TaxTMI 
TaxTMI 
2021 (11) TMI 34
X X X X Extracts X X X X
X X X X Extracts X X X X
....957/- raised u/s 201(1) of the Act without appreciating that payments towards placement fees are in the nature of fees for technical service and thus liable for TDS at the rate of 10% u/s 194J of the Act?" 2. "Whether on the facts and in the circumstances of the case and in law, the Ld, CIT(A) erred in deleting the levy of interest of Rs. 4>33,01,284/- u/s 201(1A) of the Act without appreciating that the payments towards placement fees are in the nature of fees for technical service and thus liable for TDS at the rate of 10% u/s 194J of the Act?" 3. Brief facts of the case are that the Appellant is an Indian company and is, among others, engaged in the business of broadcasting of channels over various countries, including over I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant 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. Therefore, as per appellant's argument, such payment of placement fee by the Appellant to the cable operators should be subjected to TDS @ 2% as per the provisions of section 194C of the Act. The TDS AO has adopted 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 does; not hold ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ereby also strengthening SIPL's order). In light of above judicial precedents pronounced by the Hon'ble Bombay High Court in SIPL's own case and in the case of other entities, and considering that the appellant has already deducted TDS under Section 194C of the Act, the TDS officer is directed not to consider the Appellant as assessee in default under Section 201 (1) of the Act as there is no short demand of tax by the Appellant. Accordingly, the demand of tax of Rs. 12,37,17,957 under Section 201 (1) of the Act is deleted. Further, since the assessee is not a deemed defaulter u/s..201(1), the interest u/s 201(1A) is also not leviable and the interest amounting to Rs. 4,33,01,284 under Section 201(1A) of the Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) 9. The decision of the Hon'ble ITAT in the case of Channel Guide India Limited (ITA no 1221 of 2006 and 579 of 2006) 8. Per contra Ld. DR could not dispute the decisions covered in favour of the assessee. Upon careful consideration, we note that Hon'ble Bombay High Court in assessee's own case in ITA Nos. 1420/2016 and 1422/2016, vide order dated 11/01/2019 had decided the issue in favour of the assessee by holding as under;- 1. The Revenue has filed both the appeals against the common judgment of the Income Tax Appellate Tribunal, raising similar question of law for our consideration, which is as under : (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal is correct in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncies 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 (....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that whether the payment is towards a standard fee or placement fee, the activities involved on the part of the cable operators/ MSOs are the same. When placement fee is received, a channel is placed on a particular prime band. It was found that by an agreement to place the channel on a prime band by accepting placement fee, the cable operator/ MSO does not render any technical service. As far as Appellate Tribunal is concerned, again the definition of work in clause (iv) of the explanation to Section 194C was looked into. We must note here that a grievance was made by the learned counsel appearing for the appellant that there are no detailed findings recorded by the Appellate Tribunal. However, the Commissioner (Appeals) has recorded deta....