Mrs.k.bhagyalakshmi v. The Deputy Commissioner Of Income Tax Media Circle-I, Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 03.12.2013 CORAMTHE HON'BLE MRS.JUSTICE CHITRA VENKATARAMANANDTHE HON'BLE MR.JUSTICE T.S.SIVAGNANAM Mrs.K.Bhagyalakshmi.. AppellantvsThe Deputy Commissioner of Income TaxMedia Circle-I, Chennai.. Respondent Tax Case Appeal filed under Section 260A of the Income Tax Act,1961 as against the order dated 30.09.2013 passed by the Income TaxAppellate Tribunal, Chennai Bench "D" in ITA No.1289/Mds/2013 for theassessment year 2009-2010 preferred against the order of theCommissioner of Income - Tax (Appeals)VI Chennai dated 27.12.2012 inITA NO.229/11-12 for the assessment year 2009-10 against theassessment order of Deputy Commissioner of Income-Tax, media Circle-I, Chennai dated 29.12.11 in P.A.No./GIR NO.AGWPB1355R JUDGMENT(ORDER OF THE COURT WAS MADE BY T.S.SIVAGNANAM,J.,) This appeal by the assessee is directed against the order passedby the Income Tax Appellate Tribunal, Chennai "D" Bench dated30.09.2013 in ITA No.1289/Mds/13 for the assessment year 2009-2010. 2. The assessee is a person carrying on business in the purchaseand sale of Telugu films. The assessee filed return of income forthe assessment year 2009-2010 on 29.09.2009 admitting a total incomeof Rs.33,10,829/-. The case was selected for scrutiny and a noticeunder Section 143(2)of the Income Tax Act, 1961 [The Act] was issuedon 24.08.2010. The assessment proceedings were completed underSection 143(3) of the Act and the order of assessment dated29.12.2011 was passed. The Assessing Officer made various additions,viz., (a) an addition of Rs.52,884/- as disallowance under Sectionhttps://hcservices.ecourts.gov.in/hcservices/ 69C of the Act; (b) an addition of Rs.4,00,000/- on the advancereceived, which was treated as income; (c) disallowance ofRs.8,268/- under Section 14A r/w Rule 8D of the Income Tax Rules,1962; (d) disallowance of Rs.7,16,15,000/- for non-deduction of TDSunder Section194J of the Act and (e) an addition of Rs.40,07,949/- onthe basis of a disallowance of loan credit. Accordingly, the totalincome of the assessee was assessed at Rs.7,93,94,930/- and the totaldemand was calculated at Rs.2,75,87,552/-. 3. The assessee preferred appeal to the Commissioner of IncomeTax (Appeals). The First Appellate Authority by order dated27.12.2012 allowed the appeal in part by deleting the addition madeunder Section 69C of the Act and also reversed the finding of theAssessing Officer, which made a disallowance of Rs.7,16,15,000/- fornon-deduction of TDS under Section 194J of the Act by invokingSection 40(a)(ia) of the Act. The Assessing Officer disallowed thesaid deduction of TDS under Section 194J of the Act on the groundthat the purchase of film rights fell under the term "Royalty" andthat the agreement entered into between the assessee with respect topurchase of film rights was termed as an assignment agreement and theassignee of the satellite rights and the person who transferred suchrights was the assignor and such rights were given for a period of99 years. Therefore, the Assessing Officer had concluded that it isnot a sale but a mere grant of satellite right in the movie producedby the assignor and the payments made for transfer of such rightsfall within the meaning of "Royalty". The First Appellate Authoritywhile reversing the finding given by the Assessing Officer held thatthe payments made by the assessee could not be termed as 'Royalty' asthey are not covered by Explanation 2 to Clause (vi) of Section 9(1)of the Act and the payment were covered by Section 28 of the Act astrading expenses and there was no scope for invoking Section 40(a)(ia) of the Act and therefore the First Appellate Authority held thatthe payments for acquiring of the film rights were not exigible fordeduction of Tax at Source under Section 194J of the Act as they didnot qualify as 'Royalty'. 