By TIOL News Service

MUMBAI, AUG 24, 2017: THE ISSUE BEFORE THE TRIBUNAL IS - Whether payment made to cable operators towards services rendered by them in carrying the programmes on various frequencies by receiving & re-transmitting the audio-visual signals to television viewers, were liable for deduction of tax at source u/s 194C. YES is the answer.

Facts of case:

The Assessee company engaged in the business of providing and broadcasting news programme through its satellite television channel called "Times Now". The AO noted that assessee had claimed expenditure of Rs.44,13,89,048/- under the head 'Carriage fee' on which tax was deducted at source u/s 194C @ 2%. This Carriage fee was paid to the cable operators in pursuance to a contractual understanding with them and it was towards the services rendered by them in carrying the programmes on various frequencies by receiving, re-distributing and re-transmitting the audio-visual signals to the television viewers. The AO was of the view that the payment in question fell within the scope of Sec.194J and, therefore, tax ought to have been deducted at source @ 10%. Accordingly, the AO inferred that tax was short-deducted at source by the assessee and, therefore, the corresponding expenditure was liable to be disallowed in terms of Sec 40(a)(ia) at Rs.35,31,11,238/- u/s 40(a)(ia). On appeal, the CIT(A) directed the AO to delete the disallowance made u/s 40(a)(ia).

ITAT held,

++ it is noted that in assessee's own case in ITA Nos. 2699/Mum/2012, 4204 & 4205/Mum/2012 and 2700/Mum/2012 for A.Ys 2008-09 to 2011-12, this Tribunal has held that such payments as carriage fee to the cable operators were liable for deduction of tax at source u/s 194C and not u/s 194J of the Act. The aforesaid precedents continue to hold the field as the same have not been altered by any higher authority and, therefore, in this view of the matter, it has to be held that the AO was wrong in concluding that there was a default on the part of the assessee in deducting tax at source on the impugned payment u/s 194C so as to trigger Sec. 40(a)(ia). In this view of the matter, we deem it fit to uphold the decision of CIT(A) in deleting the addition, albeit on a different ground.

(See 2017-TIOL-1185-ITAT-MUM)