ACIT (TDS) 3(1), MUMBAI V. UTV ENTERTAINMENT TELEVISION LTD, MUMBAI

ITA 2699/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83980 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Department
• Bench Allotted: F
• Next Hearing Date: 03-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 20-04-2012
• Court: TRIBUNAL
• Department Lawyers: R N DSOUZA
• Assessee Lawyers: F V IRANI
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI JH FOT; IKY JKO] U;KF;D LNL; JH FOT; IKY JKO] U;KF;D LNL; JH FOT; IKY JKO] U;KF;D LNL; JH FOT; IKY JKO] U;KF;D LNL; ,OA ,OA ,OA ,OA JH JKTSUNZ] YS[KK LNL; JH JKTSUNZ] YS[KK LNL; JH JKTSUNZ] YS[KK LNL; JH JKTSUNZ] YS[KK LNL; DS LE{K DS LE{K DS LE{K DS LE{K BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. A.Y. APPELLANT RESPONDENT 2699/MUM/2012 2008 - 09 ACIT (TDS) 3(1), MUMBAI, 10 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W), MUMBAI 400002 UTV ENTERTAINMENT TELEVISION LIMITED, 1 ST FLOOR, BUILDING NO. 14, SOLITAIRE CORPORATE PARK, GURU HARGOVINDJI MARG, CHAKALA, ANDHERI (EAST) MUMBAI 400093 PAN:- AACCV4782D 4204/MUM/2012 2009 - 10 ITO (OSD)(TDS) 3(1), MUMBAI, 10 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W), MUMBAI 400002 4205/MUM/2012 2010 - 11 ITO (OSD)(TDS) 3(1), MUMBAI, 10 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W), MUMBAI 400002 2700/MUM/2012 2011 - 12 ACIT (TDS) 3(1), MUMBAI, 10 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W), MUMBAI 400002 CO NO. A.YS APPELLANT RESPONDENT 205/MUM/2013 ARISING OUT OF ITA NO. 2699/MUM/2012 2008 - 09 UTV ENTERTAINMENT TELEVISION LIMITED, 1 ST FLOOR, BUILDING NO. 14, SOLITAIRE CORPORATE PARK, GURU HARGOVINDJI MARG, CHAKALA, ANDHERI (EAST) MUMBAI 400093 PAN:- AACCV4782D ITO (OSD)(TDS) 3(1), MUMBAI, 10 TH FLOOR, SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD (W), MUMBAI 400002 206/MUM/2013 ARISING OUT OF ITA NO. 4204/MUM/2012 2009 - 10 207/MUM/2013 ARISING OUT OF ITA NO. 4205/MUM/2012 2010 - 11 208/MUM/2013 ARISING OUT OF ITA NO. 2700/MUM/2012 2011 - 12 REVENUE BY SHRI R. N.DSOUZA ASSESSEE BY SHRI F.V. IRANI DATE OF HEARING 29-10-2014 DATE OF PRONOUNCEMENT 29.10.2014 UTV ENTERTAINMENT TELEVISION LIMITED 2 | P A G E ORDER PER BENCH THESE FOUR APPEALS BY THE REVENUE AND CROSS OBJECTIO NS BY THE ASSESSEE ARE DIRECTED AGAINST THE FOUR SEPARATE ORDERS OF CIT(A ) ARISING FROM THE ORDER PASSED U/S 201(1)/201(1A) OF THE INCOME TAX ACT FOR THE A.Y. 2008-09 TO 2011-12 RESPECTIVELY. COMMON GROUNDS HAVE BEEN RAIS ED BY THE REVENUE IN THESE APPEALS. THE GROUNDS RAISED FOR A.Y. 2008-09, A RE AS UNDER:- 1. (I) THE LD. CIT(A) HAS ERRED ON FACTS AND IN LA W IN NOT CORRECTLY APPRECIATING THE NATURE OF THE SERVICES RENDERED BY THE CABLE OP ERATORS /MSOS FOR WHICH PLACEMENT CHARGES ARE PAID AND HOLDING THAT SUCH CH ARGES COME WITHIN THE PURVIEW OF SECTION 194C WHEREAS SUCH PLACEMENT CHAR GES ARE IN NATURE OF TECHNICAL FEE WITHIN THE MEANING OF SECTION 194J OF THE INCOME-TAX ACT, 1961. (II) THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N NOT APPRECIATING THAT FOR PLACING THE CHANNEL OF BROADCASTER IN PRIME