TMI Blog2009 (3) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 of 2007 with Civil Appeals Nos.3534, 3294, 3291, 3302, 3298, 3299, 3306, 3304, 5334, 4389, 2490, 2670, 2495, 2500, 2484, 2497, 2496, 2491, 2489, 2498, 2499, 2501, 2483, 2482, 2481, 2492, 2671, 2485, 2502, 2475, 2474, 2477, 2476, 2478, 5221 of 2007, 2811, 4454, 4707, 4705, 6643 of 2008, 94, 432, 1154, 1256, 1004, 1155, 1115 and 1303 of 2009 ORDER Delay condoned. Leave granted in Special Leave Petitions. The question which arises for determination in this batch of Civil Appeal(s) is whether the foreign exchange earned by transferring the right of exploitation of the films outside India by way of lease is admissible for deduction under Section 80HHC of the Income Tax Act 1961. According to the Department, movies/films are not good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods' or 'merchandise'. In this connection, it was urged that beta-cam tape (cassette) was only a medium of transfer; that, there was no "sale" of the film in beta-cam format and that the assessee had only transferred the right to use for a period of five years and since the title remained with the assessee, the impugnedtransaction fell outside Section 80HHC. According to the learned counsel, since thefilms transferred on beta-cam tapes were given on lease with a right to telecast given to Star TV under the Lease Agreement dated 29 th March, 1995 for a period of five years, there was no element of sale so as to attract Section 80HHC. It was further urged that movies are neither "goods" nor "merchandise". In this connection, learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also invited to the scheme of Section 80HHC in support ofthe above contentions to point out that the word "sale" would also include "lease" asindicated in Rule 9A(7) which states that for the purposes of Rule 9A, the "sale" ofthe rights of exhibition of feature films would include the "lease" of such rights.Similarly, under Rule 9B(6), it has been, inter alia, provided that "sale" of rights ofexhibition of a feature film would include the "lease" of such rights. It is alsosubmitted on behalf of the assessee that Section 80HHF goes far beyond the physicalexports referred to in Section 80HHC(1). Section 80HHF recognises even softwaretransfers "by any means". Further under clause (5) of Section 80HHF, theParliament has clearly indicated that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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