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TMI Blog2018 (7) TMI 2248X X X X Extracts X X X X X X X X Extracts X X X X ..... aw it emerges that when in the hands of the nonresident recipient, the sum paid is not chargeable under the Act, there is no liability on the payer to deduct tax at source. Also in INTELSAT CORPORATION [ 2011 (8) TMI 1248 - DELHI HIGH COURT] held income received from the activities undertaken by the respondent/assessee would not be exigible to tax in India. Similar payments received by the Intelsat Corporation USA have been held to be not chargeable to income tax in the hands of the same recipient - no liability fasten on the assessee to deduct tax at source on payments made to Intelsat Corporation USA. Hence, the additional grounds of the assessee deserve to be allowed. Accordingly, we hold that since the Hon ble High Court has held that the payment was not income chargeable to tax in the hands of the same recipient, there was as a corollary no liability on the part of the assessee (the payer) to deduct tax at source on the similar payment made to the same payee. Hence, the assessee succeeds on the additional ground. - I.T.A. Nos. 599 to 614/Mum/2016 - - - Dated:- 9-7-2018 - Shri Shamim Yahya, AM And Shri Ravish Sood, Jm For the Appellant : Shri Abhishek Tilak. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referred to a larger / special bench to resolve the views rendered by the Hon'ble Income Tax Appellate Tribunal Mumbai Bench in the case of the Appellant and the other assessees which are conflicting and contrary to one another if the Hon'ble Bench decides to follow decision rendered in assessee's own case. 4. For acceptance of the additional ground, it has been submitted that they are essentially for the due dispensation of substantial of justice. In this regard, the assessee has placed reliance on the following case laws: - Jute Corporation of India Limited v CIT [1991] 187 ITR 688 (SC) - National Thermal Power Co. Ltd v CIT [19981 229 ITR 383 (SC) - CIT v Nelliappan (S.) |1967] 66 ITR 722 (SC) - Ahemdabad Electricity Co. Ltd. v CIT [1993] 199 ITR 351 (Bom.) - Ashok Vardhan Birla v CWT |1994| 208 ITR 958 (Bom.) - Inaroo Ltd. v CIT (1993] 204 ITR 312 (Bom.) - CIT v Goviodram Bros. Pvt. Ltd. [1983] 141 ITR 626 (Bom.) 5. Since the facts are identical, we are referring to the facts and figures from ITA No. 667/Mum/2016. Accordingly, we adjudicate this issue arising out of the above grounds as under: Apropos main ground of appeal no.1: Liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. For the acceptance of the aforesaid additional ground, it has been submitted that it is an important legal issue and for the substantial justice, the same should be accepted. On the touch stone of various case laws referred by the ld. Counsel of the assessee in this regard including that decision of the Hon ble Supreme Court in the case of National Thermal Power Co. Ltd. (supra), we admit the additional ground. 8. We have heard both the counsel and perused the records. We note that the Hon ble Apex Court in the case of G. E. Technology Centre Pvt. Ltd. (supra), has held that where an amount is payable to a non-resident, the payer s obligations to deduct tax at source arises only when such remittances is a sum chargeable under the Act, i.e., chargeable u/s. 4, 5, 9 of the Act in the hands of the recipient. It has further been expounded that section 195(2) of the Act is not merely a provision to provide information to the ITO(TDS), so that the department can keep track of the remittances being made to non residents outside India, rather it gets attracted to the case where payment made in a composite manner which has an element of income chargeable to tax in India and the payer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT, Delhi in the case of New Skies Satellite NV v. ADIT, International Taxation, Circle-2(1), New Delhi. Pursuant to the directions given by the DRP the Assessing Officer passed assessment orders and taxed the income pertaining to satellite transmission service/telecasting companies as royalty income. This order of the Assessing Officer was challenged before the ITAT. The ITAT has allowed the appeal of the assessee. Perusal of the order of the Tribunal would reveal that it is relied upon the judgment of this Court in the case of Asia Satellite Communication Company Ltd. v. DIT and Vice Versa in I.T.A. Nos.131 and 134/2003 decided on 31.01.2001. Operative portion of the order of the Tribunal stating the manner in which the judgment of this Court in Asia Satellite?s case (supra) was relied upon, reads as under:- 3.2 Thereafter he drew our attention towards paragraph Nos.72 to 81 of the judgment. In paragraph No.72, it is mentioned that the Tribunal has made an attempt to trace the fund flow and observed that since the end customers being persons watching televisions in India are paying the amounts to cable operators who in turn are paying the same to TV Channels, the flow of fun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee is not taxable either u/s 9(1)(vi) or section 9(1)(vii) of the Act.? Learned Counsel for the Revenue could not dispute the position that issues raised in this appeal are directly covered by the judgment of this Court in the case of Asia Satellite Telecommunications Ltd. Vs. Commissioner of Income Tax (ITA 131/2003 decided on 31.01.2011). In that judgment, a categorical view is taken that the income received from the activities undertaken by the respondent/assessee would not be exigible to tax in India. Following that judgment, this appeal is dismissed. 9. Similar order was passed by the Hon ble Delhi High Court in the case of DIT(International Taxation) vs. Intelsat Corporation (in ITA No.530 545/2012 dated 28.09.2012), wherein the Hon ble High Court has held as under: The Revenue claims to be aggrieved by the orders dated 2.2.2012 and 16.01.2012, whereby its appeals before the Tribunal were dismissed. The substantial question of law sought to be urged is whether the Tribunal fell into error in holding that the assessee did not incur any tax liability under provisions of the Income Tax Act? An elaborate discussion on the merits is not warranted si ..... X X X X Extracts X X X X X X X X Extracts X X X X
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