2017 (1) TMI 1396

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....6 lakhs.During the assessment proceedings the AO found that the assessee had entered into an agreement for sale of a TV serial vide agreement dt.10.4.2008 for Rs. 50.00 lakhs, that the assessee had offered income of Rs. 8.33 lakhs for the year under consideration. The AO directed the assessee to reconcile the income as per agreement and income offered for tax. The assessee stated that he had proposed to offer the income proportionately from the year under consideration to AY 2014- 15 ( Rs. 8.33 lakhs) per year. 3.After considering the submission of the assessee the AO referred to the terms of contract, (Cl1.15),(Cl.3),(Cl.6)and held that there was nothing in the agreement that allowed termina - tion of the agreement by the licensor,that ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... that the consideration received by him was in lieu of transfer of sale of rights and goods,that the AO was right in bringing to tax the entire consideration received during the year under appeal to tax. Finally, he upheld the order of the AO. 5.During the course of hearing before us, the Authorised Representative (AR) argued that the AO had wrongly treated the transaction as sale of goods, it was payment of royalty to the assessee,that Home video licensing rights were to come back to the assessee after a period of 6 years,that the assessee received royalty for using the asset, royalty was intangible asset. He referred to the case of K.E. Gnanavelraja (361ITR446) and T.N.K. Govindrajulu Chetty (165 ITR 231). On a query by the Bench he....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ance sheet,that he offered income of Rs. 8.33 lakhs in the subsequent AY.s and same was taxed by the AO.s in those years. Before proceeding further we would like to refer to para 6 and 7 of the Agreement and same read as under :- "6.2. Effect of Event of Default. 6.2.1. In addition to any other rights available under this agreement or any other legal recourse available to Licensee, on the occurrence of an event of default, licensee shall have the right to withhold the consideration proportionate to the said film. 6.2.2 the Licensor fails to cure the event of Default within the stipulated 10(Ten) Days, the Licensor may offer to replace the said Title with another Cinematograph Title of same value ("Alternative Titles"), which Licensee ....