TMI Blog2019 (9) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... ax at source under Sec. 194C. The Hon ble High Court while upholding the view taken by the Tribunal that as the channel placement fees was rightly subjected to deduction of tax at source by the assessee under Sec.194C and not Sec. 194J of the IT Act, therefore, no disallowance of the said expenditure was called for under Sec. 40(a)(i) of the Act in the hands of the assessee ' As the definition of royalty as envisaged in Explanation to Sec. 40(a)(i) and that in Explanation(vi) to Sec. 40(a)(ia) are similarly placed, therefore, the aforesaid judgment of the Hon ble High Court would be applicable to the case of the present assessee where the disallowance had been made by the A.O under Sec. 40(a)(ia). Apart therefrom, we also find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case and as per law, the ld. CIT(A) has erred in directing to delete the disallowance u/s 40(a)(ia) rws 194J of arriage fees/Channel Placement fees whereas the jurisdictional ITAT Mumbai L bench in its order dated 28.03.2014 in the case of ADIT-(IT)-2(2), Mumbai Vs. Viacom 18 Media P. Ltd.., has confirmed that the payments made for use/right to use of process are royalty in terms of the Income-tax Act, 1961. 3. Whether on the facts, in the circumstances of the case and as per law, the ld. CIT(A) has erred in directing to delete the disallowance u/s 40(a)(ia) without appreciating that the Hon ble Kerala High Court in its judgment dated 20.07.2015 in the case of CIT-1, Kochi Vs. PVS Memorial Hospital Ltd. (2015) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t source on the said amount under Sec. 194J had wrongly deducted the same under Sec. 194C of the IT Act. On the basis of his aforesaid deliberations the A.O disallowed the amount of ₹ 11,87,93,600/- under Sec. 40(a)(ia) of the I.T Act. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee that it had rightly deducted tax at source under Sec. 194C, was persuaded to accept the same. It was observed by the CIT(A) that the payment made by the assessee towards channel placement fees would not fall within the definition of royalty under Sec. 9(1)(vi) of the IT Act. The CIT(A) while so concluding relied on the order of the ITAT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and had rightly subjected the same for deduction under Sec.194C, therefore, no disallowance of the same was called for in its hands under Sec. 40(a)(ia) of the IT Act. 7. We have deliberated at length on the issue under consideration and are of the considered view that the issue involved in the present appeal is squarely covered by the judgment of the Hon ble High Court of Bombay in the case of the Commissioner of Income Tax-11 Vs. M/s NGC Networks (India) Pvt. Ltd. (ITA No. 397/Mum/2015; dated 29.01.2018). The two fold issues which were raised before the Hon ble High Court were viz. (i). that as to whether the Tribunal was justified in holding that the disallowance of channel placement fees cannot be made under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the IT Act, therefore, no disallowance of the said expenditure was called for under Sec. 40(a)(i) of the Act in the hands of the assessee, had observed as under: (d) We find that view taken by the impugned order dated 9th July, 2014 of the Tribunal that a party cannot be called upon to perform an impossible Act i.e. to comply with a provision not in force at the relevant time but introduced later by retrospective amendment. This is in accord with the view taken by this Court in CIT v/s. Cello Plast (2012) 209 Taxmann 617- wherein this Court has applied the legal maxim lex non cogit ad impossibilia (law does not compel a man to do what he cannot possibly perform). (e) In the present facts, the amendme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion(vi) to Sec. 40(a)(ia) are similarly placed, therefore, the aforesaid judgment of the Hon ble High Court would be applicable to the case of the present assessee where the disallowance had been made by the A.O under Sec. 40(a)(ia). Apart therefrom, we also find that the issue that channel placement fees is liable for deduction of tax at source under Sec. 194C, had also recently been looked into by a coordinate bench of the Tribunal in the case of ACIT, Mumbai Vs. M/s Star Den Media Services Pvt. Ltd. (ITA No. 1311/Mum/2016; dated 01.06.2018 for A.Y 2011-12. We thus respectfully following the aforesaid order of the Hon ble High Court of Bombay in the case of Commissioner of Income Tax-11, Vs. M/s NGC Networks (India) Pvt. Ltd. (ITA No. 39 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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