Case Law Details
DCIT Vs. Yash Raj Films (P) Ltd. (ITAT Mumbai)
In this case stand of assessee has been that assessee company had deducted TDS on the negative processing charges paid to Kodak India Ltd. as per the provisions of section 194J of the Act, as the negative processing involves specific tasks of editing, enhancement of quality of film, etc. However, the contract for making multiple prints of the final negative was given to Adlabs, on which the TDS is liable to be deducted only as per the provisions of section 194C of the Act, as work does not involve any technical or professional services, but it is restricted to making copies of the original print.
In view of above, such payments would be covered under sub-clause (e) of Explanation to section 194C of the Act and may not be covered under section 194J of the Act, as no specialized job was to be done, nor any technical services have been rendered to the assessee. In the order under section 201 of the Act, assessing officer had given details about various facilities available in Adlabs, but those facilities are used only for preparation of the final copy of negative. There is no technical service in such activity. Such jobs or work contracts of making several prints or the same final negative may not involve any technical or professional services as such, requiring the assessee to deduct tax under section 194J of the Act, but such contracts will be covered under the provisions of section 194C of the Act. It was found evident that assessee has been consistently making TDS on payments for taking prints of negative, as per the provisions of section 194C of the Act, while for original payments, it had been deducting TDS under the provisions of section 194J of the Act and such deduction of tax had been accepted by same assessing officer and in assessee’s own case for subsequent years in similar state of circumstances. Payments for supplying various copies of final negative has been made by assessee to Adlabs at the rate of Rs. 220 per 100 mtrs., which itself indicated that the kind of work done by them was not very sophisticated or specialized. At the same time, the payment made to Kodak India Ltd., for processing of the final negative, was significantly higher, indicating that the nature of the work done by them was technical and specialized manner. In view of above, Commissioner (Appeals) was justified in holding that assessee has rightly deducted TDS on the payments made to Adlabs, for supplying copies of final negative, as per the provisions of section 194C of the Act. Consequently, Commissioner (Appeals) was justified in granting relief to assessee on this account. Same is upheld.
Full Text of the ITAT Order is as follows:-
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