4. Aggrieved by such order, the Revenue preferred appeal beforethe Income Tax Appellate Tribunal [The Tribunal]. The Revenuecontended that a perusal of the agreement would show that there wasno purchase or sale, but a mere assignment of certain rights and theassessee was obligated to deduct tax at source under Section 194J ofthe Act at the time of making payment and having failed to effectdeduction of tax at source, the assessee was liable for disallowanceunder Section 40(a)(ia)of the Act. 5. The assessee filed a Cross Objection before the Tribunalagainst that portion of the order of the First Appellate Authority,which was not in favour of the assessee. In the said CrossObjection, the assessee contended that the so called assignmentagreement involved purchase of the copy right itself and is not inany way transfer of all or any other rights but transfer of copyright itself, which is a specific product, comprising a bundle of https://hcservices.ecourts.gov.in/hcservices/ right. Further the assessee contended that the rights acquired wasfor 99 years and in terms of Section 26 of the CopyRight Act, 1957the copy right would be valid and subsisted only for a period of 60years and consequently any payment made towards cost of acquisitioncannot be termed as 'Royalty'. Therefore the assessee submitted thatneither Section 40(a)(ia) nor Section 194J of the Act would have anyapplicability to the assessment. The Tribunal by order dated30.09.2013, allowed the appeal filed by the Revenue in part.Accepting the submission of the Revenue, the Tribunal held that theFirst Appellate Authority has erred in deleting the disallowanceunder Section 40(a)(ia) of the Act. For arriving at such a finding,reliance was placed on the decision of the Co-ordinate Bench of theTribunal in the case of Assistant Commissioner of Income Tax vs.M/s.Shri Balaji Communications passed in ITA No.1744/Mds/2011 dated20.12.2012 and by relying upon the said decision, the Tribunalconcluded that the payments made by the assessee amounted to'Royalty' as defined in Explanation 2 to clause (vi) of Section 9(1)of the Act. Hence, the Tribunal held that the assessee failed todeduct the tax at source under Section 194J of the Act andtherefore, the disallowance made by the Assessing Officer underSection 40 (a)(ia) of the Act was correct. 6. Aggrieved by such order passed by the Tribunal, the assesseehas filed this appeal and seeks admission of the Tax Case on thefollowing substantial questions of law: 1. Whether on the facts and circumstances of the case, thelearned Income Tax Appellate Tribunal erred in upholding thedisallowance under Section 40(a)(ia) of the Income Tax Act, 1961 asagainst the appellant? 2. Whether the learned Income Tax Appellate Tribunal erred infailing to appreciate the proposition that a disallowance of expensesunder Section 40(a)(ia) of the Income Tax Act, 1961 would not lie onpayments already made? 3. Whether the learned Income TAx Appellate Tribunal erred inconcluding that the payments made by the appellant were tantamount toRoyalty? 4. Whether the learned Income Tax Appellate Tribunal erred inrelying upon the decision of a Co-ordinate Bench of the Tribunal inthe Shri Balaji Communications case? 5. Whether the learned Income Tax Appellate Tribunal's findingsare perverse on the facts and circumstances of the case, andtherefore liable to be set aside? 7. Before, we go into the contentions raised on either side, ithas to be pointed out that if question No.3 as framed supra isanswered in favour of the assessee and it is held that the payment https://hcservices.ecourts.gov.in/hcservices/ made by the assessee were not 'Royalty', there would be no necessityto answer the other questions raised by the assessee. 4. Whether the learned Income Tax Appellate Tribunal erred inrelying upon the decision of a Co-ordinate Bench of the Tribunal inthe Shri Balaji Communications case? 5. Whether the learned Income Tax Appellate Tribunal's findingsare perverse on the facts and circumstances of the case, andtherefore liable to be set aside? 7. Before, we go into the contentions raised on either side, ithas to be pointed out that if question No.3 as framed supra isanswered in favour of the assessee and it is held that the payment https://hcservices.ecourts.gov.in/hcservices/ made by the assessee were not 'Royalty', there would be no necessityto answer the other questions raised by the assessee. 