1 Commissioner of Income Tax Vs. M/s Bhaskar Multinet P. Ltd. I. T. A. No. 5/11 4/09/14 Shri S. M. Lal, learned counsel for appellant. Shri Sumit Nema, learned counsel for respondent. This is revenue's appeal under Section 260-A of Income Tax Act. assessee company which is engaged in business of Cable TV operations in Bhopal, Indore and Jaipur filed its return of income for assessment year 2006-07 and showed certain expenses by way of payment of poll rent made to Madhya Pradesh State Electricity Board and Rajasthan State Electricity Board. It was said that as transmission lines are erected by use of electricity polls, therefore poll rent has been paid to these public authorities. assessing officer found that for purpose of payment of poll rent, tax at source as contemplated under Section 40(a)(ia) has not been deducted, and, therefore made addition of ` 21,16,387/-. Challenging said addition, appeal was filed by assessee before Commissioner (Appeals). Commissioner (Appeals) found that in view of CBDT circular bearing no. 699 dated 30 th January, 1995, if payment is made to Government or local authority, then deduction of tax at source is not required. Based on aforesaid circular, Commissioner of Income Tax allowed appeal and disallowed 2 Commissioner of Income Tax Vs. M/s Bhaskar Multinet P. Ltd. entry. Appellate Tribunal having upheld same and having dismissed appeal of revenue, this appeal has been filed by revenue. Shri S. M. Lal, learned counsel for appellant took us through provisions of Section 197 of Income Tax Act and argued that necessary certificates under aforesaid provision has not been produced and, therefore, in absence of certificate, indulgence made by Commissioner (Appeals) and Tribunal is not called for. Referring to definition of rent as provided under Section 194-I and amendment made to Section 40(a)(ia) by including words 'Rent' and 'Royalty' w.e.f. 1.04.06, Shri S. M. Lal tried to argue that Tribunal has committed error in deleting addition made by Assessing Officer. It was argued that without taking note of circular and without taking note of statutory provision, indulgence is made by Commissioner (Appeals) and Tribunal. Shri Sumit Nema refuted aforesaid and emphasized that in light of circular relied upon to say that when payments are made to Government or local authorities like Electricity Board, then deduction of tax at source is not called for and in interfering into matter on such consideration, it is 3 Commissioner of Income Tax Vs. M/s Bhaskar Multinet P. Ltd. argued that Commissioner and Tribunal have not committed any error. That apart, Shri Sumit Nema invites our attention to amendment incorporated by Taxation Laws (Amendment) Act, 2006 w.e.f. 1.04.06 to say that provisions of deduction at source as contemplated under Section 40(a)(ia) in matter of 'rent' and 'royalty' were introduced by this amendment dated 1.04.06 and this amendment has been clarified by Central Board of Direct Education dated 27.04.07 by which explanatory note to amendment made by Act of 2006 has been issued by Board and under Clause 13.3 of this note, it is indicated that amended provision shall be made applicable from assessment year 2007-08. It is argued that question of law will not arise in this case which is for assessment year 2006-07. We have considered rival contentions and we find that concurrent findings recorded by appellate authority namely Commissioner and Income Tax Appellate Tribunal are based on circular dated 30 th January, 1995 and same seems to be in accordance with requirement of law. However, it may be taken note of that provision for deducting tax at source so far as it relates to payment of 'Rent' and 'Royalty' by virtue of provisions of Section 40(a)(ia) of Income Tax 4 Commissioner of Income Tax Vs. M/s Bhaskar Multinet P. Ltd. Act was introduced w.e.f. 1.04.06 and in circular issued by Board on 27.04.07 in Clause 13.3, it is clearly indicated that amended provision has been made applicable only from assessment year 2007-08. Once, from deduction at source in matter of payment of rent is only from year 2007-08 as is evident from material available on record, we see no reason to interfere into matter i.e. assessment year 2006-07 would not arise in view of statutory provision. Accordingly, finding no ground to interfere into matter, appeal is dismissed. (Rajendra Menon) (Anil Sharma) JUDGE JUDGE Vy Commissioner of Income-tax v. Bhaskar Multinet P. Ltd