BAND, F OR WHICH PLACEMENT CHARGES ARE PAID, APPLICATION OF HUMAN MIND BY A TECHNICAL PERSON IS ESSENTIAL AND THE SAME CANNOT BE DONE MERELY BY MECHANICAL MEANS. THE REFORE, THE PAYMENT ON ACCOUNT OF PLACEMENT CHARGES IS IN NATURE OF TECHNI CAL FEE WITHIN THE MEANING OF SECTION 194J AND SECTION 194C HAS NO APPLICATION TO THE FACTS OF THE CASE. ACCORDINGLY CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING TO THE CONTRARY. (III) WITHOUT PREJUDICE TO THE FIRST TWO GROUNDS OF APPEALS AS ABOVE, SINCE PROVIDING THE SERVICES OF PREFERRED CHANNEL PLACEME NT ON ACCOUNT OF WHICH PLACEMENT CHARGES ARE PAID REQUIRES USE OF INDUSTRI AL, COMMERCIAL OR SCIENTIFIC EQUIPMENT WITHIN THE MEANING OF SUB CLAUSE (IVA) TO EXPLANATION TO SUB CLAUSE (VI) OF SECTION 9(1) OF THE INCOME-TAX ACT, 1961, T HE SAID PAYMENT IS PAYMENT ON ACCOUNT OF ROYALTY AND THEREFORE, SECTION 194J IS C LEARLY APPLICABLE. ACCORDINGLY, CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECI ATING THIS FACTUAL AND LEGAL POSITION AND IN GIVING RELIEF TO THE ASSESSEE. (IV) CIT(A) HAS FURTHER ERRED ON FACTS AND IN LAW I N NOT APPRECIATING THAT IN ANY CASE THE NATURE OF SERVICES RENDERED BY THE CABLE O PERATOR / MULTI SERVICE OPERATORS CONSISTS IN FACILITATING DELIVERY OF PROD UCTS OF BROADCASTER TO THE VIEWER AND IN VIEW OF IMPLIED AGENCY, SUCH PAYMENT ON ACCOUNT OF CARRIAGE FEE IS IN NATURE OF COMMISSION OR BROKERAGE AS DEFINED IN EXPLANATION TO SECTION 194H OF THE INCOME-TAX ACT, 1961. UTV ENTERTAINMENT TELEVISION LIMITED 3 | P A G E (V) CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT SECTION 194C APPLIES TO THE PAYMENT OF PLACEMENT CHARGES WITHOUT APPRECIATI NG THE CORRECT NATURE OF THESE CHARGES, AS IS CLEARLY BROUGHT OUT IN THE STA TEMENT OF FACT ANNEXED TO THE GROUND OF APPEAL AND THE ORDER U/S. 201(1) OF THE I NCOME-TAX ACT, 1961. 2. THE LD. CIT(A) HAS ERRED ON LAW AND IN FACTS IN NOT APPRECIATING THAT THE SUB. TITLING AND EDITING CHARGES REQUIRE PROVIDING OF TE CHNICAL SERVICES AS DEFINED IN THE ACT AND THEREFORE, ARE WITHIN THE PURVIEW OF SE CTION 194J OF THE ACT. 2. GROUND NO. 1 IS REGARDING DEDUCTION OF TAX AT SOUR CE U/S 194C OR U/S 194J IN RESPECT OF THE PAYMENT MADE BY THE ASSESSEE TO THE CABLE OPERATORS. THE ASSESSEE IN THIS CASE, IS ENGAGED IN THE BUSINES S OF DISTRIBUTION OF TELEVISION CHANNELS. THE TV CHANNELS ARE DISTRIBUTED BY THE ASS ESSEE THROUGH CABLE OPERATORS/MSOS. DUE TO BANDWIDTH CONSTRAINS WITH T HE CABLE NETWORK, IT WAS UP TO THE CABLE OPERATOR TO DECIDE WHICH CHANNEL WILL REACH THE END VIEWER AT WHAT FREQUENCY (PLACEMENT). ACCORDINGLY, BROADCASTER S MAKE PAYMENTS TO THE CABLE OPERATOR TO CARRY THEIR CHANNELS AT A PARTICU LAR FREQUENCY WHICH IS GENERALLY REFERRED TO AS CARRIAGE FEES/PLACEMENT FESS. IF A PARTICULAR CHANNEL IS PLACED IN PRIME BAND, IT WILL ENHANCE THE VIEWERSH IP AND FURTHER LEAD TO BETTER ADVERTISEMENT REVENUE FOR THE TV CHANNELS. AC CORDINGLY, THE BROADCASTER MAKE THE PAYMENT TO THE CABLE OPERATORS FOR PLACEMENT OF THEIR CHANNELS IN PRIME BAND. THE ASSESSEE DEDUCTED TAX AT SO URCE AT THE RATE OF 2% U/S 194C OF THE