D. MANMOHAN, VICE-PRESIDENT 
AND RAJENDRA, ACCOUNTANT MEMBER

ORDER

Rajendra, Accountant Member - Challenging the order dated 01.06.2012 of the CIT(A)-11,Mumbai, Assessing Officer(AO) as well as Assessee-Company has filed the following Grounds of Appeal/Cross Objection :

ITA No.5757/Mum/2012

"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that interest u/s.244A is admissible on refund of tax paid in pursuance of order u/s. 195 of the I.T. Act Without appreciating the following:

2. The Appellant prays that the order of the Ld. CIT(A) on the above ground(s) be set aside and that of the Assessing Officer restored.

3. The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary."
Following are the grounds of Cross Objection:

"1. On the facts and in circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) erred in not directing the Assessing Officer ("AO") to grant interest under Section 244A of the Income Tax Act, 1961, on the interest due to MSM Satellite (Singapore) Pte. Ltd., but not granted by the AO."
Facts of the Case:

2. Assessee-company had filed an application u/s.195 of the Act on 20.03.2009 for issue of a zero deduction of tax at source certificate in respect of payment to be made by it to M/s. Global Cricket Corporation Pvt. Ltd.(GCC) under the agreement dated 25.01.2002 for acquiring rights to telecast live cricket matches over various countries including the Indian sub-continent. AO found that assessee was a company incorporated in Singapore, that it was engaged in the business of telecasting channels by the name of 'SET MAX' over the Indian Territory, that it had made an application with request not to deduct tax at sources. After considering the submissions of the assessee, AO held that all the payments which were attributable to India attracted the provisions of the Act, that nationality of the recipient and the payer and the place of payment was irrelevant, that it was only the place; where the services for which the payments were being done was effectively utilised; determined the applicability of section 195, that in the instant case the payment had been made for the purpose of broadcast of live matches over the Indian territory, that the payer would have substantial income from India in the form of advertisement time slot sale and royalty on account of distribution of the channel, that ultimately the services were being utilised in India, that provisions of section 195 were applicable to the transaction-in-question. He further held that assessee had an agency PE in the form of its Indian agent, that situation required a detailed examination of the activities of the dependant agent PE and its cash flow, that it would be premature at that stage to held that payment was not attributable to the PE in India and hence not arising or accruing in India, that detailed examination was more appropriate at the time of regular assessment of the recipient and not at the stage of tax withdrawing order, that order u/s.195 was not affect the rights of the applicant or the department, that the payment was to be made to a bank account in New Jersey and not to a Bank account in Singapore, that DTAA was similar worded as the Act with respect to definition of Royalty, that the assessee was not entitled to get any benefit as it had already been held that payment was in the nature of royalty, that in earlier years FAA had not adjudicated the issue as to whether the payment was in the form of royalty or not, that even if it was not in the nature of royalty the same would be taxable as business income of GCC.

During the assessment proceedings, alternate submission made by the assessee-company, that entire payment could not be attributable to India, was accepted by the AO. He held that the net profit of the assessee was to be taxed provisionally @ 15% as per the normal provisions of the Act, that tax liability was to be borne by the prayer, that receipts of the assessee had to be grossed up. He held that tax were to be withheld on the gross payment made to the assessee @10.96%.In pursuant of the order of the AO, assessee withheld and deposited a tax amounting to US$ 13, 13,782/- (equivalent to Rs.6.25 Crores) with the government treasury towards payment to GCC.

3. Assessee-company preferred an appeal before the First Appellate Authority(FAA).After considering submissions of the assessee, FAA held that payment made by the assessee to GCC were not accruing or arising in India as per the article 12(7) of the Treaty, that amount was not liable to tax deduction at source in India.

In pursuance of the order of the FAA, AO passed an order u/s.251 read with section 195 of the Act on 13.09.2011.As per the assessee, AO granted only refund of taxes withheld as per the order u/s.195 amounting to Rs.62,25,19,187/-, that AO did not grant interest u/s.244A of the Act on the refund of taxes so withheld by the assessee.

