IN INCOME TAX APPELLATE TRIBUNAL K , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMIT SHUKLA, JM . ITA No.7680 Mum 2012 ( Assessment Year :2008 -2009 Satellite Television Asian Vs. DDIT(International Region Limited, C o STAR India Taxation)-2(1), Scindia Private Limited, Star House, off House, Mumbai-400038 Dr. E.Moses Road, Mahalaxmi, Mumbai-400011 . . PAN GIR No. : AAACS 5680 D ( Appellant) .. ( Respondent) AND . ITA No.7679 Mum 2012 ( Assessment Year :2008-09) Channel V Music Networks Vs. Asstt. Director of Income Limited Partnership (Channel V) Tax ( International C o Star India Pvt. Limited, Star Taxation)1 (2) Scindia House, Office Dr. E Moses House, Mumbai-400038 Road, Mahalaxmi, Mumbai- 400011 . . PAN GIR No. :AAEFC6136H ( Appellant) .. ( Respondent) AND . ITA No.7681 Mum 2012 ( Assessment Year :2008-09) Star International Movies Vs. DDIT ( IT) 2(1) Limited(SIML) C o STAR India Scindia House, Mumbai - Private Limited, Star House, off 400038 Dr. E.Moses Road, Mahalaxmi, Mumbai-400011 . . PAN GIR No. : AAICS3256P ( Appellant) .. ( Respondent) 2 ITA Nos.7679-7684 12 ITA No.32 13 AND . ITA No.7682 Mum 2012 ( Assessment Year :2008-09) Star Asian Movies Limited Vs. DDIT ( IT) 2(1) (amalgamated with STAR India Scindia House, Mumbai - Private Limited) C o STAR India 400038. Private Limited, Star House, off Dr. E.Moses Road, Mahalaxmi, Mumbai-400011 . . PAN GIR No. :AAACN1335Q ( Appellant) .. ( Respondent) AND . ITA No.7683 Mum 2012 ( Assessment Year :2008-09) Vs. Deputy Director of Star Asia Region FZ LLC ( Income Tax (International Since amalgamated with Star Taxation) 2(1) India Pvt. Ltd.) C o STAR India Scindia House Mumbai - Private Limited, Star House, off 400038 Dr. E.Moses Road, Mahalaxmi, Mumbai-400011 . . PAN GIR No. :AAACN1335Q ( Appellant) .. ( Respondent) AND . ITA No.7684 Mum 2012 ( Assessment Year :2008-09) Star Television Entertainment Vs. Deputy Director of Limited ( Since amalgamated Income Tax (International with Star India Pvt. Ltd. C o Taxation) 2(1) STAR India Private Limited, Scindia House Mumbai - Star House, off Dr. E.Moses 400038 Road, Mahalaxmi, Mumbai- 400011 . . PAN GIR No. : AAACN1335Q ( Appellant) .. ( Respondent) 3 ITA Nos.7679-7684 12 ITA No.32 13 AND . ITA No.32 Mum 2013 ( Assessment Year :2008-09) SGL Entertainment Limited, C o Vs. Deputy Director of STAR India Private Limited, Income Tax (International Star House, off Dr. E.Moses Taxation) 2(1) Road, Mahalaxmi, Mumbai- Scindia House Mumbai - 400011 400038 . . PAN GIR No. : AAJCS6874N ( Appellant) .. ( Respondent) Assessee by : Shri Porus Kaka Divesh Chawla Revenue by : Shri Rupinder Brar Date of Hearing : 22 06 2016 Date of Pronouncement 16 09 2016 O R D E R PER R.C.SHARMA (A.M): above captioned appeals have been preferred by different assesses against direction of Dispute Resolution Panel-1, Mumbai (in short DRP ), for assessment years 2008-09. 2. Since issues involved in all appeals are common, therefore, appeals have been heard altogether and are being disposed off by this consolidated order. For sake of convenience grounds as well as facts mentioned in ITA No.7680 Mum 2012 have been taken into consideration for deciding above appeals en mase. Grounds :- Based on facts and circumstances of case, Satellite Television Asian Region Limited (hereinafter referred to as 'Appellant') respectfully craves leave to prefer appeal against 4 ITA Nos.7679-7684 12 ITA No.32 13 order passed under Section 143(3) read with Section 144C(13) of Income-tax Act, 1961 ('Act') by Deputy Director of Income- tax (International Taxation) - 2(1) ('AO') in pursuance of directions issued by Dispute Resolution Panel - I (,DRP'), Mumbai, under Section 253 of Act on following grounds which are independent and without prejudice to each other: On facts and in circumstances of case and in law, learned DRP learned Additional Commissioner of Income-tax (Transfer Pricing)-1I(1 &6) (TPO') and learned AO has- (Ground number 1 erred in determining FAR based income of Appellant at Rs 149,31,07,251 instead of Rs 114,42,29,521 as declared by Appellant. Ground number 2 erred in applying transfer pricing provisions to profit arrived after application of Profit Split Method ('PSM') ignoring that such profit effectively represents