Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (10) TMI 205 - KERALA HIGH COURT

2016 (10) TMI 205 - KERALA HIGH COURT - TMI - Vires of Rule 28AA of the Income Tax Rules, 1961 - Certificate for deduction at lower rates or no deduction of tax from income other than dividends - whether no TDS need be reduced from the payments made by TV channels to the petitioner with respect to sale/distribution/exhibition of cinematographic films by the petitioner to such TV channels for exhibition by such TV channels - Held that:- We do not think that this Court should delve into the merits .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tax at lower rate and no deduction of tax could be made. The earlier restriction imposed under Rule 28AA has been taken away by the present amendment. - Under such circumstances, it is for the petitioner who is involved in such transactions to approach the assessing officer concerned and seek for necessary concession in terms of Rule 28AA. I do not think that any further direction is required to be issued as statutory provision is available to take care of such situations. An interim order h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

- 23-8-2016 - A. M. Shaffique, J. For the Petitioner : Sri.Joseph Kodianthara For the Respondent : Sri. N.Nagaresh JUDGMENT This writ petition has been filed seeking the following reliefs: "(i) To declare that no TDS need be reduced from the payments made by TV channels to the petitioner with respect to sale/distribution/exhibition of cinematographic films by the petitioner to such TV channels for exhibition by such TV channels. (ii) call for the records leading to Exhibit P6 order of the 3 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eferred to as 'the Rules') is concerned, the Rule has already undergone substantial changes w.e.f 01/04/2011. The present rule reads as under: "28AA. Certificate for deduction at lower rates or no deduction of tax from income other than dividends (1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 28 is satisfied that existing and estimated tax liability of a person justifies the deduction of tax at lower rate or no deduction of tax, as the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s the case may be, of the last three previous years; (iii) existing liability under the Income- tax Act, 1961 and Wealth-tax Act, 1957; (iv) advance tax payment for the assessment year relevant to the previous year till the date of making application under sub- rule (1) of rule 28; (v) tax deducted at source for the assessment year relevant to the previous year till the date of making application under sub- rule (1) of rule 28; and (vi) tax collected at source for the assessment year relevant to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be issued direct to the person responsible for deducting the tax under advice to the person who made an application for issue of such certificate. (6) The certificate for deduction of tax at lower rate shall be issued to the person who made an application for issue of such certificate, authorising him to receive income or sum after deduction of tax at lower rate." Therefore, there is no necessity to consider the vires of the Rules 3. The petitioner claims to be engaged in the business of pu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he persons who acquire the rights to the exhibition of cinematographic films. It is stated that the person who pays royalty is liable to credit certain amount to the account of the payee or at the time of payment, in terms of Section 194J of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). Royalty has been defined under Explanation 2 to Section 9(1) of the Act, which reads as under: "Explanation 2.- For the purposes of this clause "royalty" means considerat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ess or trade mark or similar property; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property; (iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill; (iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB; (v) the transfer of all or any rights (including the granting of a licence) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is liable to be deducted with respect to the royalty paid to the petitioner which apparently is a consideration for sale/distribution of cinematographic films. Petitioner had approached the competent authority seeking for a direction that no such tax should be deducted. However, by Ext.P4 dated 31/03/2009, certificate has been issued under Section 197(1) of the Act read with Rule 28AA to the Asia Net Communications Ltd., to deduct income tax at the reduced rate of 3%. The certificate was for a p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

led inter alia contending that the rule is ultra vires the Statute and that appropriate directions are to be issued quashing Ext.P6 and for a declaration that no TDS is liable to be deducted from the amount paid by the Satellite companies/television channels to the petitioner. 5. Statement has been filed on behalf of the 3rd respondent iner alia stating that as per Rule 28AA of the Rules, certificate under Section 197 can be obtained each year subject to the satisfaction of the conditions prescr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to be seen as to whether the transfer effected in favour of the assessee would fall within Section 9(1) r/w Explanation (2)(v) of the Act. Clause (vi) to Explanation (2) defines the "Royalty" to mean consideration (including any lump sum consideration, but excluding any consideration, which would be the income of the recipient chargeable under the Head capital Gains) and in terms of Clause (v) to Explanation 2 of Section 9(1) of the Act, the transfer of all or any rights (including the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ition of a cinematography film, then it would fall outside the scope of "Royalty" as defined under Explanation (2) in the proceedings. 15. In the preceding paragraphs, we have made an elaborate reference to the nature of transaction entered into by the assessee with the third parties. The sample transfer deed, clearly states that the transfer in favour of the assessee is for a perpetual period of 99 years. The party, who executed the agreement in favour of the assessee was desirous of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version