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M/s. Ushodaya Enterprises Private Limited Versus Asstt. Commissioner of Income-tax

2015 (5) TMI 609 - ITAT HYDERABAD

TDS liability under S.194J in respect of payments made to news service agencies - Held that:- Issue is covered by the decision of the Tribunal in assessee’s own case for assessment years 2004-05 to 2006-07 [2012 (7) TMI 120 - ITAT HYDERABAD] against the assessee wherein held as unable to appreciate that no professional services are rendered by the reporters in collecting the data for publication of news. The work carried out by news paper agents requires professional qualifications and skills. T .....

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ded against assesse.

TDS liability - payments made on account of software expenses - Held that:- Issue is covered by the decision of the Tribunal in assessee’s own case for assessment years 2004-05 to 2006-07 [2012 (7) TMI 120 - ITAT HYDERABAD] against the assesse wherein held that the assessee is making payments to various agencies on revenue sharing basis from the income generated through advertisements by way of telecasting the serials or programmes produced by the agencies. The mo .....

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rs 2004-05 to 2006-07 in favour of assesse wherein held the assessee is not liable to deduct tax u/s 194H as relying on M/s TV Today Network Ltd [2011 (7) TMI 1095 - ITAT DELHI] - Decided in favour of assesse.

Non-deduction of tax at source - payment of band width charges - Held that:- Issue is covered by the decision of the Tribunal in assessee’s own case for assessment years 2004-05 to 2006-07 in favour of assesse wherein held the assessee is not liable to deduct tax u/s 194H as rel .....

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sse wherein held the assessee is not liable to deduct tax as relying on Skycell Communications Ltd. Vs. DCIT [2001 (2) TMI 57 - MADRAS High Court] - Decided in favour of assesseE - Decided in favour of assesse.

Non-deduction of tax at source - payment of transponder rent - Held that:- Issue is covered by the decision of the Tribunal in assessee’s own case for assessment years 2004-05 to 2006-07 in favour of assesse wherein held in the case of ISRO satellite centre [2008 (10) TMI 15 - .....

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on or control of equipment of IGL and the agency that received the payment charges paid by assessee cannot be regarded as payment for use of IGL’s equipment. The AAR held that income arising to IGL out of payments received from applicant is neither in nature of ‘royalty’ under Act nor is fee for technical service - Decided in favour of assesse. - ITA No.1820/Hyd/2014, ITA No.1821/Hyd/2014, ITA No.1858/Hyd/2014, ITA No.1859/Hyd/2014 - Dated:- 24-4-2015 - Shri P.M.Jagtap And Shri Saktijit Dey JJ. .....

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Act for the assessment years 2002-03 and 2003-04. 2. The assessee in the present case is a company which is engaged in the business of publishing of newspapers, manufacturing of food items, dairy products and electronic media, i.e. TV channel, etc. A survey in the case of assessee was carried out on 3.3.2006. The findings of the survey as well as further enquiries made by the Assessing Officer revealed that there was failure on the part of the assessee in deducting tax at source from certain pa .....

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1A) Total Discount 35228985 25364869 60593854 News Service Agency 7260934 5227872 12488806 Band Width 784308 564702 1349010 Transponder Rent 18442348 13278491 31720839 Internet 109829 79077 188906 Software 5243680 3775449 9019130 Data Circuit Rental 2093589 1507384 3600972 Grand Total 69163673 49797844 118961517 Assessment year 2003-04 Head Default u/s.201(1) Interest u/s. 201(1A) Total Discount 18436709 11062026 29498736 News Service Agency 7870092 4722056 12592148 Band Width 827698 496619 1324 .....

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eld that the assessee was not required to deduct tax at source from the payments made on account of discounts, data circuit rentals, bandwidth charges, internet charges and transponder rent. As regards the payments made by the assessee on account of News Service agencies and software expenses, the learned CIT(A) however, held that the assessee was required to deduct tax at source from the said payments and having failed to do so, it was rightly treated by the Assessing Officer as assessee in def .....

