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TMI Blog2014 (12) TMI 1020X X X X Extracts X X X X X X X X Extracts X X X X ..... Act – thus, the Tribunal was right in law in holding that cinecasting/distribution of movies would be outside the purview of section 194C of the Income Tax Act, 1961 requiring tax deduction at source – Decided against revenue. - TAX APPEAL NO. 236 of 2006 TO TAX APPEAL NO. 238 of 2006 - - - Dated:- 28-11-2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. FOR THE APPELLANT : MRS MAUNA M BHATT, ADVOCATE JUDGEMENT Per: K S Jhaveri: 1. Being aggrieved and dissatisfied with the impugned order passed by the Income Tax Appellate Tribunal, Ahmedabad Bench (hereinafter referred to as ITAT) dated 30.03.2005 in ITA Nos. 3745/Ahd/2004, 3746/Ahd/2004 3747/Ahd/2004 for the Assessment Years 2002-03, 2003-04 2004-05 respectively, the revenue has preferred the present Tax Appeals. 2. These appeals were admitted on 07.09.2006 for consideration of the following substantial question of law: Whether, the Appellate Tribunal was right in law in holding that cinecasting/distribution of movies would be outside the purview of section 194C of the Income Tax Act, 1961 requiring tax deduction at source? 3. The assessee firm which runs a multiplex theatre had an agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any doubt about the facts mentioned in the order of the CIT(A) . Therefore, we proceed on the basis that the findings of the learned CIT(A) on facts are undisputed. Main basis for the assessing officer for holding that the assessee was liable to deduct at source under section 194C of the Act is the decision of the Hon'ble Supreme Courtin the case of ACC Ltd. (supra) and also Circular No. 681 of CBDT. We found that the Hon'ble jurisdictional High Court in the case of All Gujarat Federation of Tax Consultants v. CBDT (supra) has considered the decision of the Hon'ble Supreme Court in the case of ACC Ltd. (supra) as well as Circular No. 68 1. After considering the decision of the Hon'ble Supreme Court Their Lordships have quashed the Circular No. 681 issued by the CBDT. Therefore, the assessing officer was wrong in taking cognizance of circular which was purported to be given by the CBDT in accordance with the decision of Hon'ble Supreme Court in the case of Appellate Asstt. Commissioner Ltd The ratio of the decision of the Hon'ble jurisdictional High Court in the case of All Gujarat Federation of Tax Consultants v. CBDT (supra) is that the intendment for prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... something by way of surplus. Likewise, it may be noticed that the profession/ business of advertising, broadcasting and telecasting including production of programmes for such broadcasting or telecasting, carriage of goods by railway etc. which are being now been designed to be inserted to be given effect with effect from July 1, 1995. In view of this clear intention of including being effective from a prospective date, it is clearly by indicate of the fact that the proposed amendment is not brought by way of clarification of any existing professions but is intended to bring substantial change in the existing provision. We may not be taken to have construed the existing provision with the aid of the proposed amendment, but we have referred to them only by way of strengthening the conclusion to which we have arrived independently of it.' 10. Therefore, there is no possibility of any assumption that Legislature uses or indulges in exercise for bringing something by way of surplus. The activity mentioned in the Explanation III only can be considered to be as a work within the extended meaning of work . The exhibition of film in the theatre has not been described in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovement of cities, towns and villages, or for both; or (g) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or (h) any trust; or (i) any university established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or (j) any Government of a foreign State or a foreign enterprise or any association or body established outside India; or (k) any firm; shall, at the time of credit of such sum to the account of the contractor or 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- (i) one per cent in case of advertising, (ii) in any other case two per cent, of such sum as income-tax on income comprised therein.] [Explanation III For the purpose of this section, the expression work shall also include - (a) advertising; (b) broadca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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