Kal Comm P Ltd., CHENNAI v. ACIT, CHENNAI

ITA 844/CHNY/2011 | 2006-2007
Pronouncement Date: 21-10-2013 | Result: Allowed

Appeal Details

RSA Number 84421714 RSA 2011
Assessee PAN AABCK3906B
Bench Chennai
Appeal Number ITA 844/CHNY/2011
Duration Of Justice 2 year(s) 5 month(s) 16 day(s)
Appellant Kal Comm P Ltd., CHENNAI
Respondent ACIT, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 21-10-2013
Date Of Final Hearing 21-08-2013
Next Hearing Date 21-08-2013
Assessment Year 2006-2007
Appeal Filed On 05-05-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI BEFORE DR. O.K. NARAYANAN VICE PRESIDENT & SHRI VIKAS AWASTHY JUDICIAL MEMBER I.T.A. NO. 844/MDS/2011 ASSESSMENT YEAR : 2006-07 KAL COMM P. LTD. 73 MURASOLI MARAN TOWERS MRC NAGAR MAIN ROAD MRC NAGAR CHENNAI-600 028. [PAN: AABCK 3906 B] (APPELLANT) VS COMMISSIONER OF INCOME TAX CHENNAII CHENNAI 600 034. (RESPONDENT) APPELLANT BY : SHRI N. DEVNATHAN ADVOCATE SHRI K. RAMKRISHNAN C.A. RESPONDENT BY : SHRI T.N. BETGERI JCIT DATE OF HEARING : 21-08-2013 DATE OF PRONOUNCEMENT : 21-10-2013 O R D E R PER VIKAS AWASTHY JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX CHENNAI-I DATED 16-03-2011 I.T.A. NO. 844/MDS/2011 2 PASSED U/S. 263 OF THE INCOME TAX ACT 1961 (HEREIN AFTER REFERRED TO AS THE ACT). 2. THE ASSESSEE IS ENGAGED IN PROVIDING BILLING AND COLLECTION SERVICES TO M/S. SUN TV NETWORK LTD. THE ASSESSEE IS COLLECTING SUBSCRIPTIONS ON BEHALF OF M/S. SUN TV NETWORK LTD. FROM VARIOUS CABLE OPERATORS. FOR THE SERVICES RENDERED BY THE ASSESSEE THE ASSESSEE IS RECEIVING COMMISSION FROM M/S. SUN TV N ETWORK LTD. THE CABLE OPERATORS WHILE MAKING PAYMENTS TOWARDS S UBSCRIPTION CHARGES TO THE ASSESSEE DEDUCT TAX AT SOURCE. WHE REAS THE ASSESSEE IS REIMBURSING THE GROSS AMOUNT TO M/S. SU N TV NETWORK LTD. FOR THE AY. 2006-07 THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING ITS INCOME AS ` 2 08 66 850/- . THE CASE OF THE ASSESSEE WAS TAKEN UP FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSING OFFICER VIDE ORDER DATED 03-12-2008 COMPLETED THE ASSESSMENT BY ACCEPTING TH E INCOME RETURNED BY THE ASSESSEE. THE CIT WAS OF THE VIEW THAT THE ASSESSMENT ORDER IS ERRONEOUS AND IS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THUS ISSUED NOTICE U/S. 263 ON 28-0 2-2011. THE CIT ISSUED NOTICE ON THE FOLLOWING GROUNDS: I.T.A. NO. 844/MDS/2011 3 I. A SUM OF ` 2 69 44 843/- HAS BEEN RECEIVED AND TRANSFERRED BY YOU TO SUN TV NEWTWORK LTD. WITHOUT ROUTING THROUG H YOUR PROFIT AND LOSS ACCOUNT. II. YOU HAVE CHARGED SERVICE TAX ON THE ABOVE SUBSC RIPTION RECEIPTS FROM THE CABLE TV OPERATORS AO HAS NOT VERIFIED WHE THER THE TDS PROVISIONS HAVE BEEN APPLIED WHILE TRANSFERRING THE AMOUNT TO SUN TV NETWORK LTD. AND ALSO THE APPLICABILITY OF SECTION 40(A)(IA) WHEN THE AMOUNT WAS PAID TO SUN TV NETWOR K LTD. III. AS PER SCHEDULE 24 FILED BY YOU (DETAILS OF TD S DEDUCTED) DEDUCTORS INCLUDE SALEM CTN. PVT. LTD. SATELLITE C OMMUNICATION LTD. MATUNGA COMMUNICATIONS PVT. LTD. UNITED MYSO RE NETWORK PVT. LTD. ETC. RECEIPTS FROM THESE PARTIES WERE S HOWN AS 194 CONTRACT. THE ENTIRE AMOUNT OF ` 2.69 CRORES HAS BEEN RECEIVED THROUGH CONTRACT FOR WHICH THE TDS OF ` 6 50 910/- HAS BEEN CLAIMED BY YOU. THE SAME OUGHT TO HAVE BEEN BROUGH T IN YOURE YOUR PROFIT AND LOSS ACCOUNT. IV. AS PER PROVISIONS OF SEC. 199(2) CREDIT FOR TDS CAN BE ALLOWED ONLY WHEN THE CORRESPONDING INCOME IS OFFERED FOR T AXATION IN THE YEAR IN WHICH SUCH TDS IS CLAIMED. DEDUCTIONS OF T DS OF ` 6 50 910/- SUPRA WAS ALLOWED WITHOUT THE CORRESPOND ING INCOME BEING DECLARED IN YOUR PROFIT AND LOSS ACCOUNT. V. THERE IS DIFFERENCE OF ` 1 80 68 601/- BETWEEN THE INCOME AS PER TDS CERTIFICATES AND INCOME AS PER PROFIT AND LOSS ACCOUNT. I.T.A. NO. 844/MDS/2011 4 THE ASSESSEE FILED OBJECTIONS AGAINST THE ISSUANCE OF SHOW CAUSE NOTICE BUT THE CIT PROCEEDED ON TO PASS IMPUGNED OR DER U/S. 263 OF THE ACT. AGGRIEVED AGAINST THE ORDER OF CIT DATED 16-03-201 1 PASSED U/S. 263 OF THE ACT THE ASSESSEE HAS COME IN APPEA L BEFORE THE TRIBUNAL. 3. FROM THE PERUSAL OF THE FACTS WHICH HAVE NOT BEE N DISPUTED BY THE REVENUE IT IS CLEAR THAT THE ASSESSEE HAS R EMITTED THE ENTIRE GROSS AMOUNT RECEIVED FROM THE CABLE OPERATO RS TO M/S. SUN TV NETWORK LTD. THE AMOUNT REMITTED BY THE ASSESS EE TO M/S. SUN TV NETWORK LTD. INCLUDES THE AMOUNT OF TDS DE DUCTED BY THE CABLE OPERATORS AT THE TIME OF PAYMENT MADE BY THEM TO THE ASSESSEE. IN LIEU OF THE SERVICES RENDERED BY THE ASSESSEE THE ASSESSEE IS ENTITLED TO RECEIVE FIXED COMMISSION. SINCE TAX HAS ALREADY BEEN DEDUCTED AND PAID TO THE GOVERNMENT AT THE TIME OF MAKING COLLECTIONS THE ASSESSEE IS ENTITLED TO GET THE CREDIT OF THE SAME WHILE RECEIVING COMMISSION INCOME. M/S. SUN T V NETWORK LTD. HAD ENGAGED THE SERVICES OF THE ASSESSEE FOR COLLECTION OF THE SUBSCRIPTION AMOUNT AGAINST COMMISSION. HOWEVE R THE CABLE OPERATORS AT THE TIME OF PAYMENT OF SUBSCRIPTION D EDUCTED THE TAX AT SOURCE AND REMITTED THE REMAINING AMOUNT TO THE ASSESSEE. I.T.A. NO. 844/MDS/2011 5 THE SUBSCRIPTION COLLECTED BY THE ASSESSEE IS NOT I TS INCOME AND HENCE IS NOT TAXABLE IN THE HANDS OF THE ASSESSEE. THE ASSESSEE IS ONLY A NODAL AGENCY FOR COLLECTING SUBSCRIPTION ON BEHALF OF M/S. SUN TV NETWORK LTD. THE AMOUNTS COLLECTED BY THE A SSESSEE ARE CREDITED TO THE SEPARATE ACCOUNT SUBSCRIPTION CHAR GES. THE SAID ACCOUNT IS DEBITED AT THE END OF FINANCIAL YEAR WHE N THE AMOUNTS ARE PAID TO M/S. SUN TV NETWORK LTD. AS THE SUBSCR IPTION COLLECTED BY THE ASSESSEE FROM VARIOUS CABLE OPERATORS IS NOT THE INCOME OF THE ASSESSEE THE SAME IS NOT SHOWN IN PROFIT & LOS S ACCOUNT. THE SUBSCRIPTION AMOUNT IS THE INCOME OF M/S. SUN T V NETWORK LTD. AND AS SUCH IS TAXABLE IN THE HANDS OF M/S. SU N TV NETWORK LTD. HOWEVER THE CABLE OPERATORS ARE DEDUCTING TA X AT SOURCE ON THE PAYMENTS OF SUBSCRIPTION MADE TO ASSESSEE WHER EAS THE ASSESSEE IS REMITTING THE GROSS AMOUNT TO M/S. SUN TV NETWORK LTD. THE ASSESSEE IS ENTITLED TO RECEIVE CREDIT O F THE TAX DEDUCTED AT SOURCE U/S. 199 OF THE ACT SUBJECT TO PRODUCTION OF TDS CERTIFICATES RECEIVED FROM RESPECTIVE DEDUCTORS. T HE LEVY OF TAX ON THE COMMISSION RECEIVED WOULD AMOUNT TO DOUBLE TAXA TION. 4. THE OTHER GROUNDS FOR INVOKING THE PROVISIONS OF SECTION 263 ARE CONSEQUENTIAL TO THE MAIN ISSUE DISCUSSED ABOVE . SINCE WE ARE STRIKING THE IMPUGNED ORDER ON THE MAIN ISSUE I TSELF THE I.T.A. NO. 844/MDS/2011 6 CONSEQUENTIAL ISSUES AUTOMATICALLY DO NOT SURVIVE. THUS IN VIEW OF THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE WE ALLOW THIS APPEAL OF THE ASSESSEE AND SET ASIDE THE IMPUGNED O RDER. ORDER PRONOUNCED ON MONDAY THE 21 ST OCTOBER 2013 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VIK AS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 21 ST OCTOBER 2013 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR