ADIT (IT), Circle 2(2) v Taj TV Ltd.
ITAT BENCH ‘L’, MUMBAI
ITA No. 413 (MUM.) of 2008
Assessment Years: 2003-04 and 2004-05
Decided on: 28 January 2011
Order
Vijay Pal Rao, JM
This appeal by the revenue is directed against the order dated 17-10-2007 of CIT(A) -XXXI, Mumbai arising from the giving effect order passed by the Assessing Officer under section 250 for the assessment year 2003-04 only.
2. Only ground raised by the revenue in this appeal is that the CIT(A) erred in holding that the assessee is entitled to interest under section 244A of the Act in respect of excess payment of tax in response to the order of the Assessing Officer under section 201 read with sections 195, 201(1A) and 250 of the Act and directing to grant interest under section 244A.
3.1 Facts recorded by the lower authorities are that the assessee is a company registered in Mauritius and engaged in the business of telecasting sports channel known as “Ten Sports”. The assessee is a tax resident of Mauritius in terms of Article 4 of the India-Mauritius tax Treaty (treaty).
3.2 The assessee had entered into agreements with various non-residents for acquiring programming rights for telecasting sports events taking place outside India on Ten Sports channel. For some events, the rights acquired were for live telecasting while for some events the same were for delayed telecasting in India. The assessee contended that both, the events and parties with whom assessee has entered into agreements for telecasting sports events were outside India. The assessee considered the residential status in India of the parties with whom the assessee entered into agreement under the Act as “non-resident”.
3.3 The Assessing Officer held that the payments made by the assessee to the non-residents were in the nature of “Royalty” and attracts the provisions of Explanation 2 to section 9(1)(vi) of the Act which were deemed to arise in India and hence taxable in India. Therefore, the Assessing Officer was of the view that the assessee failed to deduct the tax under section 195 and was thus deemed to be a assessee in default under section 201(1). The Assessing Officer initiated the proceedings under section 201 against the assessee for non-deduction of tax at source from the payments made to the non-residents and passed an order under section 201(1)/201(1A) of the Act dated 17-3-2004. Accordingly, the Assessing Officer issued notice of demand on the assessee under section 156 of the Act for Rs. 37,464,215 under section 201(1) and interest of Rs. 1,766,064 under section 201(1A) of the Act total amounting to Rs. 39,230,279 for non-deduction of tax at source from the payments made to the non-residents.
3.4 Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the CIT(A) and also paid the entire demand raised by the Assessing Officer which are as under :
