2019 (1) TMI 606

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.... Appellate Tribunal ("Tribunal" for short). By the impugned order dated 13.4.2018, the petitioner's application under Section 254(2) of the Income Tax Act, 1961 ("the Act" for short) for rectification of order dated 26.7.2017 passed under Section 254(1) of the Act relating to assessment year 2011-12 was rejected. 3. The petitioner is engaged in the business of distributing television channels in India. During the subject assessment year, the petitioner distributed television channels inter alia owned by its Associate Enterprises to Local Cable Operators (LCO), Multi System Operators (MSO) and Direct to Home Operators (DTO). For the aforesaid activity, the petitioner is remunerated 10% of the subscription revenue collected by distribu....

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....it is held that the distribution fee paid is not in the nature of royalty which is taxable under the Act. However, the Tribunal in its order dated 26.7.2017 after having recorded thewp 350818. doc petitioner's above basic submission did not deal with the character of distribution fees payment i.e whether it is royalty or not. It proceeded to restore the issue of determining the Arm's Lengh Price to the assessing officer / TPO to consider the matter afresh. 7. As the order dated 26.7.2017 of the Tribunal passed under Section 254(1) of the Act did not deal with the fundamental dispute viz. that the distribution fee paid by it to its Associate Enterprises are not payments in the nature of royalty. This even after recording the petit....

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....decided, certain facts are to be ascertained. Thus, all facts to decide on the question of law was available with the Tribunal. In the above circumstances, the Tribunal ought to have dealt with the issue itself. By not dealing with an issue which is otherwise ripe for consideration and instead remanding to the TPO, the Tribunal has ensured further litigation and continued uncertainty for both the Revenue and the assessee. This observation of ours with regard to conduct of the Tribunal finds support in the decision of this Court in Coca-Cola India (P) Ltd Vs. Assistant Registrar representing Income Tax Appellate Tribunal, [2014] 368 ITR 487. The reliance upon an observation in the decision of this Court in Ramesh Electrical (supra) (without ....