ACIT (TDS) 3(1), MUMBAI V. ZOOM ENTERTAINMENT NETWORK LTD, MUMBAI

ITA 671/MUM/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0856 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 19-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 01-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KADAM
• Section: 194C; 201(1)

Judgement Text

M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G , MUMBAI . , , BEFORE SHRI D KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUK LA , JUDICIAL MEMBERITA ITA NO S . : 671 AND 67 2 /MUM/20 1 2 (ASSESSMENT YEAR S : 200 8 - 0 9 AND 200 9 - 10 ) A CIT - 3 ( 1 ), 10 TH FLOOR, SMT K G MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD(WEST), MUMBAI - 400 002 VS M/S ZOOM ENTERT A INMENT NETWORK LTD , 1 ST FLOOR, TRA DE GARDENS, KAMLA MILLS COMPOUND, SENAPATI BAPAT MARG, MUMBAI - 400 019 .: PAN : AAAC Z 2897 G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A K KADAM RESPONDENT BY : SHRI PORUS KAKA CO. NO. 18/MUM/2013 ARISING OUT OF ITA NO. 671/MUM/2012, AY 2008 - 0 9 CO. NO. 19/MUM/2013 ARISING OUT OF ITA NO. 6 72 /MUM/2012, AY 20 09 - 1 0 M/S ZOOM ENTERT A INMENT NETWORK LTD , MUMBAI - 400 019 .: PAN : AAACZ 2897 G VS ACIT - 3(1), MUMBAI - 400 002 ( APP LICANT - CROSS OBJECTOR ) (RESPONDENT) APPLICANT CROSS OBJECTOR BY : SHRI PORUS KAKA RESPONDENT BY : SHRI A K KADAM /DATE OF HEARING : 27 - 0 7 - 2015 / DATE OF PRONOUNCEMENT : 27 - 07 - 2015 ORDER PER BENCH : TH E AFORESAID APPEAL S BY THE REVENUE AS WELL AS CROSS OBJECTION BY THE ASSESSEE HAS BEEN FILED AGAINST THE SEPARATE IMPUGNED ORDERS OF EVEN DATE, 30.11.2011 PASSED IN RELATION TO ORDER U/S 201(1) AND 201(1A) FOR THE AY 2008 - 09 & 2009 - 10 . THE SOLE GRIEVANCE RAISED BY THE REVENUE IN BOTH THE APPEALS IS , M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 2 WHETHER ON THE CHANNEL OF PROVIDING CHOICE OF DESIRED PLACEMENT CHARGES PAID TO V ARIOUS CABLE OPERATORS /MSOS TDS IS TO BE DEDUCTED U/S 194C OR U/S 194J. 2. REVENUES CASE HAS BEEN THAT THE SAME SHOULD HAVE BEEN DEDUCTION U/S 194J , W HEREAS THE ASSESSEE HA S BEEN DEDUCT ING TDS ON THE PAYMENT OF CHANNEL PLACEMENT CHARGES U/S 194C. 3. BEFORE US, THE LD. SR. COUNSEL FOR THE ASSESSEE , SHRI PORUS KAKA SUBMITTED THAT ON SIMILAR ISSUE, ITAT MUMBAI BENCH ES IN SEVERAL CASES HAVE BEEN CONSIST ENTLY HOLDING THAT THE TDS ON CHANNEL PLACEMENT CHARGES HAS TO BE DEDUCTED U/S 194C AND IT DOES NOT FALL WITHIN THE NATURE OF TECHNICAL FEE WITHIN THE SCOPE OF SECTION 194J. IN SUPPORT, HE RELIED UPON THE FOLLOWING DECISIONS: 1 ACIT VS UTV ENTERTAINMENT T ELEVISION LIMITED (ITA NO. 2699 - 2700, 4204 - 4205/M/2012 AND CO NO.205 - 208/MUM/2013) 2 ITO (TDS) VS TIMES GLOBAL BROADCASTING COMPANY LTD.(ITA NO. 669 - 670/M/ 2012 AND CO NO 16 - 17/MUM/2013) 3 ACIT VS NGC NETWORK (I) (P) LTD. (2014) (150 ITD 772)(MUMBAI - TRI B) 4 ITO (TDS) VS TIMES GLOBAL BROADCASTING COMPANY LIMITED (ITA NO. 4809 & 4807/MUM/2013 AND CO NO. 202/MUM/2014) 4. LD. DR ADMITTED THAT THESE ISSUES ARE COVERED BY THE AFORESAID DECISIONS OF THE TRIBUNAL. 5. AFTER CONSIDERING THE RELEVANT FINDING G IVEN IN THE IMPUGNED ORDER AND ALSO THE AFORESAID TRIBUNAL ORDERS AS REFERRED TO AND RELIED UPON OTHER SENIOR LD. COUNSEL, WE FIND THAT THE ISSUE INVOLVED IS SQUARELY COVERED BY THE AFORESAID DECISIONS OF THE TRIBUNAL . THE ASSESSEE HERE IN THE PRESENT CASE IS ALSO MAINLY IN VOLVED THE BUSINESS OF DISTRIBUTION OF TELEVISION CHANNELS BELONGING TO VARIOUS BROADCASTERS , TV CHANNELS WHICH ARE DISTRIBUTED BY THE ASSESSEE THROUGH CABLE OPERATO R S/MSOS. IN TURN, THE BROADCASTERS MAKE PAYMENTS TO THESE CABLE OPERATORS TO CARRY THEIR CHANNELS AT A PARTICULAR FREQUENCY FOR WHICH THEY MAKE PAYMENTS OF CARRIAGE FEES, WHICH GENERALLY KNOWN AS PLACEMENT FEE . THESE CABLE OPERATORS ENTERED INTO AN AGREEMENT WITH THE M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 3 ASSESSEE FOR PLACEMENT OF CHANNEL IN AGREED FREQUENCY FOR W HICH THE ASSESSEE WISHES TO PLACE CHANNELS. IT IS ONLY FOR THE CONSIDERATION OF PROVIDING CHOICE OF DESIRED PLACEMENT OF CHANNEL S , TH A T THE ASSESSEE AGREED TO MAKE PAYMENT OF PLACEMENT FEE TO CABLE OPERATORS, FOR WHICH THE ASSES S EE HAS DEDUCTED TAX AT SOUR CE U/S 194C. THE ASSESSING OFFICER HELD THAT FOR SUCH PAYMENT THE ASSESSEE SHOULD HAVE DEDUCTED TDS U/S 194J @ 10% AS THE CABLE OPERATORS ARE PROVIDING TECHNICAL SERVICES TO THE ASSESSEE. FOR COMING TO HIS CONCLUSION THAT IT IS IN THE NATURE OF TECHNICAL FEES HI S OBSERVATIONS WERE AS UNDER: A) PLACEMENT FEES ARE PAID BY THE BROADCASTERS I.E. THE APPELLANT IN LIEU OF THE TECHNICAL SERVICE PROVIDED TO IT BY THE MSO/CABLE OPERATORS FOR PLACING THEIR CHANNEL (S) ON THE PRIME BANDS FOR BETTER VIEWER - SHIP RESUL TING INTO BETTER TP AND MAXIMUM REVENUE. B) THE PLACEMENT OF CHANNELS INVOLVES APPLICATION OF HUMAN MIND BY TECHNICAL PERSONS WHO PLACE THE BROADCASTERS CHANNELS ON PRIME BAND/ FREQUENCY WITH THE SOLE OBJECTIVE OF INCREASED VIEWER - SHIP, HIGHER TP AND MAXI MIZED REVENUE FOR THE BROADCASTER. THE CONSIDERATION PAID FOR UTILIZATION OF TECHNICAL SERVICE IS, THEREFORE, CLEARLY COVERED UNDER THE PROVISIONS OF SECTION 194J OF THE ACT AND NOT UNDER SECTION 194C OF THE ACT. C) THE VENDORS HAVE PROVIDED NOT MERELY THE STANDARD SERVICE OF TRANSMITTING THE SIGNALS OF THE APPELLANTS CHANNEL(S), BUT THROUGH APPLICATION OF MIND OF SPECIFIED TECHNICAL SERVICE HAS BEEN PROVIDED FOR THE APPELLANTS CHANNEL(S) ON DESIRED PRIME BANDS WHICH RESULTED INTO THE APPELLANT GETTING IN CREASED VIEWER - SHIP HIGHER TRP AND MAXIMIZED REVENUE. 6. THE LD. CIT(A) HELD THAT TDS HAS ALREADY BEEN DEDUCTED U/S 194C BY THE ASSESSEE WHICH IS THE CORRECT SECTION AND AFTER M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 4 DETAILED DISCUSSION FROM PAGES 5 TO 12 OF THE APPELLATE ORDER HE UPHELD THE CO NTENTION OF THE ASSESSEE. WE FIND THAT T HIS ISSUE HAD COME UP FOR CONSIDERATION BEFORE THIS TRIBUNAL IN SEVERAL MATTERS, PARTICULARLY IN THE CASE OF CIT VS UTV ENTERTAINMENT, WHEREIN THE TRIBUNAL AFTER TAKING NOTE OF VARIOUS DECISIONS OF HIGH COURTS DECIDE D THE ISSUE IN FOLLOWING MANNER: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE PAYMENT IN QUESTION WAS MADE BY THE ASSESSEE TO THE CABLE OPERATORS! MSOS FOR PLACING THE TV CHANNELS IN THE PRIME BAN D IN ORDER TO ENHANCE THE VIEWERSHIP AND BETTER ADVERTISEMENT REVENUE. IN THE CASE OF KURUKSHETRA DARPANS (P) LTD. VS. CIT (SUPRA), THE HON'BLE 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. L94COF THE ACT CREATES AN OBLIGATION ON A PERSON RESPONSIBLE FOR PAYING ANY SUM SPECIFIED THEREIN TO A P ERSON 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 EXPIN. 111 BELOW S.194C(2)OF THE ACT. 14. IN TERMS OF THE SAID EXPLANATION. IT IS PROVIDED THAT EXPRESSION 'WORK' SHALL IN CLUDE INTER ALIA BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES 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 THROUGH WHICH IT PROVIDES TELECASTING OF PROGRAMMES TO THE ULTIMATE CONSUMERS/SUBSCRIBERS. M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 5 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 C L . (B) OF EXPIN. III TO S. 194C(2) OF TH E 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 'COMPANY ENGAGED IN THE BUSINESS OF DISTRIBUTION OF SATELLITE BASED TELEVISION CHANNEL('S) SERVICES INCLUDING THE SE RVICE AND HAS EXCLUSIVE RIGHTS TO MARKET AND DISTRIBUTE THE SERVICES IN INDIA TO VARIOUS CUSTOMERS AND USERS OF THE SERVICE'. FURTHER, THE AGREEMENT REFERS TO THE ASSESSEE SUBSCRIBER AS A PARTY, WHICH IS DESIROUS TO SUBSCRIBE FOR AND RECEIVE THE TELECAST S IGNALS 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 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 TO 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 WIT HIN 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 THE ASSESSEE. M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 6 17. ANOTHER PLE A OF THE ASSESSEE/SUBSCRIBER WAS THAT 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 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 SUBSCRIBER 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 SIG NALS . MOREOVER; THE LICENSOR OR THE COMPANY, AS IS EVIDENT FROM THE SPECIMEN AGREEMENT 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 TER MS OF S.194C OF THE ACT ON PAYMENTS MADE 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 OBTAIN ING 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 M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 7 PROVIDED UNDER CLAUSE (IV) OF THE EXPLANATION TO SECTION 194C WHICH READS AS UNDER: - 'EXPLANATION - FOR THE PURPOSE OF THIS SECTION - ******************************* ****************************** (IV) 'WORK' SHALL INCLUDE - (Q)ADVERTISING; BROADCASTING AND TEL ECASTING INCLUDING PRODUCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING CARRIAGE OF GOODS OR PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS; CATERING; 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. T HE HON'BLE 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 OBSERVE THAT EXPLANATION III, WHICH WAS INTRODUCED SIMULTANE OUSLY WITH SECTION 194J, IS VERY SPECIFIC 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 SP ECIFIC TO THE ACTIVITY SOUGHT TO BE TAXED AND THE OTHER IN MORE GENERAL TERMS, RESORT MUST BE HAD TO THE SPECIFIC M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 8 PROVISION WHICH MANIFESTS THE INTENTION OF THE LEGISLATURE. IT IS NOT, THEREFORE, POSSIBLE TO ACCEPT THE CONTENTION OF THE REVENUE THAT PROGRA MMES PRODUCED FOR TELEVISION, INCLUDING '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 HON'BLE DELHI HIGH COURT HAS MADE IT CLEAR THAT 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 TELE CASTING OF THE PROGRAMMES SPECIFICALLY FALLS UNDER THE AMBIT OF PROVISIONS OF SECTION 194C, THEN IN VIEW OF THE DECISION OF HON'BLE DELHI HIGH COURT (SUPRA), THE PROVISIONS OF SECTION 1941 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 RESPO NSIBLE FOR DEDUCTING TAX AT SOURCE ARE 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 SO URCE UNDER SECTION 194C AS PAYMENT FOR WORK CONTRACT AS ALSO UNDER SECTION 1941 AS PAYMENTS OF FEES FOR PROFESSIONAL SERVICES. M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 9 2. IT IS HEREBY CLARIFIED THAT EACH SECTION, REGARDING TDS UNDER CHAPTER XVII, DEALS WITH A PARTICULAR KIND OF PAYMENT TO THE EX CLUSION 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 TH E DECISIONS OF HON'BLE PUNJAB & HARYANA HIGH COURT AND HON'BLE 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 B Y 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 HAS 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 BU SINESS OF DOING DUBBING WORK. THE ASSESSEE WAS HAVING HIS OWN STUDIO 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 DUBBING STUDIOS. IN RESPECT OF ONE SUCH WORK ENTRUSTED BY THE ASSESSEE TO ANOTHER STUDIO BY NAME NINETY DEGREES THE M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 10 ASSESSEE HAD MADE A PAYMENT OF RS. 1,60,000. ACCORDING TO THE ASSESSEE, THE PAYMENT WAS MADE TO A SUB - CO NTRACTOR FOR EXECUTION OF A CONTRACT AND, 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 TE RMS OF SECTION 194 - I OF THE ACT THE ASSESSEE 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 CHARGES BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. 9. BEFORE THE CJT(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 194C 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 SERV ICES RENDERED BY THE DUBBING STUDIO. BUT 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 BROADCASTING AND TELECASTING INCLUDING PRODUCTION OF PROGRAMMES F OR SUCH BROADCASTING 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. THE AGREEMENT M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 11 BETWEEN THE ASSESSEE AND TURNER ENTER TAINMENT 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 PAYM ENT 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) ARE 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 GROUN D 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 DUBBING STUDIO NINETY DEGREES BY USING THEIR EQUIPMENTS AS WELL AS THE ARTISTS WHO WERE 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 REGARD ARE NOT IN CHALLENGE BEFORE US. IN SU CH CIRCUMSTANCES 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 INTERFERE WITH M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 12 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 ILLEGALI TY IN THE ORDER OF CIT(A) QUA THIS ISSUE. 7. THUS, RESPECTIVELY FOLLO WING THE AFORESAID DECISION WHICH HAVE BEEN FOLLOWED IN OTHER CASES ALSO, WE HOLD THAT ASSESSEE HAS RIGHTLY DEDUCTED THE TDS U/S 194C AND WAS NOT LIABLE TO DEDUCT THE TDS U/S 194 J . THER EFORE THE ASSESSEE CANNOT BE TREATED AS ASSESSEE IN DEFAULT WI TH I N THE SCOPE OF 201( 1 ) AND CONSEQUENTLY NO INTEREST CAN BE CHARGED U/S 201(1A). THUS, THE ORDER OF THE CIT(A) IS CONFIRMED AND GROUNDS RAISED BY REVENUE IS DISMISSED FOR BOTH THE YEARS. 8. IN CROSS OBJECTION, THE ASSESSEE HAS RAISED AN ALTERNATE CONTENTION THAT IF THE DEDUCTEE HAVE DEPOSIT THE TAXES, THEN THE ASSESSEE CANNOT BE TREATED AS ASSESSEE IN DEFAULT. SINCE WE HAVE ALREADY HELD THAT THE ASSESSEE IS NOT IN DEFAULT U/S 201(1) ON THE GROU ND THAT TDS HAS BEEN RIGHTLY DEDUCTED UNDER THE CORRECT PROVISIONS OF THE LAW , THEREFORE THE GROUNDS RAISED IN THE CROSS OBJECTION BY THE ASSES S EE HA VE BECOME INFRUCTUOUS. ACCORDINGLY, BOTH THE C ROSS O BJECTIONS FILED BY THE ASSESSEE ARE DISMISSED BEING INF RUCTUOUS. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AND C ROSS OBJECTION S OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH JU LY , 2015. SD/ - SD/ - ( . ) ( ) ( D KARUNAKARA RAO ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBA I, DATE: 27 TH JU LY , 2015 M/S ZOOM ENTERT A INMENT NETWORK LTD ITA S 671 & 672 /M/20 1 2 COS 18 & 19/MUM/2013 13 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 14 , MUMBAI 4 ) THE CIT (TDS) , MUMBAI . 5 ) , , / THE D.R. G BENCH , MUMBAI. 6 ) COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS