TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 609
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....rther enquiries made by the Assessing Officer revealed that there was failure on the part of the assessee in deducting tax at source from certain payments made during the years under consideration. In case of certain payments, the assessee was also found to have deducted tax at source at lower rate than prescribed in the statute. Accordingly, orders under S.201(1) and 201(1A) were passed by the Assessing Officer for both the years under consideration, treating the assessee as in default for non-deduction or short deduction of tax at source from the various payments as under- Assessment year 2002-03 Head Default u/s.201(1) Interest u/s. 201(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 13....
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....made to the news agencies since no technical services are rendered by them except providing raw news to the Appellant. c)Commissioner 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.201 (1) tvs.s. 194C for non-deduction of TDS on software expenses paid by the" Appellant to Usha Kiron Television, Usha Kiron Movies and other parties holding that the provisions of Sec, 194C are attracted to such payments., b)Commissioner Income Tax (Appeals)-II grossly erred in stating that the assessee company entered into agreement with Usha Kiron Television and Usha Kiron Movies for production of TV serials/programmes to be telecast by the Appellant. c) Commissioner of Income Tax (Appeals) ought to have seen that it had entered into agreements with Usha Ki....
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....tions made on account of utilizing the band width provided to the assessee. 5) Whether on the facts and circumstances, the CIT(A).II, Hyderabad erred in deleting the additions made on account of internet charges. 6) Whether on the facts and circumstances of the case, the, CIT(A).II, Hyderabad erred in law in holding that payment of transponder rent was neither royalty nor fee for technical services. 7) Any other ground that may be urged at the time of hearing. " 4. We have heard the arguments of both the sides and also perused 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 assessment years 2004-05 to 2006-07 in ITA No.1699 to 1701/Hyd/2008 and 1706 to 1708/Hyd/2008. The Tribunal for those years has decided this issue against the assessee vide....
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.... 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 Channel Division, the assessee has made payments towards software expenses. These payments are further subdivided into 'revenue share'. 'Other programmes' and 'Direct purchases'. Expenses towards revenue shares are towards the agreed cost for production of TV serials/programmes. From the agreements with other parties, it can be concluded that the assessee is associating itself with the producers for getting the programmes telecasted on ETV channel and thereby the assessee gets a source for generating 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....
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....The Tribunal followed another decision of Hon'ble Tribunal Delhi 'H' Bench in the case of Living Media India Ltd. in ITA No.3807/Del/2005 dated 31.5.2007. The CIT(A) followed the said decision in the case of living Media India Ltd. He also noticed that the Department's appeal against the said of the Tribunal was dismissed vide order in ITA No.1264 of 2007, a copy 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 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 grounds No.1 and 2 of the Revenue in thes....
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....s 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 payment of band width 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. The Tribunal for those years has decided this issue in favour of the assessee and against the revenue vide para 17 of its order dated 23.3.2012, which reads as follows- "17. The learned counsel for the assessee Shri Shiva Kumar relied 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, wha....