8. Mr.Suhrith Parthasarathy, learned counsel appearing for theassessee after referring to the findings rendered by the FirstAppellate Authority submitted that under Explanation 2 to Clause (vi)of Section 9(1) of the Act, "Royalty" means consideration (includingany lump sum consideration, but excluding any consideration, whichwould be the income of the recipient chargeable under the HeadCapital Gains) for the transfer of all or any rights includinggranting of a licence in respect of any copy right, literary,artistic or scientific work including films or video tapes for use inconnection with television or tapes for use in connection withbroadcasting, but not including consideration for the sale,distribution or exhibition of cinematographic films. By placingemphasis on the second limb of the Explanation and by referring tothe various conditions and covenants contained in the agreemententered into between the assessee and the owner of the film, it issubmitted that the assessee had purchased the world negative rightsfor a period of 99 years and the rights transferred includedtheatrical and commercial rights, falling within the exceptioncreated in Explanation (2) and the consideration paid for the sale ofsuch rights stands excluded in terms of the said Explanation. 9. Learned counsel appearing for the assessee also referred tovarious other conditions in the agreement and submitted that thetransfer in favour of the assessee is a transfer in perpetuity.Reference was also made to Section 26 of the Copy Right Act, 1957.Learned counsel for the assessee further submitted that the Tribunalplaced reliance on its Co-ordinate Bench decision in the case of ShriBalaji Communications [cited supra] and the said decision is notapplicable to the facts of the present case as the rights which wastransferred in the said case were only for a period of 20 to 25 yearsand the Tribunal found that such transfer was not permanent.Therefore, the said decision is clearly distinguishable on facts. 10. Learned Standing Counsel appearing for the Revenue sought tosustain the order passed by the Tribunal. Learned Standing Counselreferring to the sample transfer deed dated 30.01.2008 filed by theassessee, which was entered into between the assessee and oneMs.Kakatiya Films and the terms of the agreement contained therein,submitted that it is only a licence, which has been granted in favourof the assessee and it is not a sale and there were severalconditions in the agreement and it cannot be construed as an absolutetransfer and therefore, the finding rendered by the Tribunal is fullyjustified. Further the learned Standing Counsel submitted that theTribunal after going through the terms and conditions of the licenceagreement had concluded that the rights, which was transferred to theassessee had not been transferred fully and there are certainrestrictions and unless the transfer was absolute and unconditionalit would not fall within the definition of sale and therefore, theTribunal was justified in reversing the order passed by the First https://hcservices.ecourts.gov.in/hcservices/ Appellate Authority in holding that the payments made by the assesseewould amount to "Royalty". https://hcservices.ecourts.gov.in/hcservices/ Appellate Authority in holding that the payments made by the assesseewould amount to "Royalty". 11. We have considered the submissions made on either side andperused the materials placed on record. As stated above, we shallfirst take up for consideration question No.3 which is as follows: "3. Whether the learned Income Tax Appellate Tribunal erred inconcluding that the payments made by the appellant were tantamount toRoyalty?" 12. The assessee is in the business of purchase and sale oftelevision rights for films and filed the return of income for theassessment year 2009-2010. The said return was selected for scrutinyand after issuing notice under Section 143(2) of the Act and afterhearing the assessee, an order of assessment was passed on29.12.2011. Aggrieved by such order, the assessee preferred appealto the First Appellate Authority wherein the assessee contended thateven according to the Assessing Officer, the nature of business ofthe assessee is purchase and sale of satellite Television rights ofthe films and on going through the agreement entered into between theassessee and the third parties, will leave no doubt that the assesseeunder the agreement acquired absolute rights including theatricalrights over the pictures, negative rights without any geographicalarea restrictions and the rights so transferred is for a perpetualperiod and therefore, it would amount to sale and the provisions ofSection 194J of the Act nor any provisions of the Act governing thetax deduction at source is applicable. The First Appellate Authorityexamined 14 such agreements, which appeared to be the same and on thesame line and one such sample agreement dated 30.01.2008 has beenfiled before this Court. 