ACIT v. Zoom Communication Ltd.

INCOME TAX ACT, 1961

--Tax deduction at source--Applicability of section 194CPayments to camera attendants hired on 'ad hoc' basis--Assessee-company was a service provider and was engaged in providing of events and programmes meant for broadcasting. It used its own equipment and employees to provide these services and mainly to T.V. channels. Due to business needs, camera attendants were hired on temporary basis and respective payments were made in respect of such hiring. AO was of the view that TDS was required to be deducted on said payments under section 194C and as it was not so done disallowance under section 40(a)(ia) was attracted. Held: Payments to the persons engaged on 'ad hoc' basis does not fall within the expression 'work' for the purposes of section 194C. Assessee, engaged in providing of events and programmes meant for broadcasting, had incurred the impugned expenditure on account of engaging some camera attendants on ad hoc basis, i.e., for a day or two or as and when required basis. Obviously, an activity of engaging some camera attendants for using them in the business of providing of video production services would not amount to contract for carrying out of 'work' as contemplated under section 194C. There was no material on record to demonstrate that the impugned payments constituted payments for carrying out of any work within the meaning of section 194C. AO had not asserted that there was any contract between assessee and the above individuals for providing services as camera attendants. Hence, an impugned payment made to camera attendants did not require deduction of TDS and therefore, no disallowance under section 40(a)(ia) could be made.