ACIT-16(1), MUMBAI vs. TV18 HOME SHOPPING NETWORK LTD.,, MUMBAI

O R D E R PER C.N. PRASAD (JM) 1. These two appeals are filed by the revenue against different orders of the Learned Commissioner of Income Tax (Appeals)-4, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 31.05.2018 in deleting the disallowance made u/s.40(a)(ia) of the Act for the A.Ys. 2013-14 and A.Y.2014-15.

2 & 4726/MUM/2018 (A.Ys. 2014-15 & 2013-14) M/s. TV18 Home Shopping Network Ltd., 2. Briefly stated the facts are that during these two assessment years the assessee incurred expenses towards channel placement fees on which assessee deducted TDS @2% as per provisions of section 194C of the Act. However, the Assessing Officer was of the view that these expenses were in the nature of “Royalty” and TDS is liable to be deducted @10% u/s. 194J of the Act. The assessee was required to explain as to why the provisions of section 194J are not applicable. The assessee has submitted a detailed reply as to non-applicability of why the provisions of section u/s.194J of the Act. The assessee also contended that no disallowance U/s.40(a)(ia) of the Act should be made for short deduction of TDS. Not convinced with the reply filed by the assessee the Assessing Officer disallowed channel placement fees of ₹.10,20,88,270/- and ₹.8,40,82,020/- for the A.Ys. 2013-14 & 2014-15 respectively u/s. 40(a)(ia) of the Act treating these payments as Royalty.

3 & 4726/MUM/2018 (A.Ys. 2014-15 & 2013-14) M/s. TV18 Home Shopping Network Ltd., 4. Ld. DR strongly supported the orders of the Assessing Officer and the Ld. Counsel for the assessee placed reliance on the decisions of the Tribunal particularly in the case of ACIT v. Hindustan Thompson Associated Pvt. Ltd., in ITA.No. 6729/Mum/2014 dated 13.07.2016 and ACIT v. M/s. UBJ Brodcasting Pvt. Ltd., in ITA.No. 1205/Mum/2018 dated 19.03.2019.

4 & 4726/MUM/2018 (A.Ys. 2014-15 & 2013-14) M/s. TV18 Home Shopping Network Ltd., of Ashok Kumar Parekh (186 IT R212)has dealt with the binding precedence of the High Court judgments.Here,we would also like to reproduce the a portion of the judgment delivered by the Hon’ble Bombay High Court in the case of Siemens India Ltd.(156ITR11) and same reads as under : “So far as the legal position is concerned, the ITO would be bound by a decision of the Supreme Court as also by a decision of the High Court of the State within whose jurisdiction he is (functioning), irrespective of the pendency of any appeal or special leave application against that judgment. He would equally be bound by a decision of another High Court on the point, because not to follow that decision would be to cause grave prejudice to the assessee. Where there is a conflict between different High Courts, he must follow the decision of the High Court within whose jurisdiction he is (functioning), but if the conflict is between decisions of other High Courts, he must take the view which is in favour of the assessee and not against him. Similarly, if the Tribunal has decided a point in favour of the assessee, he cannot ignore that decision and take a contrary view, because that would equally prejudice the assessee.” Considering the above, we are taking the view which is in favour of the assessee. We are following the judgment of Samir Tekriwal (supra)of the Hon’ble Kolkata High Court as well as the orders of the Mumbai Tribunal delivered by it for the earlier years. Effective ground of appeal is decide against the AO.” Respectfully following the said order, we uphold the order of the Ld. CIT(A) on this issue and dismiss the Revenue’s appeal.”

6. Similarly, in the case of ACIT v. M/s. UBJ Brodcasting Pvt. Ltd., (supra) the Coordinate Bench held as under: - “5. We have carefully considered the submissions and material on record including the decisions cited before us. The undisputed position that emerges is that the assessee has suffered impugned disallowance u/s 40(a)(ia) for want of deduction of tax at source at higher rate i.e. 10%. It is undisputed fact that the assessee has deducted tax @2% and the additions have been made for short- deduction of tax as per Section 40(a)(ia). We find that the facts of the present case are squarely covered by the cited decision of this 5 & 4726/MUM/2018 (A.Ys. 2014-15 & 2013-14) M/s. TV18 Home Shopping Network Ltd., Tribunal rendered in ACIT Vs. M/s T.V.Vision Ltd. [supra] wherein the co-ordinate bench, after considering various decisions, decided the issue in assessee’s favor, in the following manner:- 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 cases of CIT vs M/s Star Den Media Services pvt .Ltd( ITA No 1413/MUM/2014) and Chandabhoy & Jassobhoy vs DCIT 49 SOT 448 (Mumbai ITAT). As pointed out by the Ld. counsel for the assessee this issue is covered by the judgment of the Hon’ble Bombay High Court delivered in CIT vs. M/s UTV Entertainment Television Ltd. in Income Tax Appeal (supra) in favour of the assessee. Similarly, the Hon’ble Gujarat High Court in CIT vs. Prayas Engineering Ltd., (supra) and the Karnataka High Court in CIT vs. Kishore Rao & others (HUF) (supra) have held that in case of shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, no disallowance can be made by invoking provisions of 40(a)(ia) of the Act. Respectfully following the same, we confirm the stand of first appellate authority in the impugned order.”

7. As could be seen from the above decisions wherein the Coordinate Benches have held that when there is a short fall in deduction of TDS there cannot be any disallowance u/s.40(a)(ia) of the Act. Undoubtedly in the case on hand the assessee deducted TDS @2% u/s 194C of the Act on the channel placement fees paid. However, the Assessing Officer was of the view that provisions of section 194J would apply and therefore the TDS would have been deducted @10% as against 2%. Therefore, this is a case of short deduction of TDS. Thus, respectfully following the said

Order pronounced in the open court on the 19th February, 2020