4. Before us, AR submitted that as per the provisions of section 244A(1)(b) of the Act, AO had granted interest on the said refund of taxes withheld by the assessee, that the expression 'in any other case appearing in Section 244A(1)(b)' was wide enough to cover refund of tax paid in pursuance of an order under section 195 of the Act. He further submitted that issue was decided in favour of the assessee by the "L" Bench of Mumbai Tribunal vide its orders dated 26.09.2009 and 26.11.2010 for the AYs.2003-04, 2007-08 & 2008-09 respectivley. He further submitted that Hon'ble Bombay High Court that upheld the order of the Tribunal for the AY.2007-08 and 2008-09 while dismissing the appeal of the department, that while deciding the issue in favour of the assessee Hon'ble High Court had relied upon the order of the Hon'ble Supreme Court delivered in the case of ITO v. Delhi Development Authority [2001] 252 ITR 772/[2002] 120 Taxman 120. Departmental Representative (DR) supported the order of the AO.

5. We have hear the rival submission and perused materials on records. We find that in the assessee's own case in ITA No. 4975/Mum/2005 vide order dated 26.09.2009 Tribunal has held as under; (page No.23 and 24 of the paper)

'6. In the case of Delhi Development Authority (supra),identical issue has been considered by the Apex court and it is held as under:

in the case in hand, as indicated earlier the direction to refund the amount has been made in appellate proceedings before the tribunal, The amount is to be refunded to the assessee. It cannot be said that the refundee will not be an assessee only for the reason that actually no assessment proceedings had taken place. It would be pertinent to refer to the provision contained under section 201 which clearly provides that if ths principal officer or the company liable to deduct the income-tax at source fails to do so, he. shall be deemed to be assessee in default in respect of the tax, The definition of the word assessee as contained under clause (7) of section 2 reads as under:

(7) "assessee" means a person by whom [any tax] or any other sum of money is payable under this Act, and includes—(a) every person in respect of whom any proceeding under this Act has been taken for the assessment of his income [or assessment of fringe benefits or of the income of any other person in respect of which he is assessable, or of the loss sustained by him or by such other person, or of the amount of refund due to him or to such other person; (b) every person who is deemed to be an assessee under any provision of this Act; (c,) every person who. is deemed to be an assessee in default under any provision of this Act; From the above provision, it is clear that term assessee includes actual assessees as well as deemed assessees under the provisions of the Act. It is therefore; not correct to contend that unless there are actual assessment proceedings pertaining to any person, he cannot be considered to be an assessee. In the present case DDA was considered to be liable to deduct the tax at source. It failed to do so, Hence order under section 201(1) and 201(IA) was passed raising the demand and amount of tax was paid. The order of refund was passed in appellate proceedings under the Mt attracting section 240. Certain decisions were cited at the Bar to show the meaning of the words "assessee' and 'assessment' and different stages of the assessment proceedings need not be dealt with in view of clear definition of the word "assessee' under the Act as quoted above'

6. in our opinion, answer to the arguments of the Id. DR I found in the decision of the Apex Court in the case of Delhi Development Authority (supraO. The Issue is squarely covered In favour of the assessee by the decision of the Apex Court in Deihi Development Authority (supra). We find no reason to interfere with the order of the ld. CIT(A)and the same is accordingly confirmed.

22. in view of the above discussions as well as the orders of co-ordinate Benches of this Tribunal, we decide this issue In favour of the assessee. The order of the CIT(A) Is upheld.'

We find that appeal filed by the department before the Hon'ble High Court against the order of the Tribunal has been dismissed by the Hon'ble High Court of Bombay.(page nos.26 to 28 of the paper book). Following the order of the earlier years passed by Mumbai Tribunal, we decide the issue in favour of the assessee and confirm the order of the FAA.

As a result, appeal filed by the AO stands dismissed.
C.O.268/Mum/2012,A.Y.2009-10:

6. The only ground taken by the assessee in the Cross Objection is about interest on interest. During the course of hearing before us, AR fairly admitted that the issue had been decided against the assessee in the case of Gujarat Flouro Chemicals delivered by the Hon'ble Supreme Court. Respectfully following the order of the Hon'ble Apex Court, we decide the effective ground for Cross Objection against the assessee and dismiss the same.

As a result appeal and CO filed by the AO and the assessee stand dismissed.