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2014 (10) TMI 183 - HC - Income TaxGrant of satellite rights - Nature of transaction is sale or liable for TDS deduction u/s 194J or 194C – Disallowance of expenses u/s 40(a)(ia) – Payment made amounts to royalty or not - Business of Media and dealing in Movie/ Film Satellite Rights by taking them on Assignment basis and reassigning to the channels and derives income from salary, business and other sources - assessee furnished explanation for not deducting TDS and claimed that the purchase of film copy right is neither covered u/s 194J nor under sec.194C of the Act – Held that:- Following the decision in Mrs.K. Bhagyalakshmi vs Dy.CIT [2013 (12) TMI 1215 - MADRAS HIGH COURT] - the payment made by the assessee were not royalty, but one of sale - whether the grant of satellite rights to the assessee under an agreement for 99 years is a Royalty, within the meaning of sec.9(1)(vi) of the Act or a sale in terms of sec.26 of Copy Right Act, is the common question of law raised – the court has considered elaborately the perpetual transfer of rights for a period of 99 years in terms of Sec.26 of Copy Right Act and also the definition under clause 5 to explanation II to sec.9(1) of the Act in relation to Royalty and has come to the conclusion that the transfer in favour of the assessee is a sale and therefore, excluded from the definition of royalty under sec.9(1) explanation II (5) of the Act – thus, the Tribunal has erred in concluding that the payments made by the appellant are Royalty and not sale – Decided in favour of assessee.
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