A.C.I.T. (TDS)-1, MUMBAI V. B4U BROADBANK INDIA PVT. LTD, MUMBAI

ITA 5664/MUM/2012

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5413 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 07-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 133A; 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 5664 / MUM/ 201 2 & 5665 / M/ 2012 ( / ASSESSMENT YEAR: 20 1 0 - 11 & 2011 - 12 ) ACIT (TDS) - 1(1), ROOM NO. 804, K.G. MI TTAL HOSPITAL BLDG, CHARNI ROAD, MUMBAI - 2. / VS. M/S. B4U BROADBAND INDIA PVT LTD. 45, MAROL COOPERATIVE INDUSTRIAL ESTATE LTD. ANDHERI KURLA ROAD, ANDHERI (E) MUMBAI - 400009 . ./ ./ PAN/GIR NO. : AABCB 5210 F ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 09 . 0 7 .201 8 / DATE OF PRONOUNCEMENT : 25. 07. 201 8 / O R D E R PER AMARJIT SINGH, J M: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 29 .0 6 .201 2 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 10 - 11 . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN NOT CORRECTLY APPRECIATION THE NATURE OF THE SERVICES RENDERED BY THE CABLE OPERATORS/MSQS FOR WHICH PLACEMENT CHARGES ARE PAID AND HOLDING THAT SUCH CHARGES COME WITHIN THE PURVIEW OF SECTION 194C WHEREAS SUCH PLACEMENT CHARGES AR$ IN NATURE OF TECHNICAL FEE WITHIN THE MEANING OF SECTION 194J OF THE INCOME - TAX ACT, 1961. REVENUE BY : SHRI SUMAN KUMAR ASSESSEE BY: SHRI VIJAY MEHTA ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 2 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT FOR PLACING THE CHANNEL OF BROADCASTER IN PRIME BAND, FOR 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. THEREFORE, THE PAYMENT ON ACCOUNT OF PLACEMENT CHARGES IS IN NATURE OF TE CHNICAL 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. 3. WITHOUT PREJUDICE TO THE FIRST TWO GROUNDS OF APPEALS AS ABOVE, SINCE PROVIDING THE SERVICES OF PREFERRED CHANNEL PLACEMENT ON ACCOUNT OF WHICH PLACEMENT CHARGES ARE PAID REQUIRES USE OF INDUSTRIAL, COMMERCIAL OF SCIENTIFIC EQUIPMENT WITHIN THE MEANING OF SUB CLAUSE (IVA) TO EXPLANATION TO SUB CLAUSE (IV) OF SECTION 9 (1) OF THE INCOME TAX ACT, 1961, THE SAID PAYMENT IS PAYMENT ON ACCOUNT OF ROYALTY AND THEREFORE, SECTION 194J IS CLEARLY APPLICABLE. ACCORDINGLY, CIT(A) HAS ERRED IN LAW ARID ON FACTS IN NOT APPRECIATING THIS FACTUAL AND LEGAL POSITION AND IN GIVING RELIE F TO THE ASSESS.EE, 4. THE CIT(A) HAS FURTHER ERRED ON FACTS AND IN LAW IN NOT APPRECIATION ALTERNATIVELY THAT IN ANY CASE THE NATURE OF SERVICES RENDERED BY THE CABLE OPERATOR/MULTI SERVICES OPERATORS CONSISTS IN FACILITATING DELIVERY OF PRODUCTS OF BR OADCASTER 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, 5. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT SECTION 194C APPLIES TO THE PAYMENT OF PLACEMENT CHARGES WITHOUT APPRECIATING THE CORRECT NATURE OF THESE CHARGES, AS IS CLEARLY BROUGHT OUT IN THE STATEMENT OF FACT ANNEXED TO THE GROUND OF APPEAL AND THE ORDER U/S 101(1) OF THE INCOME TAX ACT, 1961 . 6. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT SECTION 194C APPLIES TO THE PAYMENT OF UP LINKING CHARGES WITHOUT APPRECIATING THE CORRECT NATURE OF THESE CHARGES, AS IS CLEARLY BROUGHT OUT IN THE STATEMENT OF FACT ANNEXED TO THE GROUND OF APPEAL AND THE ORDER U/S 201(1} OF THE INCOME TAX ACT, 1961. 7. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THE SECTION 194C APPLIES TO THE PAYMENT MADE ON ACCOUNT OF OUTSOURCING OF PRODUCTION WORK WITHOUT APPRECIATING THE CORRECT NATURE OF THESE CHARGES, AS IS CLEARLY BROUGHT OUT IN THE STATEMENT OF FACT ANNEXED TO THE GROUND OF APPEAL AND THE ORDER U/S 201(1) OF THE INCOME TAX ACT, 1961. 8. THE CIT[A) HAS ERRED ON FACT AND LA \ V IN DELETING THE INTEREST WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE AS CLEARLY BROUGHT OUT BY THE LD, A.O. IN ORDER U/S 201(1A) OF THE INCOME TAX ACT,9, THE ORDER OF THE CIT(A) BEING ERRONEOUS BE SET ASIDE AND LD. A.O'S ORDER HE RESTORED 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN ENTERTAINMENT CHANNEL OWNER COMPANY MAINLY ENGAGED IN THE BROADCASTING OF TV CHANNELS VIZ. B4U MUSIC AND B4U MOVIES. A SURVEY U/S 133A OF THE ACT WAS CONDUCTED AND DURING SURVEY THE STATEMENT OF SHRI SANDEEP GUPTA, HEAD (FINANCE) WAS RECORDED ON OATH . IT WAS NOTICED THAT THE ASSESSEE PAID ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 3 OF RS.12,05,82,012/ - AS CARRIAGE EXPENSES DURING THE YEAR TO THE MSO/CABLE OPERATORS FOR RETRANSMITTING AND/ OR CARRYING THE SERVICE OF THE CHANNELS ON S BAND IN THEIR TERRITORIES. THESE SERVICES PROVIDED BY CABLE OPERATORS WERE IN NATURE OF TECHNICAL PAYMENT FOR WHICH THE ASSESSEE WAS LIABLE TO DEDUCT THE TDS U/S 194J OF THE ACT. HOWEVER, THE ASSESSEE DEDUCTED THE TDS U/S 194C OF THE ACT ON THESE PAYMENTS. THEREFORE, NOTICE U/S 201(1)/201(1A) OF THE ACT DATED 05.10 .2011 WERE ISSUED AND SERVE D UPON THE ASSESSEE. THEREAFTER THE ASSESSEE FILED THE REPLY AND AFTER CONSIDERING THE REPLY , THE AO WAS OF THE VIEW THAT THE ASSESSEE WAS UNDER OBLIGATION TO DEDUCT THE TDS @ 10% U/S 194J OF THE ACT. HOWEVER, THE ASSESSEE DEDUCT ED THE TAX @ 2% U/S 194C OF THE ACT, THEREFORE, THE MARGINAL TAX @ 8% WAS ASSESSED AND TOTAL LIABILITY OF THE ASSESSEE WAS WORKED OUT TO THE TUNE OF RS.1,29,26,390/ - . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) WAS OF THE VIEW THAT THE AS SESSEE WAS UNDER OBLIGATION TO DEDUCT THE TAX U/S 194C OF THE ACT , HENCE , DELETED THE ADDITION, THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 4. ALL THE ISSUES ARE IN CONNECTION WITH THE CONTROVERSY THAT THE ASSESSEE WAS UNDER OBLIGATION T O DEDUCT THE TAX U/S 194C OF THE ACT OR U/S 194J OF THE ACT. BEFORE GOING FURTHER, WE DEEMED IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD. : - 3 15 I HAVE CONSIDERED THE SUBMISSIONS AND THE ARGUMENTS OF [HE ID ARS THE ABOVE GROUNDS PERTAIN TO THE SHORT DEDUCTION OF IDS ON PAYMENT BY THE APPELLANT, OF CHANNEL PLACEMENT FEES TO CATTLE OPERATORS/PSQS THE APPELLANT HAS MADE PAYMENT OF PLACEMENT CHARGES TO CABLE OPERATORS FROM THE PLACEMEN! AGREEMENT IT IS SEEN THAT THE CABLE OPERATORS AGREE WITH [HE APPELLANT TO PLACE THE CHANNELS ON CERTAIN PREFERRED FREQUENCIES, FT IS ONLY IN CONSIDERATION FOR PROVIDING CHOICE OF THE DESIRED PLACEMENT OF THE ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 4 CHANNELS THAT THE APPELLANT AGREES TO MAKE PAYMENT OF PLACEMENT FEE TO THE CABLE OPERATORS IN ORDER TO TR ANSMIT THE TV SIGNALS TO THE ULTIMATE VIEWERS, THE CABLE OPERATORS ARE AS SUCH REQUIRED TO PLACE THE SIGNALS ON SOME FREQUENCY BY AGREEING TO PLACE THE CHANNEL ON AN/ PREFERRED BAND, THE CABLE OPERATOR DOES NOT RENDER ANY TECHNICAL SERVICE TO THE DISTRIBUT OR/TV CHANNEL, IN TERMS OF THE PROVISIONS OF SECTION 194C OF THE ACT, IT IS PROVIDED THAT EXPRESSION 'WORK' SHALL INCLUDE, WRITER ALIA, BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMERS FOR SUCH BROADCASTING ANA' TELECASTING THEREFORE, IT IS EVIDENT [HAT WHERE THE PAYMENT IS FOR A WORK INVOLVING BROADCASTING AND TELECASTING, THE SAME SHALL BE SUBJECT TO DEDUCTION OF TAX AT SOURCE M TERMS OF SECTION 194C OF THE ACT. 3 16 IT IS NOT IN DISPUTE THAT CABLE OPERATORS DISSEMINATE SIGNALS RECEDED FRO M THE BROADCASTER THROUGH VARIOUS SUBSCRIBERS THUS, CARRIAGE OF CHANNELS THROUGH CABLES, WHICH ALSO INVOLVES PLACING THEM AT CERTAIN. BENTS/FREQUENCIES, IS AN INTEGRAL PART OF THE BROADCASTING PROCESS, WHICH WORK IS CONTRACTED TO CABLE OPERATORS THUS, PAYM ENT MADE TO CABLE OPERATORS FOR PLACEMENT CHARGES SHOULD BE REGARDED TO BE IN THE NATURE OF CARRYING OUT WORK OF BROADCASTING AND TELECASTING AND HENCE, SUBJECTED TO TDS U/S 194C OF THE ACT SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLES PUNJAB & HARYANA HIGH COURT IN THE CASE OF KURUSHETRA DARPANS (P) LID. VS CIT (169 TAXMAN 344} IN THE CASE OF PRASAR BHARTI {BROADCASTING CORP. OF INDIA (158 TAXMAN 470) CITED BY [HE APPELLANT, EVEN THE PRODUCTION OF TELEVISION PROGRAMS HAS BEEN HELD TO BE IN THE NATURE OF A 'W ORK CONTRACT' IN THIS CASE, THE HON'BLE COURT HELD THAT THERE IS NO APPLICABILITY OF SECTION 194J AND THE ASSESSES HAD RIGHTLY DEDUCTED TAX U/S. 194C THEREFORE, I AM OF THE VIEW THAT PAYMENT OF PLACEMENT FEE BY THE APPELLANT TO THE CABLE OPERATORS SHOULD B E SUBJECTED TO TDS @ 2% AS PER THE PROVISIONS OF SECTION 194C OF THE ACT 3 17 I DO NOT AGREE WITH THE STAND ADOPTED BY THE AO IN THE IMPUGNED ORDER THAT THE PLACEMENT FEE SHOULD BE TREATED AS FEES FOR TECHNICAL SERVICES' FOR THE PURPOSE OF TDS U / S 194J OF THE ACT. IT IS A SETTLED POSITION LAW THAT MERELY BECAUSE, AS PART OF PROVIDING ANY SERVICE OF FACILITY, IF THE SERVICE PROVIDER REQUIRES TECHNICAL EQUIPMENT THAT DOES NOT MEAN (HAT ANY TECHNOLOGY OR TECHNICAL SERVICE IS PROVIDED OY THE SERVICE PROVIDER UN DER THE ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 5 CURRENT ARRANGEMENT, WHAT THE CABLE OPERATOR DOES IS TO ONLY GIVE PREFERENCE TO A PARTICULAR CHANNEL OVER THE OTHER TO PLACE IT ON A PARTICULAR BAND TOR WHICH THEY CHARGE & CONSIDERATION MERELY BECAUSE AS PAN OF PROVIDING THUS PRIVILEGE/ FACILITY, REQUIRES THE CABLE OPERATORS TO PUT THE CHANNEL ON A PARTICULAR BAND USING TECHNICAL EQUIPMENT, DOES NOT MEAN [HAT ANY TECHNOLOGY OR TECHNICAL SERVICE IS PROVIDED BY THE CABLE OPERATORS TO THE APPELLANT HAVING REGARD TO THE DECISION OF MADRAS HIGH COURT IN THE CASE OF SKYSAIL COMMUNICATIONS LTD AND VARIOUS OTHER I PRECEDENTS RELIED UPON BY THE APPELLANT, PLACEMENT OF CHANNELS BEING A STANDARD FACILITY, THE CONSIDERATION IN RESPECT THEREOF WOULD NO! QUALIFY AS FEES FOR TECHNICAL SERVICES FOR THE PURPOSE OF S ECTION 194J OF THE ACT. 3 13 SO FAR AS THE OF THE AO THAT THE PAYMENT OF PLACEMENT FEES THE NATURE OF BROKERAGE OR COMMISSION, US DEFINED IN EXPLANATION TO SECTION 194H OF THE ACT, IS CONCERNED, THE SAME IS EVEN FARTHER FROM THE REALITY COMMISSION OR BR OKERAGE IN COMMON PARLANCE IS UNDERSTOOD TO TIE A PAYMENT RECEIVED BY A PERSON FROM THE OTHER PERSON FOR SERVICES RENDERED BY HIM TO SUCH OTHER PERSON. HOWEVER, THIS DEFINITION PRESUPPOSES THAT THE PERSON THIS REGARD, RATHER ONLY A TOOL FOR THE SAID BUS ME SS OF THE OTHER PERSON. THE RECIPIENT OF BROKERAGE OR COMMISSION PROVIDES ONLY A SERVICE TO THE OTHER PERSON, WITHOUT ENGAGING ANY RESOURCES OR ASSETS OF HIS IF AT ALL, ANY SUCH ASSETS OR RESOURCES ARE REQUIRED, THE SAME ARE PROVIDED/ SUPPLIED THE OTHER PE RSON. THE OTHER INSTANCES OF COMMISSION OR BROKERAGE ARE PAYMENTS FOR SERVICES IN THE COURSE OF BUYING OR SELLING OF GOODS OR TRANSACTIONS RELATING TO ANY ASSET VALUABLE ARTICLE OR THING AS DEFINED M EXPLANATION TO SECTION 194H ALTHOUGH THE MEANING OF THES E TERMS AS PER EXPLANATION TO SECTION 194H IS INCLUSIVE, LARGELY THE 'COMMISSION ON BROKERAGE' IS UNDERSTOOD AS ELABORATED ABOVE THE CABLE OPERATORS/MSQS CARRY OUT INDEPENDENT BUSINESS WITH THE HELP OF THEIR OWN RESOURCES, ASSETS AND INDEPENDENT ESTABLISHM ENT. THERE ACTIVITY, AS EXPLAINED ABOVE AMOUNTS TO THE ACTIVITY OF BROADCASTING AND TELECASTING THEY ARE ALSO NOT ENGAGED IN PROVIDING SERVICES IN THE COURSE OF BUYING AND SELLING OF GOODS ETC. HENCE THE CHANNEL PLACEMENT FEE RECEIVED BY THEM CANNOT IN ANY MANNER, BE CATEGORIZED AS 'COMMISSION OR BROKERAGE'. THE CASE LAWS CITED BY THE APPELLANT WHICH ARE DIRECTLY ON THIS ISSUE ALSO SUPPORT THIS VIEW. THEREFORE, IN MY OPINION, THIS ARGUMENT OF THE AO IS ALSO DEVOID OF MERITS, AND DESERVES TO BE REJECTED. ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 6 3 1 9 SINCE THE APPELLANT HAS ALREADY DEDUCTED TDS U/S. 194C OF THE ACT ON THE PLACEMEN! FEE, THE TDS OFFICER IS DIRECTED NOT TO CONSIDER THE APPELLANT AS ASSESSEE IN 'DEFAULT U/S 201(1) OF THE ACT AS THERE IS NO SHORT DEDUCTION O* TAX BY THE APPELLANT THE DEM AND OF TAX U/S 201(1) OF RS.96 46.560/ - AND INTEREST U/S. 201(1 A) OF RS.32,79,930/ - IS HEREBY DELETED. 5 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS DISCUSSED THE NATURE OF TRANSACTION BETWEEN THE ASSESSEE AND THE CABLE OPERAT OR WHICH NOWHERE LEADS THE FEE FOR TECHNICAL SERVICES . WHILE ALLOWING THE CLAIM OF ASSESSEE, THE CIT(A) HAS RELIED UPON THE LAW SETTLED IN KURUKSHETRA DARPANS (P) LTD. VS. CIT (169 TAXMAN 344 ), PRASAR BHARTI 158 TAXMAN 344 AND SKYCELL COMMUNICATIONS LTD E TC. AT THE TIME OF ARGUMENT, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE PRESENT CONTROVERSY HAS DULY BEEN COVERED BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. UTV ENTERTAINMENT TELEVISION LTD. DATED 10.11.2017 , TH EREF ORE, THE CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE. THE DECISION OF THE HONBLE HIGH COURT PERUSED IN WHICH THE HONBLE HIGH COURT HAS HELD THA T THE TRANSACTION IS NOT IN NATURE OF TECHNICAL SERVICE. THE RELEVANT FINDING IS HEREBY REPRODUCED B ELOW.: - THE PLACEMENT FEES WERE PAID UNDER THE CONTRACT BETWEEN THE ASSESSEE AND THE CABLE OPERATORS OR MULTI SYSTEM OPERATORS. CONSIDERING THE NATURE OF TRANSACTI ONS, THE PAYMENTS WERE NOT IN T HE NATURE OF COMMISSION OR ROYALTY. THE COMMISSIONER (A) HAD FOUND THAT BY AGREEING TO PLACE THE CHANNEL ON ANY PREFERRED BAND, THE CABLE OPERATOR DID NOT RENDER ANY TECHNICAL SERVICE TO THE DISTRIBUTOR OR TELEVISION CHANNEL. HE HAD RIGHTLY FOUND THAT IF THE CONTRACT WAS EXECUTED FOR BROADCASTING AND TELECASTING THE CHANNELS OF THE ASSESSEE, THE PAYMENT WAS COVERED BY SECTION 194C AS IT FELL WITHIN CLAUSE(IV) OF THE DEFINITION OF WORK. THEREFORE, WHEN PLACEMENT CHARGES WERE PAID BY THE ASSESSEE TO THE CABLE OPERATORS AND MUTLI - SYSTEM OPERATORS FOR PLACING THE SIGNALS ON A PREFERRED ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 7 BAND, IT WAS A PART OF WORK OF BROADCASTING AND TELECASTING COVERED BY SUB - CLAUSE (B) OF CLAUSE (IV) OF THE EXPLANATION TO SECTION 194C. 6 . THE ASSESSEE HAS ALSO RELIED UPON THE DECISION OF THE HONBLE ITAT IN ITA. NO.669/M/2012 AND ITA. NO. 670/M/201 2 DATED 17.03.2015 TITLE AS ITS (TDS) 3(4) VS. M/S. TIMES GLOBAL BROADCASTING CO. LTD. ON APPRAISAL OF THIS ORDER, WE NOTICED THAT ON THE SIMILAR FACTS AND CIRCUMSTANCES, THE HONBLE ITAT HAS HELD THAT THE PAYMENT MADE TOWARDS PLACEMENT OF TH E CHANNEL FALLS IN VIEW OF THE PROVISION OF SECTION 194C OF THE ACT, WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE HONBLE ITAT IN THIS REGARD ON RECORD .: - 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF DISTRIBUTION OF TELEVISION CHANNELS. A SURVEY OPERATION U/S 133A OF THE ACT WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 04.03.2011 TO VERIFY THE COMPLIANCE OF TDS PROVISIONS BY THE ASSESSEE. THEREAFTER, VIDE LET TER DATED 08.03.2011, THE INCOME TAX OFFICER(TDS) - 3(4), MUMBAI (THE AO) ISSUED A SHOW CAUSE NOTICE UNDER SECTION 201 (1) OF THE INCOME - TAX ACT, 1961 ('THE ACT'), ASKING FOR EXPLANATION AS TO WHY TDS WAS NOT DEDUCTED UNDER SECTION 194J OF THE ACT, ON THE PA YMENT OF CHANNEL PLACEMENT CHARGES TO CABLE OPERATORS/MSOS. THE ASSESSEE FURNISHED ITS REPLY VIDE LETTER DATED 18.03.2011. THE AO, AFTER CONSIDERING THE REPLY OF THE ASSESSEE, PASSED ORDER UNDER SECTION 201 (1)/201 (1A) OF THE ACT HOLDING THAT PAYMENTS MAD E TOWARDS PLACEMENT OF CHANNELS OUGHT TO BE SUBJECT TO TDS UNDER SECTION 194J OF THE ACT @ 10%. ACCORDINGLY, HE COMPUTED SHORT DEDUCTION OF TAX UNDER SECTION 201 (1) OF THE ACT AMOUNTING TO RS 3,76,44,212/ - AND LEVIED INTEREST UNDER SECTION 201(1A) OF THE ACT AMOUNTING TO RS. 1,59,98,78~LT IS AGAINST THIS ORDER PASSED UNDER SECTION 201 (1 )/(1A), THE ASSESSEE FILED APPEAL FOR THE LD. CIT(A). 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) HELD THAT ASSESSEE WAS NOT IN DEFAULT ON ACCOUNT OF SHORT DEDUCTION OF TAX U /S 201(1) AS WELL AS INTEREST LEVIED THEREON U/S 201(1A) OF THE ACT, AFTER HAVING FOLLOWING OBSERVATION: - 3.15 I HAVE CONSIDERED THE SUBMISSIONS AND THE ARGUMENTS OF THE LD. A.RS. THE ABOVE GROUNDS PERTAIN TO THE SHORT DEDUCTION OF TDS ON PAYMENT BY THE, APPELLANT, OF CHANNEL PLACEMENT FEES TO CABLE OPERATORS/MC - OS. THE APPELLANT HAS MADE PAYMENT OF PLACEMENT CHARGES TO CABLE OPERATORS, IT IS EVIDENCED FROM THE PLACEMENT AGREEMENT THAT THE CABLE ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 8 OPERATORS AGREE WITH THE APPELLANT TO PLACE THE CHANNELS ON CERTAIN PREFERRED FREQUENCIES. IT IS ONLY IN CONSIDERATION FOR PROVIDING CHOICE OF THE DESIRED PLACEMENT OF THE CHANNELS THAT THE APPELLANT AGREES TO MAKE PAYMENT OF PLACEMENT FEE TO THE CABLE OPERATORS. IN ORDER TO TRANSMIT THE TV SIGNALS TO THE ULTIMATE VIEWERS, THE CABLE OPERATORS ARE AS SUCH REQUIRED TO PLACE THE SIQNALS ON SOME FREQUENCY. BY AGREEING TO PLACE THE CHANNEL ON ANY PREFERRED BAND, THE CABLE OPERATOR DOES NOT RENDER ANY TECHNICAL SERVICE TO THE DISTRIBUTOR/ TV CHANNEL. IN TERMS OF THE PROVI SIONS OF SECTION 194C OF THE ACT, IT IS PROVIDED THAT EXPRESSION 'WORK' SHALL INCLUDE, INTER ALIA, BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING AND TELECASTING. THEREFORE, 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 TERMS OF SECTION 194C OF THE ACT. 3.16 IT IS NOT IN DISPUTE THAT CABLE OPERATORS DISSEMINATE SIGNALS RECEIVED FROM THE BROADCASTER THROUGH CABLES TO VARIOUS SUBSCRIBERS. THUS, CARRIAGE OF CHANNELS THROUGH CABLES, WHICH ALSO INVOLVES PLACING THEM AT CERTAIN BANDS/FREQUENCIES, IS AN INTEGRAL PART OF THE BROADCASTING PROCESS, WHICH WORK IS CONTRACTED TO CABLE OPERATORS. THUS, PAYMENT MADE TO CABLE OPERATO RS FOR PLACEMENT CHARGES SHOULD BE REGARDED TO BE IN THE NATURE OF CARRYING OUT WORK OF BROADCASTING AND TELECASTING AND HENCE, SUBJECTED TO TDS UNDER SECTION 194C OF THE ACT. SIMILAR VIE,,:, HAS BEEN TAKEN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT'S DECI SION IN THE CASE OF KURUKSHETRA DARPANS (P) LTD. VS. CIT, 169 TAXMAN 344. IN THE CASE OF PRASAR BHARTI (BROADCASTING CORPN. OF INDIA) 158 TAXMAN 470 CITED BY THE APPELLANT, EVEN THE PRODUCTION OF TELEVISION PROGRAMS HAS BEEN HELD TO BE IN THE NATURE OF A ' WORK CONTRACT'. IN THIS CASE, THE HON'BLE COURT HELD THAT THERE IS NO APPLICABILITY OF SECTION 194J AND THE ASSESSEE HAD RIGHTLY DEDUCTED TAX U/S 194C. THEREFORE, I AM OF THE VIEW THAT PAYMENT OF PLACEMENT FEE BY THE APPELLANT TO THE CABLE OPERATORS SHOULD BE SUBJECTED TO TDS @ 2% AS PER THE PROVISIONS OF SECTION 194C OF THE ACT. 3.17. I DO NOT AGREE WITH THE STAND ADOPTED BY THE TDS OFFICER IN THE IMPUGNED ORDER THAT THE PLACEMENT FEE SHOULD BE TREATED AS FEES FOR TECHNICAL SERVICES FOR THE PURPOSE OF TDS UNDER SECTION 194J OF THE ACT. IT IS A SETTLED POSITION IN LAW THAT MERELY BECAUSE, AS PART OF PROVIDING ANY SERVICE OR FACILITY, IF THE SERVICE PROVIDER REQUIRES TECHNICAL EQUIPMENTS THAT DOES NOT MEAN THAT ANY TECHNOLOGY OR TECHNICAL SERVICE IS PROVIDED BY THE SERVICE PROVIDER. UNDER THE CURRENT ARRANGEMENT, 5 ITA 669 & 670/M/12 & CO 16&17/M/13 WHAT THE CABLE OPERATOR DOES IS TO ONLY GIVE PREFERENCE TO A PARTICULAR CHANNEL OVER THE OTHER TO PLACE IT ON A PARTICULAR BAND FOR WHICH THEY CHARGE A CONSIDERAT ION. MERELY BECAUSE AS PART OF PROVIDING THIS PRIVILEGE/ FACILITY, IT REQUIRES THE CABLE OPERATORS TO PUT THE CHANNEL ON A PARTICULAR BAND USING TECHNICAL EQUIPMENTS , DOES NOT MEAN THAT ANY ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 9 TECHNOLOGY OR TECHNICAL SERVICE IS PROVIDED BY THE CABLE OPERATOR S TO THE APPELLANT. HAVING REGARD TO THE DECISION OF MADRAS HIGH COURT IN THE CASE OF SKYCELL COMMUNICATIONS LTD AND VARIOUS OTHER JUDICIAL PRECEDENTS RELIED UPON BY THE APPELLANT, PLACEMENT OF CHANNELS BEING A STANDARD FACILITY, THE CONSIDERATION IN RESPE CT THEREOF WOULD NOT QUALIFY AS FEES FOR TECHNICAL SERVICES FOR THE PURPOSE OF SECTION 194J OF THE ACT. 3.18. SO FAR AS THE ALTERNATIVE ARGUMENT OF THE AO, VIDE LETTER DATED 15.11.2011 THAT THE PAYMENT OF PLACEMENT FEES IS IN THE NATURE OF BROKERAGE OR COM MISSION AS DEFINED IN' EXPLANATION TO SECTION 194H OF THE I.T ACT 1961, IS CONCERNED, THE SAME IS EVEN FARTHER FROM THE REALITY. COMMISSION OR BROKERAGE IN COMMON PARLANCE IS UNDERSTOOD TO BE A PAYMENT RECEIVED BY A PERSON FROM THE OTHER PERSON FOR SERVICE S RENDERED BY HIM TO SUCH OTHER PERSON. HOWEVER, THIS DEFINITION PRESUPPOSES THAT THE PERSON RECEIVING BROKERAGE OR COMMISSION, HIMSELF DOES NOT CARRY OUT ANY INDEPENDENT BUSINESS IN THIS REGARD; RATHER HE IS ONLY A TOOL FOR THE SAID BUSINESS OF THE OTHER PERSON. THE RECIPIENT OF BROKERAGE OR COMMISSION PROVIDES ONLY A SERVICE TO THE OTHER PERSON, WITHOUT ENGAGING ANY RESOURCES OR ASSETS OF HIS OWN AND, IF AT ALL, ANY SUCH ASSETS OR RESOURCES ARE REQUIRED, THE SAME ARE PROVIDED/SUPPLIED BY THE OTHER PERSON. THE OTHER INSTANCES OF COMMISSION OR BROKERAGE ARE PAYMENTS FOR SERVICES IN THE COURSE OF BUYING OR SELLING OF GOODS OR TRANSACTIONS RELATING TO ANY ASSET, VALUABLE ARTICLE OR THING AS DEFINED IN EXPLANATION TO SECTION 194H. ALTHOUGH THE MEANING OF THESE TERMS AS PER EXPLANATION TO SECTION 194H IS INCLUSIVE, LARGELY THE 'COMMISSION ON BROKERAGE' IS UNDERSTOOD AS ELABORATED ABOVE. THE CABLE OPERATORS/MSOS CARRY OUT INDEPENDENT BUSINESS WITH THE HELP OF THEIR OWN RESOURCES, ASSETS AND INDEPENDENT ESTABLISHME NT. THEIR ACTIVITY, AS EXPLAINED ABOVE, AMOUNTS TO THE ACTIVITY OF BROADCASTING AND TELECASTING. THEY ARE ALSO NOT ENGAGED IN PROVIDING SERVICES IN THE COURSE OF BUYING AND SELLING OF GOODS ETC. HENCE THE CHANNEL PLACEMENT FEE RECEIVED BY THEM CANNOT IN AN Y MANNER, BE CATEGORIZED AS 'COMMISSION OR BROKERAGE'. THE CASE LAWS CITED BY THE APPELLANT WHICH ARE DIRECTLY ON THIS ISSUE ALSO SUPPORT THIS VIEW. THEREFORE, IN MY OPINION, THIS ARGUMENT OF THE AO IS ALSO DEVOID OF MERITS, AND DESERVES TO BE REJECTED. 3. 19. SINCE THE APPELLANT HAS ALREADY DEDUCTED TDS UNDER SECTION 194C OF THE ACT ON THE PLACEMENT FEE, THE TDS OFFICER IS DIRECTED NOT TO CONSIDER THE APPELLANT AS ASSESSEE IN DEFAULT UNDER SECTION 201(1) OF THE ACT AS THERE IS NO SHORT DEDUCTION OF TAX BY T HE APPELLANT. THE DEMAND OF TAX U/S 201(1) IS HEREBY DELETED. 6 ITA 669 & 670/M/12 & CO 16&17/M/13 4. IT WAS SUBMITTED BY THE LD. A.R. THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ORDER DA TED 29 - 10 - 2014 IN ITA NO. 2699/M/12, 4204 & 4205/M/12 AND 2700/M/2012 FOR ASSESSMENT YEARS 2008 - 09 TO 2011 - 12. THE PRECISE OBSERVATION OF THE ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 10 TRIBUNAL IS AS UNDER: - 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RELEVANT MATERIAL ON RECORD. THERE IS NO D ISPUTE THAT THE PAYMENT IN QUESTION WAS MADE BY THE ASSESSEE TO THE CABLE OPERATORS/ MSOS FOR PLACING THE TV CHANNELS IN THE PRIME BAND IN ORDER TO ENHANCE THE VIEWERSHIP AND BETTER ADVERTISEMENT REVENUE. IN THE CASE OF KURUKSHETRA DARPANS (P) LTD. VS. CIT (SUPRA), THE HONBLE HIGH COURT OF PUNJAB & HARYANA WHILE DEALING WITH AN IDENTICAL 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 ARE LIABLE TO BE REJECTED. SEC. 194C OF THE ACT CREATES AN OBLIGATION ON A PERSON RESPONSIBLE 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 T O IN CL(B) OF EXPLN. III BELOW S.194C(2)OF THE ACT. 14. IN TERMS OF THE SAID EXPLANATION. IT IS PROVIDED THAT EXPRESSION 'WORK' SHALL INCLUDE INTER ALIA BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMERS FOR SUCH BROADCASTING AND TELECASTING. BY 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 TERMS OF SECTION 194 OF THE ACT. THE ASSESSEE IS A CABLE NETWORK OPERATOR TH ROUGH WHICH IT PROVIDES TELECASTING OF PROGRAMMERS TO THE ULTIMATE CONSUMERS/SUBSCRIBERS. THE ASSESSEE IN TURN ENTERS INTO A CONTRACT WITH THE LICENSOR OF VARIOUS TV CHANNELS. ON THE PAYMENT SO MADE, S. 194C OF THE ACT' IS ATTRACTED. THIS IS FOR THE REASON THAT THE LICENSOR. IS A PERSON WHO IS PERFORMING THE 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 LICEN SOR IS REFERRED TO AS 'COMPANY ENGAGED IN THE BUSINESS OF DISTRIBUTION OF SATELLITE BASED TELEVISION CHANNEL(S) SERVICES INCLUDING THE SERVICE AND HAS EXCLUSIVE RIGHTS TO MARKET AND DISTRIBUTE THE SERVICES IN INDIA TO VARIOUS CUSTOMERS AND USERS OF THE SER VICE'. FURTHER, THE AGREEMENT REFERS TO THE ASSESSEE SUBSCRIBER AS A PARTY, WHICH IS DESIROUS TO SUBSCRIBE FOR AND RECEIVE THE TELECAST SIGNALS OF THE SERVICE FROM THE COMPANY IN ORDER TO FURTHER DISTRIBUTE THE SAME TO THE CUSTOMERS). 7 ITA 669 & 670/M/12 & CO 16&17/M/13 16. FROM THE RECITAL OF THE AGREEMENT 'ITSELF, IT IS 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' HAS ALSO BEEN REFERRED T O MEAN THE TV CHANNEL WHICH IS DEALT WITH BY THE LICENSOR OR THE COMPANY. THEREFORE, WHAT THE ASSESSEE HAS TRANSACTED FOR WITH THE LICENSOR OR COMPANY CERTAINLY INCLUDES WITHIN ITS AMBIT BROADCASTING AND TELECASTING 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 ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 11 THE ASSESSEE. 17. ANOTHER PLEA OF THE ASSESSEE/SUBSCRIBER WAS THAT THE LICENSOR OR THE PERSON TO WHOM THE ASSESSE E IS MAKING PAYMENT BY ITSELF DOES NOT DO THE WORK OF BROADCASTING' AND TELECASTING AND IS THEREFORE OUTSIDE THE PURVIEW OF S. 194C OF THE ACT. THIS ARGUMENT DESERVES TO BE NEGATED AT THE THRESHOLD. AS WE HAVE POINTED OUT EARLIER WHAT THE ASSESSEE SUBSCRIB ER IS LOOKING FOR IS TO OBTAIN THE TELECAST SIGNALS FROM THE LICENSOR, WHICH IS ENOUGH. TO DEDUCE THAT THE IMPUGNED CONTRACT INVOLVES BROADCASTING AND TELECASTING OF TV SIGNALS . MOREOVER, THE LICENSOR OR THE COMPANYV, AS IS EVIDENT FROM THE SPECIMEN AGREE MENT ON RECORD, IN THE BUSINESS OF DISTRIBUTION OF SATELLITE BASED TV CHANNELS AND HAS EXCLUSIVE RIGHTS TO MARKET AND DISTRIBUTE SAID SERVICES IN INDIA, THE SERVICE THAT IS REFERRED TO IN THE AGREEMENT IS THE BROADCASTING AND TELECASTING OF TV SIGNALS. 18. FOR THE REASONS RECORDED ABOVE. WE HAVE NO HESITATION IN CONCLUDING THAT THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE ASSESSEE WAS REQUIRED TO DEDUCT TAX AT SOURCE IN TERMS OF S. 194C OF THE ACT ON PAYMENTS MADE TO THE LICENSOR FOR OBTAINING TV SIGNALS. C ABLE 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 OBTAINING THE TELECAST LICENSES FROM THE LICENSOR FALLS UNDER THE PROVISIONS 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 SECTION 194C WHICH READS AS UNDER: - EXPLANAT ION - FOR THE PURPOSE OF THIS SECTION - ********************************* ********************************* (IV) WORK SHALL INCLUDE - (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING 8 ITA 669 & 670/M/12 & CO 16&17/M/13 (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 USING MATERIAL PURCHASED FROM SUCH CUSTOMER, BUT DOES NOT INCLUDE MANUFACTURING OR SUPPLYING A PRODUCT ACCORDING TO THE REQUIREMENT OF SPECIFICATION OF A CUSTOMER BY USING MATERIAL PURCHASED FROM A PERSON, OTHER THAN SUCH CUSTOMER.] 8. THE HONBLE DELHI HIGH COURT IN TH E 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 OBSERVE THAT EXPLANATION III, WHICH WAS INTRODUCED SIMULTANEOUSLY WITH SECTION 194J, IS VERY S PECIFIC IN ITS APPLICATION TO NOT ONLY BROADCASTING AND TELECASTING 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 ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 12 THE OTHER IN MORE GENERAL TERMS, RESORT MUST BE HAD TO THE SPECIFIC PROVISION WHICH MANIFESTS THE INTENTION OF THE LEGISLATURE. IT IS NOT, THEREFORE, POSSIBLE TO ACCEPT THE CONTENTION OF THE REVENUE THAT PROGRAMMES PRODUCED FOR TELEVISION, INCLU DING 'COMMISSIONED PROGRAMMES', WILL FALL OUTSIDE THE REALM OF SECTION 194C, EXPLANATION III OF THE ACT. WE FIND NO INFIRMITY IN THE VIEW TAKEN BY THE INCOME - TAX APPELLATE TRIBUNAL WHICH WE HEREBY AFFIRM. 9. THE HONBLE DELHI HIGH COURT HAS MADE IT CLEAR T HAT WHEN TWO PROVISIONS ARE SIMULTANEOUSLY INTRODUCED IN THE ACT., ONE IS SPECIFIC AND ANOTHER IS MORE GENERAL IN TERMS THEN THE RESORT MUST BE TO THE SPECIFIC PROVISION. THEREFORE, WHEN THE WORK OF BROADCASTING AND TELECASTING OF THE PROGRAMMES SPECIFICAL LY 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 CIRCULAR AS UNDER: - 1261. PAYMENT OF ANY SUM SHALL BE LIABLE FOR DEDUCTION 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 A RE DEDUCTING SUCH TAX BY APPLYING MORE THAN ONE PROVISION FOR THE SAME PAYMENT. IN PARTICULAR, 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 F OR WORK CONTRACT AS ALSO UNDER SECTION 1941 AS PAYMENTS OF FEES FOR PROFESSIONAL SERVICES. 2. IT IS HEREBY CLARIFIED THAT EACH SECTION, REGARDING TDS UNDER CHAPTER XVII, DEALS WITH A PARTICULAR KIND OF PAYMENT TO THE EXCLUSION OF ALL OTHER SECTIONS IS THIS CHAPTER. 9 ITA 669 & 670/M/12 & CO 16&17/M/13 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 COURT, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF CIT(A) QUA THIS ISSUE. 11. GROUND NO. 2 IS REGARDING THE PAYMENT FOR SUBTITLING AND EDITING CHARGES, TREATED BY THE ASSESSING OFFICER AS FEE FOR TECHNICAL 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 HA S RELIED UPON THE DECISION OF THIS TRIBUNAL IN 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 ENGAGED IN THE BUSINESS OF DOING DUBBING WORK. THE ASSE SSEE WAS HAVING HIS OWN STUDIO COMPRISING OF VARIOUS DUBBING EQUIPMENTS AND PROFESSIONAL ARTIST TO CARRYON 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 ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 13 DUB BING STUDIOS. IN RESPECT OF ONE SUCH WORK ENTRUSTED BY THE ASSESSEE TO ANOTHER STUDIO BY NAME NINETY DEGREES THE ASSESSEE HAD MADE A PAYMENT OF RS. 1,60,000. ACCORDING TO THE ASSESSEE, THE PAYMENT WAS MADE TO A SUB - CONTRACTOR FOR EXECUTION OF A CONTRACT AN D, THEREFORE, IN TERMS OF SECTION 194C THE ASSESSEE DEDUCTED TAX AT SOURCE AT 2 PER CENT. THE ASSESSING OFFICER HOWEVER, WAS OF THE VIEW THAT THE PAYMENT IN QUESTION WAS RENT PAID BY THE ASSESSEE AND, THEREFORE, IN TERMS OF SECTION 194 - 1 OF THE ACT THE ASS ESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE AT 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 CHARG ES BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 9. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THE 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 1 94C OF THE ACT. THE ASSESSEE POINTED OUT THAT STUDIO IS BOOKED AND DUBBING WORK IS UNDERTAKEN USING 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. BUT TH E 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 BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING. THE AS SESSEE 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 10 ITA 669 & 670/M/12 & CO 16&17/M/13 DUBBING WORK. THE AGREEMENT BETWEEN THE ASSESSEE AND TURNER ENTERTAINM ENT A TELECASTING COMPANY WAS ALSO FILED. 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 PAYMENT 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 SECTION 194C(7) EXPLANATION (IV) AR E MET ALSO. AS SUCH THE PAYMENT MADE WAS COVERABLE UNDER SECTION 194C UNDER WHICH TAX WAS DEDUCED. ON FACTS, THEREFORE, THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) IS DELETED.' 11. AGGRIEVED BY THE ORDER OF THE CIT(A) THE REVENUE HAS RAISED GROUND NO.2 B EFORE 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 DUBBING STUDIO NINETY DEGREES BY USING THEIR EQUIPMENTS AS WELL AS THE ARTISTS WHO WERE WORKING FOR STUDIO N INETY 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) ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 14 IN THIS REGARD ARE NOT IN CHALLENGE BEFORE US. IN SUCH CIRCUM STANCES WE ARE OF THE VIEW THAT THE PROVISIONS OF SECTION 194C WERE APPLICABLE AND THE ASSESSEE HAS RIGHTLY DEDUCTED 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 INTER FERE WITH THE ORDER OF CIT(A). CONSEQUENTLY GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 13. NO CONTRARY DECISION HAS BEEN REFERRED OR PRODUCED 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 CASE, THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 14, MUMBAI, ERRED IN NOT ADJ UDICATING ON THE FOLLOWING CONTENTIONS RAISED BY THE APPELLANT: (I) THE LEARNED TDS OFFICER ERRED IN HOLDING THAT THE APPELLANT IS LIABLE TO PAY PRINCIPAL AMOUNT OF TAX UNDER SECTION 201 (1) OF THE INCOME TAX ACT, 1961 WITHOUT VERIFYING THE PAYMENT OF TAX ON SUCH INCOME BY THE DEDUCTEE CABLE OPERATORS IN THEIR RESPECTIVE RETURNS/ ASSESSMENTS. THE APPELLANT PRAYS THAT THE LEARNED TDS OFFICER BE DIRECTED TO VERIFY THE PAYMENT OF TAX BY CABLE OPERATORS ON THE CHANNEL PLACEMENT CHARGES RECEIVED 11 ITA 669 & 670 /M/12 & CO 16&17/M/13 FROM THE APPELLANT AND BASED THEREON HOLD THAT THE APPELLANT IS NOT LIABLE TO PAY THE PRINCIPAL AMOUNT OF TAX. (II) WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED TDS OFFICER ERRED IN LEVYING INTEREST UNDER SECTION 201 (1A) OF THE INCOME TAX ACT, 1961 FROM THE DATE THE TAX WAS DEDUCTIBLE TILL THE DATE OF 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 CROSS 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. . AS THE FACTS AND CIRCUMSTANCES OF THE CASE DURING THE YEAR UNDER CONSIDERATION ARE SAME, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE WE HOLD THAT CHANNEL REPLACEMENT CHARGES PAID BY ASSESSEE WERE LIABLE FOR DEDUCTION OF TAX U/S 194C OF THE ACT AND THE ASSESSEE HAS CORRECTLY DEDUCTED TA X AT SOURCE U/S 194C OF THE ACT, THEREFORE, THERE IS NO LIABILITY U/S 201(1) AND 201(1A) OF THE I.T. ACT. ACCORDINGLY, WE DISMISS THE APPEALS FILED BY THE REVENUE. IN VIEW OF OUR DECISION GIVEN IN REVENUES APPEAL, THE C.O. FILED BY THE ASSESSEE HAS BECOME ACADEMIC WHICH ARE ALSO DISMISSED. 7 . IN VIEW OF THE FINDING OF THE JURISDICTION AL HIGH COURT IN THE CASE OF CIT VS. UTV ENTERTAINMENT TELEVISION LTD (SUPRA) AND FINDING OF THE ITA NO. 5664 /M/201 2 A.Y.20 10 - 11 15 HONBLE ITAT IN THE CASE OF M/S. TIMES GLOBAL BROADCASTING CO. LTD , WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THESE ISSUES ARE DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 8 . IN THE RESULT , THE APPEAL FILED BY THE REVENUE IS HEREBY ORDERED TO BE D ISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 25. 07 . 2018 . SD/ - SD/ - ( R.C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 25. 07. 2018 . VIJAY / COPY OF THE ORDER FOR WARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI