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2007 (9) TMI 448 - AT - Income TaxDeduction of tax at source u/s 194H or 194J - Expenditure incurred by TVAM (subsidiary company) for production of the TV programme "Fees for technical services or Agency Sales Commission" - HELD THAT:- In the present case, TVAM has not rendered any managerial, technical or consultancy services for the payments made by assessee to it. Rather the TV serial was produced by TVAM itself availing the services of various artists etc. The entire cost of production of the TV serial is reimbursed by the assessee. The payments by the assessee is for acquiring right in the FCT which is merely measured on the basis of cost plus 7.5 per cent. Thus, it cannot be said that the amount was paid by the assessee to TVAM in the nature of ‘fees for technical services’ as defined in Explanation to section 9(1)(vii). Thus, there is no error in the order of learned CIT(A) in this regard. Payments of commission - HELD THAT:- It is seen that the assessee has not paid any commission to the advertising agents. Rather the assessee has sold the air time to the advertising agents who in their turn have sold such air time to various other advertisers. The assessee was to receive certain consideration for selling the air time to the advertising agent and the advertising agents had retained part of that commission which is in the nature of agency commission. Thus, the assessee received payment from the advertising agent net of such agency commission. These are in the form of trade discount offered and not in the form of commission paid. On the payment made by advertising agents to the assessee, tax is deducted at source u/s 194C of the Act. Since the assessee has not paid any commission within the meaning of section 194H of the Act to the advertising agents rather have received the amount from such advertising agents, there is no occasion for the assessee to deduct tax at source as no payment is made by the assessee to such advertising agents. The decision of ITAT, Cuttack Benches in the case of Asstt. CIT v. Samaj [2000 (5) TMI 166 - ITAT CUTTACK] squarely applies. The facts being identical, the amount deducted by various advertising agents cannot be considered as commission but is also to be treated as discount given and hence, the assessee was not under any obligation to deduct tax u/s 194H of the Act. In the result, both the appeals are dismissed.
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