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TMI Blog2018 (11) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... ident from the specimen agreement on record, in the business of distribution of satellite based TV channels and has exclusive rights to market and distribute said services in India, the service that is referred to in the agreement is the broadcasting and telecasting of TV signals. Tribunal was correct in holding that the assessee was required to deduct tax at source in terms of s. 194C As decided in assessee's own case [2016 (1) TMI 213 - ITAT MUMBAI] provisions of section 194J of the Act are not applied on payment of carriage fees to cable operations hence, the disallowance carriage/ channel placement fees u/s 40(a)(ia) is deleted. - Decided in favour of assessee. - ITA No. 3689/Mum/2017, ITA No. 3690/Mum/2017 - - - Dated:- 15-10-2018 - Sri Mahavir Singh, JM And Sri Manoj Kumar Aggarwal, AM For the Appellant : Shri Purushottam Tripuri, DR For the Respondent : Shri Jitendra Sanghvi, AR ORDER PER MAHAVIR SINGH, JM: These appeals by the Revenue are arising out of the order of Commissioner of Income Tax (Appeals)-4, Mumbai [in short CIT(A)], in appeal Nos. CIT(A)-4/Tr.273/Appeal-3/ACIT-11(1)/2014-15, CIT(A)-4/IT-74/JCIT-16(1)/2015-16 vide order dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act at the rate of 10% because these payments are in the nature of royalty as per explanation 6 to section 9(1)(vi) of the Act and therefore, covered by section 194J of the Act. Accordingly, the AO disallowed these carriage / channel placement fee by invoking the provisions of section 40(a)(ia) of the Act. Aggrieved, assessee preferred the appeal before CIT(A). The CIT(A) deleted the disallowance relying on the Tribunal s decision in assessee s own case by observing in para 4.4 as under: - 4.4 I have considered the submissions of the appellant and perused the material available on records. The said issue is directly covered by the appellant s own case in ITA No 2697, 2698, 4206 and 4207/Mum/2012, order dated 16.10.2015. The Hon ble Mumbai Tribunal has held that provisions of section 194J of the Act are not applied on payment of carriage fees to cable operations hence, the disallowance carriage/ channel placement fees amounting to ₹ 39,61,12,085/- under section 40(a)(ia) of the Act is deleted. 4. The learned Counsel for the assessee stated that the Tribunal in assessee s own case in ITA No. 2697,2698,4206 4207/Mum/2012 vide order dated 16.10.2015 for AY 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum shall be liable for tax deduction only under one section. In support of his contention he has relied upon the decision of Hon ble Punjab Haryana High Court in the case of Kurukshetra Darpans (P) Ltd. Vs. CIT (supra) and submitted that the Hon'ble High Court has held that the receipt of telecasting signals from the licensor is essentially under the contract to obtain broadcasting and telecasting facility of TV channels. Therefore, section 194C is attracted to the payments made to the licensor for obtaining TV signals and the assessee was required to deduct tax at source on such payments. He has also relied upon the decision of Hon'ble Delhi High Court in the case of CIT Vs. Prasar Bharati (Broadcasting Corporation of India) (292 ITR 580) and submitted that the Hon'ble High Court has held that Explanation 3 to section 194C is very specific in its application not only to broadcasting and telecasting but also includes production of programmes for such broadcasting and telecasting. If on the same date two provisions are introduced in the Act, one specific to the activity sought to be taxed and the other (194J) in more general terms, resort must be had to the specific p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exclusive rights to market and distribute the services in India to various customers and users of the service'. Further, the agreement refers to the assessee subscriber as a party, which is desirous to subscribe for and receive the telecast signals of the service from the company in order to further distribute the same to the customers). 16. From the recital of the agreement Itself, it is clear that the service that the assessee subscriber is availing is the receipt of 'telecasting signals' from the licensor or the company. The expression 'service' has also been referred to mean the TV channel which is dealt with by the licensor or the company. Therefore, what the assessee has transacted for with the licensor or company certainly includes within its ambit broadcasting and telecasting facility. The essence of the contract is to obtain broadcasting and telecasting of TV channels and thereafter its distribution amongst ultimate customers through the cable network of the assessee. 17. Another plea of the assessee/subscriber was that the licensor or the person to whom the assessee is making payment by itself does not do the work of broadcasting' and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve that Explanation III, which was introduced simultaneously with section 194J, is very specific in its application to not only broadcasting and telecasting but also include production of programmes for such broadcasting and telecasting . If, on the same date, two provisions are introduced in the Act, one specific to the activity sought to be taxed and the other in more general terms, resort must be had to the specific provision which manifests the intention of the Legislature. It is not, therefore, possible to accept the contention of the Revenue that programmes produced for television, including commissioned programmes , will fall outside the realm of section 194C, Explanation III of the Act. We find no infirmity in the view taken by the Income-tax Appellate Tribunal which we hereby affirm. 9. The Hon‟ble Delhi High Court has made it clear that when two provisions are simultaneously introduced in the Act, one is specific and another is more general in terms then the resort must be to the specific provision. Therefore, when the work of broadcasting and telecasting of the programmes specifically falls under the ambit of provisions of section 194C, then in view of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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