ADIT (IT) 2(1), MUMBAI V. SATELLITE TELEVISION ASIAN REGION LTD, MUMBAI

ITA 8174/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8256 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2008-2009
• Appeal Filed On: 25-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Keywords: Revised return
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 8174/MUM/2010 (ASSESSMENT YEAR: 2008-09) DDIT (IT) - 2(1) M/S. SATELLITE TELEVISION ASIAN ROOM NO. 120, 1ST FLOOR REGION LTD., C/O. S.R. BATL IBOI & CO. SCINDIA HOUSE, BALLARD ESTATE VS. 18TH FLOOR, EXPRES TOWERS N.M. ROAD, MUMBAI 400038 NARIMAN POINT, MUMBAI 400 021 PAN - AAACS 5680 D APPELLANT RESPONDENT APPELLANT BY: GIRIJA DAYAL RESPONDENT BY: DIVESH CHAWLA DATE OF HEARING: 12.11.2012 DATE OF PRONOUNCEMENT: 16.11.2012 O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY REVENUE IS AGAINST THE ORDER OF CIT( A) 11, MUMBAI DATED 27.09.2010. 2. THE REVENUE HAS RAISED THE MAIN GROUND AS UNDER: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, WHETHER THE LD. CIT(A) WAS CORRECT IN HOLDING THAT WHEN DUTY IS CAST ON THE PAYER TO PAY TAX AT SOURCE, NO INTEREST U/S. 23 4B AND 234C CAN BE IMPOSED ON THE PAYEE ASSESSEE IGNORING THE FACT THA T IT IS THE LIABILITY OF THE PAYEE TO PAY ADVANCE TAX EVEN ON THE AMOUNT WHICH HAD NOT BEEN DEDUCTED AT SOURCE UNDER SECTION 195 OF THE IN COME TAX ACT, 1961. 3. WE HAVE HEARD THE LEARNED D.R. AND THE LEARNED COUN SEL FOR THE ASSESSEE. 4. BRIEFLY STATED, THE FACTS OF THE CASE AS NOTED BY T HE CIT(A) ARE THAT M/S. SATELLITE TELEVISION ASIAN REGION LTD. (STAR L TD.) IS A COMPANY INCORPORATED IN HONG KONG AND IS ENGAGED IN THE MED IA INDUSTRY. WHEREAS, STAR INDIA PVT. LTD. IS A COMPANY INCORPORATED IN I NDIA WHICH COLLECTS ADVERTISING REVENUE FROM VARIOUS CLIENTS AND PURCHA SES ADVERTISING AIRTIME ITA NO. 8174/MUM/2010 M/S. SATELLITE TELEVSION ASIAN REGION LTD. 2 FROM THE STAR LTD. (ASSESSEE). DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2008-09 STAR LTD. ALSO GRANTED DIST RIBUTION RIGHTS IN RESPECT OF CERTAIN SATELLITE TELEVISION CHANNELS IN INDIA ACQUIRED FROM NON- RESIDENT TELEVISION CHANNEL COMPANIES. THE ASSESSEE COMPANY FILED ITS ORIGINAL RETURN OF INCOME ON 30.09.2008, DECLARING THE TOTAL INCOME OF ` 77,64,96,581/- BASED ON THE DRAFT FINANCIAL STATEME NTS. ITS OVERALL GROUP INCOME WAS ` 151.61 CRORES WHICH CONSISTS OF THE FOLLOWING: - PARTICULARS AMOUNT ( ` `` ` ) ADVERTISING REVENUES 1041,44,54,137 DISTRIBUTION/SUBSCRIPTION REVENUES 278,99,44,800 SYNDICATION/LICENSING REVENUES 5,09,38,187 TOTAL REVENUE FROM INDIA 1325,53,37,124 PROFIT @ 11.44 % 151,64,11,000 THIS TOTAL INCOME OF ` 151.64 CRORES WAS OFFERED IN THREE HANDS: - (A) IN THE HANDS OF STAR LTD. (ASSESSEE COMPANY) RS.75. 