DDIT (I.T) 2(1), MUMBAI v. M/s. SATELLITE TELEVISION REGION LTD. (HONG KONG), MUMBAI

ITA 7934/MUM/2004 | 2001-2002
Pronouncement Date: 21-05-2010 | Result: Dismissed

Appeal Details

RSA Number 793419914 RSA 2004
Assessee PAN MARCH2004I
Bench Mumbai
Appeal Number ITA 7934/MUM/2004
Duration Of Justice 5 year(s) 6 month(s) 15 day(s)
Appellant DDIT (I.T) 2(1), MUMBAI
Respondent M/s. SATELLITE TELEVISION REGION LTD. (HONG KONG), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted L
Tribunal Order Date 21-05-2010
Date Of Final Hearing 12-11-2009
Next Hearing Date 12-11-2009
Assessment Year 2001-2002
Appeal Filed On 05-11-2004
Judgment Text
ITA NO. 7934/MUM/04 ASSESSMENT YEAR 2001-02 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBU NAL MUMBAI L BENCH MUMBAI BEFORE SHRI PRAMOD KUMAR ( ACCOUNTANT MEMBER) AND SHRI R S PADVEKAR ( JUDICIAL MEMBER) ITA NO. 7934/MUM/04 ASSESSMENT YEAR 2001-02 DY. DIRECTOR OF INCOME TAX - INTERNATIONAL TAXATION 2 (1) MUMBAI .APP ELLANT SCINDIA HOUSE BALLARD PIER MUMBAI 400 001 VS. SATELLITE TELEVISION ASIA REGION LIMITED HONG KONG . RESPONDENT C/O S R BATLIBOI & CO. 18 TH FLOOR EXPRESS TOWERS NARIMAN POINT MUMBAI 400 021 APPELLANT BY : SHRI AJIT KUMAR SINHA RESPONDENT BY : SHRI PORUS KAKA O R D E R PER PRAMOD KUMAR: 1. THIS IS AN APPEAL FILED BY THE ASSESSING OFFICER AND IS DIRECTED AGAINST THE ORDER DATED 26 TH AUGUST 2004 PASSED BY THE CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE IN COME TAX ACT 1961 FOR THE ASSESSMENT YEAR 2001-02. ITA NO. 7934/MUM/04 ASSESSMENT YEAR 2001-02 PAGE 2 OF 5 2. IN THE FIRST GROUND OF APPEAL THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCE: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A) ERRED IN DIRECTING TO DELETE THE ADDITION MA DE ON ACCOUNT OF ADVERTISING REVENUES RECEIVED BY SAS BV FOR ASSE SSMENT YEAR 2001-02 IN THE HANDS OF THE ASSESSEE WITHOUT APPR ECIATING THE FACT THAT IT IS NECESSARY TO KEEP THE ISSUE ALIVE S INCE THE ASSESSEE HAS NOT ACCEPTED THE STAND OF THE DEPARTMENT THAT THE ADVERTISEMENT REVENUE IS TO BE TAXED ON ACCRUAL BAS IS. 3. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THIS I SSUE IS NOW COVERED IN PRINCIPLE IN FAVOUR OF THE ASSESSEE BY TRIBUNALS ORDER DATED 24 TH MARCH 2004 IN THE CASE OF JCIT VS SATELLITE TELEVISION AS IAN REGION ADVERTISING SALES BV (ITA NO. 4988/MUM/2000; AY 1997-98). A CO PY OF THE SAID ORDER WAS PLACED ON RECORD. THE ORDER OF THE CIT(A) BEING IN CONSONANCE WITH THE SAID DECISION AND NO CONTRARY DECISION HAVING BEEN BROUGHT TO OUR NOTICE WE SEE NO REASONS TO INTERFERENCE IN THE CO NCLUSIONS ARRIVED AT BY THE CIT(A). WE DECLINE TO INTERFERE. ITA NO. 7934/MUM/04 ASSESSMENT YEAR 2001-02 PAGE 3 OF 5 4. GROUND NO. 1 IS ACCORDINGLY DISMISSED. 