TMI Blog2020 (3) TMI 1070X X X X Extracts X X X X X X X X Extracts X X X X ..... n that was carried forward up to assessment year 2001-02 would be carried forward to assessment year 2002-03 and become part thereof and it would be governed by provisions of section 32(2) as amended by Finance Act, 2001 and would be available for carry forward and set off against profits and gains of subsequent years without any limit whatsoever. Addition u/s 14A - Since, the assessee has not earned any exempt income, in accordance with the Jurisdictional High Court decisions, supra, no disallowance can be made u/s. 14A - ITA Nos.304 & 305/Chny/2018 (Assessment Years: 2009-10 & 2011-12) - - - Dated:- 25-2-2020 - SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER Appellant by: Mr. D. Manoj Kumar, CIT Respondent by: Mr. R. Vijayaraghavan, Advocate ORDER PER GEORGE MATHAN, JUDICIAL MEMBER: I.T.A. No.304/Chny/2018 is an appeal filed by the Revenue against the order of the learned Commissioner of Income Tax (Appeals)-17, Chennai in ITA No.06/2015-16 dated 21.11.2017 for the Assessment Year 2009-10 against the deletion of the levy u/s.201(1) and 201(1A) of the Income Tax Act, 1961. 2. Mr. D. Manoj Kumar, CIT represented ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dealt in ITA No. 1084/Mds/2012, for the assessment year 2002-2003, dated 20.11.2012, where the Tribunal observed in para No.13 as under:- 13. We have heard the rival contentions and gone through the relevant findings as well as case law above said. The only issue between the parties is that per Revenue, the payment in question made by the assessee is liable to TDS provisions as comprised in Chapter XVII B of the Act which the assessee is disputing. We notice that the Coordinate Bench in I.T.A. No. 1277 and 1283/Mds/2008 (supra) decided on 02.02.2012 [in which one of us N.S. Saini, A.M. Member of the Bench) has held as under:4. We have heard the rival submissions and perused the orders of the lower authorities as well as the cited decisions. We find that the Ld. CIT(A) has decided this issue by observing as under: 6. I have carefully considered the facts of the case and the rival submissions and also examined the issues carefully with reference to applicability of sec. 195, which has been denied by the appellant. The appellant company is engaged in the business of providing networking and e-commerce services by way of internet. In order to carry out its business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Assessing Officer has not properly appreciated the facts of the case and submitted that the bandwidth charges are provided either by way of undersea cables or by satellite earth stations and the appellant does not have any control over the equipments as it has only leased a part of the transponder capacity and not leased the transponder. Therefore, the right of' use of the equipment is not exclusively with the appellant. Further, the right to use equipment mainly arises if there is physical equipment and since the equipments used by the appellant are not under its control. Therefore, the payments made do not have the character of royalty. 6.3 On the above facts and in the circumstances of the case, only one question arises for decision whether the remittances made by the appellant company to the foreign parties would fall within the purview of sec. 195(1) which requires deduction of tax at source. Bandwidth is bought and sold to consumers and it acts as a conduit only. In the appellant's case there are no equipments installed in its premises and the contract entered with the foreign parties is only for the services. Mere use of equipment in providing bandwidth se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of law set out above, it is held that the transactions in respect of which the impugned payments were made was purely on account of services and there is no transfer of right to use the goods. In the result, it is held that the Assessing Officer was not justified in treating the payment as royalty and invoking the provisions of sec. 195 for both the assessment years. Consequently, the impugned order u/s, 195 r.w.s. 201(1) and 201(1A) dated 21-03-2006 for A.Ys. 2002-03 and - 2003-04 is cancelled. 6. On a query from the Bench from the ld. D.R. as to whether there is any contrary decision of any other High Court, the ld. D.R. replied that the Hon ble Delhi High Court decision is a lone decision on the issue. 7. On the above facts, when there is only one decision of the High Court, then the same requires to be followed by us. Our view finds support from the decision of the Hon ble Bombay High Court in CIT Vs. Godavari Devi Saraf [Smt] [1978] 113 ITR 589 [Bom] We, therefore, confirm the order of the ld. CIT(A) and dismiss the grounds of appeals of the Revenue. 8. In the result, both the appeals of the Revenue are dismissed. After going through the operative portio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This being so, as there is no liability of the assessee to deduct TDS on the said payments, there can be liability on the assessee for the levy u/s.201(1) and consequently 201(1A) of the Income Tax Act, 1961. In the circumstances, we find no error in the order of the learned Commissioner of Income Tax, 1961 which calls for any interference. 8. In the result, the appeal of the Revenue in I.T.A. No.304/Chny/2018 is dismissed. 9. I.T.A. No.305/Chny/2018 is an appeal filed by the Revenue against the order of the learned Commissioner of Income Tax (Appeals)-17 in appeal No.I.T.A. No.37/2016-17 dated 17.11.2017 for the Assessment Year 2011-12 against the action of the learned Commissioner of Income Tax (Appeals) in granting the assessee the benefit of set off of the unabsorbed depreciation. 10. At the time of hearing, it was fairly agreed by both the sides that the issue was squarely covered by the decision of the Co-ordinate Bench of this Tribunal in the assessee s own case in I.T.A. No.1650/Chny/2017 for the Assessment Year 2010-11 vide order dated 18.12.2018, wherein in para-8.1 and 8.2. the Co-ordinate Bench of this Tribunal has held as follows: 8.1 With regard to set of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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