Section 194-I Inapplicable to Film Revenue Sharing: No Lease Agreement Between Distributors and Exhibitors.
The circular clarifies that the provisions of section 194-I of the Income-tax Act do not apply to the sharing of proceeds between film distributors and exhibitors. The Board concluded that these provisions are inapplicable because the exhibitor does not lease the cinema hall to the distributor, the exhibitor's share is typically for composite services, and there is no lease or similar agreement between the distributor and the cinema owner. Assessing Officers are instructed to be informed of this clarification.
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