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TMI Blog2019 (12) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... vish Sood, Judicial Member For the Appellant : Shri R. M anjunatha Swamy, D.R For the Respondent : Ms. Indra G. Anand, A.R ORDER PER RAVISH SOOD, JM The present appeal filed by the revenue is directed against the order passed by the CIT(A)-4, Mumbai, dated 23.06.2017, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income Tax Act, 1961 (for short Act‟), dated 03.03.2016 for A.Y. 2013-14. The revenue has assailed the impugned order on the following grounds of appeal before us: 1. 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) r.w.s 194J in respect of 'Carriage Fees/ Channel Placement fees' and failing to appreciate that the payments made for use/right to use of 'process' are 'royalty' as per Explanation 6 to section 9(1)(vi) hence such payments are covered u/s. 194J of the Income Tax Act, 1961. 2. Whether on the facts and 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) r. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fees to the cable operators for placing its channel on different frequency bands. On the said carriage fees , the assessee had deducted tax at source under Sec.194C of the Act. A.O after deliberating at length, was of the view that carrying a particular channel on a particular frequency formed an integral part of transmission or broadcasting process. On the basis of his aforesaid observations, the A.O was of the view that neither the broadcaster nor the Multi System Operators could independently carry a channel without the intervention of the entire process involved. Accordingly, the A.O held a conviction that placement or carriage was nothing but a process by which a broadcaster gets their channel carried at a prime band of frequency. In sum and substance, the A.O was of the view that the carriage fees paid by the assessee to the cable operator was for a process that was involved in facilitating the assesses channel to be carried at a particular frequency. In the backdrop of his aforesaid observations, the A.O was of the view that the payment made by the assessee towards placement or transmission fee was a payment for/of Royalty . Accordingly, the A.O backed by his aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r A.Y. 2012-13] (copy placed on record). Apart there from, it was submitted by the ld. A.R that the issue was also covered by the judgment of 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). In the backdrop of the aforesaid facts, it was submitted by the ld. A.R that as the issue was squarely covered in favour of the assessee, therefore, the appeal filed by the revenue did not merit acceptance and was liable to be dismissed. 6. Per contra, ld. Departmental Representative (for short D.R‟) relied on the orders of the lower authorities. As regards the observation of the CIT(A) that deduction of tax at source under the wrong provision would not render the assessee amenable for disallowance under Sec.40(a)(ia) of the Act, the ld. D.R had relied on the judgment of the Hon‟ble High Court Kerala in the case of CIT-1, Kochi Vs. PVS Memorial Hospital Ltd. (2016) 380 ITR 284 (Ker). 7. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reads as under: 3.3. I have considered the issue under appeal carefully. I find that carriage fees is not at all royalty as defined in Explanation 2 to section 9(1)(vi) of the Act. The AO has not properly appreciated the fact and nature of payment. Further, such carriage fees is subject to TDS u/s 194C paid to cable operators and such fees do not qualify as fees for technical services or royalty, hence section 194J of the Act is not applicable. Further, it is pertinent to mention that this case is not of no TDS but it is a case of less TDS u/s 194C, hence no such disallowance can be made/s 40(a)(ia) as has been held by Hon‟ble Calcutta High Court in the case of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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