DCIT (TDS) 2(3), MUMBAI V. YASH RAJ FILMS P.LTD, MUMBAI

ITA 2720/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2623 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IMPUGNED
• Keywords: Tax effect
• Section: 133A; 194C; 28

Judgement Text

, , SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, SMC MUMBAI , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NOS.2720 & 2721/MUM/2015 ASSESSMENT YEARS: 2009-10 & 2010-11 DY. COMMISSIONER OF INCOME TAX ACT (TDS), 2(3) ROOM NO. 1013, 10 TH FLOOR SMT. K.G. MITTAL AYURVEDIC HOSPITAL BLDG., CHARNI ROAD MUMBAI 400002 / VS. M/S. YASH RAJ FILMS P. LTD. 5, SHAH INDUSTRIAL ESTATE VEERA DESAI ROAD ANDHERI (W) MUMBAI 4000053 ( / REVENUE) ( /ASSESSEE) PAN. NO. AAACY1176E ! ' #$ / DATE OF HEARING : 13/07/2016 ' #$ / DATE OF ORDER: 13/07/2016 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEALS ARE BY THE REVENUE, AGGRIEVED BY THE IMPUGNED ORDERS BOTH DATED 23/02/2015 FOR ASSESSMEN T YEAR / REVENUE BY SHRI RAJESH OJHA, JCIT / ASSESSEE BY SHRI VISHAL SHAH ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 2 2009-10 AND 2010-11 OF LD. COMMISSIONER OF INCOME T AX, MUMBAI. THE REVENUE HAS ELABORATED THE GROUNDS BUT THE SAME PERTAINS TO CONSIDERING THE PAYMENT MADE FOR P ROCESSING CHARGES TO ADLAB FOR SUPPLYING COPIES OF FINAL NEGA TIVE AS PER THE PROVISIONS OF SECTION 194C OF THE INCOME TAX AC T, 1961 (HEREINAFTER THE ACT) AS AGAINST THE PROVISIONS OF SECTION 194J OF THE ACT WITHOUT APPRECIATING THAT THE PRINT PROC ESSING CHARGES INCLUDES PROFESSIONAL WORK SUCH AS PRINTING , PROCESSING, PROCESSING OF COLOUR NEGATIVE, ANALYSER OF RUSH PRINT, FOG TEST ETC. WHICH ARE IN THE NATURE OF PRO FESSIONAL SERVICES ARE SPECIALIZED IN NATURE WHICH REQUIRES P ROFESSIONAL TECHNICAL KNOWHOW AND THUS ERRED IN NOT CONFIRMING THE ORDER PASSED UNDER SECTION 201(1)/201(1A) OF THE ACT IN R ESPECT OF SHORT DEDUCTION OF TAX AT LOWER RATE UNDER SECTION 194C INSTEAD OF SECTION 194J OF THE ACT. 2. DURING HEARING THE LEARNED D.R., SHRI RAJESH OJH A ADVANCED ARGUMENTS WHICH ARE IDENTICAL TO THE GROUN D RAISED. ON THE OTHER HAND, SHRI VISHAL SHAH, LEARNED COUNSE L FOR THE ASSESSEE, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIE F ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FILM PRODUCT ION/ DISTRIBUTION. A SURVEY ACTION UNDER SECTION 133A WA S CARRIED OUT ON 28.02.2006, AT THE PREMISES OF THE ASSESSEE TO ASCERTAIN WHETHER THE ASSESSEE IS COMPLYING WITH THE PROVISIO NS OF CHAPTER XVII-B OF THE ACT. THE STAND OF THE ASSESSI NG OFFICER IS THAT THE ASSESSEE DID NOT DEDUCT TAX AS PER THE PRO VISIONS OF ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 3 SECTION 194J OF THE ACT WITH RESPECT TO PAYMENTS MA DE TO M/S. ADLAB LTD. WHICH HAD MADE COPIES OF FILMS/PRINTS OF THE FILMS PRODUCED BY THE ASSESSEE. THE LEARNED ASSESSING OFF ICER ISSUED SHOW CAUSE NOTICE UNDER SECTION 201(1)/201(1A) OF T HE ACT. THE STAND OF THE ASSESSEE WAS THAT SUCH PAYMENTS ARE CO VERED UNDER SECTION 194C AND NOT UNDER SECTION 194J OF TH E ACT. THE EXPLANATION OF THE ASSESSEE WAS REJECTED BY THE ASS ESSING OFFICER AND HELD THE ASSESSEE IN DEFAULT FOR SHORT DEDUCTION OF TDS OF RS.39,49,629/- (A.Y. 2009-10) AND RS.28,11,3 45/- (A.Y. 2010-11). 