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2015 (10) TMI 379 - AT - Income TaxDisallowance u/s 40(a)(ia) for non deduction of tax u/s 194J - Copyright or the literary work of the authors for the purpose of printing and publication for the use of the students - Held that:- Admittedly, the recipient of the amount being the literary work, the payment made by the assessee shall be in respect of any copyright or the literary work transferred to the assessee. Explanation 2(v) clearly says that transfer of all or any rights in respect of copyright, literary, etc. shall be treated as royalty. Since admittedly, the payment was made for copyright or the literary work of the authors for the purpose of printing and publication for the use of the students, this Tribunal is of the considered opinion that the payment has to be treated as royalty. The co-ordinate bench of this Tribunal in the case of Majestic Prakashan (2012 (8) TMI 558 - ITAT, MUMBAI) found that the literary work was not used for radio broadcasting and hence the payment made by the assessee cannot be treated as royalty within the meaning of Explanation 2(v) to section 9(1)(vi) of the Act. Accordingly, the Mumbai Bench of this Tribunal found that the assessee was not expected to deduct tax u/s 194J of the Act; hence, there is no question of any disallowance u/s 40(a)(ia) of the Act. We find that in Explanation 2(v) to section 9(1)(vi) of the Act after the words “copyright” and “literary” the legislature uses punctuation mark coma (,). It is well settled principles of law that while interpreting taxation statutes the punctuation marks cannot be ignored. The use of coma after the words “copyright”, “literary”, “artistic” or “scientific work” clearly shows that the legislature intended to treat the words “copyright”, “literary” independent of “artistic or scientific work. In respect of artistic or scientific work, the legislature intended to include films or video tape for use in connection with television or radio broadcasting. Since the legislature uses coma (,) in between “copyright” “literary” both the words have to be treated independently and separately; hence, it may not have any connection with television or radio broadcasting. This distinction or use of coma in between the words “copyright” “literary” was not considered by the Mumbai Bench of this Tribunal in Majestic Prakashan (supra), therefore, it may not be applicable to the facts of this case. In the case before us, the payment was admittedly made for copyright / literary work; hence it has to be considered as royalty. Hence, the assessee is liable for deducting tax u/s 194J of the Act. Failure to do so, the provisions of section 40(a)(ia) would come into operation. - Decided against assessee.
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