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TMI Blog2016 (5) TMI 1535X X X X Extracts X X X X X X X X Extracts X X X X ..... edia (Bennet Coleman) as agent and media and not client and media. 2. CIT(A) has erred in not appreciating the fact that the payee M/s.Bennet Coleman and Co, has raised direct billing to the extent of Rs. 5.50 crores on the deductor for advertising charges in the capacity of client, thus proving that it was an advertisement contract. 3. CIT(A) has erred in holding that the payment made by the deductor was in the capacity of agent of M/s.Bennet Coleman, and the provisions of TDS u/s.194C was not applicable on such payment. 4. CIT(A) has erred in not appreciating the fact that it is a case of deductor not deducting taxes from payments made to deductee on account of advertisement. 5. For these and other grounds that may be raised durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny were rejected by the TDS Officer and treated the respondent-assessee-company as an assessee in default for not deducting tax at source and demanded TDS of Rs. 14,72,740/- under the provisions of sec.201(1) of the Act. 4. Being aggrieved by this order, an appeal was preferred before the CIT(A), who vide impugned order, held that the payments were made in the capacity of an agent to M/s.Bennet, Coleman & Co., and there was an agreement entered into by the respondent-assessee-company with M/s.Bennet, Coleman & Co., in this regard and therefore, held that there was no liability to deduct tax at source in view of the Circular No.715 dated 8/8/1995 according to which the provisions of sec.194C are not applicable when advertisement agents make ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent-assessee-company to M/s.Bennet, Coleman & Co., for procurement of advertisement agency. Though most of the advertisements belong to respondent-assessee-company's own business, payments are made in the capacity of an advertisement agency to M/s.Bennet, Coleman & Co., Therefore, circular No.715 dated 8/8/1995 as well as circular No.5 of 2016 dated 29/2/2016 are squarely applicable. The circular No.5 of 2016 reads as under: "Sub: Tax Deduction at Source (TDS) on payments by television channels and publishing houses to advertisement companies for procuring or canvassing for advertisements. 1. The issue of applicability of TDS provisions on payments made by television channels or media houses publishing newspapers or magazines to advert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgin retained by the former amounts to constructive payment of commission and, accordingly, TDS under section 194H is attracted. 4. The issue has been examined by the Allahabad High Court in the case of Jagran Prakashan Ltd and Delhi High Court in the matter of Living Media Limited and it was held in both the cases that the relationship between the media company and the advertising agency is that of a 'principal to principal' and, therefore, not liable for TDS under section 194H. The SLPs filed by the Department in the matter of Living Media Ltd. and Jagran Prakashan Ltd have been dismissed by the Supreme Court vide order dated 11.12.2009 and order dated 05.05.2014, respectively. Though these decisions are in respect of print medi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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