9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (6) TMI 547 - AT - Income TaxDisallowance u/s 14A - Held that - In the absence of any exempt income earned during the year no disallowance under section 14A of the Act can be made - thus we direct AO to verify assessee s claim that no exempt was earned during the relevant previous year and in case aforesaid claim of the assessee is found to be correct no disallowance under section 14A r/w rule 8D should be made - allowed for statistical purpose. TDS u/s 194H - disallowance under section 40(a)(i) for non deduction of tax on payment of commission - Held that - Identical issue arose in assessee s own case 2017 (10) TMI 539 - ITAT MUMBAI wherein it is held that TDS provisions are applicable u/s 194H in case it is held that the nature of the transaction entered into between the assessee and the distributor is that of commission but in case if it is decided that the nature of transaction is not commission but discount given on sales it cannot be regarded to be commission which is hit by the provisions of Section 194H - hence we restore the issue to the file of the AO for fresh adjudication - allowed for statistical purpose. Disallowance u/s 40(a)(i) and (ia) in respect of various payments - short deduction of tds - deduction of tax at source at a lower rate - Held that - As decided CIT vs. S.K. Tekriwal 2012 (12) TMI 873 - CALCUTTA HIGH COURT where tax was deducted by the assessee, though under a bonafide wrong impression under wrong provisions, the provisions of Section 40(a)(ia) could not be invoked and if there was any shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various tax deduction at source provisions, the assessee could be declared to be an assessee in default under section 201 but no disallowance could be made invoking the provisions of Section 40(a)(ia) - hence we uphold the deletion of disallowance made by the AO. Disallowance u/s 40(a)(ia) in respect of linking fees - Tax deducted at lower rate - Held that - Following our reasoning in above para we uphold the deletion of disallowance made under section 40(a)(ia) Withholding tax under section 195 - Payment of up linking fees to a non residence entity - Held that - As could be seen from the material placed before us, Income Tax Officer (TDS), International Taxation, Noida, vide order dated 7th February 2014, passed under section 201(1) / 201(1A) for assessment years 2009 10, 2010 11 and 2011 12, has held that assessee was not liable to deduct tax at source on the payment made to this company as such payment was towards services rendered outside India. In view of the aforesaid, the disallowance made under section 40(a)(ia) of the Act deserves to be deleted. Therefore, we uphold the decision of the Commissioner (Appeals) on the issue, though, on our own reasoning. Payment of transponder fees - TDS u/s 194C OR 194J - Disallowance under section 40(a)(ia) - Held that - it is a case of short deduction of tax at source and not a case of failure to deduct tax at source. No disallowance to be made.
Issues Involved:
1. Disallowance under Section 14A of the Income Tax Act, 1961. 2. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, regarding commission charges. 3. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, regarding channel subscription charges. 4. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, regarding up-linking fees to Antrix Corporation Ltd. 5. Disallowance under Section 40(a)(i) of the Income Tax Act, 1961, regarding up-linking fees to a non-resident entity, B.T. Worldwide. 6. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, regarding transponder fees. Issue-wise Detailed Analysis: 1. Disallowance under Section 14A of the Income Tax Act, 1961: The assessee challenged the disallowance of ?1,76,29,278 under Section 14A r/w Rule 8D. The Assessing Officer (AO) disallowed this amount, comprising interest expenditure of ?1,29,06,728 and administrative expenditure of ?47,22,550, despite the assessee's claim of no expenditure incurred for earning exempt income. The Tribunal found that the AO ignored the assessee's reply indicating no tax-free income earned during the relevant year. Citing the Delhi High Court's decision in Cheminvest Ltd. v/s CIT, the Tribunal held that in the absence of exempt income, no disallowance under Section 14A can be made. The Tribunal directed the AO to verify the claim and not to make disallowance if the claim is correct. 2. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, regarding commission charges: The AO disallowed ?7,18,15,595 paid as commission charges under Section 40(a)(ia) due to non-deduction of tax at source, treating it as covered under Section 194H. The assessee argued that the payment was a cash discount, not commission. The Tribunal, following its earlier decision for assessment years 2011-12 and 2012-13, restored the issue to the AO for fresh adjudication after examining additional evidence to determine the true nature of the transaction. 3. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, regarding channel subscription charges: The AO disallowed ?361,13,12,717 for short deduction of tax at source, treating the payment as royalty under Section 194J instead of a contract under Section 194C. The Commissioner (Appeals) held it as a case of short deduction, not non-deduction, following the Calcutta High Court's decision in CIT v/s S.K. Tekriwal. The Tribunal upheld this view, preferring the favorable interpretation for the assessee in the absence of a jurisdictional High Court decision. 4. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, regarding up-linking fees to Antrix Corporation Ltd.: The AO disallowed ?4,43,42,474 for short deduction of tax at source, treating the payment as royalty under Section 194J instead of a contract under Section 194C. The Commissioner (Appeals) deleted the disallowance, considering it a case of short deduction. The Tribunal upheld this decision, following its reasoning in the channel subscription charges issue. 5. Disallowance under Section 40(a)(i) of the Income Tax Act, 1961, regarding up-linking fees to a non-resident entity, B.T. Worldwide: The AO disallowed ?6,62,06,997 paid to B.T. Worldwide without withholding tax under Section 195, treating it as royalty. The Commissioner (Appeals) deleted the disallowance, mistakenly believing it was a case of short deduction. The Tribunal found that the payment was made before the retrospective amendment defining 'process' as royalty. Citing the jurisdictional High Court's decision in CIT v/s M/s. N.G.C. Network (India) Pvt. Ltd., the Tribunal upheld the deletion, as the assessee could not have anticipated the amendment. 6. Disallowance under Section 40(a)(ia) of the Income Tax Act, 1961, regarding transponder fees: The AO disallowed ?50,25,99,456 for short deduction of tax at source, treating the payment as royalty under Section 194J instead of a contract under Section 194C. The Commissioner (Appeals) deleted the disallowance without detailed discussion. The Tribunal upheld the deletion, considering it a case of short deduction, following its reasoning in the channel subscription charges issue. Conclusion: The Tribunal allowed the assessee's appeal for statistical purposes and dismissed the Revenue's appeal, directing fresh adjudication on specific issues and upholding the deletion of disallowances where applicable.
|
