Clarification regarding applicability of provisions of section 194-I to film distributors and exhibitors

Representations have been received from the various quarters regarding applicability of the provisions of section 194-I of the Income-tax Act to the sharing of the proceedings of film between film distributor and a film exhibitor owning a cinema theatre. The matter has been examined by the Board and the Board are of the view that the provisions of section 194-I are not attracted to such payment because :

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     (i)    The exhibitor does not let out the cinema hall to the distributor;

   (ii)    Generally, the share of the exhibitor is on account of composite services; and

  (iii)    The distributor does not take cinema building on lease or sub-lease or tenancy or under any agreement of similar nature.

You are requested to bring these instructions to the notice of the Assessing Officer under your charge.

Circular : No. 736, dated 13-2-1996.

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Category : Income Tax (25154)
Type : Circulars (7511) Notifications/Circulars (30302)

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