TMI Blog2017 (1) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... tors facilitates delivery of products of the broadcaster to the viewer and thus viewed this is the payment is in the nature of commission or brokerage as defined in Explanation to section 194H of the Income-tax Act,1961. There is uncontroverted finding in the impugned order that the assessee has already deducted TDS under section 194C of the Act on placement fee, therefore, we are in agreement with the stand of the Ld. Commissioner of Income Tax (Appeals) that the assessee may not be treated as assessee in default under section 201(1)/201(1A) of the Act as there is no short deduction of tax by the assessee, consequently, we affirm the stand of the Ld. Commissioner of Income Tax (Appeals). - Decided in favour of assessee - ITA NO.5664 & 5665/Mum/2012 - - - Dated:- 7-11-2016 - Shri Joginder Singh, Judicial Member, and Shri N.K. Pradhan, Accountant Member For The Revenue : Shri O.P. Meena - DR For The Assessee : Shri Bhupendra Karkhanis CA ORDER Per Joginder Singh (Judicial Member) Both these appeals are by the Revenue, aggrieved by the impugned orders dated 29/06/2012 of the Ld. First Appellate Authority, Mumbai. 2. The common ground raised in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich work is contracted to cable operators. Thus, payment made to cable operators for placement charges should be regarded to be in the nature of carrying out work of broadcasting and telecasting and hence, subjected to TDS u/s. 194C of the Act. Similar view has been taken by the Hon'ble Punjab Haryana High Court in the case of Kurtikshetra Darpans (P) Ltd. Vs. CIT (169 Taxman 344). In the case of Prasar Bharti (Broadcasting Corpn. of India) (158 Taxman 470) cited by the appellant, even the production of television programs has been held to be in the nature of a 'work contract'. In this case, the Hon'ble Court held that there is no applicability of section 194J and the assessee had rightly deducted tax u/s. 1940. Therefore, I am of the view that payment of placement fee by the Appellant to the cable operators should be subjected to TDS @ 2% as per the provisions of section 194C of the Act. 3.17 I do not agree with the stand adopted by the AG in the impugned order that the placement fee should be treated as fees for technical services' for the purpose of TDS u/s. 1 94J of the Act. It is a settled position in law that merely because, as part of providing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivity, as explained above, amounts to the activity of broadcasting and telecasting. They are also not engaged in providing services in the course of buying and selling of goods etc. Hence the channel placement fee received by them cannot in any manner, be categorized as 'commission or brokerage'. The case laws cited by the appellant which are directly on this issue also support this view. Therefore, in my opinion, this argument of the AO is also devoid of merits, and deserves to be rejected. 3.19 Since the Appellant has already deducted TDS u/s. 194C of the Act on the placement fee, the TDS officer is directed o consider the Appellant as assessee in default u/s. 201(1) of the Act as there is no short deduction of tax by the Appellant. The demand of tax u/s 201(1) of ₹ 96.46560/- and interest u/s 201(1A) of ₹ 32,79,830/- is hereby deleted. 4.1 1 have held above that there is no short deduction of tax by the Appellant on account of payment of channel placement charges made to cable operators! MSOs. Hence, there is no question of recovery of such taxes from the Appellant. Thus, above grounds of appeal Nos. 2, 4 and 5 do not survive and are in-fructuou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir channels placed on Prime Bands, so that the channel draws attention of its customer and it gets good TRP, which in turn will result into maximized revenue through advertisements, wherein there is no limit to advertisement charges. In 'the light of factual position as discussed in immediately preceding paragraph it is clear that carriage fee is paid by broadcasters in view of lieu of technical service provided to it by the MSO / Cable Operators for placing their channel on the Prime Bands for better viewership resulting into better TRP and maximized revenue. The fee paid by the Broadcasters is clearly covered under explanation 2 to clause VII of sub-section (1) of section 9. In the instant case, the second part of the Explanation is not relevant and the entire focus is attracted to the first part and that too to the expression 'consideration for the rendering of any managerial, technical or consultancy services'. Thus, the Carriage fees paid by the Broadcasters to Cable Operators for placing their channels on Prime Band clearly falls within the ambit of that expression, that the said payments could be regarded as 'fees for technical services' as contemplated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also a fact that without application of human mind by technical person the Channel cannot be logged onto desired frequency in Prime Band. 2.5 As discussed above Carriage fees is paid to cable operators not just for using their service but for the placing the channels of the Broadcasters in the Prime Band, which is limited in numbers, so that the channel gets the better viewership If carriage fees is considered to be paid only for using the network of the cable operators than it should have been paid by nearly all the 400 cable operators who are in operation presently in India. But this is not the case and it is seen that the Carriage fees is being paid top 40-50 Broadcasters only, who have means and resources to pay higher amounts for getting their channels placed in Prime Bands by such cable operators. The rest of the broadcasters pay standard fees to cable operators for getting their channels transmitted through them. Here it would be pertinent to mention that some of the Broadcasters don't even pay the Standard fees to cable operators for getting their channels transmitted through them. On the contrary they are get paid by these cable operators as the quality content of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication of human mind by a technical person is essential for doing so and this service is squarely coming within the ambit of section 194J for the purpose of TD.S. In this connection the reliance can also placed on the decision given by the ITAT Delhi in the case of Parasrampuria Synthetics Ltd which is quoted by the OF itself. The analogy of this case is reversely applicable in the present case. In this case the tribunal has held that rendering of services by using technical knowledge or skill is different than charging fees for technical service. In the later case the technical services are made available due to which assessee acquired certain right which can be further used . According to the tribunal the service provided in he later case falls within the meaning of Section 194J Similarly in the case of Broadcasters also it is seen that the cable Operators / MSOs are not providing the standard service of merely transmitting the signals of the Broadcasters channels but through application of human mind a specified technical service has been provided for placing Broadcasters channels on desired Prime Brands which resulted into the increased viewership, higher TRP, better advertis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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