Deduction u/s.80RR of Income-tax Act, 1961 : A.Ys. 1999-00 to 2001-02 : Dress designer is artist entitled to deduction u/s. 80RR.

[CIT v. Tarun R. Tahiliani (Bom.); dated 14-6-2010]

The assesse is a dress designer. For the A.Ys. 1999-00 to
2001-02 the assessee claimed deduction u/s.80RR of the Income-tax Act, 1961 in
respect of the design fees received from persons not resident in India in
convertible foreign exchange. The Assessing Officer rejected the claim holding
that the assessee is not an author, or a playwright, artist, musician, actor or
a sportsman, and hence did not fall within one of the categories to whom a
deduction can be allowed. The Tribunal allowed the assessee’s claim.

On appeal by the Revenue, the Bombay High Court upheld the
decision of the Tribunal and held as under :

“(i) Counsel appearing on behalf of the Revenue submitted
that (i) The expression ‘artist’ in S. 80RR must be restricted to the field of
fine arts; (ii) The purpose of the provision is to showcase Indian culture
abroad; and (iii) The field of design is an area of technical expertise and
not an art form.

(ii) In a circular (No. 31) of the Board dated 25-10-1969,
it was clarified that the expression artist includes photographers and T.V.
cameramen for S. 80RR. By circular (No. 675) dated 3-1-1994, the Board
clarified that a script writer is a playwright and that a director is an
artist for the purpose of S. 80RR. However, a producer does not fall in any of
the stated categories.

(iii) The expression ‘artist’ is not defined by the
statute. Hence, the Parliament must have intended that an artist must be
understood in its ordinary sense. No artificial constructs or deeming
fictions. There is nothing in the statutory provision which would confine the
meaning of the expression to a person
engaged in fine arts.

(iv) Simply stated, an artist is a person who engages in an
activity which is an art. Artist, as we understand them, use skill and
imagination in the creation of aesthetic objects and experience. Drawing,
painting, sculpture, acting, dancing, writing, film-making, photography and
music all involve imagination, talent and skill in the creation of works which
have an aesthetic value. A designer uses the process of design and her work
requires a distinct and significant element of creativity. The canvass of
design is diverse and includes graphic design and fashion design. An artist as
part of his or her creative work, seeks to arrange elements in a manner that
would affect human senses and emotions. Design, in a certain sense, can be
construed to be a rigorous form of art or art which has a clearly defined
purpose. Though the field of designing may be regarded as a rigorous facet of
art, creativity, imagination and visualisation are the core of design.

(v) Dress designing has assumed significance in the age in
which we live, influenced as it is by the media and entertainment. As a dress
designer, the assessee must bring to his work a high degree of imagination,
creativity and skill. The fact that designing involves skill and even
technical expertise does not detract from the fact that the designer must
visualise and imagine. A designer is an artist.

(vi) The Tribunal was not in error in holding that the
assessee is an artist for the purposes of S. 80RR.”