AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 1444
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....o 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 Rs. 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 Appellant prays that the order of the Ld. DRPII on the above grounds be set aside and that of the Assessing Officer be restored. 3. The appellant craves, leave to amend or alter any ground or add a new ground which may be necessary." C.O. No.71/M/2014: The grounds of CO, filed by the assessee read as under :- "1. On the facts and in the circumstances of the case, the lea....
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....count of channel placement fees u/s.40(a)(ia) as TDS was not deducted u/s.194J. 2. The Appellant prays that the order of the Ld. DRPII on the above grounds be set aside and that of the Assessing Officer be restored. 3. The appellant craves, leave to amend or alter any ground or add a new ground which may be necessary." CO No.72/Mum/2014:.. The assessee has filed the following grounds in its Cross Objection:- "1. On the facts and in the circumstances of the case, the learned Assistant 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') a....
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....asis of adjustments made by the TPO the AO passed a draft order on 22.3.2013. The assessee challenged the draft order before the DRP who passed the order on 31.12.2013. The AO completed the assessment u/s. 143(3) r.w.s. 144C(13) of the Act on 20.1.2014 determining the income of the assessee at Rs. 85,75,46,290/-. 2.Effective ground of appeal is about deleting the disallowance of Rs. 67.37 crores made on account of channel placement fees u/s. 40(a)(ia). During the year the assessee had paid channel placement fee of Rs. 67,37,23,506/- . The AO found that the assessee had deducted TDS u/s. 194C on payment of such fee @ 2%.He was of the opinion that it should have deducted tax u/s.194J @ 10%. The DRP in its directions held that the payment mad....
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....nnel 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 i....
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....d Another v. Union of India and others 281 ITR 305 wherein the said legal Maxim was accepted by the Hon'ble apex court. 26. In view of the above discussion, we are of the view that the amount in question paid by the assessee to SSA was not taxable in India in the hands of SSA either u/s.9(1)(vi) or 9(1)(vii) as per the legal position prevalent at the relevant time and the assessee therefore was not liable to deduct tax at source from the said amount paid to M/s. SSA and there was no question of disallowing the said amount by invoking the provisions of sec.40(a)(i). In that view of the matter, we delete the disallowance made by the AO u/s.40(a)(i) and confirmed by Ld. CIT (A) and allow ground no.1 of the assessee's appeal." 5.1 Th....
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.... and such tax has not been deducted or, after deduction has not been paid on or before the due date specified in subsection (1) of section 139'. This section 40(a)(ia) of the Act refers only to the duty to deduct tax and pay to the Government account. If there is any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, the assessee can be declared to be an assessee in default under section 201 of the Act and no disallowance can be made by invoking the provisions of section 40(a)(ia) of the Act." 5.2 Further, we find force in the contention of the ld. Sr. Counsel that payment in question does not fall under the term royalty as defined in Explanation2 ....