TaxTMI 
TaxTMI 
2019 (12) TMI 327
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....on the following grounds of appeal before us: "1. Whether on the facts, in the circumstances of the case and as per law, the Ld. CIT(A) has erred in directing to delete the disallowance u/s. 40(a)(ia) r.w.s 194J in respect of 'Carriage Fees/ Channel Placement fees' and failing to appreciate that the payments made for use/right to use of 'process' are 'royalty' as per Explanation 6 to section 9(1)(vi) hence such payments are covered u/s. 194J of the Income Tax Act, 1961. 2. Whether on the facts and circumstances of the case and as per law, the Ld. CIT(A) has erred in directing to delete the disallowance u/s. 40(a)(ia) r.w.s 194 J of 'Carriage Fees/Channel Placement fees', whereas the jurisdictional ITAT,....
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....t. Thereafter, the case of the assessee was selected for scrutiny assessment under Sec.143(2). 3. Assessee, a 100% subsidiary of Shri Adhikari Brothers Television Network Limited is running a television channel called "Masti". The T.V channel was distributed/broadcasted by the assessee through cable operators. Accordingly, the assessee company had contracted with various cable operators/multi system operators for carrying out the process of placing their channel on the desired network. It was observed by the A.O, that the assessee company had during the year debited an amount of Rs. 25,32,42,535/- under the head "Operational cost" in its profit and loss account. On being queried, it was submitted by the assessee that the said amount was p....
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.... failed to comply with the statutory obligation of deducting tax at source as envisaged under Chapter XVII-B of the Act, therefore, disallowed the assesses claim of "carriage expenses" amounting to Rs. 25,32,42,535/- under Sec.40(a)(ia) of the Act. After making the aforesaid disallowance, the A.O assessed the income of the assessee company at Rs. 26,67,72,620/-. 4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). After deliberating at length on the contentions advanced by the assessee, the CIT(A) was persuaded to subscribe to its claim. It was observed by the CIT(A) that "carriage fees" did not fall within the realm of the definition "Royalty" as contemplated in Explanation 2 to Sec.9(1)(vi) of the Act. Observing, t....
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.... High Court of Bombay in the case of CIT, TDS-2, Mumbai Vs. UTV Entertainment Television Ltd. (2017) 399 ITR 443 (Bom). In the backdrop of the aforesaid facts, it was submitted by the ld. A.R that as the issue was squarely covered in favour of the assessee, therefore, the appeal filed by the revenue did not merit acceptance and was liable to be dismissed. 6. Per contra, ld. Departmental Representative (for short "D.R‟) relied on the orders of the lower authorities. As regards the observation of the CIT(A) that deduction of tax at source under the wrong provision would not render the assessee amenable for disallowance under Sec.40(a)(ia) of the Act, the ld. D.R had relied on the judgment of the Hon‟ble High Court Kerala in the ....
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....ear i.e A.Y. 2011-12 and A.Y. 2012-13. As is discernible from the order of the ITAT "D" bench, Mumbai in the assesses own case for A.Y. 2012-13, the Tribunal had observed that as "carriage fees" paid by the assessee to the cable operators did not fall within the realm of the definition of "Royalty", therefore, no obligation was cast upon the assessee to deduct tax at source under Sec.194J of the Act. Apart there from, the Tribunal had also approved the alternative view taken by the CIT(A), that in case of shortfall due to any difference of opinion as to the taxability of any item or the nature of payment falling under the various TDS provisions, no disallowance could be made by invoking the provisions of Sec.40(a)(ia) of the Act. In fact, t....
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.... DCIT 49 SOT 448 (Mumbai ITAT). Respectfully following the decision over the issue, the AO is directed to of genuine expenditure of Rs. 30,42,13,444/-." 7. We notice that the Ld. CIT(A) has deleted the disallowance in question holding that carriage fees does not come within the ambit of the definition of Royalty. Therefore, the assessee was not required to deduct the tax at source u/s 194J. Further the Ld. CIT(A) has held that it is not the case of "no TDS‟ but the case of "less TDS‟ therefore, the disallowance made by the AO is bad in law. The Ld. CIT(A) has relied on the decision of the Hon‟ble Calcutta High Court rendered in CIT vs S. K. Tekriwal 48 SOT 515 and the decisions of coordinate Bench of the Tribunal in the....