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2015 (11) TMI 1448 - ITAT JAIPURTDS u/s 194I - non deduction of TDS - as contended by the assessee that the agreement is neither a Rent Agreement nor an agreement to take the cinema hall for exhibiting the film nor it was an agreement to take on rent the plant and machinery installed in the cinema hall but was an agreement for conducting of business and for the purpose of ensuring and boosting the business of film exhibition by M/s. Show Time Entertainment Pvt. Ltd the said agreement was entered by the assesse with cinema owner Held that:- We are of the opinion for the purposes of attracting section 194-I, the prime condition was that the payment of rent should be relatable to any use of land/building together with furniture, fixtures etc. From the perusal of the terms and conditions of the agreement referred above, it is clear that there is no corelation between the payment of ₹ 65,00,000/- and uses of cinema hall/plant and machinery. further we are of the opinion that the term ‘Rent’ is a periodical payment payable by the user of land , building etc to the owner/landlord of the land , building etc. In the present case the second party (the assessee) is not the user of the cinema hall/plant and machinery, moreover no, payment was made by the second party i.e. assessee . therefore we hold that the payment of 65 lacs were not in the nature of rent within the meaning of section 194-I of the Act and the said provision is not attracted . Thus the payment is not required to be made by the assessee (second party) to the first party, rather it was other way round i.e. the first party/ M/s. Show Time Entertainment Pvt. Ltd was required to make the payment to the second party/ assessee in case of excess collection. In fact, the assessee did not have any control over the funds as the funds were collected and managed ,by selling of tickets by the first party i.e. M/s. Show Time Entertainment Pvt. Ltd. and no money was being paid by the second party / Assessee to the first party / M/s. Show Time Entertainment Pvt. Ltd. Thus the provisions relating to the tax deduction at source do not come cannot come into play. Assured and guaranteed return by the assessee was given to the cinema owner in case of exhibiting of films by the cinema owner. There is no letting out of the cinema hall, plant and machinery, furniture and fixture for exhibition of films. We feel that the dominant and prime intention of the parties entered into agreement to conduct business and to give comfort level by the assessee to the cinema owner. The day to day maintenance and running of commercial activities remained with the owner of the cinema owner and the assessee had no control or interference whatsoever. The cinema was exclusively owned and managed by the cinema owner and the assessee was having no interference with selecting the films, exhibiting the films, issuing tickets, paying tax, maintaining statutory compliances whatsoever. Thus the agreement was not of letting out but was for conduct of business. - Decided in favour of assessee.
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