TaxTMI 
TaxTMI 
2009 (12) TMI 587
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....grounds are dismissed as not pressed. 3. Grounds of appeal No. 1 by the assessee reads as under: "The learned CIT(A) erred in upholding addition of Rs.1,09,09,328/- u/s. 40(a) of the Income-tax Act, 1961 on account of Royalty payment." 4. Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed from the Profit and Loss A/c. and the details filed by the assessee that the assessee has incurred the expenditure on royalty payment of Rs.1,09,09,328 to M/s. Columbia Tristar Films of India, Chase Manhattan Bank, 4, Chase Metro Tex Centre, 6th Floor, Broklin , New York 11245. The Assessing Officer asked the assessee to submit the details of TDS deducted and paid from the above royalty....
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.... the copy of the agreement between the assessee company and Mr. Vinod Mohindra, Chairman, VDC, VDC House, South Way, Wembley, Middlesex, HA9 OHB, England. However, the Assessing Officer was not satisfied with the explanation given by the assessee. He observed that royalty payment mentioned above is payable to M/s. Columbia Tristar Films of India (CTFI). The relevance of the copy of agreement furnished was not explained by the assessee. Therefore, the terms and conditions as per the agreement with VDC for royalty payment do not find place for deciding the allowability of payment to M/s. CTFI. Since the assessee did not deduct TDS from the royalty payment made to M/s. CTFI and since the assessee did not furnish any details of these documents ....
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....so no material has been brought on record to controvert the findings of the AO. Consequently, the order of the AO deserves to be upheld." Aggrieved with such order of the CIT(A), the assessee is in appeal before us. 7. The learned counsel for the assessee drew the attention of the Bench to provisions of section 40(a) of the Act and submitted that as per Explanation to the said provisions "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of subsection (1) of section 9 of the Act. Referring to Explanation 2 to section 9(1)(vi), he drew the attention of the Bench to all the clauses and submitted that the assessee does not fall under any of the clauses. Referring to the copy of the agreement, he drew the attention o....
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....r the licence agreement with Mr. Vinod Mohindra, Chairman, VDC has paid royalty of Rs.1,09,09,328 during the year. According to the Revenue since the assessee has not deducted tax at source from the royalty payment to M/s. CTFI, New York, therefore, the provisions of section 40(a) are attracted and such payment of royalty is not allowed as a deduction. However, it is the submission of the learned counsel for the assessee that the assessee is out of definition of "royalty" for the purpose of TDS. 11. We find as per clause (1) of the licence agreement the programmes which are subject of the licence agreement refer to the feature length and non feature motion pictures for which the licensor owns or controls the necessary rights in the terri....
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....uding the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property ; (ii) the imparting of any information concerning the working of, or the use of, a patent, invention, model, design, secret formula or process or trade mark or similar property ; (iii) the use of any patent, invention, model, design, secret formula or process or trade mark or similar property ; (iv) the imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill ; (iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB; (v) the transfer of all o....