9911796707
TMI Blog2013 (12) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... on under section 80HHC of the Act for alleged export of certain music rights through one M/s. Galaxy Timber Trading International, his proprietary concern. Such claim for deduction of Rs. 46,78,781 was scaled down to Rs. 38,04,768 in the original assessment completed on March 29, 1996 under section 143(3) of the Act. The assessee filed an appeal before the Commissioner of Income-tax (Appeals), who dismissed such appeal. Meanwhile, the Assessing Officer reopened the assessment by issuing a notice under section 148 of the Act for a reason that deduction under section 80HHC was wrongly allowed to the assessee. The reopened assessment was completed on March 31, 2003 wherein the deduction of Rs. 38,04,768 originally allowed under section 80HHC of the Act, was withdrawn. Further the appeal was filed by the assessee assailing the reopening made under section 147 of the Act as well as against the denial of deduction under section 80HHC of the Act before the Commissioner of Income-tax (Appeals). This was dismissed by an order of the Commissioner of Income-tax (Appeals) on February 5, 2004. The assessee moved in further appeal before this Tribunal and in this appeal also, the assessee assail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsider the said aspect afresh by the Assessing Officer, we are in agreement with the said conclusion. Hence, we find no substantial question of law to entertain the above appeal and the same is accordingly dismissed. No costs. Consequ ently, connected miscellaneous petition is also dismissed." 3. The culmination of the events mentioned was that the Assessing Officer took up the issue afresh once again. A notice under section 143(2) was issued to the assessee whereupon his representative appeared and filed a copy of agreement between the assessee and one M/s. Sound of Arts, Sharjah, U.A.E. evidencing the sale of copyrights. The Assessing Officer sought from the assessee evidence for export of master tapes out of India. On this, the assessee produced a bank statement of ANZ Grindlays Bank for the period March 31, 1993 to March 31, 1994. Certificates of foreign inward remittance received from the said bank and fax message received from Sound of Arts, Sharjah for having sent a demand draft in the US dollars were also filed. 4. The Assessing Officer after perusing the agreement came to a conclusion that it did not specify the nature of specified goods or merchandise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal proceedings itself. According to him, exports always necessarily need not be in physical mode since music rights fundamentally were in nature of intellectual property rights. 7. The learned Commissioner of Income-tax (Appeals) was appreciative of the above contention of the assessee. According to him, the assessee had a right to claim deduction under section 80HHC of the Act. Sale proceeds were collected in foreign exchange and what was exported were goods. The only issue was whether such exports were necessary to be done physically or not with customs clearance. According to him, in the hon'ble Mumbai High Court in the case of Abdulgafar A Nadiadwala v. ACIT [2004] 267 ITR 488 (Bom) had clearly held that physical transmission was not always necessary. Beta-Cam tapes transmitted, could be considered as exports. Beta-Cam tapes and master tapes are only one among the many modes of transportation of such rights and deduction will be available under section 80HHC of the Act for exports through such tapes as well. In this view of the matter, he held that the assessee was eligible for deduction of Rs.38,04,768 under section 80HHC of the Act. 8. Now, before us the learned Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first day of October 600 108, represented by its managing partner Dr. K. J. Yesudoss, hereinafter referred to as the party of the first part and M/s. Sound of Arts, P. O. Box 2959 Sharjah, U.A.E., represented by its Proprietor, Mr. Mahmoud Sharief Alnahary, hereinafter referred to as the party of the second part. The terms 'party of the first part' and 'party of the second part' wherever the context so permits shall mean and include their respective heirs, executors, legal representatives, administrators and assigns. Whereas the party of the first part is the (world wide) copyright holder of all titles released or to be released by M/s. Tharangini Records, M/s. Tharangini Sond Techics and M/s. Tharangini Musik, hereinafter referred to as TR, TS and TM respectively. And whereas the party of the second part is desirous of purchasing the copyrights of all the titles released by TR, TS and TM for commercial exploitation all over the world except India. And whereas both the parties are desirous of reducing the terms of this agreement in writing. Now this deed of agreement witnesseth as follows : 1. The party of the second part shall buy all the titles released and to be released ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the export of Beta-cam tapes was subject to a customs clearance. 13. Reasoning given for denying relief to the assessee under section 80HHC of the Act here is that even if the master tapes were considered "goods", his version that these were sent abroad could not be believed, since there was no customs clearance, for proving movement of such goods showing export beyond the customs frontiers of India. Explanation (aa) given under section 80HHC is relevant in this regard and this is reproduced hereunder : (aa) "export out of India" shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situated in India, not involving clearance at any customs station as defined in the Customs Act, 1962 (52 of 1962) ; By virtue of the above explanation, a transaction by way of sale in a shop in India, if it does not involve clearance at any customs station will not be considered as export out of India. In other words to be construed as export out of India, if a sale is effected in a shop or emporium in India, it is necessary that such sale should have clearance of a customs station. This pos ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
