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TMI Blog2019 (12) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of our aforesaid observations, we are of the considered view, that the CIT(A) had rightly vacated the disallowance that was made by the A.O under Sec. 40(a)(ia) of the Act. X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Whether on the facts, in the circumstances of the case and as per law, the Ld. CIT(A) has erred in directing to delete the disallowance u/s. 40(a)(ia), without appreciating that Section 40(a)(ia) is not a charging Section but is a machinery Section and thus the expression "tax deductible at source under Chapter XVII-B" occurring in the said Section has to be understood as tax deductible at source under the appropriate provision of Chapter XVII-B and hence, tax deductible under wrong section of Chapter XVII-B would result into invoking of Section 40(a)(ia) of the Act? 5. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the Assessing Officer restored. 2. The learned Authorized Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Tribunal in various subsequent decisions. However, disregarding the same, Ld. AO formed an opinion that the payment was made towards right to use the process which was embedded in the definition of royalty as defined in explanation 2 to Section 9(1)(vi) read together with clarification inserted in explanation 6 to Section 9(1)(vi). Therefore, wrong deduction of tax would attract disallowance u/s 40(a)(ia). Accordingly, the said amount was disallowed and added to the income of the assessee. 4. The learned first appellate authority deleted the disallowance in view of the fact the similar issue was decided in assessee's favor by its predecessor for AYs 2011-12 & 2012-13 which was upheld by the Tribunal. The learned first appellate authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entire amount by invoking the provisions of Sec.40(a)(ia) of the Act. 8. The core issue involved in the present appeal is as to whether any obligation was cast upon the assessee to subject the "carriage fees" paid to the cable operators for deduction of tax at source under Sec.194J, or not. We find that the aforesaid issue had been permeating in the assesses own case for the immediately preceding year i.e A.Y. 2011-12 and A.Y. 2012-13. As is discernible from the order of the ITAT "D" bench, Mumbai in the assesses own case for A.Y. 2012-13, the Tribunal had observed that as "carriage fees" paid by the assessee to the cable operators did not fall within the realm of the definition of "Royalty", therefore, no obligation was cast upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT vs S. K. Tekriwal 48 SOT 515. Recently in the case of the DCIT vs Zee Entertainment Ltd. ITA No. 3931 to 3935/MUM/2013, it has been held that such payment to cable operators should be subject to TDS @2% u/s 194C. Further appellant gets support from the jurisdictional ITAT, decision in the case of a CIT vs M/s Star Den Media Services pvt .Ltd( ITA No 1413/MUM/2014) and Chandabhoy & Jassobhoy vs DCIT 49 SOT 448 (Mumbai ITAT). Respectfully following the decision over the issue, the AO is directed to of genuine expenditure of ₹ 30,42,13,444/-." 7. We notice that the Ld. CIT(A) has deleted the disallowance in question holding that carriage fees does not come within the ambit of the definition of Royalty. Therefore, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, we uphold the decision of the Ld. CIT(A) and dismiss the sole ground of issue of the revenue. Also, we find, that the Hon'ble High Court of Bombay in the case of CIT, TDS-2, Mumbai Vs. UTV Entertainment Television Ltd. (2017) 399 ITR 443 (Bom), had observed, that in case of an assessee carrying on the business of broadcasting television channels, the payments made towards placement charges would fall within the meaning of "work" covered in Clause (iv) of Explanation to Sec.194C of the Act. On the basis of our aforesaid observations, we are of the considered view, that the CIT(A) had rightly vacated the disallowance of ₹ 25,24,75,535/- that was made by the A.O under Sec. 40(a)(ia) of the Act. Accordingly, finding no infirmity ..... X X X X Extracts X X X X X X X X Extracts X X X X
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