Applicability of the provisions of section 194-I of the Income-tax Act to film distributors and exhibitors - Clarification regarding - Income Tax - 736/1996

Applicability of the provisions of section 194-I of the Income-tax Act to film distributors and exhibitors - Clarification regarding Circular No. 736 Dated 13/2/1996 Representations have been received from various quarters regarding applicability of the provisions of section 194-I of the Income-tax Act to the sharing of the proceeds of film exhibition between a film distributor and a film exhibitor owning a cinema theatre. The matter has been examined by the Board and the Board are of the view that the provisions of section 194-I are not attracted to such payment, because :_ (i) The exhibitor does not let out the cinema hall to the distributor ; (ii) Generally, the share of the exhibitor is on account of composite services ; and (iii) The distributor does not take the cinema building on lease or sub-lease or tenancy or under any agreement of similar nature. You are requested to bring these instructions to the notice of Assessing Officers under your charge. Yours faithfully, (Sd.) Anjani Kumar, Director (Budget).