TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 213
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....or assessment year 2008-09. The common grounds raised in all these four appeals are reproduced herein below from the appeal for assessment year 2008-09:- 1. (i) The Ld. CIT(A) has erred on facts in law and not correctly appreciating the nature of the services rendered by the cable operators/ MSOs for which placement charges are paid and holding that such charges come within the purview of section 194C whereas such placement charges 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 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 technical 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....
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....ndered to them along with copy of the agreement entered into. The assessee company had deducted TDS under the provisions of Section 194C of the Act. The AO found that the payments were made to MSO/Cable Operators to retransmit and/or carry out services of the channels on „S‟ Band in their respective territories. The AO took the view that the services rendered by MSO/Cable Operators do not fall within the purview of Section 194C of the Act, because placing the service of the channel on „S‟ Band is a Technical Service for which TDS is required to be deducted under the provisions of Section 194J, instead of that the assessee has deducted the TDS as per the provisions of Section 194C @1% or 2% on the payments made to the concern contractors as mentioned therein; whereas in view of the provisions contained in Section 194J of the Act, TDS was required to be deducted @10% on the payments made. The AO issued show-cause notices to the assessee for the financial year 2007-08, 2008-09, 2009-10 and 2010-11 and ultimately, he held that the tax is required to be deducted on the amount payable by the assessee to the contractors/MSO/Cable Operators as per the provisions of ....
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....Circular No. 720 dated 30.08.1995, wherein it was clarified that each section under chapter XVII, deals with a particular kind of payment to the exclusion of 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 relied upon the decision of Hon‟ble Punjab & Haryana High Court in the case of Kurukshetra Darpans (P) Ltd. Vs. CIT (supra) and submitted that the Hon'ble High Court has held that the receipt of telecasting signals from the licensor is essentially under the contract to obtain broadcasting and telecasting facility 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 that Explanation 3 to section 194C is very specific in its application not only to broadcasting and telecasting but also includes production of programmes for such b....
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....nt 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 service 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 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 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 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 net....
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....on‟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 simultaneously 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 specific to the activity sought to be taxed and 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, 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 res....