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TMI Blog2015 (2) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... outside the purview of section 194C of the Income Tax Act, 1961 requiring tax deduction at source. - Decided in favour of the assessee. - Tax Appeal No. 775 of 2006, Tax Appeal No. 777 of 2006 - - - Dated:- 28-11-2014 - KS Jhaveri And K. J. Thaker,JJ. For the Appellant : Mrs Mauna M Bhatt, Adv. For the Respondent : Mr S N Divatia, Adv. ORDER (Per : Honourable Mr. Justice KS 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 11.08.2005 in ITA Nos. 2978/Ahd/2004, 2979/Ahd/2004 2980/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 15.11.2006 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 theatre had an agreement with the distributor of certain movies for exhibiting fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vatia, learned advocate appearing on behalf of the assessee and the question posed for consideration for us which is reproduced hereinabove and considering the decision of the Hon ble Supreme Court in the case of Associated Cement Co. Ltd (Supra), the question, which is raised in the present appeal is required to be answered in favour of the assessee as the Tribunal in paras 5 6 has observed as under: 5. We have carefully considerd the arguments of both the sides and perused the material placed before us. Section 194C and Explanation III therefore are as under:- 19. C (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and- (a) the Central Government or any State Government; or (b) any local authority; or (c) any corporation established by or under a Central, State or Provincial Act; or (d) any company; or (e) any co-operative society; or (f) any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was vehemently contended by the learned Departmental Representative that the above definition of .work is only inclusive definition and therefore, even if the distribution of film is not mentioned in the definition, the same be covered by the definition. We are unable to agree with this contention of the learned Departmental Representative because the Legislature has included the word 'broadcasting and telecasting and production of programmes. If the Legislature wanted to include the distribution of film they could have included the same along with broadcasting and telecasting. We find that similar view is taken by the SMC Bench of ITAT in the case of Essem Entertainment (P) Ltd. (supra) and also by the ITAT, Ahmedabad Bench C in the case of City Gold Entertainment (P.) Ltd. (supra) wherein it is held as under -- 8. We have considered the submissions of Ld. Departmental Representative in the light of material available on record. There is no material on record to raise 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 offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of work as described in section 194C of the Act. The following observation of the Hon'ble Gujarat High Court from the decision in the case of All Gujarat Federation of Tax Consultants v. CBDT (supra) (Page Nos. 292-293) support this view.' 'In our conclusion, we are further strengthened by the fact that the Legislature intended to make a separate provision for bringing the service contract and professional service within the purview of the provision relating to tax deduction at source, by the Finance Bill, 1987 which has been quoted above. Once again the Finance Bill, 1995, a similar insertion has been proposed. Had the service rendered by the professionals like, Advocates, chartered accountants, engineers, physicians, architects etc. already been within the scope and ambit of section 194C, the Legislature would not have resorted to this exercise. It cannot be assumed that the Legislature uses or indulges in on exercise for bringing 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. wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficient reasons] failed to deduct and pay the tax. [(1A) Without prejudice to the provisions of subsection (1), if any such person, principal officer or company as is referred to in that subsection does not deduct or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at [fifteen] per cent per annum on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid.] 6.2 Considering the facts and circumstances of the case, we are of the opinion that the Tribunal is justified in coming to the conclusion that the exhibition of film in the theatre has not been described in the Explanation, therefore, there is no case of the revenue, by which it can be held that the assessee was required to deduct tax at source from the payments made by it to the distributor of films. The Tribunal has rightly considered the agreement/arrangement between the parties and in detail discussed the same. We have considered the decision cited by learned Senior Counsel appearing for the revenue, however, the same shall not be applicable on the facts of the present case inasmuch as the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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