2019 (1) TMI 2086

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.... read as under :- 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) rws 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(l)(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) rws 194J of 'Carriage Fees/Channel Placement fees', whereas the jurisdictional ITAT, Mumbai V Bench, in....

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....e that during the course of assessment proceedings, the AO observed that the assessee has claimed certain expenses on which TDS has been deducted @2% u/s. 194C instead of 10% u/s 194J of the Act and such expenses being in the nature of Carriage fees/Channel Placement fees amounting to Rs. 11,65,28,137/-, uplinking charges of Rs. 98,09,816/- and bandwidth charges of Rs. 3,27,14,058/-. According to the AO. these amounts are paid for the professional services rendered and, therefore, liable for TDS @10% u/s. 194J, whereas the assessee has only deducted TDS @2%. The AO observed that placement or carriage is nothing but a 'process' by which broadcaster gets their channel placed at 'prime brand of frequency' and, therefore, for thi....

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....rms of Explanation-2 of Section 9(l)(vi) of the Income tax Act. Though there is an amendment in the provision and as per newly inserted Explanation-6 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 can not be pressed into service for the purpose of disallowance u/s. 40(a)(ia) because of the reason that at the relevant time when the assessee has deducted the tax at source it was not in the statute. 16. It is a Contract charges as per Section 194C. Decision of Mumbai High Court in the case of CIT-11 v/s NGC Networks (I) P Ltd, Income Tax - Appeal No 397 of 2015 is applicable. 17. On the other hand, it was....

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....IT Act. The precise observation of the Tribunal in its order dated 29/11/2017 was as under:- 4. We have heard the rival submissions. During the course of hearing, the Ld. AR stated that this issue is covered in favour of the assessee by the decision of this Tribunal in assessee's own case for the assessment year 2011-12 in I.T.A. No. 2057/Kol/2014 dated 12.05.2017. In the said order of this Tribunal it was held as under: "4. We have heard the arguments of both the sides and also perused the relevant material available on record. As agreed by the Id. representatives of both the sides, the issue involved in this appeal of the Revenue is squarely covered in favour of the assessee by the decision of this Tribunal in a....

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....s: (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying resident any sum by way of- (a) Fees for professional services, or (b) Fees for technical services, (c) Royalty, or (d) Any sum referred to in clause (va) of section 28. Shall, at the time of credit of such sum to the account of the payee or at the time of payment thereof in or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to per cent, of such sum as income tax on income comprised therein. We find that the assessee produced various types of programmes/serials and news and these were telecasted/broadcasted through Multi System Operators for which ....

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....cordingly, we uphold the same". Since the facts in the case before us are identical, respectfully following the above precedent, we uphold the order of the Id.CIT(A) on this issue. Accordingly, this appeal of the revenue stands dismissed". Respectfully following the decision of the Coordinate Bench of this Tribunal in assessee's own case for AY 2010-11 on a similar issue, we uphold the impugned order of the Id. CIT(Appeals) deleting the demand raised by the Assessing Officer for the alleged short deduction of tax at source by the assessee from the payments made towards channel carriage fees, up-linking charges and Bandwidth charges and dismiss this appeal of the Revenue. Respectfully following the same, we hold that th....