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TMI Blog2015 (9) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... by the High Court, the copyright subsists only for a period of 60 years. Therefore, the right given to the assessee beyond the period of 60 years has to be treated as sale of the right for cinematographic film. Hence, this Tribunal is of the considered opinion that the decision of this Tribunal in Shri Balaji Communications (2013 (2) TMI 373 - ITAT CHENNAI) may not be applicable to the facts of the case. This Tribunal is of the considered opinion that the judgment of Madras High Court in the case of K. Bhagyalakshmi (2013 (12) TMI 1215 - MADRAS HIGH COURT) would be squarely applicable wherein held that the findings of the First Appellate Authority was perfectly justified in holding that the transfer in favour of the assessee as sale and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure films. On verification, the Assessing Officer found that the so-called agreement of assignment is not an agreement to purchase. The Ld. D.R. further submitted that the assessee was described in the agreement as assignee and not as buyer . The assessee was given the rights for a period of 99 years. Therefore, it is not a sale. According to the Ld. D.R., it is only granting satellite rights for the movie produced by the producer. According to the Ld. D.R., in view of the satellite rights, the assessee only gets a specific right for satellite exhibition. Therefore, the judgment of Karnataka High Court in Samsung Electronics Co. Ltd. Others [2011] 16 taxmann.com 141 is applicable. 3. The Ld. D.R. further submitted that a mere satell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her side and perused the relevant material on record. The only issue arises for consideration is whether the right to telecast the cinematographic film through satellite is a mere assignment of right or it is a purchase of the feature films. The assessee claims that it amounts to purchase of films since the satellite right was given to the assessee for 99 years. However, the Revenue claims that it is only an assignment, therefore, the assessee has to deduct tax under Section 194 of the Act. We have carefully gone through the socalled assignment agreement dated 15.07.2008. As rightly submitted by the Ld. D.R., the parties to the agreement were described as assignor and assignee and not as vendor and purchaser. The agreement shows that an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommunications (supra). The case before this Tribunal was that the assessee is engaged in purchase and sale of right of satellite movies. However, the Assessing Officer found that the agreement entered between the parties is only for assignment of right to the assessee and not sale of feature film. The right assigned to the assessee is only 20 to 25 years. Therefore, the Assessing Officer found that what was paid by the assessee is in the nature of royalty. Hence, there was no sale as claimed by the assessee. However, the CIT(Appeals) found that the assignment agreement was nothing but purchase agreement whereby the assessee purchased exclusive ownership of satellite copyright by virtue of purchase. Though the assessee was described in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ast for 99 years. The Assessing Officer found that the assignment of right for the film for definite period would come within the meaning of royalty , therefore, the assessee has to deduct tax under Section 194J of the Act. The Tribunal by placing reliance in its earlier order in K. Bhagyalakshmi (supra), found that what was transferred to the assessee is only a right of telecast for a fixed period. Therefore, it is not a case of purchase and sale of the film. Hence, the payment made by the assessee would fall within the definition of royalty . On those facts, the High Court after referring to agreement between the parties, found that the exclusive right, including theatrical and commercial rights of distribution, exhibition and exploitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s excluded from the definition of royalty. In this case also, as we have extracted above from the Schedule, the right transferred to the assessee is to telecast the feature film in extra terrestrial areas for a perpetual period of 99 years. As found by the High Court, the copyright subsists only for a period of 60 years. Therefore, the right given to the assessee beyond the period of 60 years has to be treated as sale of the right for cinematographic film. Hence, this Tribunal is of the considered opinion that the decision of this Tribunal in Shri Balaji Communications (supra) may not be applicable to the facts of the case. This Tribunal is of the considered opinion that the judgment of Madras High Court in the case of K. Bhagyalakshmi (sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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