ACT., WHILE MAKING THE PAYMENT TOWA RDS PLACEMENT FEES TO THE CABLE OPERATORS/MSOS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PAYMENT WAS MADE TO THE CABLE OPERATORS FOR PROVIDING TECHNI CAL SERVICES TO THE ASSESSEE, THEREFORE, THE ASSESSEE OUGHT TO HAVE DEDUC TED TAX U/S 194J OF THE ACT., AT THE RATE OF 10%. THEREFORE, THE ASSESSING OFFICER HAS PASSED THE IMPUGNED ORDERS U/S 201(1) AND 201(1A) OF THE INCOME TAX ACT. 3. THE ASSESSEE CHALLENGED THE ACTION OF ASSESSING OFFICER BEFORE CIT(A). THE CIT(A) HAS HELD THAT THE PLACEMENT FEE PAID BY TH E ASSESSEE IS ONLY FOR GIVING PREFERENCE TO A PARTICULAR CHANNEL OVER THE OTHER TO PLACE ON A PARTICULAR UTV ENTERTAINMENT TELEVISION LIMITED 4 | P A G E BAND WHICH DOES NOT MEAN ANY TECHNOLOGY OR TECHNICAL SERVICES AS PROVIDED BY THE CABLE OPERATORS TO THE ASSESSEE. RELYING UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICATION LTD., (119 TAXMAN 496) AS WELL AS THE DECISION OF PUNJAB & HARYANA HIGH COU RT IN THE CASE OF KURUKSHETRA DARPANS (P) LTD. VS. CIT (169 TAXMAN 3 44), THE CIT(A)A HELD THAT THE PLACEMENT FEE PAID BY THE ASSESSEE TO THE C ABLE OPERATORS SHOULD BE SUBJECTED TO TDS AS PER PROVISIONS OF SECTION 194C O F THE ACT. 4. BEFORE US, THE LD. DR HAS HEAVILY RELIED UPON THE ORDERS OF ASSESSING OFFICER AND SUBMITTED THAT THE SERVICES PROVIDED BY T HE CABLE OPERATORS/MSOS ARE HIGHLY TECHNICAL SERVICES INVOLVING TECHNICAL E QUIPMENTS IN TRANSMITTING THE CHANNEL NETWORK TO THE END USER AND, THEREFORE, THE PAYMENT IS IN THE NATURE OF FEE FOR TECHNICAL SERVICES, WHICH ATTRACT S THE TDS TO BE DEDUCTED U/S 194J 5. ON THE OTHER HAND, THE LD. AUTHORIZED REPRESENTATIV E OF THE ASSESSEE HAS SUBMITTED THAT THE PAYMENT IS COVERED SPECIFICALLY U NDER THE PROVISIONS OF SECTION 194C. HE HAS REFERRED THE EXPLANATION TO SEC TION 194C AND SUBMITTED THAT AS PER CLAUSE (IV) OF THE EXPLANATION, THE WO RK SHALL INCLUDE INTER ALIA BROADCSTING AND TELECASTING INCLUDING PRODUCTION OF PR OGRAMME FOR SUCH BROADCASTING AND TELECASTING. THEREFORE, THE LD. AUTHO RIZED REPRESENTATIVE HAS SUBMITTED THAT WHEN THE PAYMENT IS IN RELATION T O BROADCASTING WORK WHICH IS SPECIFICALLY PROVIDED U/S 194C THEN THE GENE RAL PROVISIONS U/S 194J CANNOT BE APPLIED. HE HAS REFERRED THE CBDT CIRCULAR NO. 720 DATED 30.08.1995, WHEREIN IT WAS CLARIFIED THAT EACH SECTI ON UNDER CHAPTER XVII, DEALS WITH A PARTICULAR KIND OF PAYMENT TO THE EXCLUSION O F ALL OTHER SECTIONS IN THIS CHAPTER. THE PAYMENT OF ANY SUM SHALL BE LIABLE FOR TAX DEDUCTION ONLY UNDER ONE SECTION. IN SUPPORT OF HIS CONTENTION HE HAS RE LIED UPON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF KURUKSHETRA DARPANS (P) UTV ENTERTAINMENT TELEVISION LIMITED 5 | P A G E LTD. VS. CIT (SUPRA) AND SUBMITTED THAT THE HON'BLE HIGH COURT HAS HELD T HAT THE RECEIPT OF TELECASTING SIGNALS FROM THE LICENSO R IS ESSENTIALLY UNDER THE CONTRACT TO OBTAIN BROADCASTING AND TELECASTING FACI LITY OF TV CHANNELS. THEREFORE, SECTION 194C IS ATTRACTED TO THE PAYMENTS MADE TO THE LICENSOR FOR OBTAINING TV SIGNALS AND THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE ON SUCH PAYMENTS. HE HAS ALSO RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. PRASAR BHARATI (BROADCASTING CORPORATION OF INDIA) (292 ITR 580) AND SUBMITTED THAT THE HON'BLE HIGH COURT HAS HELD TH AT EXPLANATION 3 TO SECTION 194C IS VERY SPECIFIC IN I TS APPLICATION NOT ONLY TO BROADCASTING AND TELECASTING BUT ALSO INCLUDES PRODUCTI ON OF PROGRAMMES FOR SUCH BROADCASTING AND TELECASTING. IF ON THE SAME DA TE TWO PROVISIONS ARE INTRODUCED IN THE ACT., ONE SPECIFIC TO THE ACTIVITY SOUGHT TO BE TAXED AND THE OTHER (194J) IN MORE GENERAL TERMS RESORT MUST BE H AD TO THE SPECIFIC PROVISIONS WHICH MANIFESTS THE INTENTION OF THE LEG ISLATURE. THE LD. AUTHORIZED REPRESENTATIVE HAS ALSO RELIED UPON THE DECISION OF T HIS TRIBUNAL DATED 9.7.2014 IN THE CASE OF CIT VS. NGC NETWORK IN ITA NO. 1382/MUM/2014. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RELEVA NT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE PAYMENT IN QUEST ION WAS MADE BY THE ASSESSEE TO THE CABLE OPERATORS/ MSOS FOR PLACING T HE TV CHANNELS IN THE PRIME BAND IN ORDER TO ENHANCE THE VIEWERSHIP AND BETTER ADV ERTISEMENT REVENUE. IN THE CASE OF KURUKSHETRA DARPANS (P) LTD. VS. CIT (SUPRA) , THE HONBLE HIGH COURT OF PUNJAB & HARYANA WHILE DEALING WITH AN IDENT ICAL QUESTION HAS HELD IN PARA 13 TO 18 AS UNDER:- 13. AFTER HEARING LEARNED COUNSEL FOR THE PARTIES, WE ARE OF THE VIEW THAT THE CONTENTIONS OF THE COUNSEL FOR THE APPELLANT AR E LIABLE TO BE REJECTED. SEC. 194C OF THE ACT CREATES AN OBLIGATION ON A PERSON R ESPONSIBLE FOR PAYING ANY SUM SPECIFLED THEREIN TO A PERSON FOR CARRYING OUT ANY WORK, TO DEDUCT THE TAX AT SOURCE.' PRESENTLY, WE ARE CONCERNED WITH THE WORK' AS REFERRED TO IN CL(B) OF EXPLN. III BELOW S.194C(2)OF THE ACT. UTV ENTERTAINMENT TELEVISION LIMITED 6 | P A G E 14. IN TERMS OF THE SAID EXPLANATION. IT IS PROVIDE D THAT EXPRESSION 'WORK' SHALL INCLUDE INTER ALIA BROADCASTING AND TELECASTI NG INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING AND TELECASTING. B Y WAY OF SUCH EXPLANATION, IT IS EVIDENT THAT WHERE THE PAYMENT IS FOR A WORK INVOLVING BROADCASTING AND TELECASTING. THE SAME SHALL BE SUBJECT TO DEDUCTION OF. TAX AT SOURCE IN TEMS OF SECTION 194 OF THE ACT. THE ASSESSEE IS A CABLE NE TWORK OPERATOR THROUGH WHICH IT PROVIDES TELECASTING OF PROGRAMMES TO THE ULTIMATE CONSUMERS/SUBSCRIBERS. THE ASSESSEE IN TURN ENTERS INTO A CONTRACT WITH THE LI CENSOR OF VARIOUS TV CHANNELS. ON THE PAYMENT SO MADE, S. 194C OF THE ACT' IS ATTR ACTED. THIS IS FOR THE REASON THAT THE LICENSOR. IS A PERSON WHO IS PERFORMING TH E WORK WHICH IS COVERED WITHIN THE MEANING OF C1. (B) OF EXPLN. III TO S. 194C(2) OF THE ACT. 15. IT IS ALSO RELEVANT TO MENTION HERE THAT IN THE AGREEMENT BETWEEN THE ASSESSEE AND THE LICENSOR, THE LICENSOR IS REFERRED TO AS 'C OMPANY ENGAGED IN THE BUSINESS OF DISTRIBUTION OF SATELLITE BASED TELEVISION CHANN EL(S) SERVICES INCLUDING THE SERVICE AND HAS EXCLUSIVE RIGHTS TO MARKET AND DIST RIBUTE THE SERVICES IN INDIA TO VARIOUS CUSTOMERS AND USERS OF THE SERVICE'. FURTHE R, THE AGREEMENT REFERS TO THE ASSESSEE SUBSCRIBER AS A PARTY, WHICH IS DESIROUS T O SUBSCRIBE FOR AND RECEIVE THE TELECAST SIGNALS OF THE SERVICE FROM THE COMPANY IN ORDER TO FURTHER DISTRIBUTE THE SAME TO THE CUSTOMERS). 