Payment made by one advertising
agency to other advertising agency for getting work done would be
subjected to TDS under section 194C
Facts:
a)
The assessee, engaged in business of advertising services, had shown
purchase from other advertising agency, namely, RAS without deduction of
any tax at source;
b)
On query raised, the assessee contended that RAS was not advertising
agency but media buying agency and as per Circular No. 715, dated
8-8-1995, print or electronic purchase was exempt from TDS;
c)
The Assessing Officer observed that the assessee was liable to deduct
tax under section 194C(2). On further appeal, the CIT (A) dismissed
assessee’s appeal. Aggrieved-assessee filed the instant appeal.
The Tribunal held in favour of revenue as under:
1)
The section 194C(2) clearly shows that provisions of tax deduction are
applicable on the work of advertisement because the same is included
under expression 'work' in the Explanation (3) which defines 'work';
2) Further, the provisions make it clear that whenever a person being main contractor gets some work done from the
sub-contractor, even then the provisions of tax deduction would be applicable;
3)
Circular No. 715, dated 8-8-1995 clearly provides that the provisions
of TDS would apply when a client makes payment to an advertisement
agency. Admittedly, RAS was not part of media and, in fact, RAS had
booked advertisements further with other media group. So, it was a case
of one advertising agency getting work done from the other advertising
agency, i.e., a sub-contractor;
4)
It is possible that when an advertisement is booked, some part of the
work is done by one agency and some part is done by another agency. In
the absence of any evidence to show that RAS had not provided any
services, the only conclusion possible was that such agency had provided
some services. Therefore, the provisions of section 194C(2) were
clearly applicable - AAKASH TAH V. ACIT (2013) 38 taxmann.com 330 (Chandigarh - Trib.)
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