Delhi High Court
Commissioner Of Income Tax vs Turner International India P. ... on 20 September, 2007
Equivalent citations: 2008 297 ITR 373 Delhi
Bench: M B Lokur, S Muralidhar
JUDGMENT
1. The Revenue is aggrieved by an order dated February 2, 2007, passed by the Income-tax Appellate Tribunal, Delhi Bench "E" in I.T.A. No. 1070 (Delhi) of 2005 relevant for the assessment year 2001-02.
2. The Revenue has raised two issues before us. The first issue relates to depreciation claimed by the assessed on the decoders owned by it but given on loan to various cable operators.
3. It appears that the assessed 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 assessed 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 assessed is entitled to deactivate the decoders so that signals are not received by the cable operators.
4. According to the Revenue, even though the decoders are owned by the assessed, they are not used by the assessed for the purpose of its business and, therefore, it is not entitled to claim any depreciation on the decoders.
5. We have gone through the order passed by the Assessing Officer 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.
6. 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 assessed. We are unable to appreciate this contention. The assessed 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 assessed has been selling some of the decoders owned by it. Some of the decoders owned by the assessed are given on loan to cable operators. These loans transactions form a part of the business of the assessed in distribution of satellite channels and signals relating to satellite channels.
7. Under the circumstances, we are not in agreement with learned Counsel for the Revenue that the provisions of Section 32 of the Income-tax Act, 1961, are not applicable to the facts of the case and that the depreciation was wrongly allowed by the Tribunal.
8. The second issue pertains to the claim of tax deducted at source of Rs. 11,77,709. The Assessing Officer as well as the Commissioner of Income-tax (Appeals) came to the conclusion that the amounts on which the tax deducted at source was deducted related to the income of the principal of the assessed and, therefore, the assessed was not entitled to the tax deducted at source.
9. The Tribunal, on the contrary, held that the assessed had offered a sum of Rs. 22.70 crores as income under the head "Channel subscription license 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 assessed 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.
10. We are of the view that the Tribunal has not erred in allowing the claim of the assessed.
No substantial question of law arises. Dismissed.