profits from transactions entered into with third parties. Ground number 3 erred in determining arms length profitability rate (,ALP rate') of 22.57% as against ALP rate of 17.30% computed by Appellant and its Group Entities (hereinafter referred to as 'STAR Group Entities'). Ground number 4 erred in rejecting comparability analysis carried out by Appellant and thereby deviating from their own position in earlier years without any change in facts or in law. Ground number 5 erred in holding that PSM is applicable to determine arms length profits in respect of revenues from Associated Enterprises ('AE') only and not applicable for determining arm's length profits in respect of transactions with non-AEs. Ground number 6 erred in holding that revenues of Rs 208,28,90,828 from sale of advertisement airtime, as revenue from Non AEs and income! profits needs to be separately computed therefrom. 1 STAR Television Entertainment Limited, STAR International Movies Limited, STAR Asian Movies Limited, STAR Asia Region FZ LLC and Channel V Music Networks Limited Partnership 5 ITA Nos.7679-7684 12 ITA No.32 13 Ground number 7 erred in applying arbitrary profitability rate of 28% to advertising revenues of Rs 208,28,90,828 from non AEs, contrary to law. Ground number 8 failed to carry out directions of learned DRP resulting in double taxation of profits from revenues of Rs 208,28,90,828. Ground number 9 erred in doubly taxing profits from revenues of Rs 208,28,90,828 at profitability rate of 28% rather than restricting addition to difference between 28% (Rs 58,32,09,432) and 22.57% (Rs 47,01,08,460) of said revenues as assessed in hands of STAR Group Entities in assessment order. Ground number 10 erred in computing arm's length price for international transactions by ignoring provisions of Rule 10B(4) of Rules, which authorizes usage of multiple year data of comparable companies for purpose of determination of arm's length price under Section 92F of Act. Ground number 11 erred in considering financial results and data of comparable companies which were not in existence in public domain at time of determination of ALP profit rate as is mandated under Section 92F of Act. Ground number 12 erred in computing arm's length price for international transactions without considering 5 percent bandwidth available under proviso to Section 92C(2) of Act. Ground number 13 erred in adopting divergent position with respect to adjustments made under Section 40(a)(i) of Act for AY 2007-08 and AY 2008-09 and not granting deduction for Rs 1,10,35,39,414 disallowed in AY 2007-08 on which taxes were admittedly paid in AY 2008-09. Ground number 14 6 ITA Nos.7679-7684 12 ITA No.32 13 erred in providing finding that no disallowance was made in AY 2007-08 under Section 40(a)(i) of Act and thereby not allowing deduction of Rs 1,10,35,39,414 in AY 2008-09 on which taxes have been paid in current year Ground number 15 erred in disallowing amount of Rs 20,28,50,187, over and above ALP profit rate of 17.30%, under Section 40(a)(i) of Act representing transponder hire fees paid to Asia Satellite Telecommunications Company Limited. Ground number 16 erred in disallowing gross sum of transponder hire charges amounting to Rs 34,96,00,000 paid to Asia Sat under Section 40(a(i) of Act. Ground number 17 Without prejudice to ground number 16, erred in not restricting disallowance under Section 40(a)(i) of Act to amount attributable to India as Rs. 34,96,00,000 is global amount. Ground number 18 Without prejudice to ground numbers 16 and 17, erred in not restricting disallowance of transponder hire charges under Section 40(a)(i) of Act to net income chargeable to tax in hands of non-resident recipient, ie, Asia Sat. Ground number 19 Without prejudice to ground numbers 16,17 and 18, erred in disallowing of transponder hire charges under Section 40(a)(i) of Act in hands of Appellant, as Asia Sat has been regularly discharging its tax liabilities in India. Ground number 20 learned DRP erred in not disposing off objection numbers 18, 19, 20 and 21 of DRP Application. Ground number 21 erred in charging interest amounting to Rs 1,73,42,755 under Section 234C of Act without appreciating fact that Appellant is non-resident and accordingly, its