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TMI Blog2019 (5) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... a comparable. Even otherwise also, in various other decisions, Apitco Ltd., has been rejected as a comparable due to functional dissimilarity and lack of segmental break up. In view of the aforesaid, we direct the Assessing Officer to exclude Apitco Ltd., from the list of comparables and compute the arm's length price of business support service segment. Addition u/s 40(a)(ia) - TDS u/s 194J - channel placement fee - HELD THAT:- Undisputedly, assessee has deducted tax on payment of channel placement fee applying the provision of section 194C. The issue in dispute is, whether channel placement fee is in the nature of royalty requiring deduction of tax u/s 1994J. As could be seen from the material on record, this dispute arose for the first time in assessee s own case in assessment year 2009 10. Tribunal held that channel placement fee is not in the nature of royalty, hence, there is no requirement for deduction of tax at source u/s 194J We have also noted that in respect of other assesses also dispute of identical nature have been decided in their favour by the Tribunal and the Hon'ble Jurisdictional High Court [ 2019 (5) TMI 229 - BOMBAY HIGH COURT] ]. That being t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fer Pricing Officer did not accept the bench marking of the assessee. The Transfer Pricing Officer observed, most of the comparables selected by the assessee are not comparable. Therefore, the Transfer Pricing Officer proposed a set of five new comparables with arithmetic mean of 15.66% and ultimately included them in the final set of comparables. The margin shown by the assessee at 8.94% since did not fall within the acceptable range of the arithmetic mean of the comparables selected, the Transfer Pricing Officer proposed upward adjustment to the arm's length price of the international transaction relating to business support services. 8. Learned DRP also upheld the decision of the Transfer Pricing Officer. 9. Before us, learned Sr. Counsel for the assessee has restricted his argument to selection of Apitco Ltd., as a comparable. In this regard, the specific contention of the learned Sr. Counsel for the assessee is, the company being a Government company cannot be treated as comparable. To emphasize this fact, learned Sr. Counsel drew our attention to the functional profile of this company as contained in the annual report and submitted that while the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, he submitted, this company cannot be considered as comparable due to functional difference and lack of segmental break up. In support of such contention he relied upon the following decisions: i) Roche Products India Pvt. Ltd. v/s ACIT, ITA no.7035/ Mum./2012, dated 12.04.2016; ii) Travel Security Services India Pvt. Ltd. v/s DCIT, [2017] 80 taxnann.com 281 (Del. Trib.); iii) Kobelco Cranes India Pvt. Ltd. v/s ITO, [2016] 70 taxmann.com 3 (Del. Trib.); and iv) Marubeni Itochu Steel India Pvt. Ltd. v/s DCIT, [2016] 67 taxmann.com 52 (Del. Trib.). 12. We have considered rival submissions and perused material on record. The first issue which requires consideration is, whether a Government Company can be treated as a comparable. In our view, the dispute on this issue is now fairly well settled by virtue of various judicial precedents. The Tribunal, Mumbai Bench, in Thyssen Krupp Industries India Pvt. Ltd. (supra), has held that Government Company cannot be treated as comparable as they are not driven by profit motive and have been created in furtherance of social obligation of the Government. Having held so, we are to examine whet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. On the alleged failure of the assessee to deduct tax at source under the said provision, the Assessing Officer disallowed the entire channel placement fee under section 40(a)(ia) of the Act. 16. Learned DRP also sustained the disallowance while disposing off the objections of the assessee. 17. Learned Sr. Counsel for the assessee submitted, the issue has been consistently decided in favour of the assessee from the assessment year 2009 10 onwards by the Tribunal and the decision of the Tribunal has been upheld by the Hon'ble Jurisdictional High Court. In this context, he drew our attention to the decision of the Tribunal and the Hon'ble Jurisdictional High Court in assessee s own case for the assessment years 2009 10 and 2010 11. The learned Sr. Counsel submitted, even in respect of other assessees also, the Hon'ble Jurisdictional High Court and the Hon'ble Supreme Court have held that channel placement fee is not in the nature of royalty. 18. The learned Departmental Representative, though, agreed that in the preceding assessment year the issue has been decided in favour of the assessee by the Hon'ble Jurisdictional High Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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