ASST CIT 7(3), MUMBAI V. ZEE NEWS LTD, MUMBAI

ITA 8060/MUM/2011

• Counselvise Citation: 806019914 RSA 2011
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: L
• Next Hearing Date: 13-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 01-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEERAJ PRADHAN
• Assessee Lawyers: SANJIV M SHAH
• Keywords: Double taxation relief; Retrospective amendment

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.8060/ MUM/2011 ' ' ' ' # # # # / ASSESSMENT YEAR 2006-07 ASSTT. COMMISSIONER OF INCOME TAX-TAX 7(3), ROOM NO.615, 6 TH FLOOR, AAYKAR BHAVAN, MK ROAD, MUMBAI 400020 ' ' ' ' / VS. M/S.ZEE NEWS LTD. 135, CONTINENTAL BUILDING, DR.ANNIE BESANT ROAD, WORLI, MUMBAI 400018 $ ./ % ./ PAN/GIR NO. : AAACZ 1213B ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) $& ) / APPELLANT BY: MS. NEERAJ PRADHAN '($& * ) / RESPONDENT BY : SHRI SANJIV M. SHAH ' * + / DATE OF HEARING : 12/09/2013 ,-# * + / DATE OF PRONOUNCEMENT : 12/09/2013 . / O R D E R PER I.P.BANSAL, J.M THIS IS AN APPEAL FILED BY THE REVENUE. IT IS DIR ECTED AGAINST THE ORDER PASSED BY LD. CIT(A)-18, MUMBAI DATED 12/09/2011 FO R THE ASSESSMENT YEAR 2006-07. GROUNDS OF APPEAL READ AS UNDER: 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT NO TDS U/S. 195 OF THE AC T, WAS LIABLE TO BE DEDUCTED ON THE TRANSPONDER FEES FOR THE USAGE OF THE SATELL ITE OF THE FOREIGN COMPANY, FOR THE BUSINESS CARRIED OUT IN INDIA. . / ITA NO.8060/ MUM/2011 ' ' ' ' # # # # / ASSESSMENT YEAR 2006-07 2 2. THE LD. CIT(A)S ORDER IS PERVERSE IN LAW AND ON FACTS AND DESERVES TO BE SET ASIDE. 3. THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE AO RESTORED. THE APPELLANT CRAVES L EAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND THAT MAY BE NECESSARY. 2. THE ISSUE RELATES TO ADDITION OF RS.1,52,58,125/ - AN AMOUNT PAID BY THE ASSESSEE AS TRANSPONDER FEE WHICH WAS PAID TO NON-R ESIDENT ENTITY. ACCORDING TO AO ASSESSEE WAS UNDER AN OBLIGATION TO WITHHOLD TAX UN DER THE PROVISIONS OF SECTION 195 OF THE INCOME TAX ACT, 1961(THE ACT) AND SINCE ASSE SSEE DID NOT DISCHARGE THAT OBLIGATION THE SAID AMOUNT WAS LIABLE TO BE ADDED T O THE INCOME OF THE ASSESSEE UNDER SECTION 40(A)(IA) OF THE ACT. ACCORDINGLY, ADDITIO N WAS MADE WHICH WAS AGITATED IN AN APPEAL FILED BEFORE LD. CIT(A). LD. CIT(A) FOLLOWI NG THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ASIA SATELLITE TELECOMMUNICAT ION COM. LTD. (2011) 322 ITR 340 (DEL) DELETED THE ADDITION. IN THE SAID CASE IT WAS HELD THAT THE PAYMENT MADE BY TELECAST OPERATORS OUT OF INDIA TO NON-RESIDENT CO ULD NOT BE TAXED ON THE BASIS THAT THE END CONSUMERS ARE IN INDIA. THE DEPARTMENT IS AGGRIEVED BY THE AFOREMENTIONED ORDER OF THE LD. CIT(A) AND, HENCE, HAS FILED AFORE MENTIONED GROUNDS OF APPEAL. 3. AFTER NARRATING THE FACTS IT WAS SUBMITTED BY LD . DR THAT IN VIEW OF THE AMENDMENT BROUGHT INTO THE STATUTE IN THE PROVISION S OF SECTION- 9, THE AMOUNT PAID BY THE ASSESSEE HAS TO BE CONSIDERED AS PAYMENT MA DE BY THE ASSESSEE WITH REGARD TO USE OR RIGHT TO USE OF INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT. LD. DR IN THIS REGARD REFERRED TO EXPLANATION 5 & 6 TO SECTION 9(1 )(VI). SHE SUBMITTED THAT EXPLANATION 5 & 6 HAVE BEEN INSERTED IN THE STATUTE BY THE FINANCE ACT, 2012 WITH RETROSPECTIVE EFFECT FROM 1/6/1976. SHE SUBMITTED THAT THE DECISION OF HONBLE DELHI HIGH COURT ON THE BASIS OF WHICH LD. CIT(A) HAS GIV EN RELIEF TO THE ASSESSEE, DID NOT CONSIDER THE AFOREMENTIONED AMENDMENT AS THE SAME W AS NOT THERE ON THE STATUTE. SHE, THEREFORE, SUBMITTED THAT THE APPEAL SHOULD BE DECIDED IN FAVOUR OF THE REVENUE. 