Income Tax Appellate Tribunal - Mumbai
Acit 16(1), Mumbai vs Times Global Broadcasting Co. Ltd, ... on 30 July, 2018
आयकर अपीलीय अधिकरण "E " न्यायपीठ मब
ुं ई में ।
IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI
श्री महावीर स हिं , न्याययक दस्य एविं श्री जी. मंजनु ाथ लेखा दस्य के मक्ष ।
BEFORE SRI MAHAVIR SINGH, JM AND SRI G MANJUNATHA, AM
Aayakr ApIla saM . / ITA No. 1589/Mum/2017
(inaQa- a rNa baYa- / Assessment Year 20 11-12)
ACIT-16(1), M/s Times Global
Room No. 439, Aayakar Broadcasting Co. Ltd.,
Bhavan, M.K. Marg, Mumbai - 1 s t Floor, Trade House,
Vs.
20 Kamala Mills Compound,
Senapati Bapat Marg, Lower
Parel, Mumbai-400 013
(ApIlaaqaI- / Appellant) .. (p`%yaqaaI- / Respondent)
स्थायी ले खा िं . / PAN No. AACCT2259F
अपीलाथी की ओर े / Appellant by : DG Pansari, DR
प्रत्यथी की ओर े / Respondent by : V. Mohan, AR
न
ु वाई की तारीख / Date of hearing: 30-07-2018
घोषणा की तारीख / Date of pronouncement : 30-07-2018
AadoSa / O R D E R
PER MAHAVIR SINGH, JM:
This appeal by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-14, Mumbai, [in short CIT(A)] in appeal No. CIT(A)-14/IT-305/14-15 dated 27.12.2016. The Assessment was framed by the DCIT, Circle-8(3)(1), Mumbai (in short DCIT/ AO) for 2 ITA No s . 1 58 9/ Mu m/ 2 01 7 the assessment year 2012-13 order dated 29.01.2015 under section 143(3) of the Income Tax Act, 1961(hereinafter 'the Act').
2. The only issue in this appeal of Revenue is against the order of CIT(A) deleting the disallowance made by AO on account of carriage fee/ Channel Placement fee paid for non-deduction of TDS under section 194J of the Act thereby invoking the provisions of section 40a(ia) of the Act. For this Revenue has raised the following four grounds: -
"1. On the facts and circumstances of the case and in law, whether 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. On the facts and circumstances of the case and in law, whether the Ld. CIT(A) has erred in directing to delete the disallowance u/s. 40(a)(ia) r.w.s 194J of 'Carriage Fees/Channel Placement fees', whereas the jurisdictional ITAT, Mumbai 'L' Bench, in its order dated 28.03.2014 in the case of ADIT- (IT)-2(2), Mumbai Vs Viacom 18 Media Pvt.
Ltd has confirmed that the payments made for use/right to use of 'process' are 'royalty' in terms of the Income-tax Act, 1961.
3. On the facts and circumstances of the case and in law, whether the Ld. CIT(A) has 3 ITA No s . 1 58 9/ Mu m/ 2 01 7 erred in relying on the order of Hon'ble Delhi High Court in the case of CIT vs Prasar Bharti (292 ITR 580) without realizing that the said decision applies to an entity making payments to outside producers for making certain programs for it whereas in the instant case the payment was made by the assessee who is a broadcaster to various MSOs or Cable Operators for placing its channel on a particular frequency/ bandwidth.
4. On the facts and circumstances of the case and in law, whether the IA. CIT(A) has erred in directing to delete the disallowance u/s. 40(a)(ia) without appreciating that the Hon'ble Kerala High Court in its judgment dated 20.07.2015 in the case of CIT-1, Kochi Vs PVS Memorial Hospital Ltd. 120151 60 taxmann.com 69 (Kerala) has decided the issue in fovour of the Department."
3. At the outset, the learned Counsel for the assessee filed copy of Tribunal's order in assessee's own case for AY 2011-12 i.e. the immediate preceding year in ITA No. 2522/Mum/2015 order dated 31.05.2017, wherein tribunal considering the facts of the case, deleted the disallowance by observing as under: -
"6. We find that the Tribunal vide its order dated 27.3.2015 (supra) was considering the stand of the Revenue that payment made to the cable operators as Channel Subscription Fee was liable for deduction of tax at source u/s 194J of the Act. The Tribunal noted the 4 ITA No s . 1 58 9/ Mu m/ 2 01 7 earlier decision of the Tribunal in assessee's own case dated 29.10.2014 in ITA Nos. 2699/Mum/2012, 4204 & 4205/Mum/2012 and 2700/Mum/2012 for Assessment Years 2008-09 to 2011-12 and held that such payments were liable for deduction of tax at source u/s 194C of the Act and not u/s 194J of the Act, as canvassed by the Revenue. The aforesaid precedents continue to hold the field as the same have not been altered by any higher authority and, therefore, in this view of the matter, it has to be held that the Assessing Officer was wrong in concluding that there was a default on the part of the assessee in deducting tax at source on the impugned payment u/s 194C of the Act so as to trigger Sec. 40(a)(ia) of the Act. Thus, invoking of Sec. 40(a)(ia) of the Act by the Assessing Officer is misplaced. In this view of the matter, we deem it fit and proper to uphold the ultimate decision of the CIT(A) in deleting the addition, albeit on a different ground."
