TMI Blog2014 (6) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... ce from the Pay Channel Charges. - Decision in the case of Asia Satellite Telecommunications Co. Ltd. Versus Director of Income-tax [2011 (1) TMI 47 - DELHI HIGH COURT] followed – Decided in favour of Assessee. - I.T.A. No. 794/Coch/2013 - - - Dated:- 6-6-2014 - N.R.S.GANESAN and B.R.BASKAR, JJ. For the Appellant : C.V. Rajan. For the Respondent : K.K. John. ORDER:- PER : B.R.Baskaran The appeal filed by the assessee is directed against the order dated 26-09-2013 passed by the Ld. CIT(A)-V, Kochi and it relates to the assessment year 2009-10. 2. The assessee is challenging the decision of the Ld. CIT(A) in confirming the disallowance of Rs.163.30 lakhs, being the amount paid to pay channels by the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) is not applicable to the facts of the instant case. The Assessing officer held that the assessee is liable to deduct tax at source u/s. 194J of the Act on the pay channel charges paid by it. The relevant observations made by the Assessing officer are extracted below for the sake of convenience: 3. What is emphasized above is that the technical service given to a subscriber to make use of the result of scientific and technological development for a fee to individual house holder and consumers. Here in the present case under consideration, the assessee company is a Multi System Operator Company, who as per definition given by Telecom Regulatory Authority an MSO means any person who receives a broadcasting service from a broadcast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,63,30,205/- paid/credited as pay channel charges to various pay channel companies is disallowed u/s. 40a(ia) for violation of making TDS as per the provisions of Section 194J of the I.T. Act, 1961. 4. The assessee challenged the addition made by the Assessing officer by filing the appeal before the Ld. CIT(A) but could not succeed, hence the assessee has filed this appeal before us. 5. We have heard the rival contentions and carefully perused the record. For the purpose of sec. 194J, the term royalty shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of sec. 9. The said Explanation reads as under:- Explanation 2 - For the purposes of this clause, royalty means consideration (including any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression Process . We further notice that the Finance Act, 2012 has inserted Explanation 6 below clause (vi) of sub-section (1) of sec. 9 defining the word process . The said Explanation 6 reads as under:- Explanation 6 - For the removal of doubts, it is hereby clarified that the expression process includes and shall be deemed to have always included transmission by satellite (including up-lining, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology whether or not such process is secret; We notice that the expression process includes and shall be deemed to have always included transmission by satellite, cable, optic fibre of any other technology. In the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 9(1) of the Act. He submitted that the Explanation 6, which expanded the scope of the expression process has been inserted by the Finance Act, 2012 with retrospective effect, was brought into the Act only to nullify the decision rendered by the Hon'ble Delhi High Court. Accordingly, the Ld A.R submitted that the view entertained by the assessee that the payment of Pay channel charges will not fall in the category of royalty was supported by the decision of Hon'ble Delhi High Court referred above. Accordingly he submitted that the disallowance u/s 40(a)(ia) should not be made on the basis of subsequent amendment made with retrospective effect. In this regard, he placed reliance on the following case law:- (a) Sonata Inf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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