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Dilip Loyalka Versus Assistant Commissioner of Income-tax, Circle -1

2015 (12) TMI 700 - ITAT KOLKATA

Disallowance of deduction u/s 80QQB - royalty - assessee has authored book on income tax problems in question answer form. - whether the assessee is eligible for claim of deduction u/s. 80QQB of the Act on receipt of royalty for literary work? - Held that:- The government i.e. CBDT has recognised assessee's work by awarding him Pratyaksh Kar Sahitya Puruskar on his Hindi Edition of the same book as second best literary work on Income Tax in Hindi. It is a fact that the assessee has authored this .....

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sequently, notional rental income can be assessed in the hands of the assessee? - Held that:- We find from the facts of the case that though the assessee has disclosed the property received from mother through will in his Balance Sheet but claimed that he is not owner as the will is not probated. There is no doubt that a will exists and it has not been probated. This is a concurrent finding of both the authorities below. In such circumstances, when the will is not granted probate, whether notion .....

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the assessee is not the owner of the house property. Accordingly, we delete this addition - Decided in favour of assessee. - IT Appeal No. 536 (Kol.) of 2013 - Dated:- 4-12-2015 - Mahavir Singh, Judicial Member And Waseem Ahmed, Accountant Member For the Petitioner : Smt. Shreya Agarwal, ACA For the Respondent : Prabal Chowdhury, JCIT, Sr. D.R. ORDER Mahavir Singh, Judicial Member - This appeal filed by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), Asansol (i .....

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99,000/-. 3. Briefly stated the facts are that during the previous year 2004-05 relevant to the assessment year 2005-06, the assessee received royalty to the tune of ₹ 99,000/- for his book on income tax and claimed deduction under section 80QQB of the Act. The Assessing Officer disallowed deduction on the ground that the book on income-tax is not a literary work. The Assessing Officer quoted Explanation to section 80QQB, clause (b) and held that in view of the above exclusion of printed m .....

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c wise in question answer format. The book is therefore a rearrangement of existing material. In this case, there is no imaginative, creative or a different point of view in the publication. Before I draw my conclusion, I analyse the case decisions submitted by the assessee in the context of the case below:- Submission of the assessee My view Decision in Lal Paharia . v. Gaya Prasad Gupta 'Rasal' on 9th August, 1970 Judgment in context of Indian Copyright Act Infoseek Solutions v. Kerala .....

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n Copyright Act Caley and Sons ltd. v. Garret and sons Ltd. 1937 Macg. Cop Cas 99 Judgment in context of Copyright, registered designs and patents Hafiz v. Abdurahliman Modhdoomi 1999 3 KLT 384 Judgment in context of Indian Copyright Act British Oxygen Co. Ltd. v. Liquid Air Ltd. 1925 Ch 383 Judgment in context of Copyright Act of United Kingdom 19. It can be seen that all the decision cited are in the context of Copyright Acts of India and UK and I had come to a firm conclusion that definition .....

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sallowing the deduction under section 80QQB. Since the question as to whether the work is a 'guide' has been formulated, I proceed to discuss and decide the matter. 21. The assessee in their written submissions detailed the literary meaning of guide. This is in the back ground of the fact that the Income Tax Act, 1961 has not defined the term 'guide'. The work of the assessee is publishing a book. It is to be examined whether it is a guide or not. As stated in paragraph 18, the b .....

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sessing Officer had concluded that the work is a 'guidebook'. He stated that it is the author who stated it to be a guidebook. The finding of Assessing Officer is as under: "Hence from the above exclusion of printed material the assessee's claim of the book that is in question and answer format cannot be taken as literary works. Moreover in the preface of the book the author himself introduce the book as "The book has been presented in style of questions and answers to enab .....

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a pamphlet, that offers basic information or instruction (www.thefreedictionary.com) a book, pamphlet, etc. giving information, instructions, or advice, handbook: an investment guide. Even perusing the sources cited by assessee, I find that nowhere it has been stated that guide is always a guidebook. 23. There are numerous other works, again of rearranging existing material in various forms like Master Guide to Income Tax, Ready Reckoners, commentaries etc. The book 'How to Handle Income Ta .....

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eld that the work of the appellant is held as literary work qualifying for deduction under section 80QQB, then every work like ready reckoners, commentaries, compilations not only applicable to Income Tax Act 1961, but in regard to every other Act and every other aspect of life will qualify for such deduction. To thwart the same, strict qualification have been placed in the section by the legislature. These qualifications have not been met by appellant and hence he is not eligible for deduction .....

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e opinion the Directorate of Income Tax Department, entrusted with the duty of promotion of Hindi for official purpose, has selected the work for the prize. The receipt of this price or its title does not make the work of asseessee otherwise not a literary work within the meaning of section 80QQB of Income Tax Act, 1961, a literary work. Hence this contention of the assessee is not accepted. In the context of the claim of assessee, here Income Tax Department is to be viewed just as a Department .....

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I had made a finding that the publication is not a literary work and is a guide and the prize given by a Department of Govt. Of India for promoting Hindi do not make the work of assessee a literary work within the meaning and ambit of clauses of Income Tax Act, 1961, I reject the ground and uphold the decision of Assessing Officer in disallowing claim of assessee under section 80QQB of Income Tax Act, 1961. Accordingly the ground is dismissed. 27. At the conclusion of hearing the appellant has .....