4. THE ASSESSEE FELT AGGRIEVED AND PREFERRED APPEAL BEFORE THE LEARNED CIT(A) WHEREIN IT WAS HELD THAT THE ASS ESSEE HAS RIGHTLY DEDUCTED TDS ON THE PAYMENTS MADE TO ADLABS , FOR SUPPLYING COPIES OF FINAL NEGATIVE, AS REQUIRED UND ER SECTION 194C OF THE ACT. THE REVENUE IS IN APPEAL BEFORE TH E TRIBUNAL. 4.1 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER , LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DR AWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSER TIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSI TION AND ANALYZED, BEFORE ADVERTING FURTHER I REPRODUCING HE REUNDER THE RELEVANT PROVISIONS OF SECTION 194C AND 194J OF THE ACT FOR READY REFERENCE AND ANALYSIS. 194C. (1) ANY PERSON RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE CONTRACTOR) FOR CARRYING OUT ANY WORK (INCLUDIN G SUPPLY OF LABOUR FOR CARRYING OUT ANY WORK) IN PURS UANCE OF A CONTRACT BETWEEN THE CONTRACTOR AND A SPECIFIE D PERSON SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF THE CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 4 OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO (I) ONE PER CENT WHERE THE PAYMENT IS BEING MADE OR CREDIT IS BEING GIVEN TO AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY; (II) TWO PER CENT WHERE THE PAYMENT IS BEING MADE OR CREDIT IS BEING GIVEN TO A PERSON OTHER THAN AN IND IVIDUAL OR A HINDU UNDIVIDED FAMILY, OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THERE IN. (2) WHERE ANY SUM REFERRED TO IN SUB-SECTION (1) IS CREDITED TO ANY ACCOUNT, WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY ANY OTHER NAME, IN THE BOOKS OF ACCO UNT OF THE PERSON LIABLE TO PAY SUCH INCOME, SUCH CREDI TING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE AND THE PROVISIONS OF THIS SEC TION SHALL APPLY ACCORDINGLY. (3) WHERE ANY SUM IS PAID OR CREDITED FOR CARRYING OUT ANY WORK MENTIONED IN SUB-CLAUSE (E) OF CLAUSE (IV) OF THE EXPLANATION, TAX SHALL BE DEDUCTED AT SOURCE (I) ON THE INVOICE VALUE EXCLUDING THE VALUE OF M ATERIAL, IF SUCH VALUE IS MENTIONED SEPARATELY IN THE INVOIC E; OR (II) ON THE WHOLE OF THE INVOICE VALUE, IF THE VAL UE OF MATERIAL IS NOT MENTIONED SEPARATELY IN THE INVOICE . (4) NO INDIVIDUAL OR HINDU UNDIVIDED FAMILY SHALL B E LIABLE TO DEDUCT INCOME-TAX ON THE SUM CREDITED OR PAID TO THE ACCOUNT OF THE CONTRACTOR WHERE SUCH SUM IS CREDITED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUAL