TaxTMI 
TaxTMI 
2024 (1) TMI 21
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....1)(vi) read with Double Taxation Avoidance Agreements ("DTAAs") and hence warrants withholding of tax under section 195. 2.1. That the NFAC has grossly erred in facts and in law in considering the right to broadcast live sport events and the separate right to use recorded audio-visuals of the sport events (non- live rights), as a single bundle of rights constituting "copyright" under the Copyright Act, 1957. 2.2. That the NFAC has grossly erred in facts and in law in considering the payment made to non-residents for acquiring broadcasting rights of live events as "royalty" under section 9(1)(vi) since the right to broadcast live event does not constitute "copyright" under the Copyright Act, 1957. 2.3. That the NFAC has grossly erred in facts and in law in considering the payment made to non-residents for acquiring broadcasting rights of live events as "royalty" under section 9(1)(vi) since the right to broadcast live event does not constitute "process" as per Explanation 6 to section 9(1)(vi). 2.4. That the NFAC has grossly erred in facts and in law in considering the payment made to X ' non-residents for acquiring broadcasting rights of live events as "royalty" under t....
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....aper book and judicial precedents. 11. We have also gone through the written submission of the ld. DR which is as under: "Most humbly it is submitted that in respect of the above appeal in addition to the legal and factual discussion made by the Ld AO in the assessment order and the Ld. CIT(A) in the appellate order and the verbal arguments made before the Hon'ble Bench during the course of hearings, and as a rejoinder to the written submissions dated 11.10.2023 field by the appellant, the following further written submissions are being filed before your Honours for kind consideration by your Honours. No Dispute as to the taxability of receipts under the provisions of Income Tax Act- It is humbly submitted that there is no dispute as to the taxability of the payments made by the assessee to various non- resident persons under the provisions of Indian Income Tax Act 1961. The issue of taxability of the receipts and consequential treatment of the assessee as assessee in default for its failure in deducting tax at source is fully covered by the decision of the Hon'ble Delhi High Court in the case of DIT Vs. Today Network limited (2014) 41taxmann.com /92/221 (Delhi). No relief u....
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..... This expression has been explained by the Supreme Court in the case of Transmission Corporation (supra) in the following words: "Consideration would be-whether payment of sum to non-resident is chargeable to tax under the provisions of the Act or not? That sum may be income or income hidden or otherwise embedded therein. If so, tax is required to be deducted on the said sum-what would be the income is to be computed on the basis of various provisions of the Act including provisions for computation of the business income, if the payment is trade receipt. However, what is to be deducted is income-tax payable thereon at the rates in force. Under the Act, total income for the previous year would become chargeable to tax under section 4. Sub-section (2) of section 4 inter alia, provides that in respect of income chargeable under sub-section (1), income-tax shall be deducted at source where it is so deductible under any provision of the Act. If the sum that is to be paid to the non-resident is chargeable to tax, tax is required to be deducted." If the above analysis by the Supreme Court is properly construed and understood, it would mean that the person making payment to the nonres....
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....such as salaries, dividends, interest on securities, etc., but also to gross sums, the whole of which may not be income or profits of the recipient, such as payments to contractors and sub-contractors and the payment of insurance commission. It further observed that a receipt may contain a fraction of the sum as taxable income, but in other cases such as interest, commission, transfer of rights of patents, goodwill or drawings for plant and machinery and such other transactions, it may contain a large sum as taxable income under the provisions of the Act. Whatever may be the position, if the income is from profits and gains of business, it would be computed under the Act as provided at the time of regular assessment. The purpose of sub-section (1) of sec. 195 is to see that the sum which is chargeable under sec.4 of the Act for levy and collection of income-tax, the payer should deduct income-tax thereon at the rates in force, if the amount is to be paid to a non resident. Thus, the reply of the Supreme Court has to be considered in the light of the assessee's contention that sec. 195 is applicable only when whole of the payment is income chargeable to tax. According to our und....
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.... deduction of tax and why not the payer can make an application to make payment without deduction of tax. The reply is very obvious that when the payer has a bona fide belief that no part of the payment bears income character, sec. 195(1) itself would be inapplicable and hence no question of going into the procedure prescribed in sec. 195(2) of the Act. Sub-section (3) is enacted to deal with a situation where the payer wants to deduct tax from the payment but the payee believes that he is not chargeable to tax in respect of that payment and hence, sub-section (3) provides an opportunity to the payee to seek approval to receive the payment without deduction of tax. 26. A pertinent question was raised by the Id. DR as to who decides whether the payment bears any income character or not. In his view, it could be either the Assessing Officer or a Chartered Accountant as prescribed by the Board, but certainly not the assessee (the payer). The role of the Chartered Accountant comes into play in the alternative procedure prescribed by the Board and to which we shall advert to it a little later. However, we are not in agreement with the Id. D.R. that the assessee (i.e. the payer) has no....
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....duct tax and expresses this duty of his to the payee, it is for the payee then to apply under sec. 195(3) to receive the payment without any deduction at source. g) If the payee fails to obtain certificate under sec. 195(3), the payer, based on his belief will certainly withhold the tax. h) Thus it is evident that the assessee has rightly been held as an assessee in default. Reliance upon decision in Mahindra & Mahindra is totally misplaced - The reliance placed by the appellant on the decision of the Hon'ble Special Bench is totally misplaced and does not apply to the facts of the present case. The Hon'ble Special Bench has only observed that in a case where time limit for taking action on the payee under any other provisions has also passed out in such a situation passing of order under section 201 (1) will be mere ritual. The decision is not at all applicable to the present case for the following reasons: 1. The Appellant has been treated as assessee in default for its failure in deducting tax at source for the A.Y.2018-19. 2. The order u/s 201 (1) & 201(1A) of the Income Tax Act treating the assessee as an assesse in default was passed on 24/02/2021. 3. At the tim....