Commissioner Of Incometax (It) - 4 v. M/S Fox Networks Group Asia Pacific Limited

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.200 OF 2017 Commissioner of IncomeTax (IT) - 4 .... Appellant versus M/s Fox Networks Group Asia Pacific Limited... Respondent ….... Mr.Tejveer Singh, Advocate for Appellant.Mr.Tejveer Singh, Advocate for Appellant. Mr.Porus Kaka, Senior Advocate with Mr.Divesh Chawla i/b. Mr.Porus Kaka, Senior Advocate with Mr.Divesh Chawla i/b. Mr.Atul Jasani, Advocate for Respondent. CORAM : AKIL KURESHI & SARANG V. KOTWAL, JJ.DATE: 30[th] APRIL, 2019. P.C. : 1. This Appeal is filed by the revenue to challenge the judgment of Income Tax Appellate Tribunal. Following questions are presented for our consideration; “(a) Whether, on the facts and in the circumstances ofthe case and in law, the ITAT has erred in holdingthat the distribution revenue (subscription charges) 2 / 4 06-ITXA-200-17.odt of amount Rs.124,82,45,000/- is not taxable u/s44DA without giving any specific reasons as to whythe said amount should not be treated as royaltyincome u/s 44DA as assessee is having dependentagent PE and itself offered income in its hand on netbasis? (b) Whether on the facts and in the circumstances of thecase and in law, the ITAT erred in holding that theInterest u/s 234B is not leviable in this case withouttaking into consideration the existence of PE inIndia in the return of income and thus liable to payadvance tax?”case and in law, the ITAT erred in holding that theInterest u/s 234B is not leviable in this case withouttaking into consideration the existence of PE inIndia in the return of income and thus liable to payadvance tax?” 2. The Respondent-Assessee is a registered companyengaged in business of television distribution of channels. Theappeal relates to the return of income tax for the assessmentyear 2007-2008. The question (a) relates to computation ofdistribution revenue of which a certain proportion would beaccrued as the income. The Tribunal in the impugned judgmentnoted that this distribution revenue has been taxed in the handsof the assessee on protective basis. Remaining 50% has been 3 / 4 06-ITXA-200-17.odttaxed in the hands of the channel companies. The Tribunalcorrectly observed that such amount cannot be added separatelybecause it had been already included in the pool and in thecombined rate of 27.18% (PSM). In the opinion of Tribunaltherefore retaining this amount would amount to doubletaxation. 3. Having heard learned Counsel for the parties. Wegather that the Tribunal is correct is making the aboveobservations. We notice that there is no dispute about thequantification of 50% of total distribution ofRs.249,64,90,000/-. The assessee having disputed the incomearising out of such revenue collection and Tribunal havingaccepted the same, the department is not in Appeal against suchdecision of the Tribunal. No question of law therefore arises. 4. Second question pertains to whether the Petitioner isliable to pay interest under section 234B of the Income Tax Act,1961, on non-deduction of tax at source. The assessee being theliable to pay interest under section 234B of the Income Tax Act,1961, on non-deduction of tax at source. The assessee being the 4 / 4 06-ITXA-200-17.odtpayee, relies on the decision of this Court in case of Director ofIncome Tax (international Taxation) Vs. NGC Network AsiaLLC, reported in 313 ITR 187 (Bom). Apart from the saidjudgment, we note that if the revenue’s first question is notentertained, the applicability of question of interest undersection 234B of the Act would have of must similar grounds. Inany case, when the decision of Bombay High Court covers thefield, we do not see any reason to entertain the Appeal. 5. The Income Tax Appeal is dismissed. (SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)