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2014 (4) TMI 113 - AT - Income TaxDeduction of TDS u/s 194J or u/s 194C - Nature of agreement - AO was of the view that the "dubbing expenses/print processing fees" and "production expenses" were in the nature of 'fees for technical services’ and 'royalty’ respectively, and hence the tax should have been deducted under section 194J of the Act @10%,instead of @2% deducted by the assessee under section 194C - Held that:- The assignment or vesting of copy rights etc. in the programme are incidental to the main object of the agreement or transactions in question. When a contactor produces a programme on behalf of other, it is obvious that all the rights including copy rights etc. will vest in the producer and the assigned producer/contractor will not be left with any control or right over the programme and such rights of the producer have been recognized with the said assignment clause, which is incidental to the main object of the contract. The observation of the AO that assigned producer has an absolute contract over the rights of the programme is falsified from the perusal of the different clauses of the agreement. - agreement in question was an agreement to produce the programme by the assigned producer i.e., contractor on behalf of the producer i.e., assessee. Clause (b) to Explanation III to section 194C specifically covers activity of production of programmes whereas provisions of section 194J are general in nature - Provisions of section 194C would prevail over section 194J of Act - Section 194C clearly states that payment for production of programmes constitutes payments for 'work’ under section 194C - Assessee rightly deducted TDS u/s 194C at rate of 2% on payments made to contractor - CIT(A) has rightly observed that production of programmes is nothing but combination of processes right from planning - He rightly held that dubbing charges and processing fees being a part of production of television serials and programmes, are squarely covered under ambit of specific provisions of section 194C of Act and liable to TDS at rate of 2%. - General provisions of section 194J are not attracted in this case - Findings of ld. CIT (A) upheld - Decided against Revenue.
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