OR ANY MEMBER OF HINDU UNDIVIDED FAMILY. (5) NO DEDUCTION SHALL BE MADE FROM THE AMOUNT OF A NY SUM CREDITED OR PAID OR LIKELY TO BE CREDITED OR PA ID TO THE ACCOUNT OF, OR TO, THE CONTRACTOR, IF SUCH SUM DOES NOT EXCEED THIRTY THOUSAND RUPEES : PROVIDED THAT WHERE THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FINANCIAL YEAR EXCEEDS [ONE LAKH] R UPEES, THE PERSON RESPONSIBLE FOR PAYING SUCH SUMS REFERRE D TO ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 5 IN SUB-SECTION (1) SHALL BE LIABLE TO DEDUCT INCOME -TAX UNDER THIS SECTION. (6) NO DEDUCTION SHALL BE MADE FROM ANY SUM CREDITE D OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE PR EVIOUS YEAR TO THE ACCOUNT OF A CONTRACTOR DURING THE COUR SE OF BUSINESS OF PLYING, HIRING OR LEASING GOODS CARRIAGES, 6 [WHERE SUCH CONTRACTOR OWNS TEN OR LESS GOODS CARRIAGES AT ANY TIME DURING THE PREVIOUS YEA R AND FURNISHES A DECLARATION TO THAT EFFECT ALONG WI TH] HIS PERMANENT ACCOUNT NUMBER, TO THE PERSON PAYING OR CREDITING SUCH SUM. (7) THE PERSON RESPONSIBLE FOR PAYING OR CREDITING ANY SUM TO THE PERSON REFERRED TO IN SUB-SECTION (6) SH ALL FURNISH, TO THE PRESCRIBED INCOME-TAX AUTHORITY OR THE PERSON AUTHORISED BY IT, SUCH PARTICULARS, IN SUCH FORM AND WITHIN SUCH TIME AS MAY BE PRESCRIBED. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (I) 'SPECIFIED PERSON' SHALL MEAN, (A) THE CENTRAL GOVERNMENT OR ANY STATE GOVERNMENT; OR (B) ANY LOCAL AUTHORITY; OR (C) ANY CORPORATION ESTABLISHED BY OR UNDER A CENTR AL, STATE OR PROVINCIAL ACT; OR (D) ANY COMPANY; OR (E) ANY CO-OPERATIVE SOCIETY; OR (F) ANY AUTHORITY, CONSTITUTED IN INDIA BY OR UNDER ANY LAW, ENGAGED EITHER FOR THE PURPOSE OF DEALING WITH AND SATISFYING THE NEED FOR HOUSING ACCOMMODATION OR FO R THE PURPOSE OF PLANNING, DEVELOPMENT OR IMPROVEMENT OF CITIES, TOWNS AND VILLAGES, OR FOR BOTH; OR (G) ANY SOCIETY REGISTERED UNDER THE SOCIETIES REGISTRATION ACT, 1860 (21 OF 1860) OR UNDER ANY LA W CORRESPONDING TO THAT ACT IN FORCE IN ANY PART OF I NDIA; OR (H) ANY TRUST; OR (I) ANY UNIVERSITY ESTABLISHED OR INCORPORATED BY O R UNDER A CENTRAL, STATE OR PROVINCIAL ACT AND AN INSTITUTI ON DECLARED TO BE A UNIVERSITY UNDER SECTION 3 OF THE UNIVERSITY GRANTS COMMISSION ACT, 1956 (3 OF 1956); OR ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 6 (J) ANY GOVERNMENT OF A FOREIGN STATE OR A FOREI GN ENTERPRISE OR ANY ASSOCIATION OR BODY ESTABLISHED OUTSIDE INDIA; OR (K) ANY FIRM; OR (L) ANY PERSON, BEING AN INDIVIDUAL OR A HINDU UNDI VIDED FAMILY OR AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS, IF SUCH PERSON, (A) DOES NOT FALL UNDER ANY OF THE PRECEDING SUB-CL AUSES; AND (B) IS LIABLE TO AUDIT OF ACCOUNTS UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH S UCH SUM IS CREDITED OR PAID TO THE ACCOUNT OF THE CONTR ACTOR; (II) 'GOODS CARRIAGE' SHALL HAVE THE MEANING ASSIGN ED TO IT IN THE EXPLANATION TO SUB-SECTION (7) OF SECTION 44AE ; (III) 'CONTRACT' SHALL INCLUDE SUB-CONTRACT; (IV) 'WORK' SHALL INCLUDE (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTI ON OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; (C) CARRIAGE OF GOODS OR PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS; (D) CATERING; (E) MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY U SING MATERIAL PURCHASED FROM SUCH CUSTOMER, BUT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATI ON OF A CUSTOMER BY USING MATERIAL PURCHASED FROM A PERSON, OTHER THAN SUCH CUSTOMER. SECTION 194J OF THE ACT READS AS UNDER: - 194J. (1) ANY PERSON, NOT BEING AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING TO A RESIDENT ANY SUM BY WAY OF (A) FEES FOR PROFESSIONAL SERVICES, OR (B) FEES FOR TECHNICAL SERVICES, OR ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 7 (BA) ANY REMUNERATION OR FEES OR COMMISSION BY WHAT EVER NAME CALLED, OTHER THAN THOSE ON WHICH TAX IS DEDUC TIBLE UNDER SECTION 192 , TO A DIRECTOR OF A COMPANY, OR (C) ROYALTY, OR (D) ANY SUM REFERRED TO IN CLAUSE (VA) OF SECTION 28 , SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACC OUNT OF THE PAYEE OR AT THE TIME OF PAYMENT THEREOF IN CASH OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO TEN PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN : PROVIDED THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION (A) FROM ANY SUMS AS AFORESAID CREDITED OR PAID BEF ORE THE 1ST DAY OF JULY, 1995; OR (B) WHERE THE AMOUNT OF SUCH SUM OR, AS THE CASE MA Y BE, THE AGGREGATE OF THE AMOUNTS OF SUCH SUMS CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID DURING THE FI NANCIAL YEAR BY THE AFORESAID PERSON TO THE ACCOUNT OF, OR TO, THE PAYEE, DOES NOT EXCEED (I) THIRTY THOUSAND RUPEES, IN THE CASE OF FEES FOR PROFESSIONAL SERVICES REFERRED TO IN CLAUSE (A), OR (II) THIRTY THOUSAND RUPEES, IN THE CASE OF FEES FO R TECHNICAL SERVICES REFERRED TO IN CLAUSE (B), OR (III) THIRTY THOUSAND RUPEES, IN THE CASE OF ROYALT Y REFERRED TO IN CLAUSE (C), OR (IV) THIRTY THOUSAND RUPEES, IN THE CASE OF SUM REF ERRED TO IN CLAUSE (D) : PROVIDED FURTHER THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAU SE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH S UCH SUM BY WAY OF FEES FOR PROFESSIONAL SERVICES OR TEC HNICAL SERVICES IS CREDITED OR PAID, SHALL BE LIABLE TO DE DUCT INCOME-TAX UNDER THIS SECTION : ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 8 PROVIDED ALSO THAT NO INDIVIDUAL OR A HINDU UNDIVIDED FAMILY REFERRED TO IN THE SECOND PROVISO SHALL BE L IABLE TO DEDUCT INCOME-TAX ON THE SUM BY WAY OF FEES FOR PROFESSIONAL SERVICES IN CASE SUCH SUM IS CREDITED OR PAID EXCLUSIVELY