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2019 (11) TMI 336

..... before parting with the order, it is pertinent to mention that a person can have many skills i.e acting skills in Films, modeling skills for display of merchandise, singing skills etc. and such person can make earning out of such skills. It is not that total earning of that person in lieu of services rendered must attract the provisions of section 194J The expressions ‘services rendered’ used in the said Explanation assume significance and therefore, the taxable receipts u/s 194J of the Act are services-specific and not person specific. In the instant case, the payments are payable for the 'services of" modeling .and it is unconnected .with the production of cinematographic film. While 'modeling' is aimed at display of merchandise, the 'acting' is defined as ‘to act in play or film’ www.freedictionaty.com) i.e. to portray a role authored by a story-writer with different purposes and objects and certainly not to displace the merchandize 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 do not attract the provis .....

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..... ng the precedent as above, we uphold the order of learned Commissioner of Income Tax (Appeals) in this regard and decide the issue against the Revenue. - I.T.A. No.4812 & 4813/Mum/2013, I.T.A. No. 5065 & 5066/Mum/2013 - 1-11-2019 - Shri Shamim Yahya, Accountant Member And Shri Pawan Singh, Judicial Member For the Appellant : S/Sh. P.J. Pardiwala And Harmuzd Jamshedji, AR For the Responden : Sh. Manoj Kumar Singh, DR ORDER PER SHRI SHAMIM YAHYA- AM: These are cross appeals by the Revenue as well as assessee arising out of learned Commissioner of Income Tax (Appeals) order for Assessment Years 2007-08 and 2008-09 respectively. 2. Since the issues are common and connected and the appeals were heard to that these are being consolidated and disposed of by this common order. 3. One common issue raised in assessee s appeals relate to the order of the authorities below that the payment made to Matrix India on behalf of Ms. R.K. Kaif required withholding under section 194J. 4. Upon hearing both the counsel and perusing the records, it transpires that this issue stands covered in favour of the assessee by the decision of this Tribunal in assessee s own case for Assessment Year 2009-10, ITA N .....

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..... J of the Act. In the instant, admittedly, the services rendered have nothing to do with the production of a cinematographic film. Further, before parting with the order, it is pertinent to mention that a person can have many skills i.e acting skills in Films, modeling skills for display of merchandise, singing skills etc. and such person can make earning out of such skills. It is not that total earning of that person in lieu of services rendered 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 u/s 1943 of the Act are services-specific and not person specific. In the instant case, the payments are payable for the 'services of" modeling .and it is unconnected .with the production of cinematographic film. While 'modeling' is aimed at display of merchandise, the 'acting' is defined as to act in play or film www.freedictionaty.com) i.e. to portray a role authored by a story-writer with different purposes and objects and certainly not to displace the merchandize to boost the sales of a manufacturer or a trader of the product or services. T .....

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..... ng interest under section 2Q1(1A) is hereby deleted. 6.5 The AO has also raised demand of tax and interest in respect of clearing charges paid by the appellant on account of short deduction in AY 2007-08. Such demand has been raised by the AO, by applying the provisions of section 194C of the Act. The appellant has submitted a chart as above clarifying the figures of tax deduction at source in this regard and has claimed that the AO has not taken the correct figures. However, it is seen that there are four parties who have worked as CHAs of the appellant and in AY 2008-09, the appellant has deducted tax at source at a uniform rate of 5.66% under the provisions of section 194H. However, in AY 2007-08, the tax has been deducted in respect of the first two parties under section 194H, whereas the Lax has been deducted under section 194C of the Act in respect of the later two parties This aspect has not been explained by the appellant as to why in respect of the later two parties i.e. DHL Express (I) Pvt. Ltd and International Clearing & Shipping, two different sections and two different rates have been applied for tax deduction at source in AY 2007-08 and AY 2008^09. Therefore no f .....

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..... er by die agent or by the assessee would attract the provisions of section 201(l) and 201(1A). If this modus operandi is allowed then in each and every payment which otherwise attracts the TDS can be given a colour of reimbursement of making the payment through intermediatory and consequently circumvent the provisions of TDS. The real fact is that the payment is made for and on behalf of the assessee by the agent and, therefore, the same would he considered as payment made by the assessee to the third party for the purpose of TDS provisions under chapter XVII of the Act. The decision relied upon by the Ld. Authorised Representative in case of CIT v/s Siemens Aktiongesellschaft (supra) as well as S.s. & Co. Octroi Contractors Vs. State of Punjab & Ors. (supra) do not apply to the facts of the present case when it is not a real reimbursement of the expenses to the agent but is a payment to the third party through the agent. Accordingly in view of the above discussion and facts and circumstances of the case, we set aside the order of CIT(A) and restore the order of Assessing Officer on this issue. 10. In this regard it is the submission of the learned counsel of the assessee t .....

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..... mp; moulds more particularly described in annexure A hereto (hereinafter Ëquipments ) to the Supplier for carrying out job work for camera as per the requirements of the Kodak. b) Kodak and Hical have entered into an Agreement whereby Hical will supply to Kodak KB-10 Cameras as per the specifications of Kodak. c) Hical has undertaken to supply to Kodak KB10 Cameras as per requirements of Kodak. d) Supplier has agreed to use the tools and moulds owned by Kodak for the purpose of supply of camera parts to Hical. 19. Thus, as per the arrangement between the parties, the assessee supplied tool/moulds to the supplier for carrying out job work for camera parts as per requirements of the assessee. These Camera Paris were supplied to the Hical Magnetic Pvt. Ltd. for assembling of Camera. It is clear that the job work for camera parts used as a raw material for assembling of the camera by Hical Magnetic Pvt. Ltd. is arranged by the assessee under the tripartite agreement. Further the assessee is providing the working capital fund to the Hical Magnetic Pvt. Ltd, for the purpose of all cost including labor and raw material which is supplied under the tripartite agreement. Therefore, the .....

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..... c Pvt. Ltd. but only the labor charges of ₹ 20.84 and margin of ₹ 5.04 total amounting to ₹ 20.8H per camera towards the assembling job is subjected to TDS. Accordingly, we set aside the impugned order of CJT[A) on this issue and restore the order of Assessing Officer to the extent of applicability of section 194C only on the payment of ₹ 2Q.88 per camera. The decision relied upon by the CIT(A) in the case of CJT Vs Glenmark Pharmaccuticals (supra) is not relevant on the facts of this issue when the arrangement is found to be work contract. 12. In this regard learned counsel of the assessee has vehemently argued that the said decision of the ITAT was rendered on an erroneous recording of facts and erroneous inferences drawn from such facts. 13. However we note that the said order of the ITAT has already been challenged by the assessee before the Hon ble jurisdictional High Court. The jurisdictional High Court has not reversed the said decision of the ITAT. When it was pointed out by the Bench that if the learned counsel of the assessee is urging us to take a contrary view than that expressed by the ITAT in assessee s own case the matter would need to be refe .....

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