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2017 (3) TMI 333 - AT - Income TaxTDS u/s 192 or 194J - remuneration paid to six professionals engaged by the company - Held that:- Nothing has been shown to prove that Shri Chawla was not engaged on full time basis or he was working on part time basis with the company as an independent professional and he was free to take up other assignments. No cogent reason could be given before us as to why the designation of Production Manager was assigned if he was acting simply as an independent professional. Thus, in our considered opinion, the facts and the evidences brought before us duly establish that there existed an ‘employeremployee’ relationship between the assessee company and Shri Chawla. Similarly in the case of other persons, it is noted that all the terms and conditions are identical. Ms. Sushma Chitnis designated as ‘Executive Assistant to the Chairman’, Shri Blesson Oomen has been designated as ‘Manager Cum Accounts & Finance’, Shri Amitabh Shukla designated as ‘Avid Incharge’, Shri Vishal Punjabi designated as ‘Production Executive’, and Shri Rajesh Wanmali designated as ‘Production Assistant’. The remaining terms and conditions in the case of all these persons were same. Thus, the facts and the evidences brought before us clearly establish that there existed an employer-employee relationship between these persons and the assessee and thus, the assessee was liable to deduct TDS u/s 192 because the remuneration paid to them constituted ‘salary’. TDS u/s 194C OR 194J - expenses incurred as part of post production activities - Held that:- The impugned expenses incurred by the assessee are in the nature of post production activities. Therefore, the assessee was obliged to deduct TDS u/s 194C only and not u/s 194J. TDS u/s 194C OR 194J - nature of professional fee - DTAA - PE in India - Held that:- In the facts of the case before us, VHQ has carried out post production job. In this process, no technology or skill has been made available to the assessee. In case assessee would need similar job again, then he will have to go back to VHQ to get this job done. No replication or repetition is possible at the end of the assessee at its own. Thus, the requisite mandatory condition of ‘make available’ of technical knowledge or know-how or skill is missing in this case. Therefore, in our considered opinion, this amount cannot e brought to tax as FTS under India-Singapore DTAA. The judgments relied upon by the Ld. Counsel in his submissions have taken similar view. It is also noted that as per provisions of section 90(2) of the Act, most beneficial provision shall be available to the assessee between provisions of the Act and the provisions of the DTAA. Therefore, we find that this amount was not taxable in the hands of VHQ in India. Therefore, assessee was not obliged to deduct tax at source on the payment made to VHQ. As a result, these grounds are allowed. TDS u/s 194C or 194J - amount paid by the assessee to M/s KWB, UK for providing dancers, who had rendered services in India for advertisement films used in India - Held that:- the contention of the Ld. Counsel that amount was paid for production of a programme for broadcast is factually correct. Therefore, TDS was required to be deducted u/s 194C in view of the specific provision contained in section 194C in this regard. Therefore, it is held that TDS should have been deducted u/s 194C and not u/s 194J. TDS u/s 194I - non-deduction of tax at source on the hotel expenses - Held that:- As on the basis of bills of hotels and other evidences. It is noted that nothing has been brought before us to show that assessee had entered into any prior contract with the hotels for any specific room or rooms for any specific rates or rooms for any specific period. The rooms were hired on as and when available basis at the regular tariff rates subject to the discounts as agreed at the time of booking of rooms. Under these circumstances, the assessee deserves to be given the benefit of the circular issued by the Board providing that under these circumstances, TDS will not be required to be made u/s 194I. Therefore, it is held that no TDS was required to be made in this case.
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