By TIOL News Service

MUMBAI, AUG 25, 2018: THE ISSUE IS - Whether payment to cable operators for re-transmitting and carrying the service of the channels on their territories is towards work of broadcasting and telecasting liable for TDS u/s 194C of Act and not u/s 194J of Act. YES IS THE VERDICT.

Facts of the case

++ the nature of transaction between the assessee and the cable operator nowhere leads the fee for technical services. The jurisdictional High Court in the case of CIT Vs. UTV Entertainment Television Ltd had held that the placement fees were paid under the contract between the assessee and the cable operators or multi system operators. Considering the nature of transactions, the payments were not in the nature of commission or royalty. The Commissioner (A) had found that by agreeing to place the channel on any preferred band, the cable operator did not render any technical service to the distributor or television channel. When placement charges were paid by the assessee to the cable operators and multi-system operators for placing the signals on a preferred band, it was a part of work of broadcasting and telecasting covered by sub-clause (b) of clause (iv) of the Explanation to section 194C;

++ in the case of ITS (TDS) 3(4) Vs. M/s. Times Global Broadcasting Co. Ltd, Tribunal has held that the payment made towards placement of the channel falls in view of the provision of Section 194C of the Act. The channel replacement charges paid by assessee were liable for deduction of tax u/s 194C of the Act and the assessee has correctly deducted tax at source u/s 194C of the Act, therefore, there is no liability u/s 201(1) and 201(1A) of the I.T. Act. In view of the finding of the jurisdictional High Court in the case of CIT Vs. UTV Entertainment Television Ltd and finding of the ITAT in the case of M/s. Times Global Broadcasting Co. Ltd, the view was taken that the CIT(A) has decided the matter of controversy judiciously and correctly which was not liable to be interfere with at appellate stage. In the result, the appeal filed by the revenue is dismissed.

(See 2018-TIOL-1350-ITAT-MUM)