|CORAM:||R. C. Sharma (AM), Ram Lal Negi (JM)|
|CATCH WORDS:||Revision, TDS deduction|
|COUNSEL:||Dr. K. Shivram|
|DATE:||February 19, 2016 (Date of pronouncement)|
|DATE:||April 13, 2016 (Date of publication)|
|AY:||2010-11 & 2011-12|
|FILE:||Click here to download the file in pdf format|
|S. 263: As issue of whether TDS should bee u/s 194C or 194H is subject to two views, revision is not possible|
The Assessee, was a step-down subsidiary of Zenith Sports Pvt. Ltd. which was a subsidiary of Nimbus Communications Ltd. (NCL) and the group was engaged in the business of broadcasting through two channels namely Neo Cricket and Neo Sports. NCL has acquired the telecast rights from BCCI in respect of cricket matches played in India for which as per terms of agreement between BCCI and NCL, NCL was under obligation to provide for the Bank Guarantee to BCCI for Rs.2000 Crore. To secure this, NCL has been paying Bank Guarantee Commission to various banks year after year as per agreed terms. NCL has entered into another agreement with the assessee for telecast of the cricket matches for which NCL has set a condition that 80% of the BGC has to be reimbursed to it by the assessee. Accordingly during the F.Y.2009-10 relevant to A.Y.2010-2011 the assessee reimbursed Rs.21,31,28,582/- to NCL without deduction of tax at source. In order passed u/s.201(1)/201(1A) dt.18.03.2012, ITO(TDS)-2(4) treated that these payments are subject to TDS u/s.194C and passed order accordingly.
However, the CIT did not accept the provisions of Section 194C invoked by the AO and held that payment of bank guarantee commission was in the nature of interest (sec. 194A) thereby invoking his powers u/s 263. Held, by the Tribunal that in the original assessment proceedings, the AO had analysed the payment in detail and then concluded that the provisions of sec. 194C are applicable. Also, not two but three views were possible viz. (i) TDS u/s 194H which was discussed by the AO in original order; (ii) TDS u/s 194C which was upheld by AO; and (iii) sec. 194A now sought to be taken by CIT. Since three views were possible, revision was not permissible. Furthermore, even on merits, it was held that view of the CIT was not correct because there was no money borrowed or debt incurred, and hence, payment made to NCL was not “income by way of interest”.