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Hon'ble. Supreme Court of India in the decision reported in 88 ITR 192. 28. The decisions are applicable in case there is a doubt. My discussion in the preceding paragraphs makes matter unambiguous on the eligibility of deduction under section 80QQB of Income Tax Act, 1961. In absence of doubts or ambiguity, the decisions are not applicable to the case". Aggrieved, the assessee is in second appeal before the Tribunal. 5. We have heard rival submissions and gone through facts of this cas .....

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ong with the return of income. The assessee claimed before the AO as well as before the CIT(A) that he has received an award from CBDT (Pratyaksh Kar Sahitya Puruskar) on his Hindi Edition of this book "Kaise Suljhaye Aayekar Samasyein" and considered the same as second best literary work on income tax on Hindi. Copy of the same was filed before lower authorities and even now before us. In term of the above facts of the case, whether the assessee is eligible for claim of deduction u/s. .....

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following works, namely:- (i) A literary, dramatic, musical or artistic work, (ii) A cinematograph film, (iii) A record " We find that the CIT(A) considered the explanation to section 80QQB of the Act and noted that, it does not mean everything that is not literary as stated in Explanation to section 80QQB of the Act need be literary, since, anything out of 'brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text books for schools, tracts and other pub .....

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Copyright Act, 1957. The expression literary work covers which are expressed in printing or writing irrespective of the question whether the quality or style is high or whether there is any literary merit or not. The expression literary work means not only such work which deals with any particular aspect of literature in poetry but also indicates a work which is literature i.e. anything in writing which could be said to come within the ambit of literary work. Hon'ble Kerala High Court has d .....

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the reporter. 8. Similarly, Hon'ble Supreme Court in the case of Eastern Book Company v. D. B. Modak [2008] 95 AIR 809 has also adjudicated identical issue and held that Affirming the above view the Apex court held that not only the head notes and short notes are literary works but even the judgments cited by the law reporters by (i) segregating the existing paragraphs in the original text by breaking them into separate paragraphs; (ii) adding internal paragraph numbering within a judgment .....

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ernal referencing requires skill and judgment in great measure. The editor who inserts para numbering must know how legal argumentation and legal discourse is conducted and how a judgment of a court of law must read. Often legal arguments or conclusions are either clubbed into one paragraph in the original judgment or parts of the same argument are given in separate paragraphs. It requires judgment and the capacity for discernment for determining whether to carve out a separate paragraph from an .....

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of law relevant to the topic discussed is not disturbed, would require full understanding of the entire subject of the judgment. Making paragraphs in a judgment could not be called a mechanical process. It requires careful consideration, discernment and choice and thus it can be called as a literary work of an author. Creation of paragraphs would obviously require extensive reading, careful study of subject and the exercise of judgment to make paragraph which has dealt with particular aspect of .....

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judgment and understanding the questions involved and thereafter finding out whether the Judges have disagreed or have the dissenting opinion or they are partially disagreeing and partially agreeing to the view on a particular law point or even on facts. In these inputs put in by the appellants in the judgments reported in SCC, the appellants have a copyright and nobody is permitted to utilize the same. 9. It is clear that even the government i.e. CBDT has recognised assessee's work by awar .....

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Volume 3" as under: "Literary and artistic work in the International Copyrights Act, 1886, 'unless the context otherwise requires, means every book, print, lithograph, article of sculpture, dramatic piece, musIndian Copyright Act composition, painting, drawing, photograph and other work of literature and art to which the Copyrights Acts or the International Copyrights Acts, as the case requires extends." "Copyright protection extends to literary works which are defined as .....

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r data bases, and computer programs." 10. From the above facts and circumstances of the case, the definitions and the precedents of Hon'ble Supreme Court and Kerala High Court, cited supra, we are of the view that the assessee's authored book is a literary work in term of section 80QQB of the Act and accordingly, assessee is entitled to deduction u/s. 80QQB of the Act. This issue of assessee's appeal is allowed. 11. The next issue in this appeal of assessee is, whether the asses .....

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ng deduction u/s. 54F amounting to ₹ 29,425/- and assessing a notional income of ₹ 48,000/- under the head house property. " 12. We have heard rival contention of the assessee and gone through facts and circumstances of the case. We find from the case records that the AO noted from the Balance Sheet of the assessee that it has included one house property in the Balance Sheet, which was inherited from his late mother Sita Devi Loyalka, who expired on 08.07.1998. According to AO, .....

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(A) also confirmed the action of AO. Aggrieved, assessee preferred second appeal before Tribunal. 13. We find from the facts of the case that though the assessee has disclosed the property received from mother through will in his Balance Sheet but claimed that he is not owner as the will is not probated. There is no doubt that a will exists and it has not been probated. This is a concurrent finding of both the authorities below. In such circumstances, when the will is not granted probate, whethe .....

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tor from whom he might derived title, he cannot do so unless the will under which the right as a legatee or executor is claimed has resulted in the grant of a probate or letters of administration. Therefore, as soon as the appellant wanted to establish that Mrs. Mitter was the legatee of Dr. Miss Mitter and was therefore entitled to the whole house she could only do so if the will of Dr. Miss Mitter in favour of Mrs. Mitter had resulted in the grant of probate or letters of administration. Admit .....

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