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TMI Blog2010 (4) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... as appeal against the order passed in ITA No. 155/Del/06/06 for the A.Y. 2002-03. 2. The appellant/assessee claims to be engaged in the business of manufacture of television film software, for which professional services were provided by it to the foreign clients for shooting cinematograph films in India. For the assessment years in question, the appellant claimed deduction under Section 80 HHF on the ground that it was engaged in the business of transfer, by any means, out of India, of film software, television software, music software, television news software, including telecast rights. The appellant did not produce its agreement with the foreign party, for production of film, before the Assessing Officer. For the A.Y.2002-2003, the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where certain services were rendered to the foreign clients for shooting films in India and the negatives were handed over to them in India, which did not involve any export or transfer of film software. 5. Section 80 HHF of the Act, to the extent it is relevant, provides that where an assessee is engaged in the business of export or transfer, by any means, out of India, of any film software, television software, music software, television news software, including telecast rights, the deductions specified in the Section will be allowed, while computing the total income of the assessee. Therefore, the only question relevant to these appeals is as to whether the appellant company was engaged in the business of export or transfer, out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Italgist Video. Thus, the agreement cannot be said to be one for transfer of film software by any means outside India by the assessee to Italgist Video. 8.3. Coming to the agreement with Sign + Media Service Gm BH and Company, the obligations of the assessee are contained in paragraph 3, which reads as under: "Article 3: Obligations of Kas KAS as a party hereto commissions hereto CP as the other party hereto with the complete organization for this film production to theextent to such activities are carried out of India. Resposible Executive - Producer of these three documentaries in India is Ms. Aruna Har Prasad & Kalyan Mukherjee from KAS. Ms. Aruna Har Prasad & Kalyan Mukherjee will be in charge of the entire production coordination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..... In the instant case there has been no sale of the film software off the shelf. That is also not the case of the assessee. It is a case where certain services were rendered to foreign clients for shooting films in India, and the negatives were handed over to them in India. The services may involve the use of assessee's expertise in the process of production. We have already seen that this activity neither involves export nor transfer of film software by any means outside India by the assessee and everything was handed to the clients in India............................................................................................................... 8.5. The invoices produced by the assessee show nil value. We are of the view that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the expenses incurred outside India, the responsibility of the appellant was confined to the expenses incurred in India. (iv) The production of the film was financed by the producer Italgest Video SRL. Receipts, invoices, contracts and backup material were required to be provided by the appellant to the producer Italgest Video SRL. (v) The payment to Robin Melville, the designated representative of the producer in India, was to be made by the producer Italgest Video SRL and not by the appellant. (vi) The appellant was entitled to a fixed fee of 2 (two) million Indian rupees. In the event of the production of the film getting stopped for any reason other than breach on the part of the appellant company, it was entitled to keep the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the help of the assessee, it was not owned by it and, therefore, there could be no export or transfer of the film by the appellant outside India, the ownership of the film being the sine qua non for its export or transfer by the appellant. 12. The terms and conditions of the agreement show that no sale price for the film in question was fixed. The insurance policies under clause 9 of the agreement were owned by Italgest Video SRL and in the event of any claim being made with the insurance company, it is that company and not the appellant which would have been entitled to the payment made by the insurance company. Yet another important term which shows that the ownership in the film vested in the foreign client and not in the appellant co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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