entire income is liable for TDS, and is not liable to pay advance tax. Ground number 22 7 ITA Nos.7679-7684 12 ITA No.32 13 erred in not granting credit of taxes deducted at source amounting to Rs 1,19,13,016. Ground number 23 erred in not granting interest under Section 244A of Act on tax refund due to Appellant. Ground number 24 erred in initiating penalty proceedings under Section 271 (1 )(c) of Act without appreciating fact that Appellant has neither concealed any income nor furnished any inaccurate particulars of its income. Ground number 25 erred in initiating penalty proceedings under Section 271A of Act without appreciating fact that Appellant is non-resident and not required-to maintain India specific books of accounts. Ground number 26 erred in initiating penalty proceedings under Section 271 B of Act without appreciating fact that Appellant is non-resident and accordingly, is not required to get accounts audited. 3. Rival contentions have been heard and record perused. Facts in brief are that assessee-Star Limited, foreign company in Hong Kong and part of News Crop Group, is engaged in business of distribution of channel and advertising airtime at global level. assessee is aggregator and distributor of channels which consolidates numerous channels into network and negotiations carriage with distribution platforms. It relies on reputation of STAR brand (which it develops) and its technical capability to effectively broadcast channels to negotiate favourable terms with distribution platforms. assessee grants channel distribution rights to various distributors across Asia. Under terms of 8 ITA Nos.7679-7684 12 ITA No.32 13 distribution agreements granted, Star Ltd. is required to organize broadcasting of channels, including uplinking and to provide range of infrastructure services associated with broadcasting. In addition, Star Ltd leases transponders and provides some transponder capacity to Chanel Companies i.e. SIML,SAML,STEL &SAR, which are responsible for acquiring for relevant content of various genres which are finally broadcast on channels. These channels include Star Plus, Star World, Channel V, etc. appeal in ITA No. 7680 M 12 pertaining to Assessment Year 2008-09 is taken as lead case. 3. Grounds No.1 to 4 of ITA No.7680 M 12 relate to rejection of three of assessee s comparables by TPO by applying low turnover filter. 3.1. assessee has adopted profit split method as most appropriate method to determine arm s length price. For this purpose, assessee has aggregated all its transactions with other channel companies and SGL Limited and determined global profits. These profits were compared with profits earned by certain comparable companies engaged in telecasting activity. assessee determined profit margin of eight companies, identified by assessee, at 17.3%, as compared to its own margin of 5.08%. After making various adjustments, assessee determined profitability rate of 12.23% to which extent it increased its profits by making suo moto transfer pricing adjustment and these profits were then divided amongst channel companies and assessee. However, TPO rejected three 9 ITA Nos.7679-7684 12 ITA No.32 13 comparables of assessee i.e. i) Aastha Broadcasting Network Limited; ii) Broadcast Worldwide Limited and iii) Jain Studios Limited, on basis that turnover of these companies was less than 10% of assessee s turnover of Rs.13,240 crores. After excluding three companies, TPO has calculated comparable margin, which has come to 22.57%. In proceeding before DRP, action of TPO has been upheld. Now, assessee is in appeal before Tribunal. 