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roneous, contrary to law and facts of the case. 2. a) Commissioner Income Tax (Appeals)-II grossly erred in confirming the action of Assessing Officer treating the Appellant as defaulter u/s.201(1) r.w.s.194J for nondeduction of TDS on payments made by the Appellant to news service agencies holding that such payments are in the nature of professional and technical services and therefore attract the provisions of Section 194J of the Act. b)Commissioner of Income Tax (Appeals)-II, ought to have se .....

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ioner of Income Tax (Appeals) in the alternative, ought to have seen that since news service agencies have filed their return of income considering the service charges as their income and paid taxes thereon there is no loss to the re'venue and hence there is no justification in treating the Appellant as defaulter u/s.201 (1) and 201 (1A) of the Act 3. a) Commissioner Income Tax (Appeals)-II grossly erred in confirming the action of Assessing Officer in treating the Appellant as defaulter u/s .....

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eals) ought to have seen that it had entered into agreements with Usha Kiron Television, Usha Kiron Movies and others only for telecasting their programmes through the Appellant's TV channels on an understanding that the revenue generated on advertisements for time slots during telecasting of the said programmes shall be shared between them and not for production of TV serials/ programmes and hence subjecting to TDS the share of revenue given to the said parties invoking the provisions of Se .....

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Kiron Movies and Usha Kiron Television have filed their returns of income considering the amounts paid by the Appellant towards share of revenue for their programmes telecast by the Appellant as their income and paid the taxes thereon, there is no loss to the revenue and hence there is no justification treating the Appellant as defaulter u/s.201 (1) and 201 (1 A) of the Act by the Assessing Officer. 4. For all of the above and such other grounds as may be urged at the time of hearing it IS most .....

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usion that the amount retained by the advertising agencies did not partake the character of "commission" and the provisions of 194H were therefore not applicable. 3) Whether on the facts and circumstances, the CIT(A).II, Hyderabad erred in holding that data circuit rentals did not constitute technical services, thereby attracting the provisions of sec.194J of the Act. 4) Whether on the facts and circumstances, the CIT(A).II, Hyderabad erred in deleting the additions made on account of .....

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rused the relevant material on record. Let us first take up the appeals of the assessee for consideration, in which grounds No.1 and 4 are general and do not require specific adjudication. As regards the issue involved in grounds 2(a) and 2(b) relating to TDS liability under S.194J of the Act in respect of payments made to news service agencies, learned representatives for both the sides have agreed that it is covered by the decision of the Tribunal dated 23.3.2012 in assessee s own case for ass .....

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qualifications and skills. Though, the data collected by such reporters has tobe reviewed glossed up and made fit to be published/presented. Nevertheless, procurement of the basic data cannot be done without qualified reporters who utilise their professional skills for collection of the same. Further, the newspapers employ reporters who have been trained to have interrogative ability, presence of mind and have specialised in a way for doing their work and hence they are rendering work in their p .....

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iss grounds No.2(a) and 2(b) of the assessee in these appeals. 5. As regards Ground No.2(c) of the assessee s appeals, relating to its alternative claim, learned counsel for the assessee has submitted that the issue involved therein was also raised by the assessee in ground No.3(d) of its appeals filed before the learned CIT(A). He has submitted that the learned CIT(A) however, has not decided the same, and this position clearly evident from the impugned order of the learned CIT(A) is not disput .....

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greed that it is covered by the decision of the Tribunal dated 23.3.2012 in assessee s own case for assessment years 2004-05 to 2006-07 in ITA No.1699 to 1701/Hyd/2008 and 1706 to 1708/Hyd/2008. The Tribunal has decided this issue against the assessee for those years vide para 48 its order dated 23.3.2012, which reads as follows- 48. We heard both the parties and perused the materials available on record. From the Profit and Loss account it was seen that in the ETV Telugu Division and ETV Other .....

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g advertisement revenue. Hence the assessee is making payments to various agencies on revenue sharing basis from the income generated through advertisements by way of telecasting the serials or programmes produced by the agencies. The mode of payment is nothing but a payment for contract of work and is squarely covered by explanation III to section 194C which says work shall include programmes for such broadcasting or telecasting. In view of the same, we hold that the nature of payments fall wit .....

