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2016 (9) TMI 504 - AT - Income TaxTDS u/s 194C or 194J - payments made for processing charges to Adlab for supplying copies of final negative - nature of payment - Held that:- Such payments would be covered under sub-clause (e) of Explanation to Section 194C of the Act and may not be covered u/s. 194J of the Act, as no specialised job was to be done, nor any technical services have been rendered to the assessee. In the order u/s.201 of the Act, Assessing Officer had given details about various facilities available in Adlabs, but those facilities are used only for preparation of the final copy of negative. There is no technical service in such activity. Such jobs or work contracts of making several prints or the same final negative may not involve any technical or professional services as such, requiring the assessee to deduct tax u/s. 194J of the Act, but such contracts will be covered under the provisions of Section 194C of the Act. It was found evident that assessee has been consistently making TDS on payments for taking prints of negative, as per the provisions of Section 194C of the Act, while for original payments, it had been deducting TDS under the provisions of Section 194J of the Act and such deduction of tax had been accepted by same Assessing Officer and in assessee's own case for subsequent years in similar state of circumstances. Payments for supplying various copies of final negative has been made by assessee to Adlabs at the rate of ₹ 220/- per 100 mtrs., which itself indicated that the kind of work done by them was not very sophisticated or specialized. At the same time, the payment made to Kodak India Ltd., for processing of the final negative, was significantly higher, indicating that the nature of the work done by them was technical and specialized manner. In view of above, CIT(A) was justified in holding that assessee has rightly deducted TDS on the payments made to Adlabs, for supplying copies of final negative, as per the provisions of Section 194C of the Act. Consequently, CIT(A) was justified in granting relief to assessee on this account.
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