FOR PERSONAL PURPOSES OF SUCH INDIVIDUA L OR ANY MEMBER OF HINDU UNDIVIDED FAMILY. (2) [***] (3) [***] EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'PROFESSIONAL SERVICES' MEANS SERVICES RENDERED BY A PERSON IN THE COURSE OF CARRYING ON LEGAL, MEDICAL, ENGINEERING OR ARCHITECTURAL PROFESSION OR THE PROF ESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR ADVERTISING OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOARD FOR THE PURPOSES OF SECTION 44AA OR OF THIS SECTION; (B) 'FEES FOR TECHNICAL SERVICES' SHALL HAVE THE SA ME MEANING AS IN EXPLANATION 2 TO CLAUSE (VII) OF SUB- SECTION (1) OF SECTION 9 ; (BA) 'ROYALTY' SHALL HAVE THE SAME MEANING AS IN EXPLANATION 2 TO CLAUSE (VI) OF SUB-SECTION (1) OF SECTION 9 ; (C) WHERE ANY SUM REFERRED TO IN SUB-SECTION (1) IS CREDITED TO ANY ACCOUNT, WHETHER CALLED 'SUSPENSE ACCOUNT' O R BY ANY OTHER NAME, IN THE BOOKS OF ACCOUNT OF THE PERS ON LIABLE TO PAY SUCH SUM, SUCH CREDITING SHALL BE DEE MED TO BE CREDIT OF SUCH SUM TO THE ACCOUNT OF THE PAYEE A ND THE PROVISIONS OF THIS SECTION SHALL APPLY ACCORDINGLY. IF THE AFORESAID PROVISIONS OF THE ACT ARE ANALYSED WITH FACTS OF THE PRESENT APPEALS THE WHOLE CASE OF THE REVENUE I S THAT FOR OBTAINING COPIES OF THE FILM PRINTS, THE TDS IN RES PECT OF PAYMENTS MADE BY THE ASSESSEE TO M/S. ADLABS SHOULD HAVE BEEN AS PER THE PROVISIONS OF SECTION 194J OF THE A CT. THERE IS NO DISPUTE TO THE FACT THAT THE TDS WAS DEDUCTED BY THE ASSESSEE ON THE NEGATIVE PROCESSING CHARGES AS THE PROCESSING ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 9 INVOLVES SPECIFIC TASK OF EDITING WHICH ENHANCES TH E QUALITY OF FILM. THE ASSESSEE HAD BEEN CONSISTENTLY DEDUCTING TDS ON PAYMENTS FOR TAKING PRINTS OF NEGATIVE AND EARLIER THE CLAIMED DEDUCTION WAS ACCEPTED BY THE DEPARTMENT IN SUBSEQU ENT YEARS ALSO. THE LEARNED CIT(A) HAS ALSO CONSIDERED THE LETTERS DATED 30.11.2009 AND 17.01.2011 (PARA 15 OF THE IMP UGNED ORDER) AS PER WHICH THE PAYMENTS MADE TO ADLAB FILM S LTD. WAS COVERED UNDER SECTION 194C OF THE ACT AND IN THE CE RTIFICATE NAME OF THE ASSESSEE IS CLEARLY MENTIONED. THE DECI SION IN DISTRIBUTORS PVT. LTD. (ITAT KOLKATA), ASSOCIATED C EMENTS LTD. VS. CIT, JALAN DISTRIBUTORS PVT. LTD. VS. ITO (ORDE R DATED 13.04.2011) CLEARLY COMES TO RESCUE OF THE ASSESSEE WHEREIN IT WAS HELD THAT PAYMENTS FOR MAKING PRINTS OF FILM AR E COVERED UNDER SECTION 194C OF THE ACT. THE STAND OF THE REV ENUE IS THAT PRINT PROCESSING CHARGES INCLUDES THE PROFESSIONAL WORK SUCH AS PRINT PROCESSING, PRINT PROCESSING TRAILER, PROC ESSING OF COLOUR NEGATIVE, ANALYSER OF RUSH PRINT, FOG TEST, ULTRA CLEANING, SOUND PROCESSING, PHOTO GUARD COATING, EDITING TABL E AND SUB- TITLING SERVICES REQUIRES TAX DEDUCTION AT SOURCE U NDER SECTION 194J. WE HAVE PERUSED THE RECORD, FACTUAL FINDING R ECORDED BY THE LEARNED CIT(A) AND FOUND THAT THERE ARE TWO TYP ES OF PROCESSING CHARGES, ONE BEING NEGATIVE PROCESSING A ND OTHER BEING POSITIVE PROCESSING. NEGATIVE PROCESSING REQU IRES PROFESSIONAL SKILL FOR WHICH THE ASSESSEE DEDUCTED TAX AT SOURCE AS REQUIRED UNDER SECTION 194J OF THE ACT. WHEREAS POSITIVE PROCESSING MEANS NUMBER OF COPIES REQUIRED OF PRINT S FROM ONE ORIGINAL WHICH DOES NOT REQUIRE ANY PROFESSIONAL OR TECHNICAL SKILL BUT JUST A MACHINE. IT IS ALSO NOTED THAT THE ASSESSEE ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 10 OPERATED TWO LEDGER ACCOUNTS IN THE TALLY SOFTWARE, ONE FOR NEGATIVE PROCESSING AND OTHER BEING PRINT PROCESSIN G. AS PER SECTION 194J THE CONCERNED COMPANY HAS TO PROVIDE S OME TECHNICAL INPUT, AS STATED BY ASSESSING OFFICER HIM SELF IN THE ASSESSMENT ORDER, THAT PRINT PROCESSING CHARGES INC LUDED PROFESSIONAL WORK SUCH AS PROCESSING OF COLOUR NEGA TIVE, ETC., WHICH IS NOT THE CASE IN SUCH PROCESS. THE SYSTEM I S THAT ONE MASTER PRINT, NUMBER OF PRINTS ARE TAKEN AND SEND T O THE VARIOUS DISTRIBUTORS FOR EXHIBITION. THUS PRINTING OF VARIOUS PRINTS FROM THE MASTER PIECE IS KNOWN AS PRINT PROC ESSING. HOWEVER, AS PER SECTION 194C, SUB-CLAUSE 7(IV)(E) T HE WORK SHALL INCLUDE MANUFACTURING AND SUPPLYING A PRODUCT ACCOR DING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY U SING MATERIAL PURCHASED FROM A PERSON OTHER THAN SUCH CU STOMER. IT IS NOTED THAT WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3), THE LEARNED ASSESSING OFFICER WHILE DEALING WITH IDENTICAL ISSUE FOR ASSESSMENT YEAR 2007-08 HIMSELF MENTIONS THAT TDS NEEDS TO BE DEDUCTED UNDER SECTION 194C. I DENTICAL VIEW WAS TAKEN BY THE LEARNED CIT(A) FOR ASSESSMENT YEAR 2007-08 AND THE ADDITION MADE BY THE ASSESSING OFFI CER UNDER SECTION 40(A)(IA) WAS DELETED SAYING THAT TDS HAS B EEN DEDUCTED AT APPROPRIATE RATE. THE CERTIFICATE ISSUE D UNDER SECTION 197 BY THE DEPARTMENT TO ADLABS ITSELF MENT IONS THAT TDS HAS TO BE DEDUCTED UNDER SECTION 194C AND THE A NNEXURES ALSO MENTIONS THE NAME OF THE PRESENT ASSESSEE. THU S WE FIND NO FORCE IN THE CONCLUSION OF THE ASSESSING OFFICER . 4.2 SO FAR AS THE ALLEGATION OF THE ASSESSING OFFIC ER THAT ALL WORK IS DONE WHEN PROCESSING OF NEGATIVE IS DONE. I T IS NOTED ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 11 THAT THE INITIAL MASTER PIECE WHEREIN SHOOTS TAKE P LACE, IS SENT TO THE APPROVAL OF THE SENSOR BOARD AND THIS MASTER PIECE WAS GOT DONE/PROCESSES FROM KODAK LTD. ON WHICH TDS WAS DEDUCTED @10%. WHEREAS THE Q QUESTION BEFORE US IS POSITIVE PRINT PROCESSING CHARGE WHICH IS A COPYING WORK SO DOES NOT REQUIRE THE SKILL WHICH IS REQUIRED FOR THE MASTER PRINT. