TaxTMI 
TaxTMI 
2015 (4) TMI 256
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce 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 payment 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 made 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 fore 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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, 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 consideration. 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 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 Skycell Communications Ltd and various other judicial precedents relied upon by the Appellant, placement of channels being a standard facility, the consideration in respect thereof would not qua....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... that the issue under consideration is squarely covered by the order of the Tribunal in assessee's own case vide order dated 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 tribunal is as under:- "6. 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 band 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. 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 to in cl(b) of Expln. III below s.194C(2)of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct. 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 signals . Moreover, the licensor or the companyv, 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 theagreement is the broadcasting and telecasling 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. 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 obtaining the telecast licenses from the licensor falls under the provisions of section 194C. We find that the work of broadcasting/telecasting inc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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 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 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, regarding 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 Hon'ble Punjab & Haryana High Court and Hon'ble Delhi High Court, we do not find any error or illegality in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....grammes for 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 between the assessee and Turner Entertainment 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) 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 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 dubbing st....