Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home

1948 (2) TMI 17

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... nasmuch as a grant of film rights would concern both Mr. Kipling as owner of the copyright in the novel, and the respondent as owner of the copyright in the play, it was agreed between Mr. Kipling and the respondent that the entire control of the film rights in both the novel and the play should be in Mr. Kipling's hands, and that one-third of the gross amount of all sums received by Mr. Kipling for the film rights should be paid, as and when he received them, to the respondent. From 1916 onwards the film rights were granted by Mr. Kipling, and later by his legal personal representative, to various film-producing companies, and onethird of the sums received from time to time were duly paid over to the respondent. The transaction, however, with which this appeal is immediately concerned is the following: On June 27, 1939, an agreement was made between Mrs. Caroline Kipling, the widow and legal personal representative of the late Mr. Kipling (in the agreement called "the seller") and Paramount Pictures Incorporated (in the agreement called "the purchaser") under which the seller "grants and assigns" to the purchaser for a period of ten years from Jan .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ot be disturbed on appeal, but I agree with the Master of the Rolls that this is not so. As we said in Bomford v. Osborne ([1942] A.C. at p. 22; 10 I.T.R. Suppl. at p. 34): "No doubt, there are many cases in which commissioners, having had proved or admitted before them a series of facts, may deduct therefrom further conclusions which are themselves conclusions of pure fact, but in such cases the determination in point of law is that the facts proved or admitted provide evidence to support the commissioners' conclusions." Lord Sumner's speech in Usher's Wiltshire Breweries, Ltd. v. Bruce (84 L.J.K.B. at p. 434; [1915] A.C. at p. 466) contains an observation to a similar effect. But here it is plain that the extract from the special commissioners' decision quoted above is not a decision of pure fact, but raises a question of law in support of which a previous decision is cited. The question of law is whether the facts set out in the case, and the documents annexed to it, establish that the amount paid to the respondent under the agreement of June 27, 1939, is "annual profits or gains" falling under Case VI of Schedule D. If the respondent had been .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e copyright or for any part thereof." So far as the property is assigned, the assignee becomes the owner instead of the assignor. The Act also provides that, in contrast with an assignment of copyright, the owner may grant a licence which, though it permits the licensee to use the copyrighted matter within the limits of the licence without breach of copyright, does not involve any change of ownership in the copyright at all. It appears to me that the argument for the Crown does not sufficiently allow for this distinction. It is not disputed that the present case is a case of assignment; the respondent, under the relevant agreement, made a partial assignment of her copyright and ceased to be the owner of the portion assigned, receiving a sum of money in exchange. This amounts to a sale of property by a person who is not engaged in the trade or profession of dealing in such property, and the proceeds of such a sale is, for income tax purposes, a sum in the nature of untaxable capital and not in the nature of taxable revenue. The Solicitor-General referred to a number of reported cases, the first of which is Constantinesco v. R. [1927] 11 Tax Cas. 730 That was a petition of right .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... le as the licensee might desire. In all the above cases what was granted was a licence to use the patent―not necessarily an exclusive licence at all, and, moreover, the owner of the patent itself remained owner throughout, whereas in the present case the appellant actually transferred the ownership of her copyright to a new owner for the time being. Neither does Inland Revenue Commissioners v. British Salmson Aero Engines, Ltd. [1939] 7 I.T.R. 245, assist the Crown's argument. There the company acquired a sole licence to manufacture and sell in the British Commonwealth a type of aeroplane engine, and the consideration was the sum of £ 25,000, and in addition sums of £ 2,500 payable "as royalty" during each year of the currency of the licence. The special commissioners were upheld by the Court of Appeal in deciding that the sum of £ 25,000 was a capital payment, but that the ten further payments of £ 2,500 were royalties or other sums paid in respect of the user of a patent. The judgment of the present Master of the Rolls in the present case seems to me to summarise very accurately the effect of the earlier decisions, and I would, in parti .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... wn, and the effect of any dealing with if must not be judged merely on principles which may be applicable in other cases, but in the light of the terms of the Copyright Act of 1911. Whatever may be the result of granting rights partial in quantity or length of time in other cases, as to which I should desire to express no opinion, Section 6 of that Act permits the assignment of copyright either wholly or partially, either generally or subject to limitation of place, and either for the whole term or for any part thereof. Any such assignment is a parting with the whole rights limited, it is true, to a particular place or places, or for a particular period, but still to that extent a complete diverting of the property in the copyright from one owner to another. The Act itself in the same section marks the distinction between such an assignment of part of the copyright, and an interest in the right by licence by enacting that the owner shall also be entitled to grant each an interest. Finally, it provides that in the case of a partial assignment the assignee shall be the owner of the right in the part assigned, and the assignor of the right in that not assigned, If is true that this pr .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... xpressed to be made. The circumstance that the document contains provisions which state independently some of the rights necessarily involved in the assignment or which add to or subtract from those rights―however relevant that circumstance might be if the document were ambiguous as to its intended operation― cannot render it something other than an assignment. In my opinion, it is an assignment of the motion picture rights and is not a licence. The agreement dealt with motion picture rights all over the world. In the absence of evidence to the contrary I assume that the agreement had as respects copyright all over the world the same effect as it had with regard to copyright subsisting by virtue of the Copyright Act, 1911. If I am right in the construction of the agreement the fate of this appeal as regards the sum paid under the agreement is, to my mind, obvious. Miss Nethersole has been found to be a person not engaged in any trade or business. The assessment is made under Case VI of Schedule D on the footing that the consideration falls within the category "annual profits and gains." The relevant fact is that an owner of an asset, entitled by law to divide .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Site Map - Recent || Site Map ||