3.2 Ld. AR for assessee has submitted before us that Transfer Pricing officer (TPO) and Dispute Resolution Panels ( DRP) have accepted Profit Split Method (PSM) for determining arm`s length price. Admittedly, PSM is method for transfer pricing for group except rejection of three comparables by TPO viz: i) Aastha Broadcasting Network Limited; ii) Broadcast Worldwide Limited and iii) Jain Studios Limited. TPO rejected these companies on basis that their turnover was less than 10% of turnover of India revenue of Star group entities. Ld. AR for assessee stated that TPO has erroneously applied one sided lower turnover margin. It is imperative to note that assessee had not applied turnover filter while carrying out benchmarking analysis while identifying functionally comparable Indian broadcasters. TPO has considered same benchmarking analysis, of functionally comparable india broadcasters, and rejected three comparables merely on ground that their turnover was less than 10% of turnover of Star group entities Indian revenue. If low 10 ITA Nos.7679-7684 12 ITA No.32 13 turnover filter is to be applied high turnover filter shall also be consequently applied to exclude comparables i.e. Zee Entertainment Enterprise Limited. Ld. AR has submitted that TPO has done cherry picking by applying turnover filter. turnover filter is quantitative filter i.e. it ought to have been applied during search process and that also not one sided one but both high and low turnover before examining functional comparability. However, in instant case, TPO has applied it on set of comparables finalized after thorough functional comparability. This kind of selective application of turnover filter at last step tantamount to cherry picking. Further, Ld. AR has relied on following judicial precedents: 1.Nortel network India, 40 ITR 102 and 375 ITR 183 2. Temasek Holdings Advisors India Pvt. Limited( 67 Taxmann.com 221 Mumbai-trb) 3. CIT-II Vs. Mckinsey knowledge centre Pvt. Ltd. ITA No. 217 2014 ( Delhi HC) sum and substance of above cited judicial precedents are that Turnover filter must be applied not as tool for cherry picking at later stage but at time of search process and by applying quantitative filter.It can not be one sided process to exclude companies after qualitative level based on FAR analysis where no filter has been applied in earlier. Consistency requires that it can not be used to exclude it in individual given year, when it has not been applied in earlier year and subsequent year. 11 ITA Nos.7679-7684 12 ITA No.32 13 Ld. AR for assessee has also relied on following judicial precedents in support of rule of consistency, wherein it has been held that there can not be pick and choose of comparables every year unless there are some material differences in facts and circumstances: (i).Temasek Holdings Advisors India Pvt. Limited .( 67 Taxmann .com 221 Mumbai-trib ) (ii). Temasek Holdings Advisors India Pvt. Limited A.Y. 2009-10 ( 151 ITD 458, Mumbai Trib) (iii).General Atlantic Pvt. Ltd. 2006-07 ( 32 Taxmann.com 178 Mumbai- trib) 3.3 On other hand, Ld. DR for Revenue has primarily reiterated stand of DRP TPO.. 3.4 Having heard rival submissions, and considering judicial pronouncements discussed above, we are of view that turnover filter must be applied not as tool for cherry picking at later stage but at time of search process and by applying quantitative filter. It can not be one sided process to exclude companies after qualitative level based on FAR analysis where no filter has been applied in earlier. Consistency also requires that it can not be used to exclude it in individual given year, when it has not been applied in earlier year and subsequent year. There can not be pick and choose of comparables every year unless there are some material differences in facts and circumstances. Therefore, based on above cited reasoning we direct DRP TPO AO to delete this addition. 12 ITA Nos.7679-7684 12 ITA No.32 13 3.5 same and identical issues are involved in grounds Nos. 2 to 5 of ITA No. 7681 M 12, ITA No. 7682 M 12, ITA No. 7683 M 12, ITA No. 7684 M 12, and ITA No. 7679 M 12, all pertaining to A.Y 2008-09, therefore, these grounds cited, are allowed. 4. Ground No.5 to 9 relate to determination of higher profitability for advertisement receipts received by STAR Ltd. on ground that it was Non-Associated Enterprise (Non-AE) receipt, hence, outside PSM. 4.1 We have heard rival contention and found that TPO on basis of directions of DRP, while passing final assessment order, did not apply Rule 10(i) in case of assessee for A.Y.2007-08 as all revenues generated by assessee during relevant year were from transactions with AEs and returned income of assessee was accepted. 4.2 DRP followed its order for assessment year 2007-08 on reason of consistency. 