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TMI Blog2015 (5) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... ware expenses - Held that:- Issue is covered by the decision of the Tribunal in assessee’s own case for assessment years 2004-05 to 2006-07 [2012 (7) TMI 120 - ITAT HYDERABAD] against the assesse wherein held that the assessee is making payments to various agencies on revenue sharing basis from the income generated through advertisements by way of telecasting the serials or programmes produced by the agencies. The mode of payment is nothing but a payment for contract of work and is squarely covered by explanation III to section 194C which says ‘work’ shall include programmes for such broadcasting or telecasting. In view of the same, we hold that the nature of payments fall within the purview of section 194C - Decided against assesse. Non deduction of tax at source - discounts on advertisements - Held that:- Issue is covered by the decision of the Tribunal in assessee’s own case for assessment years 2004-05 to 2006-07 in favour of assesse wherein held the assessee is not liable to deduct tax u/s 194H as relying on M/s TV Today Network Ltd [2011 (7) TMI 1095 - ITAT DELHI] - Decided in favour of assesse. Non-deduction of tax at source - payment of band width charges - Held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2014 and two filed by the Revenue being ITA Nos.1858 and 1859/Hyd/2014 are cross appeals, which are directed against the common order of the learned CIT(A) II, Hyderabad dated 4.9.2014, whereby she disposed of the appeals filed by the assessee against the orders passed by the Assessing Officer under S.201(1)/201(1A) of the Act for the assessment years 2002-03 and 2003-04. 2. The assessee in the present case is a company which is engaged in the business of publishing of newspapers, manufacturing of food items, dairy products and electronic media, i.e. TV channel, etc. A survey in the case of assessee was carried out on 3.3.2006. The findings of the survey as well as further enquiries made by the Assessing Officer revealed that there was failure on the part of the assessee in deducting tax at source from certain payments made during the years under consideration. In case of certain payments, the assessee was also found to have deducted tax at source at lower rate than prescribed in the statute. Accordingly, orders under S.201(1) and 201(1A) were passed by the Assessing Officer for both the years under consideration, treating the assessee as in default for non-deduction or short d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned CIT(A) held that the assessee was not required to deduct tax at source from the payments made on account of discounts, data circuit rentals, bandwidth charges, internet charges and transponder rent. As regards the payments made by the assessee on account of News Service agencies and software expenses, the learned CIT(A) however, held that the assessee was required to deduct tax at source from the said payments and having failed to do so, it was rightly treated by the Assessing Officer as assessee in default under S.201(1). Accordingly, the appeals filed by the assessee for both the years under consideration were partly allowed by the learned CIT(A), vide his common appellate order dated 4.9.2014, which is impugned by both the revenue and the assessee in the present appeals filed before the Tribunal, on the following grounds, which are identical in both the years under consideration. Assessee Appeals: 1. The Order of the Commissioner of Income Tax (Appeals)- II, Hyderabad dated 04-09-2014 is erroneous, contrary to law and facts of the case. 2. a) Commissioner Income Tax (Appeals)-II grossly erred in confirming the action of Assessing Officer treating the Appellant a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) ought to have seen that the provisions of Section 194C are not attracted to the transaction between the Appellant and Usha Kiron Television, Usha Kiron Movies and others for the reason the said parties did not carry out any work for the Appellant within the meaning of the provisions of section 194C of the Act. e)Commissioner of Income Tax Appeals (Appeals), without prejudice to the above, ought to have seen that since Usha Kiron Movies and Usha Kiron Television have filed their returns of income considering the amounts paid by the Appellant towards share of revenue for their programmes telecast by the Appellant as their income and paid the taxes thereon, there is no loss to the revenue and hence there is no justification treating the Appellant as defaulter u/s.201 (1) and 201 (1 A) of the Act by the Assessing Officer. 