Re:question (A v. Priya Soparkar

Priya Soparkar IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1410 OF 2016WITH INCOME TAX APPEAL NO.1409 OF 2016 Commissioner of Income Tax-TDS-2… Appellant V/s. Viacom 18 Media Pvt. Ltd. … Respondent --- Mr.Suresh Kumar for the Appellant.Mr.F.V.Irani with Mr.Atul Jasani for the Respondent. --- CORAM : AKIL KURESHI AND M.S.SANKLECHA, JJ. DATE : JANUARY 10, 2019. P.C.:- 1.Both these appeals under Section 260-A of the Income TaxAct (Act) challenge a common order dated 14[th] October, 2015passed by the Income Tax Appellate Tribunal (Tribunal). Thecommon impugned order dated 14[th] October, 2015 relates toAssessment Years 2009-10, 2010-11 and 2011-12. These twoappeals have been filed in respect of Assessment Years 2009-10and 2010-11. Priya Soparkar 2.The revenue has urged the following questions of law for our consideration:- “a) Whether on the facts and in thecircumstances of the case and in law, the ITAT iscorrect in holding that the placement fees/carriagefees paid to cable operators/MSO/DTH Operatorsare payments for work contract covered u/s 194Cand not fees for technical services u/s 194J,without appreciating that the services received byassessee are technical in nature? b)Whether on the facts and in the circumstancesof the case and in law, the ITAT is correct inholding that the uplinking charges paid to TV-18India Ltd for uplinking its channels /signals fromTV-18's uplinking centre are payments for workcontract covered u/s 194C and not fees towardsroyalty u/s 194J, without appreciating that theservices received by assessee are technical innature? c)Whether on the facts and in the circumstancesof the case and in law, the ITAT is justified inholding that the payment for production ofprogrammes constitutes payment for work u/s 194Cand not fees for royalty and technical services u/s194J, without appreciating that such payments arein nature of royalty and technical fees? d)Whether on the facts and in the circumstancesof the case and in law, the ITAT was justified inrejecting the order of the Assessing Officer byholding that the Assessee is not in default u/s201(1) in respect of the amount of tax which hasnot been deducted from the payments made underthe required sections and that the Assessee is notliable for levy of interest under section 201(1A)?” Priya Soparkar31 itxa 1409-16 and 2 itxa 1410-16-o-sof various television channels in India. In the course of itsbusiness it engages the services of various persons and onmaking payment is required to deduction tax at source. Theseappeals relate to the appropriate Sections i.e. 194C or 194Junder which the tax has to be deducted in subject of servicesengaged. It is the case of the Revenue that tax had to bededucted under Section 194J of the Act while the respondentcontends that the tax is to be deducted under Section 194C ofthe Act. -4. Re:Question (a) (i)Mr. Suresh Kumar, the learned counsel for the Revenuefairly states that this question stated concluded against therevenue and in favour of the respondent-assessee. This in view ofthe order of this Court in The Commissioner of Income Tax,TDS-2, Mumbai Vs. M/s Zee Entertainment Enterprises Ltd.(Income Tax Appeal Nos.1117 of 2015, 1107 of 2015, 1174of 2015 and 126 of 2016) decided on 28[th] February, 2018.(ii) In view of the above decision of this Court and for thereasons indicated therein, question No.(a) as proposed does not Priya Soparkar 41 itxa 1409-16 and 2 itxa 1410-16-o-s give rise to any substantial question of law. Thus, not entertained. 5. Re:-Question No.b -4. Re:Question (a) (i)Mr. Suresh Kumar, the learned counsel for the Revenuefairly states that this question stated concluded against therevenue and in favour of the respondent-assessee. This in view ofthe order of this Court in The Commissioner of Income Tax,TDS-2, Mumbai Vs. M/s Zee Entertainment Enterprises Ltd.(Income Tax Appeal Nos.1117 of 2015, 1107 of 2015, 1174of 2015 and 126 of 2016) decided on 28[th] February, 2018.(ii) In view of the above decision of this Court and for thereasons indicated therein, question No.(a) as proposed does not Priya Soparkar 41 itxa 1409-16 and 2 itxa 1410-16-o-s give rise to any substantial question of law. Thus, not entertained. 5. Re:-Question No.b (i) The respondent paid unlinking charges to a third party. Theimpugned order of the Tribunal upheld the order of the CIT (A) ofthe applicant's contention that these charges were liable fordeduction under tax at source under 194C of the Act and notunder Section 194J as contended by the revenue. This becausethe applicant's charges are integral part of broadcasting andtelecasting and would stand specifically covered by the definationof work as included under Section 194C of the Act. (ii)We note that Section 194C of the Act specifically definesthe scope of “work” included therein by defining the meaning of“work” to include broadcasting and telecasting. The work ofunlinking charges is an integral part of telecasting theprogrammes. Thus, the deduction of tax on the above paymentwould thus clearly fall within Section 194C of the Act. Therevenue has not been able to show as to why Section 194C of theAct would not apply in these facts (iii)In view of the above self evident position, the question as 51 itxa 1409-16 and 2 itxa 1410-16-o-s proposed does not give rise to any substantial question of law.Thus, not entertained. 6. Re:-Question No.c (i)The respondent made payment to third party forproduction of programmes. (ii)The impugned order of the Tribunal upheld the view ofthe respondent and the CIT (A) that the payment for productionof programmes for broadcasting and telecasting were liable to taxdeduction at source under Section 194C of the Act and not underSection 194J of the Act as contended by the Revenue. (iii)We note that the Tribunal inter-alia placed reliance uponthis CBDT circular bearing No.4 of 2016 dated 29[th] February,2016, wherein it has been clarified that payment made by abroadcaster, telecaster to a production house for production of aprogramme would fall under the defination of "work" as definedin Section 194C of the Act. (iv)In view of the binding CBDT circular dated 29[th] February,2016 the question as proposed does not give rise to anysubstantial question of law. Thus, not entertained. Priya Soparkar -7. Re:Question No.d (i)Admittedly, this question as urged, is consequential to the earlier questions. Therefore, would only arise if there is shortdeduction of tax and have made the deduction under Section194C of the Act instead of Section 194J of the Act. (ii)However, in view of the fact that there is no short deductionof tax this question in the present facts would not arise. In theabove view, there is no question of entertaining this question. 8.Accordingly, both the appeals are dismissed. No order as tocosts. (M.S.SANKLECHA,J.) (AKIL KURESHI,J.)….