TaxTMI 
TaxTMI 
2017 (11) TMI 915
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....on account of carriage fees, editing expenses and dubbing charges. Tax was deducted on the said amounts as per Section 194C of the Income Tax Act, 1961. 3. The Assessing Officer was of the opinion that the carriage fees, editing charges and dubbing charges were in the nature of fees payable for technical services and, therefore, tax should have been deducted under Section 194J of the Income Tax Act, 1961 (for short "the Act"). Accordingly, a show cause notice was issued to the respondent asking for explanation with respect to following payments made. (i) Carriage Fees / Placement Charges. (ii) Subtitling charges (Editing Expenses) (iii) Dubbing Charges. 4. After considering the reply of the respondent assessee, it was held that an aggregate amount of Rs. 34,71,36,096/is in the nature of fees for rendering technical services and therefore tax should have been deducted under Section 194J of the said Act. Before we come to the submissions made across the bar, it will be necessary to make reference to the relevant provisions of the Income Tax Act. Section 194C and Section 194J of the Income Tax Act form part of the Chapter XVII which generally deals with the collection and r....
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....cessary to advert to the facts of the case. For that purpose, it will be necessary to make a reference to the order passed by the Income Tax Officer. Paragraph 3 of the order reads thus : "3. During the Survey, on perusal of the books of accounts of the assessee company, it was found that for Financial Years 201011, the year under consideration the assessee company has debited an amount of Rs. 33,24,56,189/on account of "carriage fees" Rs. 8,20,650/on account of Editing expenses and Rs. 12,95,400/on account of Dubbing Charges. The assessee was asked to give the details of the Carriage Fees, Editing Expenses and Dubbing Charges paid by the company and the services rendered to them along with copies of Agreements made in this regard. The assessee has deducted TDS as per the provisions of section 194C of the I.T.Act on such payment. On further perusal of the Agreements submitted by the assessee it is seen that these payments are given to MSO/Cable Operators to retransmit and/or carry the service of the channels on 'S' Band in their respective territories. The services provided by these MSOs / Cable Operators does not come within the purview of section 194C of the I. T. Act, ....
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....The agreements are entered into with the respondent by the cable operators for placement of channels on agreed frequencies on which the respondent wishes to place a particular channel. The placement fee is the consideration for providing choice of the desired placement of the channels. That is how, channel placement charges are paid to the cable operators under the agreement. Under the agreement, the cable operators agree for placing a particular channel on agreed frequency band. As stated earlier, the respondent has deducted tax at the rate of 2% at source by invoking Section 194C of the Income Tax Act while making payment towards placement fees to the cable operators/ MSOs. If Section 194J is to be applied, the deduction would be of 10%. The Commissioner (Appeals) has also gone through the method followed by the cable operators/ MSOs. The Commissioner (Appeals) has also gone into the submission of the Revenue that, in fact, Section 194J would apply. In substance, the argument is that placement charges are basically for rendering technical service. The Commissioner (Appeals) has recorded a finding of fact on the basis of material on record that the placement charges are considerat....
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....pects. Subtitles are textual versions of the dialogs in the films and television programmes which are normally displayed at the bottom of the screen. Sometimes, it is a textual version of the dialogs in the same language. It can also be a textual version of the dialogs in a particular language other than the language of the film or the TV programme. Again the stand of the Revenue was that this will be covered by Section 194J and not by Section 194C. We must note here that in this appeal, the Revenue has not made any grievance regarding applicability of Section 194C to dubbing charges. The finding of fact recorded by the Commissioner (Appeals), which is confirmed by the Appellate Tribunal, is that work of subtitling will be covered by the definition of "work" in clause (iv) of explanation to Section 194C. Reliance is placed by the Commissioner (Appeals) on the CBDT notification dated 12th January 1977. The said notification includes editing in the profession of film artists for the purpose of Section 44AA of the Income Tax Act. However, the service of subtitling is not included in the category of film artists. As noted earlier, sub-clause (b) of clause (iv) of the explanation to Sec....