4.3 Ld. AR for assessee has submitted before us that sale of advertisement airtime by STAR Ltd to AEs is international transaction which is closely related to apply PSM has not been disputed by TPO DRP. Therefore, advertisement revenues from Non-AEs could not be excluded from computation of income under PSM. starting point of PSM is to determine combined net profit. This net profit finally represents receipts from third parties and Non-AEs as all inter-company transactions are eliminated non-recognised. PSM is to 13 ITA Nos.7679-7684 12 ITA No.32 13 determine prior to its application whether international transactions are so inter-related that they can not be evaluated separately see Rule 10B (1) (d) of Rules. Once it is accepted that transaction is so inter- related, combined net profit has to be determined of group. TPO has accepted and DRP has not disputed that transaction in respect of advertisement revenue is to be included under PSM. DRP has however, only excluded one stream and that also in parts namely, receipts by STAR Ltd but not what has been received thereafter by channel companies in respect of same advertisement stream from STAR Ltd. TPO has totally approved computation methodology of PSM of benchmarking of transactions with AE including all inter-related international transactions relating to advertisement and distribution streams of income. Assessee made full disclosure of fact that its commercial uplifted profitability is 17.30% as per PSM which is as per section 92CA (4) of Act. Once TPO has accepted methodology neither AO nor DRP can change same in view of Section 92CA (4). combined net profit as per PSM under Rule 10B (1) (d) at 17.30% has been found to be at arm`s length except for exclusion of 3 companies for 10% turnover filter applied by TPO. On present facts, all international transactions in respect of advertisement and distribution stream cannot be separated. DRP`s reliance on Rule 10 of Rules is contrary to provisions of Act and Law since if it is accepted that transactions are closely inter related then they must be included under PSM in accordance with Act. 14 ITA Nos.7679-7684 12 ITA No.32 13 arm`s length price determined by TPO is 22.57% and considering profits earned from Non-AE`s arbitrarily at 28%, is unjustified as there can not be such variation between profit from transactions with AEs and transactions with Non-AEs. If it is Non-AE transaction then question of estimation cannot arise. assessee also relied on decision in case of Globe One India Pvt Ltd. 44 Taxmann.com 100 ( ITAT Del). 4.4 On other hand, Ld. DR for Revenue has primarily reiterated stand of DRP TPO,which we have already noted in earlier paras and is not being repeated for sake of brevity. 4.5 We have heard rival parties at length and considered same carefully. We noticed merit in submissions of Ld. AR for assessee, as combined net profit as per PSM under Rule 10B (1) (d) at 17.30% has been found to be at arm`s length except for exclusion of 3 companies for 10% turnover filter applied by TPO. On present facts, all international transactions in respect of advertisement and distribution stream cannot be separated. We therefore set aside orders of lower authorities on this issue and restored same back to AO TPO for deciding afresh in terms of our above discussion. 4.6 In result, ground taken by assessee is allowed for statistical purposes. 4.7 same and identical issues are involved in ground No. 6 of ITA No. 7681 M 12, ITA No. 7682 M 12, ITA No. 7683 M 12, ITA No. 7684 M 12, and ITA No. 7679 M 12, all pertaining to A.Y 2008-09, therefore, following 15 ITA Nos.7679-7684 12 ITA No.32 13 our above contention appeals filed by assessee on this ground , are allowed for statistical purposes. 5.Ground No.10 to 12 relates to determining arms length profitability rate (,ALP rate') of 22.57% as against ALP rate of 17.30% computed by Assessee and its Group Entities.These relate to application of certain transfer pricing principles such as AO TPO erred in using single year data as against multiple year data and contemporaneous data for computation of ALP. 5.1 As we have decided this issue in favour of assessee while deciding ground No.1-4 above, therefore, this issue is also applies mutatis mutandis to above grounds. This also applies to ground No. 7 to 9 of Star group appeals (7681 M 12,7682 M 12,7683 M 12,7684 M 12, 7679 M 12, ) for A.Y. 2008-09. 