9911796707
TMI Blog2021 (11) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that payments towards placement fees are in the nature of fees for technical service and thus liable for TDS at the rate of 10% u/s 194J of the Act?" 2. "Whether on the facts and in the circumstances of the case and in law, the Ld, CIT(A) erred in deleting the levy of interest of Rs. 4>33,01,284/- u/s 201(1A) of the Act without appreciating that the payments towards placement fees are in the nature of fees for technical service and thus liable for TDS at the rate of 10% u/s 194J of the Act?" 3. Brief facts of the case are that the Appellant is an Indian company and is, among others, engaged in the business of broadcasting of channels over various countries, including over Indian sub continent A show cause notice was issued under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order to transmit the TV signals to the ultimate viewers, the cable operators are as such required to place the signals on some frequency. By agreeing to place the channel on any preferred band, the cable operator does not render any technical service to the distributor/ TV channel. Therefore, as per appellant's argument, such payment of placement fee by the Appellant to the cable operators should be subjected to TDS @ 2% as per the provisions of section 194C of the Act. The TDS AO has adopted in the impugned order that the placement fee should be treated as Fees for technical services for the purpose of TDS under section 194J of the Act does; not hold ground. On the said issue, the appellant's AR relied on the decision of Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Bombay High Court in SIPL's own case and in the case of other entities, and considering that the appellant has already deducted TDS under Section 194C of the Act, the TDS officer is directed not to consider the Appellant as assessee in default under Section 201 (1) of the Act as there is no short demand of tax by the Appellant. Accordingly, the demand of tax of Rs. 12,37,17,957 under Section 201 (1) of the Act is deleted. Further, since the assessee is not a deemed defaulter u/s..201(1), the interest u/s 201(1A) is also not leviable and the interest amounting to Rs. 4,33,01,284 under Section 201(1A) of the Act is also hereby deleted." 6. Against the above order revenue is in appeal before us. 7. We have heard both the parties a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in favour of the assessee. Upon careful consideration, we note that Hon'ble Bombay High Court in assessee's own case in ITA Nos. 1420/2016 and 1422/2016, vide order dated 11/01/2019 had decided the issue in favour of the assessee by holding as under;- 1. The Revenue has filed both the appeals against the common judgment of the Income Tax Appellate Tribunal, raising similar question of law for our consideration, which is as under : (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal is correct in holding that the placement fees / carriage fees paid to cable operators / MSO/DTH Operators are payments for work contract covered u/s 194C and not fees for technical service u/s 194J, without appreciating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble operators under the agreement. Under the agreement, the cable operators agree for placing a particular channel on agreed frequency band. As stated earlier, the respondent has deducted tax at the rate of 2% at source by invoking Section 194C of the Income Tax Act while making payment towards placement fees to the cable operators/ MSOs. If Section 194J is to be applied, the deduction would be of 10%. The Commissioner (Appeals) has also gone through the method followed by the cable operators/ MSOs. The Commissioner (Appeals) has also gone into the submission of the Revenue that, in fact, Section 194J would apply. In substance, the argument is that placement charges are basically for rendering technical service. The Commissioner (Appeals) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was found that by an agreement to place the channel on a prime band by accepting placement fee, the cable operator/ MSO does not render any technical service. As far as Appellate Tribunal is concerned, again the definition of work in clause (iv) of the explanation to Section 194C was looked into. We must note here that a grievance was made by the learned counsel appearing for the appellant that there are no detailed findings recorded by the Appellate Tribunal. However, the Commissioner (Appeals) has recorded detailed findings on the basis of material on record and by referring to the findings, the Appellate Tribunal has expressed general agreement with the findings recorded by the first Appellate Authority. While affirming the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
