High Court Of Delhi
CIT vs. Turner International India (P)Ltd.
Section 32, 199
Asst. Year 2001-02
Madan B. Lokur & Dr. S. Muralidhar, JJ.
IT Appeal No. 891 of 2007
20th September, 2007
Counsel Appeared :
Mrs. P.L. Bansal with Vishnu Sharma, for the Appellant : Saubhagya Aggarwal, for the Respondent
ORDER
By the court :
The Revenue is aggrieved by an order dt. 2nd Feb., 2007 passed by the Tribunal, Delhi Bench ‘E’ in ITA No. 1070/Del/2005 relevant for the asst. yr. 2001-02.
The Revenue has raised two issues before us. The first issue relates to depreciation claimed by the assessee on the decoders owned by it but given on loan to various cable operators.
It appears that the assessee owns decoders for decoding television signals. Some of the decoders are sold on deferred payment basis, while others are loaned to cable operators and an amount is charged by way of subscription fees. The assessee retains full control over the decoders in terms of the agreement entered into by it with the cable operators. If there is any default in payment by the cable operators, the assessee is entitled to deactivate the decoders so that signals are not received by the cable operator.
According to the Revenue, even though the decoders are owned by the assessee, they are not used by the assessee for the purposes of its business and, therefore, it is not entitled to claim any depreciation on the decoders.
We have gone through the order passed by the AO and find that it is based on surmises that the decoders are given free of charge to the cable operators. This has rightly been found on facts to be incorrect by the Tribunal.
It is contended by learned counsel for the Revenue that the decoders for which depreciation is claimed are not used for the purposes of the business of the assessee. We are unable to appreciate this contention. The assessee is engaged in the business of providing satellite signals, distribution of satellite channels and is also an advertisement representative of foreign telecasting channels. Admittedly, the assessee has been selling some of the decoders owned by it. Some of the decoders owned by the assessee are given on loan to cable operators. These loan transactions form a part of the business of the assessee in distribution of satellite channels and signals relating to satellite channels.
Under the circumstances, we are not in agreement with learned counsel for the Revenue that the provisions of s. 32 of the IT Act,1961 are not applicable to the facts of the case and that the depreciation was wrongly allowed by the Tribunal.
The second issue pertains to claim of TDS of Rs. 11,77,709. The AO as well as the CIT(A) came to the conclusion that the amounts on which the TDS was deducted related to the income of the principal of the assessee and, therefore, the assessee was not entitled to the tax deducted at source.
The Tribunal, on the contrary, held that the assessee had offered a sum of Rs. 22.70 crores as income under the head ‘channel subscription licence fees’. This amount included various payments made by cable operators, etc. for receiving the signals for TV viewing and in respect of which tax had been deducted at source. Since the tax deducted at source corresponded to the amount offered for taxation, the assessee was entitled to take credit of the tax deducted at source. This was a matter that could easily have been verified and matched by the Revenue by correlating the income with the corresponding deduction. However, the Revenue did not do so.
We are of the view that the Tribunal has not erred in allowing the claim of the assessee.
[Citation : 297 ITR 373]
