The Tax Publishers2020 TaxPub(DT) 0243 (Cal-HC) : (2020) 312 CTR 0409 : (2020) 275 TAXMAN 0272

INCOME TAX ACT, 1961

Section 194C

Where Multi System Operators i.e. deductees simply carried out a contractual work of up-linking and broadcasting programmes made or produced by assessee in electronic media by permitting the assessee to avail the benefit of requisite electronic set up against payment of a fee, in such circumstances, section 194C would apply as definition of 'work' under that section was inclusive and specifically included broadcasting and telecasting.

Tax deduction at source - Under section 194C or 194J - Services of Uplinking, Bandwidth Services, Air Time and Channel Carriages to Multi System Operators -

Assessee-company was engaged in business of media broadcasting and telecasting. It entered into an Up-linking Service agreement for Up-linking and Bandwidth services and also entered into another agreement for Air Time service charges. While making payment for the said services, the assessee deducted tax at source in accordance with section 194C. However, AO was of the view that the said payments made to Multi System Operators would be covered by section 194J since such payments were in the nature of fees for professional and technical services. Held: It was found that Multi System Operators, i.e. deductees simply carried out a contractual work of up-linking and broadcasting programmes made or produced by assessee in electronic media by permitting the assessee to avail the benefit of requisite electronic set up against payment of a fee. It was purely contractual in nature and the assessee had right to use the set up only so long as the contract subsists. Thus, the facilities offered by the deductees would not amount to providing 'technical services' and therefore, the payments they received from the assessee could not be termed as 'fees for technical services'. Hence, section 194J was not attracted. It was section 194C, which would apply to the facts of the instant case as definition of 'work' under that section was inclusive and specifically included broadcasting and telecasting.

REFERRED : CIT v. Kotak Securities Ltd. (2016) 383 ITR 1 (SC) : 2016 TaxPub(DT) 1609 (SC) CIT v. UTV Entertainment Television Ltd. (2017) 399 ITR 443 (Bom) : 2017 TaxPub(DT) 4885 (Bom-HC) CIT v. De Beers India Minerals (P.) Ltd. (2012) 21 Taxmann.com 214 (Karn) : 2012 TaxPub(DT) 2504 (Karn-HC) CIT v. Bharti Cellular Ltd, Escotel Mobile Communications Ltd., Hutchison Essar Telecom Ltd. (2009) 319 ITR 139 (Del) : 2009 TaxPub(DT) 0996 (Del-HC) CIT v. Estel Communications (P.) Ltd. (2009) 318 ITR 185 (Del) : 2009 TaxPub(DT) 0379 (Del-HC) Skycell Communications Ltd. & Anr. v. Dy. CIT & Ors. (2001) 119 Taxman 496 (Mad) : 2001 TaxPub(DT) 1189 (Mad-HC)

FAVOUR : In assessee's favour

A.Y. :


INCOME TAX ACT, 1961

Section 271C

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