4. The learned Counsel for the before us, also stated that this issue for fee for technical services is also decided by Hon'ble Bombay High Court in the case of CIT vs. UTV Entertainment Television Ltd. (2017) 399 ITR 443(Bom) wherein it is held at Para 15 to 17 as under: -
"15. Now, turning to the second grievance regarding subtitling charges, again the Commissioner (Appeals) has gone into the details of the factual aspects. Subtitles are 5 ITA No s . 1 58 9/ Mu m/ 2 01 7 textual versions of the dialogs in the films and television programmes which are normally displayed at the bottom of the screen. Sometimes, it is a textual version of the dialogs in the same language. It can also be a textual version of the dialogs in a particular language other than the language of the film or the TV programme. Again the stand of the Revenue was that this will be covered by Section 194J and not by Section 194C. We must note here that in this appeal, the Revenue has not made any grievance regarding applicability of Section 194C to dubbing charges. The finding of fact recorded by the Commissioner (Appeals), which is confirmed by the Appellate Tribunal, is that work of subtitling will be covered by the definition of "work" in clause (iv) of explanation to Section 194C. Reliance is placed by the Commissioner (Appeals) on the CBDT notification dated 12th January 1977. The said notification includes editing in the profession of film artists for the purpose of Section 44AA of the Income Tax Act. However, the service of subtitling is not included in the category of film artists. As noted earlier, sub-clause (b) of clause (iv) of the explanation to Section 194C covers the work of broadcasting and telecasting including production of programmes for such broadcasting or telecasting. The work of subtitling will be naturally a part of production 6 ITA No s . 1 58 9/ Mu m/ 2 01 7 of programmes. Apart from confirming the finding of fact recorded by the Commissioner (Appeals) on both the aspects on placement fee and subtitling charges, the Appellate Tribunal has noted that both Sections 194C and 194J having introduced into the Income Tax Act on the same day, it is observed that the activities covered by Section 194C are more specific and the activities covered by Section 194J are more general in terms. Therefore, for the activities covered by Section 194C, Section 194J cannot be applied being more general out of the two.
16. In the alternative, a submission was canvassed by the learned counsel for the appellant that the carriage fees or the placement charges are in the nature of commission or brokerage as defined in explanation to Section 194H of the Income Tax Act. Further, in the alternative, it was submitted that carriage fees/placement charges were in the nature of royalty covered by Section 194J of the Income Tax Act.
17. We have already discussed in detail the findings of fact recorded by the Commissioner (Appeals) as regards placement fees/carriage fees. We have agreed with the findings of fact based on material on record that when the payment is made towards standard fee or placement fee, the activity involved is the same in both 7 ITA No s . 1 58 9/ Mu m/ 2 01 7 cases. As stated earlier, when services are rendered as per the contract by accepting placement fee or carriage fee, the same are similar to the services rendered against the payment of standard fee paid for broadcasting of channels on any frequency. In the present case, the placement fees are paid under the contract between the respondent and the cable operators/MSOs. Therefore, by no stretch of imagination, considering the nature of transaction, the argument of the appellant that carriage fees or placement fees are in the nature of commission or royalty can be accepted."
5. In view of the above judicial president of Hon'ble Bombay High Court in the case of UTV Entertainment Television Ltd. (supra) and co- ordinate Bench decision in assessee's own case in ITA No. 2522/Mum/2015, respectfully following the same, we confirm the order of CIT(A) deleting the disallowance.
6. In the result, the appeal of Revenue is dismissed.
Order pronounced in the open court on 30-07-2018.
Sd/- Sd/-
(जी. मंजनु ाथ /G MANJUNATHA) (महावीर स ह
िं /MAHAVIR SINGH)
(लेखा दस्य / ACCOUNTANT MEMBER) (न्याययक दस्य/ JUDICIAL MEMBER)
मिंब
ु ई, ददनािंक/ Mumbai, Dated: 30-07-2018 सदीप सरकार, व.निजी सधिव / Sudip Sarkar, Sr.PS 8 ITA No s . 1 58 9/ Mu m/ 2 01 7 आदे श की प्रनिललपप अग्रेपिि/Copy of the Order forwarded to :
1. अपीलाथी / The Appellant
2. प्रत्यथी / The Respondent.
3. आयकर आयुक्त(अपील) / The CIT(A)
4. आयकर आयुक्त / CIT
5. ववभागीय प्रयतयनधि, आयकर अपीलीय अधिकरण, मुिंबई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
आदे शािसार/ BY ORDER, त्यावपत प्रयत //True Copy// उप/सहायक पुंजीकार (Asstt. Registrar) आयकर अपीलीय अधिकरण, मुिंबई / ITAT, Mumbai