TaxTMI 
TaxTMI 
2017 (1) TMI 572
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the rival submissions and perused the material available on record. Before coming to any conclusion we are reproducing hereunder the relevant finding recorded by the ld. First Appellate Authority for ready reference and analysis:- "3.15 I have considered the submissions and the arguments of the Id. ARs. The above grounds pertain to the short deduction of TDS on payment by the Appellant, of channel placement fees to cable operators/MSOs. The Appellant has made payment of placement charges to cable operators. From the placement agreement, it is seen that the cable 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 signals 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 provisions of section 1940 of the Act, it is provided that ex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ogy 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 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. that the payment of placement fees is in the nature of brokerage or commission as defined in explanation to section 194H of the Act, 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 services rendered by him to such other person. However, this definition pre-supposes 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perusal of the submission made by the IBF before the Board it is seen that basic thrust and the sole purpose of the same is to somehow to simplify and over simplify a process which is otherwise complex and technical in nature. It needs to be appreciated that just by linguistic simplification, an elaborate and technical process cannot be brought at part with an exercise/process which is non technical in nature. Therefore, it is necessary to understand in clear terms what precisely is the nature of services rendered by the cable operators in order to be eligible to receive I earn Carriage Fees. 2.3 Nature of service rendered by cable operators / MOS's : Carriage fees is generally paid by the Broadcasters to MSO/ Cable Operators to place their channel on the network at a hand of their choice. Right frequency is important to ensure a good viewership of a channel and get high TRPs resulting into better advertisements. The carriage fees has become a contentious issue between broadcasters and cable distributors company, as there are about 400 television channels registered by the government looking around to be viewed, while the analog cable distributor platform can carry only 7....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equency. * The cable operator / MSO connects the IRD to the modulator of the specified frequency for which the carriage / placement agreement has been made for the Channel for further distribution to subscribers. 2.4 It is true that the process is automated after modulators is connected, but the question that arises here is who connects the modulator? It is here that the human intervention comes into play and the modulator of the desired channel on a particular frequency on the Prime band is connected by way of application of human mind by a technical person, for which the Federation itself has admitted that a separate Channel Placement Deal is made with the Cable operators. This process is not automated is for placing the Channel on a particular frequency of Prime Band human intervention is essential. The process that follows subsequent to connection of modulator is automated. It is seen that the Broadcaster of a channel first beams its signals to the Satellite. From Satellite the signal is received on earth by the LNB of the Parabolic Antenna and from there the signal is sent to Decoder / IRD. which is supplied by the Broadcaster, through Black Cable where it is logged perm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue. 2.6 The Standard fees paid by Broadcasters comes within the purview of contract payments u/s. 194C as the same can he said be paid pursuant to carrying out the "work" of transmitting the channels of the Broadcasters. This service clearly falls within the ambit of Explanation given below section 194C wherein the term Work" is stated. to include Broadcasting & Telecasting" also and the term Broadcasting Service has been defined in The Register of Interconnect Agreements (Second Amendment) Regulation 2004, issued by the TRAI, which says that Broadcasting Service means dissemination of any form of Communication like sings. Signals, writing pictures, images and sounds of all kinds by transmission of electromagnetic waves, through space or through cables intended to the received by the general public either directly or indirectly and all its grammatical variations and cognate shall be construed accordingly (Emphasis supplied). However, the same cannot be said to be the case in respect of carriage / placement fees as it involves application of human mind by the technical person who place the Broadcasters channels on Prime Band with the sole objective of increased viewership, higher....