TMI Blog2014 (10) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable. 4. However, Assessing Officer is of the view that the transaction claimed as purchase of film right is in reality a transfer/lease of right for a definite period of use by converting the film rolls to DVCAM for satellite usage without permanently transferring the satellite right to the assessee. Thus, the payments debited as purchase warrant a TDS under Sec.194J of the Act and worked out disallowance under sec.40(a)(ia) for non-deduction of TDS under Sec.194J of the Act. Aggrieved by which, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). 5. The Commissioner of Income Tax (Appeals) allowed the appeal vide Order ITA No 235/11-12 dated 24-12-2012 holding that the consideration paid do not come un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before this court. On admission, the following questions of law were raised: '1. Whether on the facts and circumstances of the case, the learned Income tax Appellate Tribunal erred in upholding the disallowance under Section 40(a)(ia) of the Income Tax Act, 1961 as against the appellant? 2. Whether the learned Income Tax Appellate Tribunal erred in failing to appreciate the proposition that a disallowance of expenses under Sectioin 40(a)(ia) of the Income Tax Act, 1961 would not lie on payments already made? 3. Whether the learned Income Tax Appellate Tribunal erred in concluding that the payments made by the appellant were tantamount to Royalty? 4. Whether the learned Income Tax Appellate Tribunal's findings are perver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l question of law raised are one and the same. 17. 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 in the case on hand and the Bagyalakshmi's case (Mrs.K. Bhagyalakshmi vs Dy.CIT (Mad) reported in (2014) 221 TAXMAN 225. The earlier Division Bench of this 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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