2019 (5) TMI 229 - HC - Income Tax

TDS u/s 194J - Channel Placement fees - Whether was not in the nature of Royalty as defined u/s.9(1) (vi) and so the tax is not required to be deducted u/s. 194J despite insertion of clarification by virtue of Explanation 6 in Section 9(1)(vi) w.e.f. 01.06.1976? - HELD THAT - It is an agreed position between the parties that, the issue raised herein stands concluded in favour of the Assessee and against the Revenue by the decision of this Court in the Assessee's own case viz.CIT v/s. M/s. NGC Networks (India) Pvt. Ltd. 2016 (1) TMI 1368 - ITAT MUMBAI . Thus, this question does not give rise to any substantial question of law. Thus, not entertained. Channel Placement fees u/s. 40(a)(ia) - TDS u/s. 194C or 194J - HELD THAT - The issue raised herein stands concluded against the Revenue and in favour of the Assessee by the decision of this Court in CIT v/s. M/s. UTV Entertainment Television Ltd., 2017 (11) TMI 915 - BOMBAY HIGH COURT rendered on 10/11th October, 2017. Thus, this question does not give rise to any substantial question of law. Thus, not entertained.

Summary

Issues:
1. Interpretation of Channel Placement fees as Royalty under Section 9(1)(vi) of the Income Tax Act.
2. Applicability of Section 40(a)(ia) of the IT Act regarding tax deduction on Channel Placement fees.

Analysis:
1. The first issue raised in the appeal questions whether the Channel Placement fees should be considered as Royalty under Section 9(1)(vi) of the Income Tax Act, thus requiring tax deduction under Section 194J. The Tribunal held that the fees do not fall under the definition of Royalty as clarified by Explanation 6 in Section 9(1)(vi) from 01.06.1976. This decision was supported by a previous ruling in the case of CIT v/s. M/s. NGC Networks (India) Pvt. Ltd., where a similar issue was decided in favor of the Respondent-Assessee. As the matter was already settled by precedent, the Court did not find any substantial question of law and dismissed this aspect of the appeal.

2. The second issue pertains to whether the Channel Placement fees can be disallowed under Section 40(a)(ia) of the IT Act due to tax deduction being made under Section 194C instead of Section 194J. The Court referred to the decision in the case of CIT v/s. M/s. UTV Entertainment Television Ltd., where a similar issue was resolved in favor of the Respondent-Assessee. Since the matter was already decided and no new substantial question of law arose, the Court dismissed this aspect of the appeal as well.

In conclusion, the High Court of Bombay dismissed the appeal under Section 260A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal regarding the Assessment Year 2010-11. The Court upheld the decisions based on previous rulings and found no merit in entertaining the questions raised by the Revenue.