16. FROM THE RECITAL OF THE AGREEMENT 'ITSELF, IT I S CLEAR THAT THE SERVICE THAT THE ASSESSEE SUBSCRIBER IS AVAILING IS THE RECEIPT OF ' TELECASTING SIGNALS' FROM THE LICENSOR OR THE COMPANY. THE EXPRESSION 'SERVICE' H AS ALSO BEEN REFERRED TO MEAN THE TV CHANNEL WHICH IS DEALT WITH BY THE LICENSOR OR THE COMPANY. THEREFORE, WHAT THE ASSESSEE HAS TRANSACTED FOR WITH THE LICEN SOR OR COMPANY CERTAINLY INCLUDES WITHIN ITS AMBIT BROADCASTING AND TELECAST ING FACILITY. THE ESSENCE OF THE CONTRACT IS TO OBTAIN BROADCASTING AND TELECASTING OF TV CHANNELS AND THEREAFTER ITS DISTRIBUTION AMONGST ULTIMATE CUSTOMERS THROUGH THE CABLE NETWORK OF THE ASSESSEE. 17. ANOTHER PLEA OF THE ASSESSEE/SUBSCRIBER WAS THA T THE LICENSOR OR THE PERSON TO WHOM THE ASSESSEE IS MAKING PAYMENT BY ITSELF DOES NOT DO THE WORK OF BROADCASTING' AND TELECASTING AND IS THEREFORE OUTS IDE THE PURVIEW OF S. 194C OF THE ACT. THIS ARGUMENT DESERVES TO BE NEGATED AT TH E THRESHOLD. AS WE HAVE POINTED OUT EARLIER WHAT THE ASSESSEE SUBSCRIBER IS LOOKING FOR IS TO OBTAIN THE TELECAST SIGNALS FROM THE LICENSOR, WHICH IS ENOUG H. TO DEDUCE THAT THE IMPUGNED CONTRACT INVOLVES BROADCASTING AND TELECASTING OF T V SIGNALS . MOREOVER, THE LICENSOR OR THE COMPANYV, AS IS EVIDENT FROM THE SP ECIMEN AGREEMENT ON RECORD, IN THE BUSINESS OF DISTRIBUTION OF SATELLITE BASED TV CHANNELS AND HAS EXCLUSIVE RIGHTS TO MARKET AND DISTRIBUTE SAID SERVICES IN IN DIA, THE SERVICE THAT IS REFERRED TO IN THEAGREEMENT IS THE BROADCASTING AND TELECASL ING OF TV SIGNALS. 18. FOR THE REASONS RECORDED ABOVE. WE HAVE NO HESI TATION IN CONCLUDING THAT THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE ASSESSEE W AS REQUIRED TO DEDUCT TAX AT UTV ENTERTAINMENT TELEVISION LIMITED 7 | P A G E SOURCE IN TERMS OF S. 194C OF THE ACT ON PAYMENTS M ADE TO THE LICENSOR FOR OBTAINING TV SIGNALS. CABLE TV NETWORK OWNED BY THE ASSESSEE . 7. THUS AFTER EXAMINATION OF THE EXPLANATION III TO THE THEN SECTION 194C, THE HON'BLE HIGH COURT HELD THAT THE PAYMENT FOR OB TAINING THE TELECAST LICENSES FROM THE LICENSOR FALLS UNDER THE PROVISIO NS OF SECTION 194C. WE FIND THAT THE WORK OF BROADCASTING/TELECASTING INCLUDING PRODUCTION OF PROGRAMME OR SUCH BROADCASTING OR TELECASTING FALLS UNDER THE DEFINITION OF WORK AS PROVIDED UNDER CLAUSE (IV) OF THE EXPLANATION TO SE CTION 194C WHICH READS AS UNDER:- EXPLANATION - FOR THE PURPOSE OF THIS SECTION - ********************************* ********************************* (IV) WORK SHALL INCLUDE- (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTION O F PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING (C) CARRIAGE OF GOODS OR PASSENGERS BY ANY MODE OF TRAN SPORT OTHER THAN BY RAILWAYS; (D) CATERING; (E) MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO T HE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCH ASED FROM SUCH CUSTOMER, BUT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A P RODUCT ACCORDING TO THE REQUIREMENT OF SPECIFICATION OF A CUSTOMER BY U SING MATERIAL PURCHASED FROM A PERSON, OTHER THAN SUCH CUSTOMER.] 8. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. PRASAR BHARATI (BROADCASTING CORPORATION OF INDIA) (SUPRA), HAS OBSERVED IN PARA 11 AS UNDER:- WE ARE UNABLE TO AGREE WITH THIS SUBMISSION. WE OB SERVE THAT EXPLANATION III, WHICH WAS INTRODUCED SIMULTANEOUSLY WITH SECTION 19 4J, IS VERY SPECIFIC IN ITS APPLICATION TO NOT ONLY BROADCASTING AND TELECASTIN G BUT ALSO INCLUDE 'PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING AND TELECASTING'. IF, ON THE SAME DATE, TWO PROVISIONS ARE INTRODUCED IN THE ACT , ONE SPECIFIC TO THE ACTIVITY SOUGHT TO BE TAXED AND THE OTHER IN MORE GENERAL TE RMS, RESORT MUST BE HAD TO UTV ENTERTAINMENT TELEVISION LIMITED 8 | P A G E THE SPECIFIC PROVISION WHICH MANIFESTS THE INTENTIO N OF THE LEGISLATURE. IT IS NOT, THEREFORE, POSSIBLE TO ACCEPT THE CONTENTION OF THE REVENUE THAT PROGRAMMES PRODUCED FOR TELEVISION, INCLUDING 'COMMISSIONED PR OGRAMMES', WILL FALL OUTSIDE THE REALM OF SECTION 194C, EXPLANATION III OF THE A CT. WE FIND NO INFIRMITY IN THE VIEW TAKEN BY THE INCOME-TAX APPELLATE TRIBUNAL WHI CH WE HEREBY AFFIRM. 9. THE HONBLE DELHI HIGH COURT HAS MADE IT CLEAR TH AT WHEN TWO PROVISIONS ARE SIMULTANEOUSLY INTRODUCED IN THE ACT., ONE IS SP ECIFIC AND ANOTHER IS MORE GENERAL IN TERMS THEN THE RESORT MUST BE TO THE SPE CIFIC PROVISION. THEREFORE, WHEN THE WORK OF BROADCASTING AND TELECASTING OF THE PROGRAMMES SPECIFICALLY FALLS UNDER THE AMBIT OF PROVISIONS OF SECTION 194C, THEN IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT (SUPRA), THE PROVISIONS OF SECTION 194J CANNOT BE APPLIED ON SUCH PAYMENTS. THE CBDT CIRCULAR NO. 720 DATED 30.08.1995, ALSO SUPPORTS THIS VIEW AS IT WAS CLARIFIED IN THE SAID CI RCULAR AS UNDER:- 1261. PAYMENT OF ANY SUM SHALL BE LIABLE FOR DEDUCTI ON OF TAX ONLY UNDER ONE SECTION . IT HAS BEEN BROUGHT TO THE NOTICE OF THE BOARD THAT IN SOME CASES PERSONS RESPONSIBLE FOR DEDUCTING TAX AT SOURCE ARE DEDUCTI NG SUCH TAX BY APPLYING MORE THAN ONE PROVISION FOR THE SAME PAYMENT. IN PA RTICULAR, IT HAS BEEN POINTED OUT THAT THE SUMS PAID FOR CARRYING OUT WORK OF ADVERTISING ARE BEING SUBJECTED TO DEDUCTION OF TAX AT SOURCE UNDER SECTION 194C AS PAYMENT FOR WORK CONTRACT AS ALSO UNDER SECTION 1941 AS PAYMENTS OF FEES FOR PROFESSIONAL SERVICES. 2. IT IS HEREBY CLARIFIED THAT EACH SECTION, REGARD ING TDS UNDER CHAPTER XVII, DEALS WITH A PARTICULAR KIND OF PAYMENT TO THE EXCLUSION OF ALL OTHER SECTIONS IS THIS CHAPTER. THUS, PAYMENT OF ANY SUM SHALL BE LIABLE FOR DEDUCTION OF TAX ONLY UNDER ONE SECTION. THEREFORE, A PAYMENT IS LIABLE FOR TAX DEDUCTION ONLY UNDER ONE SECTION. 