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TMI Blog2016 (9) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... such activity. Such jobs or work contracts of making several prints or the same final negative may not involve any technical or professional services as such, requiring the assessee to deduct tax u/s. 194J of the Act, but such contracts will be covered under the provisions of Section 194C of the Act. It was found evident that assessee has been consistently making TDS on payments for taking prints of negative, as per the provisions of Section 194C of the Act, while for original payments, it had been deducting TDS under the provisions of Section 194J of the Act and such deduction of tax had been accepted by same Assessing Officer and in assessee's own case for subsequent years in similar state of circumstances. Payments for supplying various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company for ascertaining whether the assessee was complying with the provisions of Chapter XVII-B of the Act. It was noticed by Assessing Officer that assessee had not made TDS as per the provisions of Section l94J of the Act, in respect of payments made to M/s. Adlabs Ltd., for making copies of films/prints for the films produced by assessee. Accordingly, Assessing Officer issued a show cause notice u/s.201(1)/201(1A) of the Act to the assessee, communicating the defaults noticed. The stand of assessee has been that such payments were covered u/s.194C of the Act and not u/s.194J of the Act, but the Assessing Officer rejected the same and held the assessee to be in default for short deduction of TDS of ₹ 37,95,763/-. 2.2. In appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual or a Hindu undivided family; (ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family, of such sum as income-tax on income comprised therein. Explanation. - For the purposes of this section, - (iv) work shall include (a) advertising; (b) broadcasting and telecasting including production of programmes for such broadcasting or telecasting; (c) carriage of goods or passengers by any mode of transport other than by railways; (d) catering; (e) manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person, other than such customer. 2.4 While ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es means any consideration (including any lump sum consideration) for the rendering of any managerial, technical or consultancy services (including the provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head Salaries . 2.5 Explanation 2 to clause (vi) of sub-section (1) of section 9, referred to in clause (ba) of Explanation to Sec. 194J, reads as under :- Explanation 2. - For the purposes of this clause, royalty means consideration (including any lump sum consideration but excluding any consideration which would be the income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made as per the provisions of Sec. 194J of the Act, and not u/ s. 194C of the Act, as was done by assessee, and, accordingly, he worked out the shortfall in TDS at ₹ 37,95,763/-. During course of appellate proceedings, the stand of assessee has been that assesse company had deducted TDS on the negative processing charges paid to Kodak India Ltd. as per the provisions of Section 194J of the Act, as the negative processing involves specific tasks of editing, enhancement of quality of film, etc. However, the contract for making multiple prints of the final negative was given to Adlabs, on which the TDS is liable to be deducted only as per the provisions of Section 194C of the Act, as work does not involve any technical or professional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... histicated or specialized. At the same time, the payment made to Kodak India Ltd., for processing of the final negative, was significantly higher, indicating that the nature of the work done by them was technical and specialized manner. In view of above, CIT(A) was justified in holding that assessee has rightly deducted TDS on the payments made to Adlabs, for supplying copies of final negative, as per the provisions of Section 194C of the Act. Consequently, CIT(A) was justified in granting relief to assessee on this account. Same is upheld. 3. In the result, appeal filed by Revenue for A.Y. 2005-06 is dismissed. 4. In ITA No. 2719/Mum/2015 for A.Y. 2008-09, similar issue arose as in above appeal. Facts being similar, so, following sam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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