2016 (4) TMI 38 - AT - Income Tax

TDS u/s 194C OR 194J - payments for production of programmes for broadcasting and telecasting and payments for uplinking charges - Held that - As decided in assessee s own case for A.Y. 2009- 10 Coordinate Bench followed the decision of the Hon ble Delhi High Court in the case of Prasar Bharati (2006 (11) TMI 159 - DELHI High Court ) holding that placement charges/ carriage fees is covered under the definition of work contracts and therefore tax was to be deducted at source on such payments under section 194C we decide this issue in favour of the assessee

Summary

Issues Involved:
1. Applicability of section 194C vs. section 194J for payments made on account of outsourcing of production work.
2. Applicability of section 194C vs. section 194J for payment of placement charges to cable/DTH operators.
3. Applicability of section 194C vs. section 194J for uplinking charges.

Issue-Wise Detailed Analysis:

1. Applicability of section 194C vs. section 194J for payments made on account of outsourcing of production work:

The core issue was whether payments for production of programs for broadcasting and telecasting were liable for deduction of tax under section 194C or 194J of the Act. The assessee deducted TDS under section 194C, while the AO contended that such payments were in the nature of royalty and technical fees, thus falling under section 194J. On appeal, the CIT(A) favored the assessee, referencing the Hon'ble Delhi High Court's decision in CIT vs. Prasar Bharati (292 ITR 580) and CBDT Circular No. 720 dated 30.08.1995. The Tribunal upheld this decision, noting that the issue had been previously settled in the assessee's favor for A.Y. 2009-10 and 2011-12, where it was established that section 194C was applicable.

2. Applicability of section 194C vs. section 194J for payment of placement charges to cable/DTH operators:

This issue involved determining whether placement charges paid to cable/DTH operators were subject to TDS under section 194C or 194J. The assessee deducted TDS at 2% under section 194C, while the AO argued for a 10% deduction under section 194J, considering the payments as technical services. The CIT(A) sided with the assessee, again citing the Prasar Bharati case and CBDT Circular No. 720, classifying placement charges as work contracts under section 194C. The Tribunal confirmed this view, referencing its earlier decisions for A.Y. 2009-10 and 2011-12, which held that such payments fell under section 194C.

3. Applicability of section 194C vs. section 194J for uplinking charges:

The final issue was whether uplinking charges were liable for TDS under section 194C or 194J. The assessee deducted TDS under section 194C, while the AO argued that uplinking involved complex equipment operations, making the payments akin to royalty, thus falling under section 194J. The CIT(A) reversed the AO's decision, relying on the Prasar Bharati case and CBDT Circular No. 720, stating that uplinking was an integral part of broadcasting/telecasting and thus covered by section 194C. The Tribunal upheld this decision, referencing its prior rulings for A.Y. 2009-10 and 2011-12, which determined that uplinking charges were subject to TDS under section 194C.

Conclusion:

The Tribunal dismissed the Revenue's appeal for A.Y. 2012-13, affirming the CIT(A)'s decisions on all issues, consistently applying section 194C for the payments in question, in line with prior judicial precedents and CBDT guidelines. The order was pronounced in the open court on 30th March 2016.