4. For all of the above and such other grounds as may be urged at the time of hearing it IS most respectfully prayed that this Hon'ble Tribunal may be pleased to allow the appeal by deleting the additions sustained by the Commissioner of Income Tax (Appeals) in the interest of justice Revenue s Appeals: 1) Whether on the facts and circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resented. Nevertheless, procurement of the basic data cannot be done without qualified reporters who utilise their professional skills for collection of the same. Further, the newspapers employ reporters who have been trained to have interrogative ability, presence of mind and have specialised in a way for doing their work and hence they are rendering work in their professional capacity. Hence we agree with the CIT(A) in deducting TDS u/s 194J and not under section 194C and dismiss the assessee s appeal on this issue. The assessee s appeal is dismissed on this issue. Facts and circumstances of the case for the years under consideration being similar to those considered by the Tribunal in the above decision for the assessment years 2004-05 to 2006-07, respectfully following the said decision, we uphold the impugned order of the CIT(A) on this issue, and dismiss grounds No.2(a) and 2(b) of the assessee in these appeals. 5. As regards Ground No.2(c) of the assessee s appeals, relating to its alternative claim, learned counsel for the assessee has submitted that the issue involved therein was also raised by the assessee in ground No.3(d) of its appeals filed before the learned C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal in the above decision for the assessment years 2004-05 to 2006-07, respectfully following the said decision, we uphold the impugned order of the CIT(A) on this issue, and dismiss grounds No.3(a) to 3(d) of the assessee in these appeals. 7. As regards Ground No.3(e) of the assessee s appeals, relating to its alternative claim, learned counsel for the assessee has submitted that the issue involved therein was also raised by the assessee in ground No.7(f) of its appeals filed before the learned CIT(A). He has submitted that the learned CIT(A) however, has not decided the same, and this position clearly evident from the impugned order of the learned CIT(A) is not disputed by the Learned Departmental Representative. We therefore, remit this issue involved in ground No.3(e) of the assessee s appeals relating to its alternative claim, to the learned CIT(A) for deciding the same on merits in accordance with law after giving sufficient opportunity of hearing to the assessee. 8. In the result, both the appeals of the assessee are treated as partly allowed for statistical purposes. 9. Now taking up the appeals of the Revenue, as regards the issue involved in grounds 1 and 2 rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue in favour of the assessee and against the revenue vide paras 13 and 14 of its order dated 23.3.2012, which read as follows- 13. We heard both the parties and perused the materials available on record. We find that the decision in the case of Skycell communications has taken support of in the case of CIT Vs. Bharati Cellular Ltd. (319 ITR 0139) (Del) wherein it has been held that interconnect charges/port access charges cannot be regarded as fees for technical services. In this decision the meaning of technical services was explained and it was held that there had to be involvement of human interface for a service to be called technical services. 14. Further, the authority for advancing Ruling has held in the case of Intertek Testing Services India P Ltd. (307 ITR 418)(AAR) that the offer of a standard facility to a number of customers such as telephone/cell phone users does not amount to rendering any technical service within the meaning of the definition of technical service. Technical or consultancy service rendered should be of such a nature that it makes available the technical knowledge, skills etc. must remain with the person receiving the services even after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n being similar to those considered by the Tribunal in the above decision for the assessment years 2004-05 to 2006-07, respectfully following the said decision, we uphold the impugned order of the CIT(A) on this issue, and dismiss ground No.4 of the Revenue in these appeals. 12. As regards the issue involved in ground 5 relating to non-deduction of tax at source on payment of internet charges, learned representatives for both the sides have agreed that it is covered by the decision of the Tribunal dated 23.3.2012 in assessee s own case for assessment years 2004-05 to 2006-07 in ITA No.1699 to 1701/Hyd/2008 and 1706 to 1708/Hyd/2008. The Tribunal for those years has decided this issue in favour of the assessee and against the revenue vide para 21 of its order dated 23.3.2012, which reads as follows- 21. We heard both the parties. We uphold the order of the CIT(A) that payments of Internet Charges are not liable for TDS relying on the following decisions: 1. Skycell Communications Ltd. Vs. DCIT 251 ITR 53 MAD. 2. Software Technology Parks of India Vs. ITO 3 SOT 529 (Bangalore) 3. Pacific Internet (India) Pvt Ltd. Vs. ITO (318 ITR (AT) 0179(Mum). . Hence we uphold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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