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2016 (11) TMI 1679 - AT - Income TaxRectification of mistake - TP Adjustment - Tribunal observed assessee is the owner of two television channels viz. The National Geographical Channel and FOX International Channel - As submitted that the FOX International Channel is not owned by the assessee - HELD THAT - It is pertinent to note that the assessee was having Principal to Agent relationship under Advertising Sales Representation Agreement dated 01-07-2004 entered with NGC India effective from 01-09-2004. The above said agreement was terminated and a new agreement was entered on 01-05-2006 wherein the assessee sold advertisement and sponsorship air time to NGC India. The tax authorities after examining the agreements and related facts came to the conclusion the relationship between the assessee and NGC India continues to be that of Principal and agent . The above said decision was upheld by the Tribunal by making a modification viz. the Tribunal held that the provisions of Article 5(4)(a) of India-US DTAA shall be applicable. Thus we notice that the Tribunal has taken a conscious view in the matter. In view of the above there was no necessity to deal with other submissions made by the assessee.We do not find any merit in the contentions of the assessee that there was incorrect appreciation of facts. Whether advertisement airtime is Goods or not? - We notice that the assessing officer has discussed at length about this issue in the assessment order. We notice that the Tribunal has considered this issue in paragraph 18 19 of the order and has taken a conscious view that the advertisement airtime is not goods by duly considering the characteristics of airtime . We notice that the Tribunal has taken into consideration the above said decisions in paragraph 18 of the order. In effect the Tribunal has come to the conclusion that the airtime is not goods since it is only allocation of a portion of telecasting time.Since the Tribunal has taken a view in this matter the same cannot be considered to be a mistake apparent from record. Taxability of Distribution revenue - We notice that the Tribunal has restored the matter to the file of the AO with the observation that the AO has not critically examined the provisions of India-US DTAA and also the provisions of sec. 9(1)(vi) of the Act. We are unable to agree with the contentions of the assessee. As submitted by Ld D.R the power of the Tribunal is wider and it is entitled to take its own decision as it thinks fit to dispose of the issues considered by it. The Tribunal in respect of the above said issue took the view that the same requires reconsideration at the end of the AO by considering the amendment brought in sec. 9(1)(vi) of the Act. Hence the Tribunal found it not necessary to address various contentions urged in that regard. Accordingly we are of the view that the Tribunal has taken a view in this matter and the same cannot be rectified u/s 254(2) of the Act. It is an undisputed fact that a counsel named Ms. Sheetal Shah appeared on behalf of the assessee on 4th September 2015 and hence her name was marked on that date. With regard to the submission made with regard to the time gap between the date of hearing and the date of order the same may be outside the scope of sec. 254(2) of the Act. However we notice that the Tribunal has considered all relevant facts necessary to adjudicate the issue from the angle from which it was considered.
Issues Involved:
1. Incorrect recording of facts 2. Incorrect date of hearing and Counsel 3. Absence of opportunity to be heard 4. Suo motu decision by the Tribunal 5. Failure to follow binding decisions 6. Incorrect assumptions 7. Ignoring Transfer Pricing orders Detailed Analysis: 1. Incorrect Recording of Facts: The assessee claimed that the Tribunal incorrectly recorded that it owned both the National Geographical Channel and FOX International Channel. The Tribunal acknowledged this error, clarifying that the assessee only owned the National Geographical Channel. However, this mistake did not impact the final decision. The Tribunal modified the first line of paragraph 4 to reflect the correct ownership. 2. Incorrect Date of Hearing and Counsel: The assessee pointed out that the dates of hearing were incorrectly stated as 4th September 2015, whereas the hearings were initially held on 4th and 5th June 2015. The Tribunal agreed to correct the dates in the order but noted that a counsel named Ms. Sheetal Shah appeared on 4th September 2015, hence her name was marked. 3. Absence of Opportunity to be Heard: The assessee contended that the Tribunal considered the Delhi High Court decision in Idea Cellular Ltd without providing the assessee an opportunity to be heard. The Tribunal reasoned that the reference to the decision was only to extract principles regarding the "Principal-Agent relationship" and did not prejudice the assessee's rights. 4. Suo Motu Decision by the Tribunal: The Tribunal made observations based on its understanding of the facts and the law, even if not argued by either party. The Tribunal held that the relationship between the assessee and NGC India was that of Principal and Agent, and not Principal to Principal, under the Advertising Sales Representation Agreement. The Tribunal also noted that the provisions of Article 5(4)(a) of the India-US DTAA were applicable. 5. Failure to Follow Binding Decisions: The assessee argued that the Tribunal failed to distinguish certain decisions regarding whether "advertisement airtime" is "goods". The Tribunal noted that it had considered these decisions and concluded that "airtime" is not goods, as it is only the allocation of telecasting time. The Tribunal's view was that this did not constitute a mistake apparent from the record. 6. Incorrect Assumptions: The assessee pointed out that the Tribunal made incorrect assumptions about the nature of transactions and the role of NGC India. The Tribunal clarified that it had taken a conscious decision based on the peculiar facts of the case and the agreements examined. The Tribunal upheld the view that NGC India was a dependent agent, creating a Permanent Establishment (PE) in India under the India-US DTAA. 7. Ignoring Transfer Pricing Orders: The assessee argued that the Tribunal ignored the Transfer Pricing Officer's (TPO) acceptance of transactions at arm's length. The Tribunal acknowledged the TPO's acceptance but maintained that the taxability of the lump sum consideration received by the assessee needed examination, as NGC India constituted a PE. Other Observations: The Tribunal noted that the decision regarding "Distribution revenue" was remanded to the Assessing Officer (AO) for fresh consideration, as the AO had not critically examined the provisions of the India-US DTAA and section 9(1)(vi) of the Act. The Tribunal found it unnecessary to address various contentions as the issue required reconsideration. The Tribunal also acknowledged that it omitted to adjudicate Ground No. 6 in ITA No.7631/Mum/2012 for AY 2008-09 and recalled the order for this limited purpose. Conclusion: The Tribunal allowed the miscellaneous applications partly, making specific corrections and recalling the order for ITA No.7631/Mum/2012 to dispose of Ground No. 6. The corrected order included the accurate date of hearing, ownership details, and corrected illustrations on taxability. The registry was directed to post the appeal for AY 2008-09 before the regular bench. The order was pronounced on 23.11.2016.
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