TMI Blog2020 (1) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... oyalty on account of the licence fees earned by the assessee or the quantum of royalty payable to such persons, it is evident that the provision made to carry forward a certain amount during a financial year almost invariably substantially exceeds the pay-out during the following year. Indeed, the provision must necessarily be in excess of the pay-out; but the difference between the quantum of provision and the extent of pay-out may be of some consequence. The notice does not pertain to such aspect of the matter and the recorded reasons reveal that the assessing officer may have mixed up between the royalties paid or payable by the assessee for its sound recordings and the royalty paid or payable by the assessee in respect of the licence fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Court : The appeal arises out of the refusal of an ad interim order by the vacation Bench on a challenge to a notice issued under Section 148 of the Income Tax Act, 1961 for reassessing the income of the writ petitioner assessee for the assessment year 2012-13 on the ground that income chargeable to tax had escaped assessment. According to the assessee, it carries on business of, inter alia, producing sound recordings of music and, for such purpose, it obtains assignment of the copyright from the first owners against royalty paid or payable upon exploitation of such rights. The assessee claims that a substantial part of the assessee s business is of issuing licence for its sound recordings to be played all over the country. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer perceived that some of the income pertaining to the relevant assessment year had escaped assessment. It is evident from such recorded reasons dated August 8, 2019 that the provision made for royalties in respect of licence fees earned by the assessee and the discrepancy between the purchase price shown in the assessee s books and the sale price recorded for the corresponding assets in the vendor s books have prompted the notice. As far as the second aspect is concerned, if it is as the assessee claims, there may not be any cause for worry since it is obvious that the excise duty and the tax paid for the transaction could not have been credited in the books of the vendor. An explanation in such regard may satisfy the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extent of pay-out may be of some consequence. However, the notice does not pertain to such aspect of the matter and the recorded reasons reveal that the assessing officer may have mixed up between the royalties paid or payable by the assessee for its sound recordings and the royalty paid or payable by the assessee in respect of the licence fees earned. As to the provision part of the accounts pertaining to royalty in respect of licence fees, there was a specific note in the accounts and schedule 28 to the accounts was quite clear. If the accounts were before the assessing officer and several queries were raised pertaining even to the royalty and matters connected therewith, it is difficult to accept that the additional income rep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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