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TMI Blog2013 (5) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... the order was only Rs. 44,94,400 and not Rs. 70 lakhs as presumed by the Assessing Officer. The demand under section 201 requires to be reduced accordingly. 3. In any event, the interest levied under section 201(1A) is excessive and arbitrary and requires to be reduced substantially. 4. Without prejudice to the foregoing grounds, both the lower authorities erred in holding that the payment was made to Ms. Katrina Resomary Turcotte. The appellant submits the payment has been made to Matrix India Entertainment Consultants P. Ltd. and consequently, the provisions of section 194J do not apply to the payment. 5. Without prejudice, the Assessing Officer should have refrained from passing an order under section 201(1) and 201(1A) considering that Ms. Katrina Resomary Turcotte was an assessee on record and had duly filed her return of income." 2. Briefly stated relevant facts of the case are that the assessee is a subsidiary company of Kodak, Rochester (USA) engaged in the manufacturing cameras, trading in cameras and dealing in photographic films in and out of India. During the action under section 133A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to render services as model for photo shots under the agreement in respect of cameras. During the first appellate authority proceedings, the assessee submitted that the said Explanation (a) is exhaustive in nature, so far as the classification of services are concerned, the modelling does not fit into the services so satisfied therein. In this regard, the assessee relied on the Notification of the Central Board of Direct Taxes dated August 21, 2008 (304 ITR statute page 62) and mentioned that it is not that all professional services are included in the said list and therefore, the attempt of the Assessing Officer to include the impugned service of modelling for advertisement for marketing digital cameras manufactured by the assessee for applying the said provisions of section 194J is uncalled for and is not legal. Without prejudice, it was also submitted that the payee in this case was M/s. Matrix India Entertainment Consultants P. Ltd., and it does not engage in any professional services within the meaning of the said Explanation to section 194J of the Act. Therefore, the provisions of section 194J have no application to the impugned payments. The assessee also submitted detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts of Kodak. Further, learned counsel brought to our attention the provisions of Explanation (a) to section 194J and mentioned that the fees for professional service is defined there and the same does not include modelling as a defined profession for this purpose of section 194J. It is also brought to our attention the Notifications dated January 12, 1977 issued by the Central Board of Direct Taxes in the context of section 44AA of the Act in the context of list of professionals who must get their accounts audited and it was issued to include various professions. The profession of film artist is included in the said Notification. Further, the learned authorised representative brought our attention to another notification where the film artist is also defined to mean any person engaged in professional capacity in the profession of cinematography film whether produced by him or other person as an actor ; cameraman ; director including assistant director ; music director including assistant music director ; dance director including assistant dance director, an editor ; a singer ; a lyricist ; a story writer ; a screenplay writer ; a dialogue writer and a dress designer as well as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the fact that the amount was paid only to M/s. Matrix India and not to Ms. Katrina Kaif, learned counsel mentioned that the order passed under section 201 by the Assessing Officer needs to be cancelled and the impugned order of the Commissioner of Income-tax (Appeals) is ought to be set aside. 5. Per contra, the learned Departmental representative heavily relied on the orders of the Revenue authorities. Further, he mentioned that the profession of modelling is a part of acting and since the film actor is a professional, the services rendered by such actor constitute "professional services". Thus, as per the learned Departmental representative, the fee paid to such an actor constitutes "fees for professional services-FPS". In that sense, the assessee is covered by the Notification in the capacity of an actor qua the provisions of section 194J of the Act. 6. During the rebuttal time, learned counsel vehemently objected to the learned Departmental representative's argument that the modelling is a part of acting and stated forcefully objecting to this new argument raised before the Tribunal for the first time. Learned counsel mentioned that the learned Departmental representative m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the parties in dispute. We have perused the paper book and the copies of the decisions filed before us. For adjudication of the issue on hand, i.e., if the payments made by the assessee in lieu of the services rendered by Ms. Katrina Kaif attracts the provisions of section 194J of the Act, we should first analyse the available information relating to the legal scope of the matter. For this, we shall first analyse the provisions of section 194J and the notification issued in connection with the said provisions. To start with, we shall take up the provisions of section 194J of the Act. They read as follows : "194J. (1) Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident any sum by way of- (a) fees for professional services, or (b) fees for technical services, or (c) royalty, or (d) any sum referred to in clause (va) of section 28, shall, at the time of credit of such sum to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; (v) an art director, including an assistant art director ; (vi) a dance director, including an assistant dance director ; (vii) an editor ; (viii) a singer ; (ix) a lyricist ; (x) a story writer ; (xi) a screen-play writer ; (xii) a dialogue writer ; and (xiii) a dress designer." 12. A film artist is also notified as professional and an actor engaged in his or her professional capacity in the production of a cinematograph film is a professional and the payments made to such an actor attracts the provisions of section 194J of the Act. Essentially, the above list of artists is those who are engaged in the production of a cinematograph film. An actor who is engaged in modelling should not be deemed to be engaged in the production of a cinematographic film. Therefore, the actors who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ismissed." 15. Further, in the case of EMC v. ITO [2010] 37 SOT 31 (Mum.), the issue of whether the work of photography and artwork attracts the provisions of section 194J of the Act came up for adjudication and the Tribunal held that the said works since not done in production of the cinematographic film, the payments made to such photographers are outside the scope of the notification and consequently, the provisions of section 194J of the Act does not apply. Para 4.1 is relevant here and the same read as follows : "4.1 The only other dispute is whether in respect of artwork and photography the parties to whom payments had been made by the assessee should be treated as a professional or as a contractor. The department has treated the artwork and photography work as a professional. The professional service has been defined in clause (a) to the Explanation to section 194J which had been reproduced in para 3 earlier. None of the services mentioned in clause (a) is relevant to the services of the assessee and only other services which have been notified by the Board and not appearing in the clause are the profession of authorised representative and the prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of that person in lieu of services rendered which must attract the provisions of section 194J of the Act. The expressions "services rendered" used in the said Explanation assume significance and therefore, the taxable receipts under section 194J of the Act are services-specific and not person specific. In the instant case, the payments are payable for the services of modelling and it is unconnected with the production of cinematographic film. While "modelling" is aimed at display of merchandise, the "acting" is defined as "to act in play or film" (www.freedictionary.com), i.e., to portray a role authored by a story-writer with different purposes and objects and certainly not to displace merchandise to boost the sales of a manufacturer or a trader of the product or services. Therefore, the impugned payments made by the assessee to Matrix India on behalf of Ms. Katrina Kaif did not attract the provisions of section 194J of the Act. Accordingly, the grounds raised are allowed. 17. Thus, we have granted relief to the assessee on the main issue. Therefore, adjudication of other ground constitutes an academic exercise. Therefore, the said grounds are dismissed as academic. 18. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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