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TMI Blog2007 (2) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... g them rights to telecast programmes produced by the appellant, and for having given the rights to the above parties, the appellant received an amount of Rs. 50,86,342 as remuneration. The appellant claimed the said amount as deduction under section 80HHC of the Income-tax Act (for brevity, "the Act"). However, the Assessing Officer, rejected the same on the ground that there was no sale of any goods or merchandise in this case and only assignment of right has taken place. The appeal preferred by the assessee against the said order of the Assessing Officer was allowed by the Commissioner of Income-tax (Appeals), observing that the assessee has assigned rights to telecast the programmes in foreign countries either by sale of video cassettes or with the help of satellite and in any case, after entering into agreement with the foreign parties, the appellant forfeits its right to telecast these programmes in those countries, and therefore, the transaction can effectively be termed as sale of goods or merchandise. On appeal, at the instance of the Revenue, the Tribunal upheld the order of the Commissioner of Income-tax (Appeals) and decided the issue in favour of the assessee. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange. (b) This section does not apply to the following goods or merchandise, namely:- (i) mineral oil; and (ii) minerals and ores (other than processed minerals and ores specified in the Twelfth Schedule). Explanation 1.- The sale proceeds referred to in clause (a) shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India. Explanation 2.- For the removal of doubts, it is hereby declared that where any goods or merchandise are transferred by an assessee to a branch, office, warehouse or any other establishment of the assessee situate outside India and such goods or merchandise are sold from such branch, office, warehouse or establishment, then, such transfer shall be deemed to be export out of India of such goods and merchandise and the value of such goods or merchandise declared in the shipping bill or bill of export as referred to in sub-section (1) of section 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss carried on by the assessee: Provided also that in the case of an assessee having export turnover exceeding rupees ten crores during the previous year, the profits computed under clause (a) or clause (b) or clause (c) of this sub-section or after giving effect to the first proviso, as the case may be, shall be further increased by the amount which bears to ninety per cent. of any sum referred to in clause (iiid) of section 28, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee, if the assessee has necessary and sufficient evidence to prove that,- (a) he had an option to choose either the duty drawback or the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme; and (b) the rate of drawback credit attributable to the customs duty was higher than the rate of credit allowable under the Duty Entitlement Pass Book Scheme, being the Duty Remission Scheme: Provided also that in the case of an assessee having export turnover exceeding rupees ten crores during the previous year, the profits computed under clause (a) or clause (b) or clause (c) of this sub-section or after giving effect to the first provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount which bears to the profits of the business the same proportion as the turnover in respect of sale to the respective Export House or Trading House bears to the total turnover of the business carried on by the assessee. (4) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. (4A) The deduction under sub-section (1A) shall not be admissible unless the supporting manufacturer furnishes in the prescribed form along with his return of income,- (a) the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed on the basis of the profits of the supporting manufacturer in respect of his sale of goods or merchandise to the Export House or Trading House; and (b) a certificate from the Export House or Trading House containing such particulars as may be prescribed and verified in the manner prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) the profits of any branch, office, warehouse or any other establishment of the assessee situate outside India; (c) 'Export House Certificate' or 'Trading House Certificate' means a valid Export House Certificate or Trading House Certificate, as the case may be, issued by the Chief Controller of Imports and Exports, Government of India; (d) 'supporting manufacturer' means a person being an Indian company or a person (other than a company) resident in India, manufacturing (including processing) goods or merchandise and selling such goods or merchandise to an Export House or a Trading House for the purposes of export." The provisions of the Act do not define the word "goods" or "merchandise". Hence, a reference to meaning of "goods" and "merchandise" as can be inferred from the law settled so far would be a guiding factor to decide the case on hand. The larger Bench of the apex court in Tata Consultancy Services v. State of A.P. [2004] 271 ITR 401; [2004] 3 RC 535; [2005] 1 SCC 308, while testing whether the property involved in a transaction is "goods" for the purposes of sales tax held as under: "The term 'goods' includes all types of movable properties, whether those p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. If the above attributes are satisfied, the same would be goods. In the case on hand, the Appellate Tribunal as well as the Commissioner of Income-tax (Appeals), after careful consideration of the facts of the case, found that the assessee assigned rights to telecast the programmes in foreign countries either by sale of video cassettes or with the help of satellite, of course after entering into agreements with foreign parties, which forfeits its right to telecast these programmes in those countries. We are, therefore, satisfied that the attributes required for bringing the property involved within the meaning of "goods" are satisfied with reference to its utility; capability of being bought and sold; and capability of being transmitted, transferred, delivered, stored and possessed. In view of our above finding that the property involved is "goods", we find no hesitation to hold that the assessee is entitled to deduction under section 80HHC of the Act, and our above view is fortified by the decision of the Division Bench of the Bombay High Court in Abdulgafar A. Nadiawala v. Assistant CIT [2004] 267 ITR 488. Alternatively, it is contended by Mr. J. Narayanaswamy, learned st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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