TaxTMI 
TaxTMI 
2014 (6) TMI 410
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....Pay Channel charges", by invoking the provisions of sec. 40(a)(ia) of the Act for the failure to deduct tax at source from the said payment in terms of sec. 194J of the Act, as according to the assessing officer the said payments fall in the category of "royalty". 3. The facts relating to the said issue are stated in brief. The assessee company is engaged in the business of distributing cable signals. It receives satellite signals from various channel companies like Star Den Media Ltd., Zee Turner Limited, M.S.M. Discovery P. Ltd., U.T.V. Global Broadcasting P. Ltd. etc. in the capacity of Multi System Operator. The assessee is liable to make payment to the above said companies for receiving the signals. During the course of assessment p....
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....e from a broadcaster/or their authorized agencies and retransmits the same to consumers/or retransmits the same to one or more cable operators. Thus, a MSO assumes the character and status which is totally different from the individual consumer. 4. The MSO pays a tariff to the pay channels. This is covered under the definition of royalty as used in clause (c) of sub-section (1) of Section 194J of the I.T. Act, 1961. As per Explanation 2(v) below clause (vi) of sub-section 1 of Section 9, royalty means the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tape....
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....For the purposes of this clause, "royalty" means consideration (including any lump sum consideration but excluding any consideration which would be the income of the recipient chargeable under the head "Capital gains") for - (i) the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property; (ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property; (iii) the use of any patent, invention, model, design, secret formula or proc....
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....milar 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 case, the assessee is engaged in the business of transmitting the television channels or signals by cable by receiving signals through satellite. Such kind of transmission (both receipt of signal and transmission of the same) is included in the definition of "Process" under Explanation 6, which has been inserted by the Finance Act, 2012 to remove the doubts. Since this Explanation starts with the words "for removal of doubts", in our view, it is clarificatory in nature and it would apply for the year under....
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....ve. 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 Information Technology Ltd v. DCIT (2012)(TaxCorp (INTL)4659 (Mumbai-Trib) (b) Infotech Enterprises Limited v. Addl. CIT (2014) TaxCorp (INTL) 6945 (ITAT - Hyderabad) (c) Channel Guide India Limited v. ACIT (2013) TAxCorp (INTL) 6702 (ITAT-Mum) We have gone through the above said decisions rendered by different benches of the Tribunal. We notice that they have held that the assessee cannot be held to be liable to deduct ta....