4. ON THE OTHER HAND, LD. AR HAS PLACED BEFORE US A COPY OF ORDER OF MUMBAI TRIBUNAL L BENCH IN THE CASE OF CHANNEL GUIDE I NDIA LTD. VS. ACIT, (2012) 25 TAXMANN.COM 25 (MUM) AND COPY OF THE SAME WAS ALSO GIVEN TO LD. DR. HE SUBMITTED THAT IN THE AFOREMENTIONED DECISION THE TRIBUNAL H AS CONSIDERED THOSE AMENDMENTS . / ITA NO.8060/ MUM/2011 ' ' ' ' # # # # / ASSESSMENT YEAR 2006-07 3 AND FACTS OF THE ASSESSEES CASE ARE SIMILAR. THER EFORE, HE SUBMITTED THAT THE ORDER PASSED BY LD. CIT(A) SHOULD BE UPHELD. 5. IN THE REJOINDER IT WAS SUBMITTED BY LD. DR THAT IN THE AFOREMENTIONED DECISION IN THE CASE CHANNEL GUIDE INDIA LTD. VS. ACIT (SU PRA), THOUGH THE AFOREMENTIONED AMENDMENT HAS BEEN CONSIDERED BUT SIMULTANEOUSLY PR OVISIONS OF INDO-THAILAND TREATY WERE ALSO CONSIDERED AND AFTER CONSIDERING T HE TREATY THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. SHE SUBMITTED THAT IN THE PRESENT CASE PROVISIONS REGARDING APPLICABLE TREATY HAVE NEVER BEEN CONSIDERED. THE REFORE, SHE PLEADED THAT RELIEF CANNOT BE ALLOWED TO THE ASSESSEE SIMPLY ON THE BA SIS OF AFOREMENTIONED DECISION OF MUMBAI TRIBUNAL. 6. WE HAVE HEARD BOTH THE PARTIES AND THEIR CONTENT IONS HAVE CAREFULLY BEEN CONSIDERED. WE HAVE ALSO CAREFULLY GONE THROUGH TH E ASSESSMENT ORDER AND THE ORDER OF LD. CIT(A). IT HAS NEVER BEEN CLAIMED THAT ACCO RDING TO THE PROVISIONS OF APPLICABLE TREATY THE PAYMENT MADE BY THE ASSESSEE WAS NOT TA XABLE IN THE HANDS OF THE RECIPIENT. THE AO IS OF THE OPINION THAT SUCH PAY MENT MADE TO NON-RESIDENT ARE LIABLE FOR DEDUCTION OF TAX U/S. 195 OF THE ACT.. LD. CIT(A) SIMPLY RELYING UPON THE AFOREMENTIONED DECISION OF HONBLE DELHI HIGH COURT HAS GRANTED RELIEF TO THE ASSESSEE WITHOUT DISCUSSING THE PROVISIONS OF APPLICABLE TRE ATY. AS AGAINST THAT IN THE DECISION OF MUMBAI ITAT WHICH HAS BEEN RELIED UPON BY LD. AR THERE IS A DISCUSSION IN DETAIL REGARDING APPLICABLE TREATY WHICH IN THE PRESENT C ASE IS STATED TO BE DTAA OF INDIA WITH MALAYSIA. ACCORDINGLY, WE CONSIDER IT JUST AN D PROPER TO RESTORE THIS ISSUE TO THE FILE OF AO FOR RE-ADJUDICATION OF THE MATTER IN THE LIGHT OF APPLICABLE LAW AND TREATY. DURING THE COURSE OF HEARING LD. AR CONVEYED HIS A PPREHENSION REGARDING NON CONSIDERATION BY THE AO OF THE RELEVANT PROVISIONS OF THE ACT AND OTHER LAW WHICH MAY BE RELIED UPON BY THE ASSESSEE IN ITS FAVOUR TO CON TEND THAT THE PAYMENT MADE BY THE ASSESSEE WERE NOT LIABLE TO BE TAXED IN INDIA IN TH E HANDS OF THE RECIPIENT. TO REMOVE SUCH APPREHENSION WE MAY CLARIFY THAT ASSESSEE WILL BE ENTITLED TO PUT-FORTH ALL DEFENSE AVAILABLE IN LAW TO SUPPORT ITS CASE AND AFTER CONSIDERING ALL THOSE DEFENSES OF THE ASSESSEE, THE AO IS DIRECTED TO RE-ADJUDICAT E THE MATTER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. WE DIRECT SO. WITH . / ITA NO.8060/ MUM/2011 ' ' ' ' # # # # / ASSESSMENT YEAR 2006-07 4 THESE OBSERVATIONS THE APPEAL FILED BY THE REVENUE IS DISPOSED OF WHICH WILL BE CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS CON SIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MANNER AFORESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 12/09/2013 . * ,-# / 0'1 12/09/2013 - * 2 3 SD/- SD/ - ( / RAJENDRA ) ( . . / I.P. BANSAL ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; 0' DATED 12/09/2013 . . . . * ** * '+45 '+45 '+45 '+45 65#+ 65#+ 65#+ 65#+ / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 7 ( ) / THE CIT(A)- 4. 7 / CIT 5. 582 '+' , , / DR, ITAT, MUMBAI 6. 29 : / GUARD FILE. .' .' .' .' / BY ORDER, (5+ '+ //TRUE COPY// ; ;; ; / < < < < (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ' . ./ VM , SR. PS . / ITA NO.8060/ MUM/2011 ' ' ' ' # # # # / ASSESSMENT YEAR 2006-07 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 12/09/13 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 12/09/13 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER