TaxTMI 
TaxTMI 
2023 (5) TMI 472
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....d working with technical equipment." 3. "Whether, in facts of circumstances of case, the Ld.CIT(A) has erred in holding that the director fees paid to Mr. Jean Carlier is not technical nature despite the fact that the payment is covered under professional services which include technical, management and consultancy service." 4. "Whether, in facts of circumstances of case, the Ld.CIT(A) has erred in deletion the addition made by AO despite the fact that the said payments are covered u/s 9(l)(vii) and hence ought to have been disallowed u/s 40(a)(i)." 3. Briefly stated the facts are that the assessee is a company engaged in the business of making ad films (TVC). For AY 2013-14, the assessee e-filed its return on 29.09.2013 declaring income of Rs. 85,09,790/-. The case was selected for scrutiny and statutory notices were issued and duly served upon the assessee. In response thereto, the assessee produced complete books of account and also filed all the necessary details as called for by the Ld. Assessing Officer ("AO") from time to time. The reply filed by the assessee was not found tenable by the Ld. AO who proceeded to make disallowance of Rs. 1,69,275/- under s....
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.... form 15CB/15CA has been issued and submitted with the bank. All these payments are being made to non- resident having no PE in India A detailed chart of all such payments is enclosed for your kind perusal. We are also enclosing copies of invoices received against the payment made to non-resident. 2. Regarding the non deduction of TDS on Payment to Non Resident. The person to whom the payment is made they have no permanent establishment in India It is to be submitted that we have made major payments to non-resident for ad film production services like :- a. Arranging for shooting locations, b. Obtaining necessary permits for the appellant. c. Arranging shipping & custom clearances d. Arranging for extras, shooting equipment, meals, transport etc. if required e. Rendering help in obtaining visas f Arranging for makeup of casts, if required g. Coordinating necessary licenses. 3. The said Services rendered outside India by the overseas service providers in connection with making logistic arrangement are in the nature of commercial Services and the amount received by them from the assessee for such Service....
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....J of the Act was not applicable. Production of film for telecasting is covered under the definition of work. Hence the same cannot be termed as Technical or Professional Services. 7. Out of the total amount remitted out of India, an amount of Rs. 572850/- has been paid for services of ad film director Mr. Jean Carlier. All other payments are on account of production services. This payment is made for the direction of the ad film "Dalda". This payment is covered under article 15 of the DTAA with country Malasiya. This payment is made to a non-resident individual having no PE in India and payment for ad film director is covered under "Professional Services. Film direction services cannot be termed as technical services as defined under explanation 2 to section 9(1)(vii) of the Act." 4.4 It was submitted that the AO had wrongly presumed all these payments are covered under "Fee for technical services" as defined u/s 9(1)(vii)(b) of the Act whereas these payments were made to all these persons on account of ad film production line services like a. Arranging for shooting locations, b. Obtaining necessary permits for the appellant. c.....
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....ction services cannot be termed as technical services as defined under explanation 2 to section 9(1)(vii) of the Act. 4.9 It was vehemently submitted that the said Services were purely of commercial nature and could not be termed as Technical Services. The foreign Services providers in the case of the assessee thus were remunerated for their efforts and time spent in making logistic arrangement for the assessee. The entire payments made by the assessee to the foreign service providers thus were not in the nature of fees for Technical Services within the meaning of Explanation 2 to section 9(1)(vii) and the same were not chargeable to tax in India. The assessee, therefore, was not required to deduct tax at source from payments made to the overseas service providers. 4 10 The appellant also relied on a similar view taken in the case of Yash Raj Films P. Ltd v ITO (IT) (2013) 140 ITD 625 / 23 ITR 125 (Mum.)(Trlb.) Assessee Company was engaged in business of production of films, shooting of which was often done outside India. For shooting films outside India, its production unit used to go abroad and services required in connection with work of shooting abroa....
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.... 13.12.2013). 4.13 It is held in this case. "12.The questions raised by the applicant are answered as follows:- (1) The payments made by the applicant towards line production services provided by Endemol ARG in accordance with the agreement entered into by the applicant with Endemol ARG is not 'fees for technical services' as the services falls under 13 'work contract' as defined in Explanation to Section 194C of the IT Act. (2) The question is not dealt with because of our answer to question No. 1 (3) The payments made by the applicant to Endemol ARG for availing the line production services under the agreement is not chargeable to tax as per the provision of section 9(1)(i) of the IT Act. (4) The receipts by Endemol ARG from the applicant will not suffer withholding of tax under section 195 of the Act as the income earned is not taxable in India." 4.14 It was further submitted that the assessee is procuring similar services from same countries during the preceding and succeeding assessment years but no such addition has ever been made. The assessments for the AY 2009-10, AY 2011-12, AY 2012-13 and 2015- 16 have been c....
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....lm Production Services UNITED KINGDOM 17 20/12/2012 Nolabel Sp.z.o.o 329850.00 Ad Film Production Services POLAND 18 29/01/2013 Nolabel Sp.z.o.o 329400.00 Ad Film Production Services POLAND 19 05/02/2013 Nolabel Sp.z.o.o 272813.00 Ad Film Production Services POLAND 20 01/03/2013 Nolabel Sp.z.o.o 296020.00 Ad Film Production Services POLAND 21 14/03/2013 Marco Pinesii Production Service 860250.00 Ad Film Production Services MALAYSIA 22 25/03/2013 Marco Pinesi Production Service 862500.00 Ad Film Production Services MALAYSIA 23 18/03/2013 Prisana Trachai 1925000.00 Ad Film Production Services THAILAND 24 22/03/2013 Nolabel Sp.z.o.o 142200.00 Ad Film Production Services POLAND 25 07/12/2012 Nolabel Sp.z.o.o 213600.00 Ad Film Production Services POLAND TOTAL 15885633.00 9. It is also an undisputed fact that the services received by the assessee by these non-resident service providers are on account of ad film production line services like arranging for shooting locations; obt....