The Tax Publishers2020 TaxPub(DT) 1687 (SC) : (2020) 269 TAXMAN 0569

INCOME TAX ACT, 1961

Section 61 Sections 192, 194C, 194H, 194J & 201(1A)

Where the Department preferred SLP to appeal against the judgment of Bombay High Court in CIT v. Zee Entertainment Enterprises Ltd. [ITA Nos. 1117, 1107, 1174 of 2015, dt. 28-2-2018] : 2018 TaxPub(DT) 1288 (Bom-HC), whereby the High Court held that (i) As per decision rendered in CIT v. URV Entertainment Television Ltd. [ITA No. 55 of 2015, Order dated 10-10-2017] placement fees/carriages fees paid to cable operators/MSO/DTH operators are payments for work contract covered under section 194C, and not under section 194J. No substantial question of law arose. (ii) There was no occasion to deduct tax on the reimbursement of the expenses paid by the respondent assessee to Zee Turner Ltd. and this concurrent finding of fact by CIT(A) as well as by the Tribunal had not been shown to be perverse, further it is settled position in law that reimbursement of expenses is not taxable as held by this court in CIT v. Siemens Aktiongesellschaft (2009) 310 ITR 320 (Bom) and DIT (International Taxation) v. Krup Udhe, Gmbh (2013) 354 ITR 173 (Bom-HC), (iii) Both the lower authorities held that the payments made to these non-executive/independent directors to attend meeting(s) of the Board as well as various committees of the company could not be treated as salary and there would be no occasion to deduct tax. (iv) The concurrent finding of fact by CIT(A) as well as Tribunal to the effect that there was no short deduction of tax at source had not been shown as perverse in any manner therefore, no substantial question of law arose, the Supreme Court dismissed the SLP, leaving the question of law open.

Appeal (Supreme Court) - Special leave petition - Tax deduction at source - Under section 194C or 194J/Section 194H/Section 192--Placement fees paid to cable operators reimbursement of expenses, commission paid to directors and short deduction of tax at source

Department preferred SLP to appeal against the judgment of Bombay High Court in CIT v. Zee Entertainment Enterprises Ltd. [ITA Nos. 1117, 1107, 1174 of 2015, dt. 28-2-2018] : 2018 TaxPub(DT) 1288 (Bom-HC), whereby the High Court held that: (i) As per decision rendered in CIT v. URV Entertainment Television Ltd. ITA No. 55 of 2015, Order dated 10-10-2017 placement fees/carriages fees paid to cable operators/MSO/DTH operators are payments for work contract covered under section 194C, and not under section 194J. (ii) There was no occasion to deduct tax on the reimbursement of the expenses paid by the respondent assessee to Zee Turner Ltd. and this concurrent finding of fact by CIT(A) as well as by the Tribunal had not been shown to be perverse, further it is settled position in law that reimbursement of expenses is not taxable as held by this court in CIT v. Siemens Aktiongesellschaft (2009) 310 ITR 320 (Bom) and DIT (International Taxation) v. Krup Udhe, Gmbh (2013) 354 ITR 173 (Bom-HC). (iii) Both the lower authorities held that the payments made to these non-executive/independent directors to attend meeting(s) of the Board as well as various committees of the company could not be treated as salary and there would be no occasion to deduct tax. (iv) The concurrent finding of fact by CIT(A) as well as Tribunal to the effect that there was no short deduction of tax at source had not been shown to be perverse in any manner therefore, no substantial question of law arose. Held: Counsel for the petitioner, on instructions, issued by the Department of Revenue, Ministry of Finance vide F.No. 390/Misc./116/2017-JC, dated 22-8-2019, sought permission to withdraw this Special Leave Petition along with pending applications therein due to low tax effect. Permission was granted, subject to just exceptions. The special leave petition and pending applications were dismissed as withdrawn, leaving the question of law open.

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