITY EXPEN SES AMOUNTING TO RS 5,24,83,316 HAS BEEN INCURRED WHOLLY AND EXCLUSIVEL Y FOR THE PURPOSE OF BUSINESS OF THE RESPONDENT AND HENCE, THE SAME IS A LLOWABLE UNDER THE PROVISIONS OF SECTION 37(1) OF THE ACT. 11. ERRED IN RAISING A GROUND THAT THE MARKETING AN D PUBLICITY EXPENSES HAVE ULTIMATELY BENEFITTED THE FOREIGN SISTER CONCERN (O WNER OF THE 'STAR' BRAND). 3. AT THE OUTSET OF HEARING, THE LD. AUTHORIZED REPRES ENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT ALL THE GROUNDS OF APPEAL RAI SED BY REVENUE ARE COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVEN UE BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2010-11 WHEREIN IDENTICAL GROUNDS OF APPEAL WAS RAISED BY REVENUE I N ITA NO. 1686/MUM/2015 DECIDED ON 09.03.2016. THE LD. AR OF THE ASSESSEE ALSO ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 6 FILED COPY OF DECISION OF TRIBUNAL FOR ASSESSMENT Y EAR 2010-11 AS STATED ABOVE. THE LD. AR OF THE ASSESSEE SUBMITS THAT GROU ND NO.1 TO 4 RELATES TO DELETING THE DISALLOWANCES MADE BY ASSESSING OFF ICER ON ACCOUNT OF CHANNEL PLACEMENT FEES/CARRIAGE FEES UNDER SECTION 40(A)(IA). THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT THESE GROUN DS OF APPEAL ARE COVERED BY THE GROUND NO.2 IN APPEAL FOR ASSESSMENT YEAR 2010-11 DECIDED VIDE ORDER DATED 09.03.2016. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT GROUND NO.5 & 6 RELATES TO DELETING TH E DISALLOWANCES ON ACCOUNT OF MARKETING AND PUBLICITY EXPENSES. THE LD . AR OF THE ASSESSEE SUBMITS THAT THIS GROUND OF APPEAL IS ALSO COVERED BY THE ORDER OF TRIBUNAL FOR ASSESSMENT YEAR 2010-11 WHEREIN SIMILAR GROUND OF APPEAL WAS DISMISSED BY THE TRIBUNAL. 4. ON THE OTHER HAND, THE LEARNED DR FOR THE REVENUE A FTER GOING THROUGH THE CONTENTS OF ORDER OF TRIBUNAL RELIED UPON THE ORDER OF ASSESSING OFFICER. IN THE REJOINDER SUBMISSION, THE LD. AR OF THE ASSE SSEE SUBMITS THAT ASSESSEE HAS RAISED GROUNDS OF APPEAL IN ITS CROSS OBJECTION TO SUPPORT THE ORDER OF ASSESSING OFFICER AND THAT IN CASE, THE AP PEAL OF THE REVENUE IS DISMISSED, THE ADJUDICATION ON GROUNDS OF CROSS OBJ ECTION RAISED BY ASSESSEE WOULD BECOME ACADEMIC. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. GROUND NO. 1 TO 4 RELATES TO DELETING THE DISALLOWANCES ON ACCOUNT OF CHANNEL PL ACEMENT FEES. WE ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 7 HAVE NOTED THAT THE REVENUE HAS RAISED SIMILAR GROU ND OF APPEAL IN ASSESSMENT YEAR 2010-11 AND THE TRIBUNAL VIDE ITS O RDER DATED 09.03.2016 IN ITA NO. 1686/MUM/2016 PASSED THE FOLL OWING ORDER : 4. GROUND NO. 2: IN THIS GROUND THE REVENUE HAS CH ALLENGED THE ACTION OF THE DRP IN DELETING THE DISALLOWANCE MADE BY THE ASSESS ING OFFICER OF THE EXPENSES DEBITED IN THE NAME OF CHANNEL PLACEMENT FEE OF RS 28,25,63,036/- UNDER SECTION 40 (A) (IA) OF THE INCOME TAX ACT. 4.1. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSES SEE PAID AFORESAID AMOUNT TO THE CABLE OPERATORS AND DEBITED THE SAME IN ITS PROFIT AND LOSS ACCOUNT. THE REASON FOR INCURRING THE SAID EXPENDITURE WAS THAT THE SIG NALS OF THE TV CHANNELS TELECAST BY THE BROADCASTER WERE DISTRIBUTED IN THE AREA COVERED BY CATENA OF THE CHANNELS PROVIDED BY DISTRIBUTORS SUCH AS THE ASSES SEE. HOWEVER, ULTIMATE CONNECTIVITY WAS PROVIDED BY THE CABLE OPERATOR, WH O COLLECTS SUBSCRIPTIONS AND PASSES THEM AFTER RETAINING A PORTION THEREOF. HERE , IT WAS ALWAYS THE CABLE OPERATOR'S DISCRETION TO PLACE A PARTICULAR CHANNEL ON A PREFERRED BAND OR A HIGHER FREQUENCY. THEREFORE, TO ENSURE SUCH PLACEMENT OF T HE CHANNEL ON A PREFERRED BAND/HIGHER FREQUENCY, WHICH IN TURN WOULD ENSURE H IGHER VIEWERSHIP, HIGHER SUBSCRIPTIONS AND HIGHER ADVERTISING REVENUES, THE ASSESSEE PAID THE CABLE OPERATORS AN AMOUNT TIME TO TIME WHICH HAS BEEN DES CRIBED AS CHANNEL PLACEMENT FEES. ACCORDING TO THE AO, THE ASSESSEE O UGHT TO HAVE DEDUCTED TAX UNDER SECTION 194J OF THE ACT. ON THE PAYMENT OF AF ORESAID CHANNEL PLACEMENT FEES, AND SINCE IT WAS NOT SO DONE, HE DISALLOWED T HE ENTIRE PAYMENT MADE UNDER THE HEAD CHANNEL PLACEMENT FEES UNDER SECTION 40(A) (IA) OF THE ACT. THE AO HELD THAT IMPUGNED PAYMENT TO BE ROYALTY AND AS SUC H CHARGEABLE TO TDS @ 10% UNDER SECTION 194J OF THE ACT. ACCORDING TO THE AO, THIS WAS CLARIFIED BY FINANCE ACT, 2012 BY WAY OF INSERTION OF AN EXPLANA TION TO SECTION 9 OF THE ACT. THE AO RELIED ON THE DECISIONS OF THE DELHI TRIBUNA L IN THE CASE OF ASIA SATELLITE TELECOMMUNICATION CO. LTD. CI-I- (322 ITR 140) AND NEW SKIES SATELLITES NV V. A D I T (121 ITS 1). 4.2. BEING AGGRIEVED, THE ASSESSEE FILED ITS OBJECT IONS BEFORE THE DRP. IT WAS CONTENDED BY THE ASSESSEE, INTER-ALIA, THESE PAYMEN TS DID NOT FALL WITHIN THE DEFINITION OF ROYALTY AS WAS ALLEGED BY THE ASSESSI NG OFFICER. IT WAS FURTHER ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 8 SUBMITTED THAT IN ANY CASE THE ASSESSEE HAS DEDUCTE D TAX AT SOURCE UNDER SECTION 194C OF THE ACT, AND THEREFORE IN ANY CASE NO DISAL LOWANCE COULD HAVE BEEN MADE UNDER SECTION 40 (A) (IA). 