81 CRORES (B) IN THE HANDS OF CHANNEL COMPANIES ` 75.82 CRORES (C) IN THE HANDS OF SGL ` 40,000/- THE ASSESSING OFFICER IN ITS INTIMATION UNDER SECTI ON 143(1) OF THE INCOME TAX ACT HAS DETERMINED THE ASSESSED TOTAL INCOME AT ` 77.64 CRORES. THE ASSESSEE COMPANY HAS SUBSEQUENTLY FILED ITS REVISED RETURN BASED ON AUDITED FINANCIAL STATEMENTS ON 31.03.2010 DECLARIN G THE TOTAL INCOME OF ` 82.73 CRORES. IN ITS ORIGINAL RETURN FILED ON 30.09 .2008, THE ASSESSEE COMPANY HAD SHOWN AMOUNT OF TDS PAID AS ` 55.08 LAKHS AND SELF ASSESSMENT TAX OF ` 31.85 CRORES. SINCE, THE AMOUNT OF TDS IS RELATIVEL Y SMALL AND LARGE AMOUNT HAS BEEN PAID AS SELF ASSESS MENT TAX, ASSESSING OFFICER CHARGED INTEREST UNDER SECTION 234B AMOUNT ING TO ` 2,64 CRORES AND UNDER SECTION 234C ` 1.62 CRORES. ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) AND THE CIT(A) DELETED THE LEVY OF INTEREST BY HOLDING AS UNDER: - 4. AFTER CAREFULLY EXAMINING THE ISSUE IN DETAIL, I AM OF THE VIEW THAT IN THE LIGHT OF THE JUDGEMENT OF HON'BLE BOMBA Y HIGH COURT IN THE CASE OF DIT VS. NGC NETWORK ASIA LLC LLC [313 ITR 1 87 (BOM)], NO INTEREST U/S. 234B AND 234C OF THE INCOME-TAX ACT C AN BE IMPOSED ON THE APPELLANT COMPANY. ACCORDINGLY, THE ASSESSING O FFICER IS DIRECTED ITA NO. 8174/MUM/2010 M/S. SATELLITE TELEVSION ASIAN REGION LTD. 3 TO DELETE THE INTEREST CHARGED U/S. 234B AND 234C O F THE INCOME-TAX ACT. FURTHER THE ASSESSING OFFICER IS DIRECTED TO A LLOW CREDIT FOR TDS PAID BY THE APPELLANT COMPANY AFTER DUE VERIFICATIO N. IN CASE, IT IS NOTED BY THE ASSESSING OFFICER THAT THE APPELLANT C OMPANY HAS NOT DEDUCTED THE TDS IN ACCORDANCE WITH THE LAW, THE PR OCEEDINGS U/S. 201 AND 201(1A) OF THE INCOME-TAX ACT AND DISALLOWA NCE U/S. 40(A)(I) DURING 143(3) CAN BE TAKEN BY HIM INDEPENDENTLY AS HE DEEMS FIT BUT HE CANNOT IMPOSE INTEREST U/S. 234B AND 234C OF THE INCOME-TAX ACT IN VIEW OF THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT . 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE DO NOT S EE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). IT IS IN TU NE WITH THE PRINCIPLES LAID DOWN BY THE HON'BLE HIGH COURT IN THE CASE OF NGC N ETWORK ASIA LLC 313 ITR 187 (BOM) WHERE IN IT WAS HELD THAT WHERE ALL I NCOME RECEIVED BY ASSESSEE WERE SUCH FROM WHICH TAX WAS DEDUCTIBLE AT SOURCE, ASSESSEE COULD NOT BE HELD TO HAVE COMMITTED DEFAULT IN PAYMENT OF ADVANCE TAX AND CONSEQUENTLY NOT LIABLE TO PAY INTEREST. SINCE THE ORDER IS IN CONFORMITY WITH THE PRINCIPLE LAID DOWN BY THE HON'BLE JURISDICTION AL HIGH COURT, WE DISMISS THE APPEAL OF THE REVENUE. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2012. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 16 TH NOVEMBER, 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 11, MUMBAI 4. DIT (IT) - I, MUMBAI, MUMBAI CITY 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.