6. Ground No.13 & 14 relate to non-grant of reversal of disallowance of foreign content fees and uplinking cost under Section 40(a)(ia) for A.Y.2007-08 upon payment of taxes in A.Y.2008-09. In transfer pricing order for A.Y.2007-08 and 2008-09 in case of STAR group entities, Ld. TPO has accepted Profit Split Method (PSM) to be most appropriate method and has also accepted that Transfer Pricing Study being at arm`s length. It was contention of Ld. AR that during A.Y. 2008-09, STAR Group entities have deposited taxes in respect of following expenditure disallowed under section 40(a) (i) of Act in A.Y. 2007-08: 16 ITA Nos.7679-7684 12 ITA No.32 13 1) Foreign content procurement cost amounting to USD 47.02 Million and 2) Technical cost amounting to USD 0.54 Million. Accordingly, in light of proviso to Section 40 (a) (i) of Act, reversal of above expenses were claimed in computation in A.Y. 2008-09. However, in assessment order for A.Y. 2008-09, learned AO has rejected submission of STAR group entities, on ground that profitability rate of 27.18% in 2007-08 as applied to India revenues is as per directions of Honourable DRP and does not include disallowance under section 40(a) (i) of Act. Since profitability percentage of 27.18% does not include disallowances under section 40(a) (i) of Act, issue of granting reversal in A.Y. 2008-09 does not arise. 6.1 Ld. AR for assessee has submitted that stand of Assessing Officer is wholly inconsistent with his own order for A.Y. 2007- 08, wherein para 6 on page 5, he has noted computation made by assessee and said computation has been upheld by hon`ble ITAT in case of STAR Ltd for A.Y. 2007-08. 6.2 Ld. DR for Revenue has fairly agreed on submissions made by Assessee and he reiterated stand taken by TPO and DRP. 6.3 We have heard both parties on this issue, gone through facts and circumstances of case and perused material on record. We noticed merit in submissions of Ld. AR for assessee, hence, in light of order of AO and Hon`ble ITAT for A.Y. 2007- 08 in case of assessee that disallowance under section 40(a) (i) of 17 ITA Nos.7679-7684 12 ITA No.32 13 Act uplifted profitability and increasing assessee`s profit chargeable to tax in India. It is wholly inconsistent and contrary to Law, not to allow reversal in years when taxes have been deducted and paid in accordance with section 40(a) (i) of Act, merely on erroneous contention that no disallowance had been made by him under section 40(a) (i) of Act in A.Y. 2007-08 while determining final taxable income at 27.18%, therefore, we allow appeal of assessee on this ground. 6.4 In result, appeal of assessee is allowed on this ground. 6.5 Considering same and identical issue we also allow ground No. 10 to 11 of Star group appeals (7681 M 12,7682 M 12,7683 M 12,7684 M 12, 7679 M 12, ) for A.Y. 2008-09. 7. Ground No. 15 relates to disallowance of Transponder hire charges under section 40(a) (i) paid to Asia Sat while computing profitability of 22.57%. 7.1 assessee while computing profitability percentage for Y. 2008-09, had made suo moto disallowances under section 40 (a) (i) of Act on account of payment made to Asia Sat for transponder hire charges. 7.2 Ld. AR for assessee has submitted that pursuant to filing of return of income, Delhi High court in case of Asia Sat 332 ITR 340 has held that income of Asia Sat is not liable to tax in India. Accordingly, payments made to Asia Sat are not liable to withholding of taxes in India. In view of above, assessee requests not to disallow payments 18 ITA Nos.7679-7684 12 ITA No.32 13 made to Asia Sat, while computing profitability percentage for A.Y. 2008-09.The Ld. AR submitted that in view of judgement of Supreme Court in case of Vodafone International Holdings BV 341 ITR 1 has held that provisions of section 195 of Act do not apply to transaction between one non-resident to another non-resident. Ld. AR also submitted that no disallowance could be made due to retrospective amendments made by Finance Act 2012, for years prior to A.Y. 2013-04, in view of principles laid down in followings judicial precedents: a)B4U International Holding limited ( 52 SOT 544) Mumbai ITAT b)Channelc Guide India Limited 139 ITD 49 Mumbai ITAT c) Sterling Abrasiv Limited (140 TTJ 68) Mumbai ITAT. 7.3 On other hand, Ld DR for revenue relied on stand taken by TPO DRP. 7.3 We have heard both parties on this issue, gone through facts and circumstances of case and perused material available on record. We noticed that provisions of section 195 of Act do not apply to transaction between one non-resident to another non-resident and it is supported by case law cited above, therefore, we allow appeal of assessee on this ground. 