TMI Blog2013 (9) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... The appeal has been filed by the Revenue impugning the order of the Commissioner of Income Tax(Appeals)-VI, Chennai dated 27-12-2012 relevant to the Assessment Year (AY) 2009-10. The assessee has filed cross-objections in support of the order of the CIT(Appeals). 2. The assessee is in the business of purchase and sale of TV rights for films. The assessee filed her return of income for the AY. 2009-10 on 29-09-2009 declaring her income asRs. 33,10,829/-. The case of the assessee was selected for scrutiny and notice u/s. 143(2) of the Income Tax Act, 1961 (herein after referred to as the Act ) was issued to the assessee on 24-08-2010. During the course of assessment, the Assessing Officer made additions/dis-allowances u/sec. 69C, u/sec. 14A r.w.rule 8D, u/sec. 40(a)(ia) for non deduction of TDS u/s. 194J and dis-allowance of loan creditors. Aggrieved against the assessment order dated 29-12-2011 the assessee preferred an appeal before the CIT(Appeals). The CIT(Appeals) vide impugned order dated 27-12-2012 deleted the addition made u/s. 69C, un-explained advance received and disallowance u/s. 40(a)(ia) r.w.s. 194J of the Act and partly allowed the appeal of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights, the ld. AR contended that the assessee has purchased World Negative rights and Satellite TV rights of the film for 99 years. Cinematographic films are outside the ambit of the term royalty as given in Explanation 2 to Section 9(1)(vi) of the Act. Therefore, no tax is to be deducted at source for such payments. The ld. AR further contended that even under the provisions of the Copy Right Act, the copy righted articles are protected up to sixty years and thereafter they become free. In the instant case, the rights have been purchased by the assessee for a period of 99 years. The ld. AR submitted that the ratio laid down by the Tribunal in the case relied upon by the Revenue i.e., M/s. Shri Balaji Communications (supra) is not applicable in the facts and circumstances of the present case. In M/s. Shri Balaji Communications (supra), the rights were transferred only for 20 to 25 years and were not permanent in nature. In the facts of the case, the Tribunal held that such payments fall within the definition of royalty and the assessee was duty bound u/s. 194J to deduct tax at source. Whereas, in the instant case there is outright purchase of world rights. On the second iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ORS have assigned the Exclusive World Negative (Picture Sound) rights including the theatrical and commercial rights of Distribution, Exhibition Exploitation by 35mm (valid only after 5 years from the date of first theatrical release of the film) 16, 8mm, and any dimensions in all media, performing rights and reproduce the film from the Picture and sound negatives of the fim in original or in dupe Master Negatives or from a positive print of the film or Video compact disc (after 25 years), U matic, Laser disc, Digital video disc, copyright, copying rights, Sole exclusive copyright for broadcasting the said film through any Satellite system (Indian or foreign exclusive world Satellite rights, Satellite Broadcasting service, Satellite television Broadcasting Service, Satellite Radio broadcasting, Public service broadcasting, Private communication/broadcast, Terrestrial broadcasting service, Terrestrial digital service/broadcasting Cable television service, Station, Doordarshan (except National Network) Direct to Home Service, Airborne rights, Searborne rights, Railborne rights, Pay TV rights, VCD, DVD, Laser disc, Internet, Delivery service, MMDS, Cable, Wire, Wireless, any forms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing technical, industrial, commercial or scientific knowledge, experience or skill ; [(iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB;] (v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films ; or (vi ) the rendering of any services in connection with the activities referred to in sub-clauses (i ) to [(iv), (iva) and] (v). Thus, the consideration for transfer of all or any rights in respect of any copyright, including copyright for films and video tapes, used in connection with television or tapes, would fall within the definition of royalty . What is excluded are consideration for sale, distribution and exhibition of cinematographic films. What the assessee paid here was not consideration for sale, distribution or exhibition of cinematographic films. Assessee did not pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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