TMI Blog2019 (3) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... on 194C and not under section 194J of the Act. Since the assessee deducted TDS u/s. 194C there is no infirmity in the action of the assessee. Being so, we are inclined to decide the issue in favour of the assessee and against the Department. - I.T.A. No.403/Coch/2018 - - - Dated:- 8-2-2019 - SHRI CHANDRA POOJARI, AM AND GEORGE GEORGE K., JM For The Assessee : Shri Banusekhar, CA For The Revenue : Shri Alok Nath Mitra, CIT(DR) ORDER Per CHANDRA POOJARI, AM: This appeal filed by the assessee is directed against the order of the CIT(A) , Trivandrum dated and pertains to the assessment year 2010-11. 2. The only issue in this appeal is with regard to determination of short deduction of ₹ 8,25,310/- u/s. 201(1) of the Act and the payments made in the instant case do not fall within the ambit of section 194J of the Act, instead section 194C of the Act would be attracted. 2.1 The assessee has filed the following additional ground: For that the assessee cannot be treated as an assessee in default where the payees have admitted the income and paid the tax due in their return of income. The assessee submitted that failure to raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o section 194C, payment made towards a contract concerning broadcasting and telecasting including production of programmes for such broadcasting or telecasting would be covered by section 194C. Section 194J of the Act provides for deduction of tax at source from fees for professional or technical services. As ruled by the Hon'ble Delhi High Court in the case of CIT vs Delhi Transco Ltd (380 ITR 398), professional and technical servicewss consist of services of technical nature when special skills or knowledge relating to technical field are required for their provision, managerial services are rendered for performing management functions and consultancy services relate to provision of advice by someone having special qualification that allow him to do so. What constitutes technical services cannot be understood in a rigid formulaic manner. It will vary from industry to industry. There will have to be a specific line of enquiry for determining what in a particular industry would constitute rendering of a technical service. 4.1 Section 194C provides for deduction of tax at source at 1% or 2% on payments in pursuance of a contract concerning broadcasting and telecasting includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey were invited to be the guest or judge of a particular programme because of the talent they have had in a particular field and identified as famous actors, musicians, orators, singers etc. But for the talent they have had, ordinarily they would not have been invited to be part of a television programme and because of this specific identity, they can be treated as individuals who offered professional and technical services to the assessee's television channel. This apart, it is not the case of assessee that the deductees have already brought to tax the amount which they have received from them, paid tax and filed return as well. It is also not the case of assessee that the individuals to whom payments were made have actually worked towards arranging advertisement, getting sponsors, telecasting etc. As long as the above two are responded positively, the assessee cannot have case to argue that the provisions of section 194J won't apply to them and necessity to deduct tax at 10% also won't arise. 4.3 Section 194J read with Explanation 2 to section 9(1)(vii) of the Act provides that the predominant purpose to fall in technical services should be the consideration for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 8,25,310/- u/s 201(1) doesn't require further interference. 5. Against this, the assessee is in appeal before us. 6.. We have heard both the parties and perused the record. Section 194C(1) requires a person responsible for paying any sum to any resident for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and any corporation established by or under a Central Act (which would include the assessee herein) to deduct tax at source in the equivalent of one percent of such payment in case of advertising and two per cent in all other cases. Explanation III to section 194C was inserted by Finance Act, 1995, with effect from July1, 1995 which reads as under: Explanation III For the purposes of this section, the expression work shall also include ( a) advertising; ( b)broadcasting and telecasting including production of programmes for such broadcasting or telecasting; c) carriage of goods and passengers by any mode of transport other than by railways; d) catering Therefore, in terms of clause (b), of Explanation III to section 194C, payment made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... professional services and that there are several technical aspects of producing such programmes. Therefore, the view expressed by the CIT(A) should be accepted and it is to be upheld. In our opinion, the assessee paid remuneration to various persons in connection with reality shows telecasted by the assessee and it was not involved in production of any films and recipients of payments were not engaged by the assessee in any of the activities as enumerated under section 194J of the Act. For this purpose, it is pertinent to refer to Explanation 1 of section 194J which reads as follows: 194J Fees for professional or technical services (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 technical services, or ( b) fees for technical services., shall, at the time of credit of such sum to the account of the payee and at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to five per cent of such sum a income-tax on income comprised therein Explanation to section 194J, releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inematograph film should be liable to deduct TDS u/s. 194J of the Act. A person who is engaged in production of reality show cannot be equated with a person engaged in the production of cinematograph film. Therefore, the persons who are engaged in production of film falls under the realm of said Explanation to s. 194J of the Act and to that effect, the following decisions relied on by the assessee will come to the help of the assessee: 1) ACIT vs. M/s. Sahara One Media and Entertainment Ltd. in ITA Nos. 4548-4549 4550/Mum/2012 dated 23/10/2013 (ITAT, Mum.) wherein it was held as under: Deduction of TDS u/s 194J or u/s 194C - Nature of agreement - AO was of the view that the dubbing expenses/print processing fees and production expenses were in the nature of 'fees for technical services' and 'royalty' respectively, and hence the tax should have been deducted under section 194J of the Act @10%,instead of @2% deducted by the assessee under section 194C - Held that:- The assignment or vesting of copy rights etc. in the programme are incidental to the main object of the agreement or transactions in question. When a contactor produces a programme on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Explanation (a) to section 1943 and Notifications issued by Board suggest that services rendered by other notified professions for purpose of section 44AA which includes film artist as listed in rule 6F, who are engaged in production of cinematographic film, constitute fees for professional service for purposes of section 194J-List of film artist cannot be extended to include other category of stunt actors, although they are engaged in the production of cinematographic film-It is not that total earning of that person in lieu of services rendered which must attract provisions of section 194J-Expressions services rendered used in said Explanation assume significance-Taxable receipts u/s 194J are services-specific and not person specific-In instant case payments were payable for services of modelling, which is unconnected with production of cinematographic film-Impugned payments made by the assessee to K would not attract provisions of section 194]-Assessee's appeal allowed Held: The provisions of Explanation (a) to section 194J of the Act and Notifications issued by the Board suggest that the services rendered by a person in the course of carrying on l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction of film. However, an artist/entertainer will not be film artist if he entertains people not involved in production of film. The case of the revenue is not that Jasbir Jassi, Kunal Ganjawala have performed an activity while film production was going on and the assessee had made the payment, for the said activity performed by these persons. There is no doubt that Jasbir Jassi. Kunal Ganjawala and others are artists and if they perform in film as an actor or director or music director or assistant director or art director or singer or editor or lyricist or story writer or dialogue writer or as a dress designer could have attracted section 194J of the Act. It is not the case of the revenue that the assessee was producing a film and the artists were engaged in any of these activities which has been stated before. Therefore, the payment made to the artist does not fall in the ken of section 194J of the Act and so no TDS need to be deducted on this as per section 194J of the Act. It has been pointed out by the learned authorised representative that the payments made to Sonlibre International and Rhythm is not as per any contract and it was only for managing and arranging the art ..... X X X X Extracts X X X X X X X X Extracts X X X X
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