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2016 (5) TMI 31 - AT - Income TaxTDS u/s 194C - placing the magazines on the back of the seats of the aircraft - payment made by the assessee to KAL on account of sharing of incremental advertisement - Held that:- The agreement between the two was on account of sharing of incremental advertisement only and nothing else. According to Ld. DR, displaying of magazine to the captive audience by KAL in its flight would itself fall within the definition of 'work'. In this regard we beg to differ with the views of Ld. DR. The admitted facts are that KAL has purchased the magazines, which was a separate transaction and for which KAL had made payment to the assessee. Thus displaying of magazines by KAL was for its own consumption and purposes. Once the product of the assessee was purchased by KAL, thereafter whatever has been done by KAL with the said product was for own benefits, advantages and purposes of KAL only. Under these circumstances it could not be said at all that KAL had displayed the magazine for and on behalf of the assessee, nor it could be said that by placing the magazines on the back of the seats of the aircraft, KAL had done a 'work' for the assessee. KAL provided magazines to its guest passengers as part of its effort for creating a five star in-flight experience for its customers. Thus, increase in the advertisement revenue cannot be said to have occurred directly as a result of any 'work' done by KAL for on behalf of the assessee. Further, no such 'work' could have been recognized or merged in any tangible or quantifiable terms. Thus, without any hesitation, we can say that the impugned payment made by the assessee to KAL on account of sharing of incremental advertisement revenue shall not fall within the provisions of section 194C. - Decided in favour of assessee. TDS u/s 195 - payment for for procuring images and figures to be published in assessee's magazines in India - Held that:- To be included in the definition of 'royalty', the payment should be made for use of a copyright of the items. Even if we presume, although denied by the assessee, that photograph will fall in any one or more of the items mentioned in the above said definition, even, then it is mandatory on the part of the revenue before applying these provision to show that the payment was for use of 'copyright' and not 'copyrighted article'. In our opinion, use of copyright and 'copyrighted article' are altogether two different things as has been held in many judgments also. The admitted fact is that the photograph has been given to the assessee for the limited purpose of its one time use in the magazine. The assessee can neither edit the photograph nor can it make copies of the photograph to be sold further or to be used elsewhere. The assessee is not permitted to make resale of these photographs to any other person for any other use. Thus, what has been permitted to the assessee is to make use of the article and not use of the copyright. Thus, we find that the transactions of downloading of photographs for exclusive one time use for publication in the magazine did not fall within the provisions of relevant Article 12 of DTAA and therefore, assessee was not liable to deduct tax on the payments made for the same. It is further brought to our notice that in the assessment year 2009-10 also payments were made to these very parties namely M/s Getty Images and M/s Famous-Pictures & Features Agency, for downloading of photos. But no disallowance has been made by the assessing officer in the assessment order passed under section 143 (3) dated 24.11.2011.- Decided in favour of assessee.
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