ASIANET NEWS NETWORK P.LTD MUMBAI vs ASST CIT CIR 16(1) MUMBAI

The Mumbai bench of the Income Tax Appellate Tribunal has held in the case of Asianet News Network vs. ACIT that channel placement fee paid by the broadcast company would not be liable to be disallowed u/s 40(a)(ia) as there is no obligation on the assessee in the case to deduct TDS u/s 194J of the Income Tax Act. The Tribunal relied on the decision of the Bombay HC in the case of CIT vs. NGC Networks to hold that channel placement fees would not amount to royalty in terms of Explanation 2 to Section 9(i)(vi) of the Income Tax Act, and hence disallowance u/s 40(a)(ai) could not be made since there was no liability to deduct tax u/s 194 J of the Act.

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