4.3. THE DRP CONSIDERED THE SUBMISSIONS OF THE ASSE SSEE IN DETAIL AND HELD THAT TAX WAS NOT REQUIRED TO BE DEDUCTED UNDER SECTION 1 94J OF THE ACT, AND ACCORDINGLY HELD THAT SINCE ASSESSEE HAS DEDUCTED T HE TAX UNDER SECTION 194C, THEREFORE NO DISALLOWANCE COULD HAVE BEEN MADE BY T HE ASSESSING OFFICER UNDER SECTION 40 (A)(IA) . THE RELEVANT PORTION OF THE OR DER OF THE DRP IS REPRODUCED HEREUNDER FOR THE SAKE OF READY REFERENCE: WE HAVE CAREFULLY CONSIDERED THE AD'S ORDER AND TH E ASSESSEE'S CONTENTIONS. IT IS CLEAR THAT THE ASSESSEE HAS DEDU CTED TAX 2% UNDER SECTION 1940 OF THE ACT, BY WAY OF ABUNDANT CAUTION . SECTION J94C OF THE DEALS WITH TDS ON PAYMENTS TO CONTRACTORS ENTRUSTED WITH WORKS. ACCORDING TO THE AD, J 0% DEDUCTION OF TAX UNDER SE CTION 194J OF THE ACT WAS NECESSARY, AS THE SAID PAYMENT WAS FOR ROYALTY AS DEFINED IN EXPLANATION 2 TO SECTION 9, SPECIFICALLY ON ACCOUNT OF USE OF PROCESS' SECTION 40(A)(IA) OF THE ACT MAKES A CLEAR MENTION OF DISALLOWANCE UNDER SECTION 40(A)(IA) OF THE ACT WOULD NOT BE CALLED FO R IN THE FACTS AND CIRCUMSTANCES OF THE CASE, EXPLANATION 6 TO SECTION 9(I)(VI) OF THE ACT HAVING BEEN INSERTED LATER WITH RETROSPECTIVE EFFEC T. FURTHER, THE ASSESSEE HAS DEDUCED TAX AT SOURCE, ALBEIT UNDER THE PROVISI ONS OF SECTION 1940 OF THE ACT IN THE CASE DCIT V. CHANDABHOY & JASSOBHOY (ITA NO. 201 MUM/2010, COPY PLACED ON RECORD), THE HON'BLE MUMBA I TRIBUNAL HAD HELD THAT DEDUCTION OF TAX AT A LESSER RATE WOULD NOT LE AD TO APPLICATION OF PROVISION'S OF SECTION 40(A)(IA) OF THE ACT. HERE, WE ALSO NOTE THAT THE DRP HAD HELD SUCH PAYMENTS TO HE NOT CHARGEABLE TO TAX, IN ITS ORDER FOR A Y 2009-10 IN THE CASE OF A GROUP COMPANY VIZ. M/ S ST AR DEN MEDIA SERVICES PVT. LTD. 4.4. DURING THE COURSE OF HEARING BEFORE US, LEARNE D DEPARTMENT REPRESENTATIVE SUBMITTED THAT IN VIEW OF JUDGMENT OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VIACOM 18 MEDIA PVT LTD 162 TIJ 336, THE IMPUGNE D PAYMENT SHOULD BE TREATED AS PAYMENT MADE FOR ROYALTY UNDER SECTION 9 AND THAT THE ASSESSEE SHOULD ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 9 NOT BE GIVEN BENEFIT OF ANOTHER JUDGMENT OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF NGC NETWORKS LTD 150 ITD 772. 4.5. PER CONTRA, LEARNED COUNSEL OF THE ASSESSEE HA S RELIED UPON THE ORDER OF THE DRP AND ALSO SUBMITTED THAT THIS ISSUE STOOD COVERE D IN FAVOUR OF THE ASSESSEE ON ACCOUNT OF VARIOUS JUDGMENTS OF THE TRIBUNAL IN THE CASE OF NGC NETWORK, SUPRA AND AS WELL AS VARIOUS OTHER JUDGMENTS INCLUD ING THE JUDGMENT IN THE CASE OF ONE OF THE GROUP COMPANIES OF THE ASSESSEE NAMEL Y STAR DEN MEDIA SERVICES PVT LTD IN ITA NO 1413-1414/ M /2014 AND ALSO ANOTH ER JUDGMENT HI- THE CASE OF NGC NETWORK DT. 12/1/2016 IN ITA NO 1525/M/2015. 4.6. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND JUDGMENTS PLACED BEFORE US BY BOTH THE SIDES. IN OUR OPINION, THIS ISSUE STAND S ALREADY CONCLUDED IN FAVOUR OF THE ASSESSEE. IN THE CASE OF STAR DEN MEDIA SERV ICES PRIVATE LIMITED, SUPRA, IT HAS BEEN HELD BY THE HON 'BLE BENCH THAT 'THE IMPUG NED PAYMENT DID NOT FALL WITHIN THE MEANING OF ROYALTY AS ENVISAGED UNDER SE CTION 9 OF THE ACT. RECENTLY) ANOTHER JUDGMENT PASSED BY THE COORDINATE BENCH IN THE CASE OF NGC NETWORKS INDIA PVT. LTD IN ITS ORDER DATED 12/1/2016 CONSIDE RED THE JUDGMENT OF VIACOM 18 MEDIA PVT LTD, SUPRA, WHICH HAS BEEN RELIED UPON BY THE LEARNED DEPARTMENT REPRESENTATIVE BEFORE US AND HELD THAT ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE ON THIS PAYMENT, MUCH LESS UNDER SECTION 194 J. IN OUR CONSIDERED OPINION, THIS ISSUE IS CONCLUDED IN FAVOUR OF THE A SSESSEE BY MANY JUDGMENTS. FURTHER, IN VIEW, DEDUCTION OF TAX AT A LESSER RATE WOULD NOT LEAD TO APPLICATION OF PROVISION OF SECTION 40(A)(IA) OF THE ACT, AS HA S BEEN HELD BY THE DRP ALSO IN ITS ORDER. WE FIND THAT ORDER OF THE DRP IS IN ACCO RDANCE WITH LAW AND FACTS, AND NO INTERFERENCE IS CALLED FOR THEREIN, AND THEREFOR E SAME IS UPHELD. RESULTANTLY, GROUND RAISED BY THE REVENUE IS DISMISSED. 6. CONSIDERING THE DECISION OF TRIBUNAL ON IDENTICAL G ROUND, WHEREIN NO VARIANCE OF FACT IS BROUGHT TO OUR NOTICE, THEREFOR E, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY REVENUE AN D RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL FOR ASSESSMENT Y EAR 2010-11 IN ITA NO. 1686/MUM/2016, THE GROUNDS OF APPEAL RAISED BY REVENUE IS DISMISSED. ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 10 7. GROUND NO.5 & 6 RELATES TO DELETING THE DISALLOWANC E ON ACCOUNT OF MARKETING AND PUBLICITY EXPENSES. WE HAVE NOTED THA T THE IDENTICAL GROUND OF APPEAL WAS RAISED FOR ASSESSMENT YEAR 201 0-11 IN ITA NO. 1686/MUM/2016, THE TRIBUNAL PASSED THE FOLLOWING OR DER: 5. GROUND NO. 3 : IN THIS GROUND, THE REVENUE HAS CHALLENGED THE ACTION OF DRP IN DELETING THE DISALLOWANCE OF RS. 2,43,94,323 /- ON ACCOUNT OF MARKETING AND PUBLICITY EXPENSES. 5.1 THE BRIEF FACTS IN THIS REGARD AS NOTED BY THE AO ARE THAT THE ASSESSEE HAD INCURRED EXPENDITURE OF RS.9.75 CRORES BY WAY OF MA RKETING AND PUBLICITY EXPENSES AND CLAIMED THEM AS DEDUCTION UNDER SECTIO N 37(1) OF THE ACT FOR PROMOTING ITS CHANNELS VIZ. REGIONAL CHANNELS SUCH AS 'STAR PRAVAH' AND 'STAR MAZHA'. HOWEVER, THIS PROMOTION, AS PER THE AO, INT ER ALIA RESULTED ALSO INTO PROMOTION OF THE 'STAR BRAND, WHICH IS OWNED BY M/S . STAR LTD. TO WHOM THE ASSESSEE HAD PAID BRAND ROYALTY FOR USING THE 'STAR ' BRAND, WHERE AS THE ROYALTY AGREEMENT DID NOT REQUIRED THE ASSESSEE TO INCURE S UCH MARKETING AND PUBLICITY EXPENDITURE WHICH ALSO BENEFITED M/S. STAR LTD. UND ER THESE CIRCUMSTANCES, THE AO ALLOWED ONLY 75% OF THE SAID EXPENSES HOLDING TH AT PORTION AS RELATING TO THE ASSESSEE'S BUSINESS ONLY WAS ALLOWABLE, THEREBY DISALLOWING THE BALANCE 25% OF SUCH EXPENSES AMOUNTING TO RS.2.48 CRORES. I N THIS CONNECTION, THE AO PLACED RELIANCE ON THE RULING OF THE HORI'BLE SPECI AL BENCH IN THE CASE OF CIT VS. L.G. ELETROLICS PVT. LTD. (ITA NO.5140/DEL/2011 ). THE ASSESSEE, ON THE OTHER HAND, RELIED ON THE THIRD MEMBER DECISIONS OF THE HON'BLE MUMBAI TRIBUNAL IN THE CASES OF ACIT VS. STAR INDIA PVT. L TD. AND ACIT VS. NGC INDIA LTD. IN THESE CASES, SUBSEQUENTLY, HON'BJE BOMBAY H IGH COURT HAD DISMISSED THE REVENUE'S APPEALS. 8. CONSIDERING THE DECISION OF TRIBUNAL ON ASSESSEES OWN CASE ON IDENTICAL GROUNDS OF APPEAL FOR AY 2010-11 IN ITA NO. 1686/MU M/2016, WHEREIN NO VARIANCE OF FACT IS BROUGHT TO OUR NOTICE. THERE FORE, RESPECTFULLY ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 11 FOLLOWING THE DECISION OF CO-ORDINATE BENCHTHE GROU NDS OF APPEAL RAISED BY REVENUE IS DISMISSED. C.O. NO. 96/MUM/2018 9. WE HAVE SEEN THAT THE ASSESSEE HAS FILED ITS C.O. T O SUPPORT THE ORDER OF LD. CIT(A). NO INDEPENDENT SUBMISSION WAS MADE ON B EHALF OF ASSESSEE, THEREFORE, CONSIDERING THE FACT THAT WE HAVE ALREAD Y DISMISSED THE APPEAL OF THE REVENUE. THEREFORE, THE ADJUDICATION ON THE GROUNDS OF APPEAL RAISED BY ASSESSEE IN ITS CROSS OBJECTIONS HAS BECO ME ACADEMIC. 10. IN THE RESULT, C.O. RAISED BY THE ASSESSEE IS DISMI SSED. ITA NO. 7454/MUM/2016 11. AS WE HAVE ALREADY NOTED THAT THE REVENUE HAS RAISE D IDENTICAL GROUNDS OF APPEAL IN THE YEAR UNDER CONSIDERATION. AS WE HAVE ALREADY DISMISSED THE APPEAL FOR ASSESSMENT YEAR 2011-12 ON IDENTICAL GRO UNDS OF APPEAL. THEREFORE, CONSIDERING OUR DECISION FOR ASSESSMENT YEAR 2011-12 ON IDENTICAL GROUNDS OF APPEAL, THE APPEAL OF THE REVE NUE FOR THE YEAR UNDER CONSIDERATION IS ALSO DISMISSED WITH SIMILAR OBSERV ATION. 12. IN THE RESULT, THIS APPEAL FILED BY REVENUE IS ALSO DISMISSED. C.O. NO. 95/MUM/2018 13. WE HAVE SEEN THAT THE ASSESSEE HAS FILED ITS C.O. T O SUPPORT THE ORDER OF LD. CIT(A). NO INDEPENDENT SUBMISSION WAS MADE ON B EHALF OF ASSESSEE, THEREFORE, CONSIDERING THE FACT THAT WE HAVE DISMIS SED THE APPEAL OF THE ITA NO. 7454 & 7441 MUM 2016 & C.O. 95 & 9 6 MUM 2018 M/S. STAR ENTERTAINMENT MEDIA PVT. LTD 12 REVENUE. THEREFORE, THE ADJUDICATION ON THE GROUNDS OF APPEAL RAISED BY ASSESSEE HAVE BECOME ACADEMIC. 14. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AS WE LL AS C.O. FOR BOTH THE ASSESSMENT YEAR RAISED BY THE ASSESSEE ARE ALSO DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.07 .2019 SD/- SD/- (G. MANJUNATHA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 09.07.2019 SK P.S. COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED, MUMBAI 4. THE CIT- CONCERNED, MUMBAI 5. THE DR BENCH, 6. MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. RE GISTRAR ITAT, MUMBAI