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eals, relating to its alternative claim, learned counsel for the assessee has submitted that the issue involved therein was also raised by the assessee in ground No.7(f) of its appeals filed before the learned CIT(A). He has submitted that the learned CIT(A) however, has not decided the same, and this position clearly evident from the impugned order of the learned CIT(A) is not disputed by the Learned Departmental Representative. We therefore, remit this issue involved in ground No.3(e) of the a .....

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ives for both the sides have agreed that it is covered by the decision of the Tribunal dated 23.3.2012 in assessee s own case for assessment years 2004-05 to 2006-07 in ITA No.1699 to 1708/Hyd/2008 and 1706 to 1701/Hyd/2008. The Tribunal for those years has decided this issue in favour of the assessee and against the revenue vide para 9 of its order dated 23.3.2012, which reads as follows- 9. We heard both the parties. We have perused the order of the Delhi Bench C wherein it has been decided in .....

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py of which was placed before him by the assessee. We also find that the department conceded before the Tribunal and when the matter reached up to the Supreme Court and the decision of the Tribunal was upheld. Therefore, we are of the opinion that the issue is covered by the decision of the Coordinate Bench in the case of Living Media India Limited in ITA No.3807/Del./2005. Hence we confirm the order of the CIT (A) on this issue and hence the departmental appeal is dismissed on this issue. Facts .....

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tatives for both the sides have agreed that it is covered by the decision of the Tribunal dated 23.3.2012 in assessee s own case for assessment years 2004-05 to 2006-07 in ITA No.1699 to 1701/Hyd/2008 and ITA Nos.1706 to 1708/Hyd/2008. The Tribunal for those years has decided this issue in favour of the assessee and against the revenue vide paras 13 and 14 of its order dated 23.3.2012, which read as follows- 13. We heard both the parties and perused the materials available on record. We find tha .....

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n the case of Intertek Testing Services India P Ltd. (307 ITR 418)(AAR) that the offer of a standard facility to a number of customers such as telephone/cell phone users does not amount to rendering any technical service within the meaning of the definition of technical service. Technical or consultancy service rendered should be of such a nature that it makes available the technical knowledge, skills etc. must remain with the person receiving the services even after the particular contract come .....

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rentals and dismiss the departmental appeal on this issue. Facts and circumstances of the case for the years under consideration being similar to those considered by the Tribunal in the above decision for the assessment years 2004-05 to 2006-07, respectfully following the said decision, we uphold the impugned order of the CIT(A) on this issue, and dismiss ground No.3 of the Revenue in these appeals. 11. As regards the issue involved in ground 4 relating to non-deduction of tax at source on paym .....

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lied on the decision of the Tribunal Mumbai Bench in the case of Pacific Internet (India) P Ltd. Vs. ITO 318 ITR (AT) 0197 Mum wherein it has been held that payment made for using bandwidth and network operation are not technical services and tax needed not be deducted from such payments u/s 194J. The learned counsel for the assessee submitted that it is now settled that mere provision of facility to use equipment, whatever may be the sophistication that went into the creation of such facility, .....

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he said decision, we uphold the impugned order of the CIT(A) on this issue, and dismiss ground No.4 of the Revenue in these appeals. 12. As regards the issue involved in ground 5 relating to non-deduction of tax at source on payment of internet charges, learned representatives for both the sides have agreed that it is covered by the decision of the Tribunal dated 23.3.2012 in assessee s own case for assessment years 2004-05 to 2006-07 in ITA No.1699 to 1701/Hyd/2008 and 1706 to 1708/Hyd/2008. Th .....

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TR (AT) 0179(Mum). …. Hence we uphold the order of the CIT(A) holding the provisions of section 194J are not applicable to the impugned payments. Facts and circumstances of the case for the years under consideration being similar to those considered by the Tribunal in the above decision for the assessment years 2004-05 to 2006-07, respectfully following the said decision, we uphold the impugned order of the CIT(A) on this issue, and dismiss ground No.5 of the Revenue in these appeals. 13. .....

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