10. IN VIEW OF THE ABOVE DISCUSSION AS WELL AS THE DECISIONS OF HONBLE PUNJAB & HARYANA HIGH COURT AND HONBLE DELHI HIGH C OURT, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF CIT(A) Q UA THIS ISSUE. UTV ENTERTAINMENT TELEVISION LIMITED 9 | P A G E 11. GROUND NO. 2 IS REGARDING THE PAYMENT FOR SUBTIT LING AND EDITING CHARGES, TREATED BY THE ASSESSING OFFICER AS FEE FOR TECHNICA L SERVICE AND THEREBY APPLIED PROVISIONS OF SECTION 194J. 12. WE HAVE HEARD THE LD. DR AS WELL AS LD. AUTHORIZED REPRESENTATIVE AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE CIT(A) WHILE DECIDING THIS ISSUE HAS RELIED UPON THE DECISION OF THIS TRIBUNAL I N THE CASE OF ACIT VS. MANISH DUTT (12 TAXMANN.COM 50) , WHEREIN, THE TRIBUNAL HELD IN PARA 8 TO 12 AS UNDER:- 8. WE HAVE ALREADY SEEN THAT THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF DOING DUBBING WORK. THE ASSESSEE WAS HAVING HIS OWN STUDI O COMPRISING OF VARIOUS DUBBING EQUIPMENTS AND PROFESSIONAL ARTIST TO CARRY ON THE WORK OF DUBBING. WHENEVER THE ASSESSEE'S OWN STUDIO COULD NOT BE USED THE ASSESSEE USED TO GIVE THE JOB OF CARRYING OUT DUBBING WORK TO OTHER DUBBI NG STUDIOS. IN RESPECT OF ONE SUCH WORK ENTRUSTED BY THE ASSESSEE TO ANOTHER STUD IO BY NAME NINETY DEGREES THE ASSESSEE HAD MADE A PAYMENT OF RS. 1,60,000. A CCORDING TO THE ASSESSEE, THE PAYMENT WAS MADE TO A SUB-CONTRACTOR FOR EXECUTION OF A CONTRACT AND, THEREFORE, IN TERMS OF SECTION 194C THE ASSESSEE DE DUCTED TAX AT SOURCE AT 2 PER CENT. THE ASSESSING OFFICER HOWEVER, WAS OF THE VIE W THAT THE PAYMENT IN QUESTION WAS RENT PAID BY THE ASSESSEE AND, THEREFORE, IN TE RMS OF SECTION 194-1 OF THE ACT THE ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE A T 20 PER CENT. SINCE THE ASSESSEE DID NOT DEDUCT TAX AT SOURCE AT THE PROPER RATE THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION OF A SUM OF RS. 1,60,000 UNDER THE HEAD STUDIO HIRE CHARGES BY INVOKING THE PROVIS IONS OF SECTION 40(A)(IA) OF THE ACT. 9. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT T HE CONTRACT DETAILS WERE NOT CALLED FOR DURING THE ASSESSMENT AND THAT THE WORK DONE BY 90 DEGREE WAS FOR WORK AS PROVIDED FOR UNDER SECTION 194C OF THE ACT. THE ASSESSEE POINTED OUT THAT STUDIO IS BOOKED AND DUBBING WORK IS UNDERTAKEN USI NG STUDIO EQUIPMENT, STAFF ETC. THE WORD STUDIO HIRE IS A TERM GENERALLY USED BY INDUSTRY TO DENOTE THE VARIOUS SERVICES RENDERED BY THE DUBBING STUDIO. BU T THE REAL NATURE OF WORK IS A CONTRACT FOR CARRYING OUT WORK. THE ASSESSEE RELIED ON EXPLANATION TO SECTION 194C(7) WHERE AT (IV) 'WORK' WOULD INCLUDE BROADCAS TING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCA STING OR TELECASTING. THE ASSESSEE FURNISHED DETAILS OF THE WORK CARRIED OUT BY IT FROM STUDIO 90 DEGREE WHICH SHOWED THAT IN RESPECT OF TV SERIAL KARMA THE ASSESSEE UNDERTOOK DUBBING WORK. T HE AGREEMENT BETWEEN THE ASSESSEE AND TURNER ENTERTAINMENT A TELECASTING COM PANY WAS ALSO FILED. UTV ENTERTAINMENT TELEVISION LIMITED 10 | P A G E 10. ON CONSIDERATION OF THE ABOVE SUBMISSIONS, THE CIT(A) HELD AS FOLLOWS: '2.3.2 FACTS AND MATERIALS ON RECORD ARE CONSIDERED . IT IS SEEN THAT ASSESSING OFFICER HAD ONLY ASKED APPELLANT TO EXPLAIN THE PAY MENT BUT HAD NOT SPECIFIED ANY EVIDENCE TO BE FURNISHED. THE SUBMISSIONS MADE DURING THE APPEAL INDICATE THAT THE STUDIO WAS HIRED FOR UTILIZING THE DUBBING FACILITIES WHICH INCLUDED SERVICE THROUGH THE STUDIO STAFF. CONDITION OF SECT ION 194C(7) EXPLANATION (IV) ARE MET ALSO. AS SUCH THE PAYMENT MADE WAS COVERABL E UNDER SECTION 194C UNDER WHICH TAX WAS DEDUCED. ON FACTS, THEREFORE, THE DIS ALLOWANCE MADE UNDER SECTION 40(A)(IA) IS DELETED.' 11. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVENU E HAS RAISED GROUND NO.2 BEFORE THE TRIBUNAL. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS. AS CAN BE SEEN FROM THE ORDER OF THE CIT(A), THE ASSESSEE HAD UTILIZED THE SERVICES OF D UBBING STUDIO NINETY DEGREES BY USING THEIR EQUIPMENTS AS WELL AS THE ARTISTS WHO W ERE WORKING FOR STUDIO NINETY DEGREES. THE ASSESSEE HAD THUS CARRIED OUT THE WORK OF DUBBING BY ENGAGING SERVICES AND THE SAME WAS OF THE NATURE OF GETTING WORK DONE THROUGH A SUB- CONTRACTOR. THE FINDINGS OF THE CIT(A) IN THIS REGA RD ARE NOT IN CHALLENGE BEFORE US. IN SUCH CIRCUMSTANCES WE ARE OF THE VIEW THAT T HE PROVISIONS OF SECTION 194C WERE APPLICABLE AND THE ASSESSEE HAS RIGHTLY DEDUCT ED TAX AT SOURCE AT 2 PER CENT TREATING THE PAYMENT AS A PAYMENT TO SUB-CONTRACTOR FOR CARRYING OUT A WORK. WE DO NOT FIND ANY GROUND TO INTERFERE WITH THE ORDE R OF CIT(A). CONSEQUENTLY GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 13. NO CONTRARY DECISION HAS BEEN REFERRED OR PRODUCE D BEFORE US. THEREFORE, FOLLOWING THE DECISION OF THIS TRIBUNAL, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF CIT(A) QUA THIS ISSUE. 14. IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED COMMON GROUNDS WHICH READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) - 14, MUMBAI, ERRED IN NOT ADJUDICATING ON THE FOLLOWING CONTENTIONS RAISED BY THE APPELLANT: (I) THE LEARNED TDS OFFICER ERRED IN HOLDING THAT T HE APPELLANT IS LIABLE TO PAY PRINCIPAL AMOUNT OF TAX UNDER SECTION 201 (1) OF THE INCOME TAX ACT, 1961 WITHOUT VERIFYING THE PAYMENT O F TAX ON SUCH UTV ENTERTAINMENT TELEVISION LIMITED 11 | P A G E INCOME BY THE DEDUCTEE CABLE OPERATORS IN THEIR RES PECTIVE RETURNS/ ASSESSMENTS. THE APPELLANT PRAYS THAT THE LEARNED TDS OFFICER BE DIRECTED TO VERIFY THE PAYMENT OF TAX BY CABLE OPERATORS ON THE CHANNE L PLACEMENT CHARGES RECEIVED FROM THE APPELLANT AND BASED THERE ON HOLD THAT THE APPELLANT IS NOT LIABLE TO PAY THE PRINCIPAL AMOUNT OF TAX. (II) WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED TD S OFFICER ERRED IN LEVYING INTEREST UNDER SECTION 201 (1A) OF THE INCO ME TAX ACT, 1961 FROM THE DATE THE TAX WAS DEDUCTIBLE TILL THE DATE O F ORDER UNDER SECTION 201(1) / 201(1A) OF THE ACT. 15. SINCE WE HAVE DISMISSED THE APPEAL OF THE REVENUE AND, THEREFORE, IN VIEW OF OUR FINDING IN THE REVENUES APPEAL, THE C ROSS OBJECTIONS FILED BY THE ASSESSEE BECOMES ACADEMIC IN NATURE AND, THEREFORE, DISMISSED AS INFRUCTOUS. 16. IN THE RESULT APPEALS OF THE REVENUE AS WELL AS THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DAY OF OCTOBER 2014 SD/- SD/- ( RAJENDRA ) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK YS[KK YS[KK YS[KK LNL; LNL; LNL; LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 29-10 -2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI