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TMI Blog2013 (9) TMI 1045X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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. Aggrieved against the order of the CIT(Appeals), the Revenue has come in appeal before us. 3. Shri Anirudh Rai, appearing on behalf of the Revenue submitted that the CIT(Appeals) has erred in deleting the disallowance u/s. 40(a)(ia) to the tune ofRs. 7,16,15,000/- in respect of payments made for assignment of World Negative Rights and Satellite rights. The CIT(Appeals) has erred in holding that such payments come within the four corners of Section 28 and not u/s. 30 to 38 to bring the provisions of Section 40(a)(ia). The ld. DR further submitted that the assignment agreements are contractual in nature and a perusal of the same would show that the assessee has been shown to be assignee and rights are given for a specific period. There is no purchase and sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances 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 issue relating to loan from creditors, the ld. AR submitted that the only grouse of the Assessing Officer was that no confirmation letters were filed before the Assessing Officer. The CIT(Appeals) has deleted the addition made by the Assessing Officer after taking into consideration the material information furnished by the assessee which the Assessing Officer has failed to take into consideration. The assessee was subscriber to chits floated by M/s. Durga Finance and M/s. Mahalakshmi Finance. During the year the assessee bid for the chits and as a result, there was a closing balance in the books of the assessee. No fresh evidence was filed by the assessee before the CIT(Appeals). With regard to credit for TDS to the extent ofRs. 23.67 Lakhs is concerned, the ld. AR subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 of communications like Signs, Signals, Writing, Pictures, Images and Sounds of all kinds of transmission of electro magnetic waves through Space or through Cable intended to be receive by general public either directly or indirectly through the medium of relay stations and all its grammatical variations and cognate expressions shall be construed accordingly or any other system without restriction of geographical area for a period of 99 years of the Telugu feature film "PRODUCTION No.1" from the date of this agreement and ASSIGNOR shall permit the ASSIGNEE to telecast the said film after 3(Three) months from the date of its first theatrical release of the film." The ld. DR to support his contentions has relied on the order of the co-ordinate bench of the Tribunal in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect 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 purchase the cinematographic films as such through the transactions. Assessee had only received right for satellite broadcasting. The definition also does not say that it would apply only if the rights are considered only for a definite period. Even if the transfer of rights is perpetual or even if the transfer is only a part of the rights, as long as transfer is of any right relatable to a copyright of a film or video tape, which is to be used in connection with television or tapes, the consideration paid would be royalty only. Thus, the impugned transaction, in our opinion, would fall within the definition of "royalty"." In the instant case, a reading of para 2 of the agreement reproduced herein above would show that transfer of rights is not absolute. Some of the rights would be effective aft ..... X X X X Extracts X X X X X X X X Extracts X X X X
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