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ACIT (TDS) 3 (1) , Mumbai, ITO (OSD) , Mumbai Versus M/s Viacom 18 Media Pvt. Ltd. And Vica-Versa

2015 (12) TMI 139 - ITAT MUMBAI

TDS u/s 194C or u/s 194J - payment of placement charges to cable operator/D.T.H. - Held that:- The issue regarding deduction of tax at source for the payment made to cable operators as placement charges is fully covered in favour of the assessee by the various decisions and also by the Circular no. 720 of 30.08.1995, The Hon'ble Delhi High Court in the case of CIT Vs. Prasar Bharati [2006 (11) TMI 159 - DELHI High Court] on a similar issue has held that Explanation III, which was introduced simu .....

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nue that programmes produced for television, including "commissioned programmes", will fall outside the realm of section 194C, Explanation III of the Act. - Decided against revenue

Uplinking charges were liable for deduction of tax at source u/s 194C or 194J - Held that:- In the light of the proposition laid down by the Hon'ble Delhi High Court in the case of CIT Vs. Prasar Bharati [2006 (11) TMI 159 - DELHI High Court], the specific provisions of section 194J are applicable in case o .....

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lecasting was liable to tax u/s 194C or 194J - Held that:- The CIT(A) decided the issue in favour of the assessee by following the decision in the case of Prasar Bharati (Broadcasting Corporation of India) (Supra) and CBDT circular dated 30.08.1995 (supra) By holding that the AO was not justified in treating the payments for programmes production as royalty. In any case as also held in the aforesaid judgment provisions of section 194C are more specific as compared to those of section 194J( Since .....

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held that provisions of section 194C would prevail over section 194J of the Act in this case.- Decided against revenue - ITA No. 3515/Mum/2012, CO No. 131/Mum/2013, ITA No.4208/Mum/2012, CO No.156/Mum/2013, ITA No.4209/Mum/2012, CO No.157/Mum/2013, Arising out of ITA No. 4209/Mum/2012 - Dated:- 14-10-2015 - D. Karunakara Rao, AM And Sanjay Garg, JM For the Appellant : Shri G M Doss For the Respondent : Shri Farooq Irani ORDER Per Bench These three appeals by the revenue and even number of Cross .....

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of appeal:- "I. The Ld. CIT (A) has erred on facts and in law in not correctly appreciating the nature of the services rendered by the cable operators / D.T.H. operators for which placement charges are paid and holding that such charges come within the purview of section 194C whereas such placement charges are in nature of technical fee within the meaning of section 194J of the income-Tax Act, 1961. II. The Ld. CIT (A) has erred on facts and in law in not appreciating that for placing the .....

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of appeals as above, since providing the services of preferred channel placement on account of which placement charges are paid requires use of industrial, commercial of scientific equipment within the meaning of sub clause (iva) to Explanation to sub clause (vi) of section 9(1) of the income tax Act, 1961, the said payment is payment on account of royalty and therefore, section 194J is clearly applicable. Accordingly, CIT (A) has erred in law and on facts in not appreciating this factual and l .....

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in law and on facts in holding that section 194C applies to the payment of placement charges without appreciating the correct nature of these charges, as is clearly brought out in the statement of fact annexed to the ground of appeal and the order u/s.201 (1) of the income tax Act, 1961. VI. The CIT (A) has erred in law and 0n facts in holding that section 194C applies to the payment of unlinking charges without appreciating the correct nature of these charges, as is clearly brought out in the s .....

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he payment of placement charges to cable operator/D.T.H. was liable for deduction of tax at source u/s 194C or u/s 194J. 3. The facts in brief are that the assessee is a company incorporated in India and is primarily engaged in broadcasting and telecasting of television serials /films/other programs from India viz. Colors, MTV, Nick and VH1. It is also engaged in marketing of advertising airtime on these channels, distribution of the channels, marketing and distribution of films through its film .....

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operators for placing a particular channel on a preferred bandwidth in order to telecast programmes during peak hours so that it attracted the viewership and also fetched better revenue for the TV Channels. The assessee deducted tax at source at the rate of 2% u/s 194C from such payments. 4. The AO held that the said payment were in the nature of technical services and , therefore, the assessee was to deduct tax at source at the rate of 10% u/s 194J and not u/s 194C and consequently treated the .....

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ork contract u/s 194C. 6. The Ld. DR relied on the order of AO and submitted that the services provided by the cable operators are highly technical, involves technical equipment for transmitting the channel network to end user and, therefore, the payment is in the nature of fees for technical services and thus attracted deduction of tax at source u/s 194J. 7. On the other hand, the Ld. AR relying upon the following decisions submitted that the issue of TDS on placement charges was squarely cover .....

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nt Enterprises Ltd (ITA Nos.: 3931 to 3935/Mum/2013 (e) ACIT Vs. NGC Network (I) Pvt Ltd. (ITA No. 1382/Mum/2014 dated 9 July 2014) (f) Kurukshetra Darpans V. CIT [2008] 169 Taxman 344 (P&H High Court) (g) CIT Vs. Prasar Bharati [2007] 292 ITR 580 (Del.) (h) ACIT Vs. Sahara One Media & Entertainment Ltd. (ITA Nos. 4548, 4549, & 4550/Mum/2012. 8. He further relied and referred to circular no. 720 dated 30th August, 1995 and prayed for dismissal of appeal of Revenue on this ground. 9. .....

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are unable to agree with this submission. We observe that Explanation III, which was introduced simultaneously with section 194J, is very specific in its application to not only broadcasting and telecasting but also include "production of programmes for such broadcasting and telecasting" if, on the same date, two provisions are introduced in the Act, one specific to the activity sought to be taxed and the other in more general terms resort must be had to the specific provisions which m .....

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the Judgment of Hon'ble Delhi High Court in the case of CIT Vs. Prasar Bharati (supra), we do not find any reason to interfere with the order of CIT(A) qua this issue and the same is hereby affirmed. Accordingly, the grounds no. 1 to 5 are dismissed. 11. Ground no. 6 relates to the issue whether the uplinking charges were liable for deduction of tax at source u/s 194C or 194J. 12. The facts of the case are that the assessee is in the business of telecasting/broadcasting TV channels and for .....

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and thus provisions of section 194J were attracted and not 194C. 14. The CIT(A) rejected the action of the AO by observing that uplinking was an integral part of broadcasting/telecasting and is covered under the Explanation to section 194C of the Income Tax Act by following the Judgement of Honourable Delhi High Court in the case of Prasar Bharati (Broadcasting Corporation of India) (Supra) and CBDT circular no 720 dated 30.08.1995 (supra) by observing as under:- that since the assessee has alr .....

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case of Asst. CIT Vs. Sanskar Info. T.V.P. Ltd [2008] 24 SOT 87 (Mum.) 16. On the other hand, the Ld. AR, in support of his claim , relied upon the following decisions as well as Circular No. 720 dated 30.08.1995. (a) ACIT (TDS) V. UTV Entertainment Television Limited (ITA Nos. 2699, 4204, 4205, 2700/Mum/2012 dated 29 October 2014 (Mumbai Tribunal) (b) DCIT (TDS) 1(1), v. M/s Genx Entertainment Ltd (ITA Nos. 2627, 4197/2012, CO 228,229/2013 dated 14 January 2015 (Mumbai Tribunal) (c) DCIT (TDS) .....

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We have considered the rival submissions and also perused the relevant material on record. The decision of Mumbai Bench in the case Asst. CIT Vs. Sanskar Info. T.V.P. Ltd (supra), relied upon by the Ld. DR are not applicable in the facts and circumstances of the present case as the payment made in that case was made to a non-resident whereas in the present case the payment has been made to Indian resident. In the light of the proposition laid down by the Hon'ble Delhi High Court in the case .....

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ssessee. 18. Ground No. 7 relates to whether the payment for production of programmes for bradcasting and telecasting was liable to tax u/s 194C or 194J. 19. The brief facts of the case are that the assessee used to get his programmes such as TV serials, films and other programmes produced from outside producers/studios for which it used to make payments. The similar production was also undertaken by the assessee in-house. The assessee deducted TDS u/s 194C from the payments made to such produce .....

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treating the payments for programmes production as royalty. In any case as also held in the aforesaid judgment provisions of section 194C are more specific as compared to those of section 194J( Since provision of 194C deals with very payment in question- production of programmes and not with general category of payment like fee for technical services or royalty as in section 194J and hence section 194J cannot apply to the payment for production of programmes. Section 194C clearly states that pa .....

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