TaxTMI 
TaxTMI 
2013 (1) TMI 1008
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....ter referred to as the 'Appellant') respectfully submits that the learned Commissioner of Income-tax (Appeals) -XXXI ['learned CIT (A)'] has erred in upholding the assessment under Section 143(3) of the Income-tax Act, 1961 ('Act'), on the following grounds. Ground No 1 The learned CIT (A) has erred in holding that Satellite Television Asian Region Advertising Sales BV [now known as 'International Global Networks By'] ('SAS By') is a 'conduit' for the Appellant and that the advertisement revenues earned by SAS BV are taxable in the hands of the Appellant. The Appellant respectfully submits that the above finding is erroneous and should be set aside. Ground No 2 Without prejudice to Ground 1, the learned CIT (A) has erred in taxing the advertisement income earned by SAS BV in the hands of the Appellant on an accrual basis. The Appellant respectfully submits that the above finding is erroneous and should be set aside. The Appellant craves leave to submit such further grounds at or before the hearing of the appeal, so as to enable the Income tax Appellate Tribunal to decide the appeal according to law. ITA/....
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....total assessed income on regular assessment. It is irrespective of the fact whether assessee is liable to Pay advance tax or not. (2)On the facts and in the circumstances of case and in law, the CIT(A) erred in deleting the interest charged U/s 234B and 234C of the Act, 1961, ignoring the fact that: (a)Interest U/s 234B and 234C is in the nature of compensatory payment and is of penal in character. (b)Since the tax was not deducted at source in the case of assessee, it was obligatory on the part of assessee to pay advance tax as held by the ITAT in the case of DCIT Vs. Castrol Ltd. [ITA No.4055/ Bom/93 dtd. 23.07.2003]. (c)The tax was deducted in the case of the conduit company, STAR Sales BV and refund has been granted to that company along with interest. The charging of interest in the case of assessee is only to compensate the interest granted in the case of conduit company." The appellant prays that the order of the Ld.CIT(A) on the above grounds be set aside and that of the A.O. restored. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." ITA/4082/M/04 AY.1999-2000 ....
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....bsp; (2)On the facts and in the circumstances of case and in law, the CIT(A) erred in deleting the interest charged U/s 234A of the Act,1961, ignoring the fact that: (a)Interest u/s 234A is of penal in character. &nb....
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....sp; (c)The tax was deducted in the case of the conduit company, STAR Sales BV and refund has been granted to that company along with the interest &n....
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....; (2)On the facts and in the circumstances of case and in law, the Ld.CIT(A) erred in deleting the interest charged u/s 234A,234B and234Cof the I.T.Act, 1961 on the ground that since the taxes were deductible at source from payments made by Indian and other advertisers, the assessee to be saddled with the burden of the above interest, ignoring the fact: &....
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....s of completion of assessments, assessed incomes, dates of penalty orders, penalty imposed etc. can be summarised as under : AY. Dt. of filing of ROI Returned Income Dt. of assessment Assessed Income Penalty- order dt. Penalty imposed 1998-99 14.08.2001 Nil 31.03.2003 5.40 Crores 31.3.2005 Rs. 5.74Crores 1999-00 06.02.2001 Nil 20.06.2001 14.12 Crores 31.3.2005 Rs. 6.24Crores 2000-01 30.03.2001 26.25Crore 28.03.2003 3,33,55,67,423/- - - 3.First we would like to take up the appeals filed by the assessee. Briefly stated, the material facts are as under: Assessee-company, incorporated in Hong Kong, is primarily engaged in television broadcasting mainly through cable distributors in the Asian-region. During the period May, 1992 to May,1994, assessee company had entered into an agreement with Mediascope Associates ('Mediascope'),an independent third party Indian entity, wherein Mediascope was appointed....
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....g the rate of 20% on gross receipts on accrual basis, whereas the appellant had computed the income by applying the rate of 10% of gross receipts on receipt. The assessed income of SAS BV was added to the income of the Appellant, since SAS BV was held to be a conduit of the Appellant. As stated earlier, income of the assessee was assessed on accrual basis by the AO, as against the receipt basis claimed by the assessee-company. AO also levied interest under section 234A, 234B and 234C of the Act. 3. 1.Being aggrieved, assessee filed appeal before the First Appellate Authority(FAA).After considering the submissions of assessee and the assessment order, he held that the matter has been discussed in detail in the appeal order passed by him (order dtd.19.12.2003)in the case of SAS BV for the AY 1998-99.Referring to the reasons cited therein, he further held that it would be appropriate to tax the advertisement income from India in the hands of the assessee. In short, following the order for AY. 1998-99 in the case of SAS BV, he approved the finding of the AO that the SAS BV was a conduit of the appellant. However,in hi....
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....ho has observed that given the facts of case, it would be "more appropriate" to tax the income in the hands of the STAR Limited. He exercised a choice which was not available to him. What is to be taxed in the hands of STAR Limited is to be decided when the assessment of STAR Limited is finalized, and how can any finding be given against STAR Limited without even hearing the said assessee. The course of action adopted by the CIT (A), in taxing the income in the hands of the STAR Hong Kong rather than doing so in the hands of the assessee, does not meet our approval. Having said so, however, we may hasten to add that this decision will have no bearing on the question as to whether the STAR Limited will be taxable in respect of these incomes directly, as we do not want to be seen as pre-empting the decision in the case of STAR Limited. That is a question which can be decided after taking into account material on records in that case and after hearing the STAR Limited..........The subject matter of appeal before us must be restricted to the appeal before us, and we should be careful in being within these limits. All we can say is that, on the basis ....
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....mpany amounted to receipt of the royalty by the assessee. In the present case, it is pleaded by the ld counsel for the assessee that the assessee does not come to know as to what amount has actually been received by the Indian agent from the advertisers. He pointed out that Advertisers some times do not pay the amount to the Indian agent, therefore, the correct position could not be gathered/ ascertained from the copies of the assessee's account in the books of Indian advertisers. Which particular method of accounting will be proper in a particular case depends on the facts and circumstances of each case. In the case of Pfizer Corporation, Hon'ble Bombay High Court, after taking into consideration, that unless RBI's permission was available, the amount could not be remitted and, therefore, cash system of accounting was proper in such circumstances. In the present case, we find that the CBDT in Circular No.742 after recognising peculiarity and speciality of transactions held that the income should be accounted for on receipt basis. In view of the above discussion, we uphold the orders of id. CIT (A)." We find that similar issue for assessment year 1994-95 was d....
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....grounds of appeal, filed by the department for all the three assessment years, is about deleting of interest charged under various sub-section of Section 234 (i.e.234A, 234B and 234C) of the Act. As stated earlier, while passing orders u/s.143(3) and143(3)r.w.s147 of the Act, AO had levied interest u/s. 234A,234B and 234C of the Act. Assessee preferred appeals before the FAA challenging the levy of interest. After considering the submissions of the assessee, FAA held that in a case where income was liable for deduction or tax at source an assessee could not be saddled with the burden of interest u/s.234A, 234B and 234C of the Act, that had the tax been deducted there would not any case for shortfall in tax and resultant levy of interest under said sections, that an assessee could not be penalised for the fault of somebody else. Following the decision of the Mumbai Tribunal delivered in the case of ITO vs. M.M.Ratnam, 62 ITD 21(Mum.), he decided the issue of levy of interest u/s.234A,234B and 234C of the Act in favour of the assessee. 9.1.Before us,DR supported the order of the AO.AR submitted that assessee was a non-resident, that provisions of section 234 of the Act were not ap....
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....r 2000-01 is about treatment of taxation of the advertisement revenues on accrual/receipt basis. As per the AO in the year under consideration agreement with SAS BV has been terminated and assessee-company entered in to agreement with STAR India for the advertisement revenues. He further held that SAS BV had offered income of earlier years on receipt basis for the AY under consideration. As per the AO to protect the interest of the Revenue he was assessing the said income amounting to Rs. 87.73lakhs of SAS BV in the hands of the assessee. He further held that that although, the income of SAS BV had been taxed on substantial basis in the hands of the assessee-company on accrual basis in earlier years, that the assessee had not accepted the order of the Department, that to protect the interest of revenue till the matter reaches finality. In the appellate proceedings FAA deleted the addition made by the AO. 11.1.DR and the AR advanced the arguments that have been incorporated by us in earlier paragraphs while dealing with the issue of taxing the income of on accrual or receipt basis. We have already decided the issue while dealing with the ground no. 2 filed by th....
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....re-plan of the assessee to float a conduit company so that the income was not taxed. He held that it was a fit case for levy of penalty u/s. 271(l)(c) of the Act. He imposed penalty of Rs. 5.74 Crores and Rs. 6.24 Crores, as mentioned in the last two columns of the table of paragraph 2. 12.2.Assessee-company preferred appeals before the FAA.After considering the facts of the case and the submissions of the assessee he held that the very basis for the levy of penalty was misplaced, hat it was the belief of the appellant that the income from advertisement was assessable in the hands of SAS BV and not in its hands, that the belief of the appellant was bona fide keeping in view the fact that in the preceding assessment years the said income had been assessed by the department in the hands of SAS BV, that by showing the income in the hands of SAS BV no avoidance of tax had been made,that the issue of assessing the income from adverti- sement in the hands of the appellant or in the hands of SAS BV was a matter of debate, that penalty u/s. 271(1)(c) of the Act could not be levied in such circumstances. Fina....