7.4 In result, appeal of assessee is allowed on this ground. 19 ITA Nos.7679-7684 12 ITA No.32 13 7.5 Considering same and identical issue we also allow respective ground of Star group appeals in ITA Nos. 7681 M 12, 7682 M 12, 7683 M 12, 7684 M 12, 7679 M 12, for A.Y. 2008-09. 8. Ground No. 16 to 19 relate to Double disallowances of Transponder hire charges under section 40(a) (i) paid to Asia Sat. 8.1 issue involved in these grounds as per assessee is that assessee has suo moto made disallowance U s 40(a) (i) of Act while computing PSM profit perentage and therefore it should not be disallowed further by AO. 8.2 Ld. AR for assessee has submitted that assessee had already made disallowance under section 40 (a) (i) of Act while computing PSM profit percentage and despite same AO also made further disallowance under section 40(a) (i) of Act again, which is not justified. 8.3 Ld. DR for Revenue relied on orders of lower authorities. 8.4 We have heard both parties on this issue and gone through facts and circumstances of case. We noticed merit in proposition canvassed by Ld. AR for Assessee, as he submitted that assessee had already made disallowance under section 40 (a) (i) of Act while computing PSM profit percentage and despite same AO also made further disallowance under section 40(a) (i) of Act again, which is not justified, accordingly we direct AO to verify same should delete addition after proper verification. We direct accordingly. 20 ITA Nos.7679-7684 12 ITA No.32 13 8.5 In result, appeal filed by assessee on this ground is allowed. 9. Ground No.20: DRP erred in not disposing certain objection raised by assessee. This ground is general therefore it does not require separate adjudication. 10. Ground No. 1 and 2 of Assessee`s appeal No.32 M 2013 and ground No.21 of Appeal No.7680 M 2012: Issue involved is, levy of interest under section 234B and 234C of Act. 10.1 Ld. AR for assessee has submitted that Assessing officer has erred in levying interest under sections 234B and 234C of Act on income assessed in hands of assessee without appreciating fact that assessee, being non-resident, was not liable to pay advance tax. If non-resident assessee is not liable to pay advance tax then there is no any question to levy interest under sections 234B and 234C of Act. 10.2 We have heard both parties and gone through facts of case. We noticed merit in proposition of assessee and found that, if non-resident assessee is not liable to pay advance tax then there is no any question to levy interest under sections 234B and 234C of Act. For this purpose reliance can be placed on decision of Bombay High Court in case of DIT Vs. NGC Network Asia LLC, ( 313 ITR 187 (Bom) wherein similar issue has been decided by Bombay High Court, and therefore, we allow assessee`s appeal on this ground. 21 ITA Nos.7679-7684 12 ITA No.32 13 40.4 In result, appeal filed by assessee is allowed on this ground. ground No. 21 of appeal in ITA No. 7680 M 12, on similar issue, is also allowed. 11.Ground No. 22 to 26 relating to credit of TDS,Levy of penalty U s 271(1) ( C), 271A and 271B . 11.1 These grounds of appeals are pre-mature and consequential in nature and therefore, do not require adjudication. 12. In result, appeals of assessee are allowed in part, in terms indicted herein above. Order pronounced in open court on this 16 09 2016. Sd - Sd - (AMIT SHUKLA) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 16 09 2016 . . pkm, . PS Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. ( ) CIT(A), Mumbai. 4. CIT 5. , , DR, ITAT, Mumbai 6. Guard file. BY ORDER, True Copy (Asstt. Registrar) , ITAT, Mumbai Satellite Television Asian Region Limited v. DDIT(International Taxaion)-2(1), Scindia House, Mumbai