TMI Blog2004 (8) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... s professional income from the work of music direction of films. For the assessment year under appeal, the assessee claimed deduction under section 80RR amounting to Rs. 1,79,608 on royalty income of Rs. 2,39,477. This was disallowed by the Assessing Officer in the assessment order observing as under : "( i )Form 10H were not filed in respect of the entire receipt of Rs. 2,39,477, which were not derived from the exercise of profession. ( ii )There is no direct nexus between the royalty income received and the exercise of the profession. ( iii )The appellant had exercised his profession when he first produced the said music. The foreign exchange remitted into India at that point of time, as a result of the exercise, was the income wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his composition in person every time. The composition is the result of direct use of the appellant s professional talents and skill and there is a close proximity between royalty income received and the exercise of profession. 4. In the impugned order, the CIT(A) upheld the action of the Assessing Officer on the ground that receipt of Rs. 2,39,477 is for the usage of copyrights of assessee s music. This income cannot be said to be derived from the exercise of the assessee s profession. Therefore, does not qualify for deduction under section 80RR of the Income-tax Act, 1961. In the impugned order, the CIT(A) also held that the assessee had exercised his profession when he first produced the music and foreign exchange was remitted to Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1995-96 and 1996-97. Therefore, on identical facts, in the assessment year under appeal, the Assessing Officer is not justified in denying the deduction under section 80RR of the Income-tax Act, 1961. The Counsel for the assessee relied on the following decisions regarding consistency in allowing deduction/claim : 1. CIT v. A.K.J. Security Printers [2003] 264 ITR 276 (Delhi) 2. Berger Paints India Ltd. v. CIT [2004] 266 ITR 99 (SC). 8. Continuing his arguments, the Counsel further submitted that provisions regarding allowance of deduction/exemption are to be liberally construed as held in the following judgments : 1. Bajaj Tempo Ltd. v. CIT [1992] 196 ITR 188 (SC). 2. CIT v. Strawboard Mfg. Co. Ltd. [1989] 177 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 29A of Income-tax Rules, 1962 was furnished either alongwith the return of income or during the course of assessment proceedings. There is no evidence that royalty in question is received either from Government or foreign state or any person non-resident Indian because the assessment year under appeal, the assessee has not furnished Form 10H as required by Rule 29A of the I.T. Rules, 1962. He submitted that regarding rule of consistency, each assessment year is an independent assessment year and principle of adjudication is not applicable to the income-tax proceedings. 11. In rejoinder, the ld. Counsel for the assessee submitted that facts are identical and requirement of furnishing Form 10H alongwith return of income is not mandat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm No. 10H as required by Rule 29A of the I.T. Rules, 1962. There is no evidence available on record to suggest that the amount in question on which the assessee claimed deduction under section 80RR is derived from ( a ) a foreign Government ( b ) any person not resident in India. The certificate from the Indian Performing Right Society Ltd., also do not certify the amount as well as source from which the same was received. It is also not known whether the amount in question was received by the assessee or on his behalf in convertible foreign exchange within the prescribed period of 6 months or whether the assessee sought some extension of time. 14. We also found that the Assessing Officer has stated that no certificate under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erified whether the assessee has furnished Form No. 10H or brought into India the income earned by him or on his behalf in convertible foreign exchange within six months or extended period of time as provided in section 80RR. 15. In view of the foregoings, we set aside the order of the CIT(A) and direct him to examine the various conditions mentioned in section 80RR because the income earned by the assessee for playing cassettes from foreign source as mentioned in section 80RR is eligible for deduction subject to fulfilment of various conditions enumerated by us hereinabove. 16. Before parting with we may add that the principle of fresh adjudication are not applicable to the income-tax proceedings. Therefore, we do not consider it n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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