5. IN GROUND NO. 2 THE ASSESSEE HAS RAISED THE FOL LOWING GRIEVANCE: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE CIT(A) ERRED IN DELETING THE INTEREST CHARGES UNDER SECTION 234 B AND 234 C OF THE INCOME TAX ACT 1961 ON THE GROUN D THAT SINCE THE TAXES ARE DEDUCTIBLE AT SOURCE FROM PAYMENTS MA DE BY THE INDIAN AND OTHER ADVERTISERS THE ASSESSEE CANNOT B E SADDLED WITH THE BURDEN OF ABOVE INTEREST IGNORING THE FAC T : A. THAT THE INTEREST IS IN THE NATURE OF COMPENSATO RY PAYMENT AND IS OF PENAL CHARACTER; B. THAT SINCE WAS NOT DEDUCTED AT SOURCE IT WAS OB LIGATORY ON THE PART OF THE ASSESSEE TO MAKE GOOD THE DEFICI T BY WAY OF MAKING PAYMENT FOR ADVANCE TAX; AND C. THAT SINCE THE ASSESSEE FAILED TO PAY ADVANCE TA X THE PROVISIONS OF SECTION 234 B AND 234 C OF THE INCOME TAX ACT 1961 HAVE BEEN CORRECTLY APPLIED BY THE ASSESSING OFFICER. ITA NO. 7934/MUM/04 ASSESSMENT YEAR 2001-02 PAGE 4 OF 5 6. AS REGARDS THIS GRIEVANCE RAISED BY THE ASSESSE E THERE IS NO DISPUTE WITH THE ELEMENTARY FACTUAL POSITION THAT T HE PERSONS MAKING PAYMENT TO THE ASSESSEE WERE REQUIRED TO DEDUCT TAX ON INCOME EMBEDDED IN THE PAYMENTS MADE TO THE ASSESSEE. THE ASSESSEE BEFORE US IS NON RESIDENT AND IT WAS OBLIGATION OF THE PERSON MAKING PAYMENT TO THE NON RESIDENT TO DEDUCT TAX AT SOURCE AS MAY BE APPLICA BLE UNDER SECTION 195. THE SHORT ISSUE REQUIRING OUR ADJUDICATION IS WHETH ER OR NOT LEVY OF INTEREST UNDER SECTION 234 B AND 234 C IN RESPECT OF INCOME FROM SUCH PAYMENTS RECEIVED BY THE NON RESIDENT IS JUSTIFIED . WHILE THE ASSESSING OFFICER HAS LEVIED THE INTEREST UNDER SECTION 234 B AND 234 C THE CIT(A) HAS DELETED THE SAME BY FOLLOWING HIS ORDERS FOR TH E EARLIER YEARS. 7. THE LEARNED REPRESENTATIVES AGREE THAT THE ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY A LARGE NUMBER OF DECISIO NS OF THE TRIBUNAL INCLUDING SPECIAL BENCH DECISION IN THE CASE OF MOT OROLA INC VS DCIT(95 ITD SB 269)WHICH HAS SINCE BEEN APPROVED BY THE HO NBLE JURISDICTIONAL HIGH COURT IN THE CASE OF DIT VS NGC NETWORK LLC (2 009 TIOL 43 HC MUM IT). RESPECTFULLY FOLLOWING THESE DECISIONS WE APP ROVE THE CONCLUSIONS ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE I N THE MATTER. 8. GROUND NO. 2 IS ALSO THUS DISMISSED. ITA NO. 7934/MUM/04 ASSESSMENT YEAR 2001-02 PAGE 5 OF 5 9. IN THE RESULT THE APPEAL IS DISMISSED. PRONOUN CED IN THE OPEN COURT TODAY ON 21 ST DAY OF MAY 2010. SD/XX SD/XX (R S PADVEKAR) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 21 ST DAY OF MAY 2010. COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) MUMBAI 4. COMMISSIONER (APPEALS) MUMBAI 5. DEPARTMENTAL REPRESENTATIVE L BENCH ITAT MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI