TMI Blog2015 (8) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... en, the Assessee was not supposed to foresee the subsequent retrospective amendment in the statute to be held liable to tax deduction at source under the provisions of section 194J - Decided in favor of assessee. - Cross Objection No.71/Mum/2014, 72/Mum/2014 Arising Out of ITA No.1413/Mum/2014, 1414/Mum/2014 - - - Dated:- 5-8-2015 - S/Sh. A.D. Jain,Judicial Member Rajendra, Accountant Member Assessee by : S/Shri Porus Kaka Divesh Chawla Revenue by : Shri G.M. Doss Per Rajendra, AM Challenging the directions dt.31.12.2013 of the Dispute Resolution Penal(DRP)-II,Mumbai, the Assessing Officers (AO.s) have filed appeals in both the cases .The assessee has also filed cross objections. As the issues involved in both the appeals and the CO.s are common and the assessee s belong to the same group, so, we are deciding the appeals by a common order. ITA 1413/M/2014: The AO has raised following grounds of appeal. 1. On the facts and circumstances of the case and in law, the Ld. DRP was not justified in deleting the disallowance of ₹ 67,37,23,506/made on account of channel placement fees u/s.40(a)(ia) as TDS was not deducted u/s.194J. 2. The Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax11( 1) ['Assessing Officer'] erred in objecting to the directions of DRP that the Respondent has rightlydeducted TDS on channel placement fees/ carriage fees under Section 194C of the Income Tax Act, 1961 ('Act') and that the provision of Section 194J of the Act are not applicable on the channel placement fees/carriage fees paid by the Respondent and hence, there cannot be any disallowances under Section 40(a)(ia) of the Act. 2. On the facts and in the circumstances of the case, without prejudice to the above, the learnedAssessing Officer erred in not appreciating that the disallowances under Section 40(a)(ia) of the Act cannot be made in case of alleged short deduction of tax at source. 3. On the facts and in the circumstances of the case, without prejudice to the above, the learned Assessing Officer erred in not appreciating that the disallowances under Section 40(a)(ia) of the Act cannot be made in light of the retrospective amendments to the provisions of Section 9(1)( vi) of the Act The Respondent craves to consider each of the above grounds of crossobjections without prejudice to each other and craves leave to add, alter, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been deducted as per provisions of Section 194J. The Assessee challenged proposed action of Assessing Officer before DRP. The DRP has held that channel placement fee does not come in the definition of royalty and therefore, the provision u/s. 194J are not applicable. The DRP while coming to the conclusion also considered retrospective amendment in section 9(1)(vi) in the shape of Explanation6. The DRP found that the payment of channel placement fee is not tantamount to payment of fee for transmission purpose which includes hiring of transponder, uplinking/downlinking etc. Thus the DRP held that the disallowance u/s. 40(a)(ia) on account of short deduction of tax is not warranted. We find that the channel placement fee paid to the cable TV operator/DTH provider cannot be regarded as royalty as it does not fall under the definition in terms of Explanation2 of Section9( 1)(vi) of the Income tax Act. Though there is an amendment in the provision and as per newly inserted Explanation6 with retrospective effect the term process has been defined and it includes transmission, uplinking and down linking of signals etc. But the said retrospective amendment cannot be pressed into service for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bad Bench of this Tribunal in the case of Sterling Abrasives Ltd. v. ITO [IT Appeal No. 2247 2248 (AHD.) of 2008, dated 23122010] which was followed by the coordinate Bench of this Tribunal in case of Channel Guide India Ltd. (supra). It is not the case of the Revenue that the issue of applicability of section 194J was already considered in the case of the Assessee. Therefore, when the Assessee has deducted the tax as per provisions of Section 194C which is a bonafide decision of assessee keeping in view the nature of payments and facts of the case, then, the Assessee was not supposed to foresee the subsequent retrospective amendment in the statute to be held liable to tax deduction at source under the provisions of section 194J. We further note that in case of S.K. Tekriwal (supra), the Hon'ble Calcutta High Court has considered an issue of disallowance u/s. 40(a)(ia) on account of short deduction of tax. The relevant part of the decision is as under : 1. ....There is nothing in the said section to treat, inter alia, the assessee as defaulter where there is a shortfall in deduction. With regard to the shortfall, it cannot be assumed that there is a default as the deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
