By Ashok Dhere, Jagdish D. Shah, Chartered Accountants
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(Full texts of the following Tribunal decisions are available
at the Society’s office on written request. For members desiring that the
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11 Molly Boban v. ITO
ITAT Cochin Bench
Before N. Barathwaja Sankar (AM)
ITA No. 01 /Coch./2007
A.Y. : 2001-02. Decided on : 11-3-2008
Counsel for assessee/revenue : R. Sreenivasan/
T. R. Indira
S. 2(24) of the Income-tax Act, 1961 — Income — Year of
taxability — Amount received in consideration of right to telecast films for
five years — Whether assessee justified in claiming that the amount received is
taxable equally in each of the five years — Held, Yes.
Facts :
The assessee, an individual, was the world satellite telecast
right holder of certain feature films. In consideration for transfer of
exclusive rights to transmit, broadcast, etc. of four feature films to Asianet
for the period of five years, she was paid a sum of Rs.4 lacs. According to the
assessee, since the agreement was for the period of five years, the sum of Rs.4
lacs should be taxed over the said period of five years. However, the AO,
relying on the decision of the Apex Court in the case of Tuticorin Alkali
Chemicals & Fertilisers Ltd., brought to tax the entire sum of Rs.4 lacs in the
year under appeal. The CIT(A) on appeal upheld the order of the AO and held that
the income was in the nature of royalty.
Held :
The Tribunal accepted the contention of the assessee that she
had transferred/sold her rights in the said pictures for a period of five years,
which according to it, showed that the entire sum of Rs.4 lacs was the
consideration for the exercise of the rights by Asianet for a period of five
years. Accordingly, the Tribunal accepted the contention of the assessee that
the sum of Rs.4 lacs had to be assessed in five years and not in the year under
appeal alone.
Case referred to :
Tuticorin Alkali Chemicals & Fertilisers Ltd. v. CIT, 227
ITR 172 (SC)
