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Income Tax Appellate Tribunal, “D” BENCH : KOLKATA
Before: Hon’ble Shri M.Balaganesh, AM & Shri S.S.Viswanethra Ravi, JM]
ORDER Per M.Balaganesh, AM
This appeal is directed against the order passed by the Learned Commissioner of Income Tax(Appeals)-24, Kolkata [in short the ld CIT(A)] in Appeal No.1292/CIT(A)-24/Kol/2014-15 dated 15.01.2016 for the financial year 2011- 12 against the order passed by the Learned Income Tax Officer (TDS), Ward- 58(3), Kolkata [in short the ld AO] u/s 201(1)/201(1A) of the Income Tax Act, 1961 (in short “the Act”) dated 29.03.2014.
The brief facts of this issue is that the assessee is a company engaged in the business of media broadcasting. A survey u/s 133A of the Act was carried out in its business premises on 20.06.2011. The Ld. AO treated the assessee deductor as 2 Media Worldwide Pvt.Ltd A.Yr.2012-13 a defaulter in respect of payment by way of Channel carriage fees (Rs. 15,47,46,375/-), up-linking charges and Bandwidth charges (Rs. 3,21,15,389/-) and Airtime Charges (Rs.50,82,920/-). The assessee deducted tax at source in respect of aforesaid payments u/s 194C of the Act @ 2%, whereas the Ld. AO held that the same is liable to be deducted u/s 194J of the Act @10%. Accordingly, the Ld. AO raised a demand of Rs. 1,89,06,702/- as payable by the assessee towards the difference. The Ld. CIT(A) by following the decision taken in assessee own case for the immediately preceding two years held that the assessee is liable for deduction tax at source only u/s 194C of the Act and not u/s 194J of the Act. Aggrieved, the Revenue is in appeal before us on the following grounds:
1. The Ld. CIT(A) erred in law and facts by holding that the provisions of section 194C are applicable in the case of assessee/deductor and not sec. 194J.
2. The Ld. CIT(A) erred in law and facts by holding that the channel carriage fee, up-linking charges, bandwidth charges and airtime charges are not technical services but only carriage charges.
3. The Ld. CIT(A) has erred in law and facts by holding that the payments of the assessee/deductor are covered u/s 194C while process includes transmission by satellite (including up-linking, amplification, conversion of down linking of signal) cable, optic fibre etc. is Royalty as per explanation of Section 9(1)(vi) of the Income Tax Act, 1961 and the provisions of section 194J are not applicable.
4. The Ld. CIT(A) has erred by not holding the assessee/ deductor in default u/s 201(1)/201(1A) and further not holding/direction it to pay the difference due to short deduction in accordance with the notice of demand u/s 156 of the I.T. Act, 1961.
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 dated 12.05.2017. In the said order of this Tribunal it was held as under: 2
3 Media Worldwide Pvt.Ltd A.Yr.2012-13 “4. We have heard the arguments of both the sides and also perused the relevant material available on record. As agreed by the ld. 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 assessee's own case for the immediately preceding year, i.e. AY 2010-11 rendered vide its order dated 29.08.2014 in ITA No. 1422/KOL/2012, whereby the order passed by the ld. CIT(Appeals) cancelling the demand raised by the Assessing Officer against the assessee under section 201(1)/201(1A) for the alleged short deduction of tax at source from the similar payments made by the assessee was upheld by the Tribunal vide paragraph no. 8 of its order, which reads as under:- "8. Upon careful consideration of the submissions, we find that identical issue was considered by the tribunal in the case of M/s. Sristi Television (referred to supra). We find that the Tribunal has adjudicated the issue as under- "8. We have heard both the parties and perused the material available on record We can gainfully refer to the provisions of sections 194C and 194J, which are reproduced as under:- "194C-Pavments to contractors: Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to". "194J-fees for professional or technical services:
(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 3
4 Media Worldwide Pvt.Ltd A.Yr.2012-13 telecasted/broadcasted through Multi System Operators for which payments were made to them under the head 'carriage charges'. The assessee has duly deducted and paid tax under section J94C of the Act. We agree with the Id CIT(Appeals) that no technical services were involved in payment of carriage charges made by the assessee for broadcasting of the programmes produced by the assessee. The assessee produced various types of programmes/serials and news and these were telecasted/broadcasted through Multi System Operators. Payments in this regard were made as carriage charges for which payment of tax was deductible under section 194C of the Income Tax Act. As per definition of technical services given in Explanation to Section 9 of the Act, the deductee should have rendered managerial, technical or consultancy services. In this case, we find that there is no such finding of the Assessing Officer. The deductee has only telecasted the programmes produced by the assessee. In this case law referred to by the ld.CIT'(Appeals) decision in the case of DCIT - vs- NNM Securities Limited, ITATheld that if the assessee is using any facility of anyone the same is not technical services. Hon'ble Punjab & Haryana High Court in the case of Karukshetra Darpan (P) Ltd -vs- CIT [217 CTR 326J has held that telecasting on the programme was covered under section 194C of the Act .
In the background of the above discussion and following the precedent as above, we do not find any reason to interfere with the order of the Id. CIT(Appeals). Accordingly, 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 ld.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 ld. CIT(Appeals) deleting the demand raised by the Assessing 4
5 Media Worldwide Pvt.Ltd A.Yr.2012-13 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 the issue is covered in favour of the assessee and hence the assessee is liable to deduct tax at source only u/s 194C of the Act in respect of aforesaid subject mentioned payments. Accordingly the grounds raised by the Revenue are dismissed.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Court on 29.11.2017