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY DOC UMENTARY EVIDENCE TO PROVE THAT THE ASSESSEE HAS UTILIZED TH E SERVICES WHICH ARE REQUIRED FOR MASTER PRINT FROM ADLABS. TH E ASSESSING OFFICER HAS ALSO NOT PROVED THAT THE ASSESSEE UTILI ZED ALL THE FEATURES, AVAILABLE WITH THE ADLABS, WHILE PROCESSI NG POSITIVE PRINT, WHICH ARE REQUIRED FOR NEGATIVE PROCESSING. THE ASSESSEE HAS ALSO NOT UTILIZED THE SERVICES, AS HAS BEEN OBS ERVED BY THE LEARNED ASSESSING OFFICER IN THE ASSESSMENT ORDER F ROM RELIANCE OR THE EXTRA SERVICES FROM ADLABS AND WHER EVER THE TDS WAS TO BE DEDUCTED @10% UNDER SECTION 194J HAS BEEN DEDUCTED AND WHEREVER IT WAS NOT REQUIRED IT HAS BE EN DEDUCTED AS PER SECTION 194C @2%. THIS FACTUM IS FU RTHER VERIFIABLE FROM CERTIFICATE ISSUED UNDER SECTION 19 7 TO ADLABS. THE DEFINITION OF WORK UNDER SECTION 194C HAS BEEN CLEARLY DEFINED WHICH INCLUDES (A) ADVERTISING, (B) BROADCA STING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING, (III) CARRIAGE OF GOOD S OR PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS, (D ) CATERING, (E) MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCHASED FROM SUCH CUSTOMER BUT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO T HE ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 12 REQUIREMENT OR SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCHASED FROM A PERSON OTHER THAN SUCH CUSTOMER. NO CONTRARY DECISION OR FACTS WERE BROUGHT TO OUR NOTI CE BY THE REVENUE. THE CBDT CIRCULAR NO. 619 DATED 04.12.1991 ALSO CLARIFIES THAT THE COMMISSION RETAINED WILL BE SUBJ ECTED TO TDS AS PER THE PROVISIONS OF SECTION 194H OF THE ACT. T HEREFORE, I FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LE ARNED CIT(A). BOTH THE APPEALS OF THE REVENUE ARE THEREFORE DISMI SSED. 5. EVEN ON THE ISSUE OF TAX EFFECT THE LEARNED COUN SEL PRODUCED COPIES OF THE DEMAND NOTICE UNDER SECTION 156 OF THE ACT WHEREIN IT HAS BEEN MENTIONED THAT THERE IS NIL DEMAND FOR BOTH THE ASSESSMENT YEARS. THUS IN VIEW OF LATEST C BDT INSTRUCTION NO.21 OF 2015, DATED 10/12/2015 (F NO.2 79/ MISC./142/2007-IT(PT), APPLICABLE WITH RETROSPECTIV E EFFECT, WHEREIN, THE DEPARTMENT WAS ADVISED/DIRECTED BY TH E BOARD NOT TO FILE APPEAL IN THE CASES WHERE THE TAX EFFEC T DOES NOT EXCEED THE MONETARY LIMIT, BOTH THESE APPEALS OF TH E REVENUE DO NOT SURVIVE. FINALLY THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. D.R. AT THE CONCLUSION OF THE HEARI NG ON 13/07/2016. SD/- (JOGINDER SINGH) ! /JUDICIAL MEMBER ! MUMBAI; & DATED : 13/07/2016 AA? P.S / /. . . ITA NOS.2720 & 2021/MUM/2015 M/S. YASH RAJ FILMS P. LTD. 13 ' #$%&%'# / COPY OF THE ORDER FORWARDED TO : 1. ()*+, / THE APPELLANT (RESPECTIVE ASSESSEE) 2. -.+, / THE RESPONDENT. 3. / / 0 ( ()* ) / THE CIT (TDS), MUMBAI. 4. / / 0 / CIT(A)-52, MUMBAI, 5. 23 - , / ()*# (4 , ! / DR, SMC BENCH, ITAT, MUMBAI 6. 5 6!* / GUARD FILE. / BY ORDER, .2) - //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI