INCOME TAX ACT, 1961

Sections 194C & 194J

Tax deduction at source - Under section 194C or section 194J - Carriage fee/Channel Placement fee -

AO made disallowance under section 40(a)(ia) on account of non-deduction of tax at source under section 194J on account of carriage fee/channel placement fee. Tribunal deleted the same holding that the channel placement fees/carriage fees paid to cable operators/MSO/DTH operators being payments for work contract would cover under section 194C and not under section 194J. Aggrieved by the same, Revenue was in appeal. Held: In case of CIT v. UTI Entertainment Television Ltd. (2017) 399 ITR 443 (Bom), it was noted that both sections 194C and 194J having been introduced into the IT Act on the same day, the activities covered by section 194C are more specific and the activities covered by section 194J are more general in terms. Therefore, for the activities covered by section 194C, section 194J cannot be applied being more general out of the two. It was further held by Court that when services are rendered as per the contract by accepting placement fee or carriage fee, the same are similar to the services rendered against the payment of standard fee paid for broadcasting of channels on any frequency. In the subject case, placement fees were paid under the contract between the assessee and the cable operators/MSOs. Therefore, by no stretch of imagination, considering the nature of transaction, the argument of the Revenue that carriage fees or placement fees were in the nature of fees for technical service could be accepted.

Relied:CIT v. UTI Entertainment Television Ltd. (2017) 399 ITR 443 (Bom)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2009-10

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