13. From a perusal of the said agreement, it is seen that thefirst party to the agreement is the holder of the World NegativeRights and Copy Rights of Cinematography Telugu Feature Film and thesaid party was desirous of disposing of the World Negative Rights,satellite rights and all other rights pertaining to the said pictureof any interested purchaser. The assesee expressed their desire toacquire the same from the said Kakatiya films and the terms andconditions of transfer, which was recorded by means of deed oftransfer dated 30.01.2008. The total consideration payable under theagreement has been mentioned in clause (1) of the agreement. For thepurpose of this case, the entire sample agreement is extracted hereunder for ready reference: This Deed of Transfer executed at Chennai on this 30thJanuary, 2008Between M/s.Kakatiya Films,having their office at Plot No.219, I Floor, PhaseIII, Road No.78, Jubilee Hills, Hyderabad 500 033, represented byMrs.Pengoti Saraswathi,W/o.Mr.Rammohan Rao, hereinafter referred toas 'ASSIGNOR' which term shall include his heirs, executors,administrators and legal representatives of the FIRST PART https://hcservices.ecourts.gov.in/hcservices/ ANDK.BHAGYALAKSHMI, residing at No.13, 1st Madley Street, T.Nagar,Chennai 600 017,hereinafterr referred to as the ASSIGNEE of theSECOND PART(which respective terms shall wherever the context topermits mean and include their respective heirs, executors,administrators, legal representatives and assigns) WHEREAS the ASSIGNOR is the World Negative Right holder and Copyrightholder of the Cinematography Telugu Feature Film 'BATHUKAMMA'(colour) the details of which are mentioned in the Schedule to thisAgreement. WHEREAS the Picture and Sound Negatives of the said Picture is freefrom all commitments, disposals, charges, lien etc. and the Negativesare stored with M/s.GEMINI COLOUR LAB, HYDERABAD, for safe custody. WHEREAS the ASSIGNORS are desirous of disposing of the WORLD NEGATIVERIGHTS SATELLITVE TV RIGHTS and all other rights pertaining to thesaid picture to any interested purchaser/s. WHEREAS the ASSIGNOR is the World Negative Right holder and Copyrightholder of the Cinematography Telugu Feature Film 'BATHUKAMMA'(colour) the details of which are mentioned in the Schedule to thisAgreement. WHEREAS the Picture and Sound Negatives of the said Picture is freefrom all commitments, disposals, charges, lien etc. and the Negativesare stored with M/s.GEMINI COLOUR LAB, HYDERABAD, for safe custody. WHEREAS the ASSIGNORS are desirous of disposing of the WORLD NEGATIVERIGHTS SATELLITVE TV RIGHTS and all other rights pertaining to thesaid picture to any interested purchaser/s. AND WHEREAS the ASSIGNEES have expressed their desire to acquire thesame from ASSIGNOR.WHEREAS the Parties hereto have mutually agreed to reduce the termsand conditions of the Deed of Transfer into writing. NOW THIS DEED OF TRANSFER WITNESSETH:1. That in pursuance of the aforesaid agreement and in considerationof the total amount of Rs.40,00,000/- (Rupees forty lacs only) to bepaid in the following manner:Rs.18,00,000/- (Rupees eighteen lakhs only) by cheque/DD BearingNo......... on ..... Bank, on receipt of confirmed lab letteconfirming the rights by the ASSIGNOR in favour of ASSIGNEE from therespective Laboratory.Rs.16,00,000/- (Rupees sixteen lacs only) to be paid to M/s.GEMINILABS, Hyderabad by the ASSIGNEE on behalf of the ASSIGNOR, and finalsettlement of Rs.6,00,000/- (Rupees six lacs only) to be paid twodays before the release of the said film. 2. The ASSIGNORS have assigned the Exclusive World Negative(Picture& Sound) rights including the theatrical and commercialrights of Distribution, Exhibition and Exploitation by 35 mm (validonly after 5 years from the date of first theatrical release of thefilm) 16 mm, 8mm and any dimensions in all media, performing rightsand reproduce the film from the picture and sound negatives of thefilm in original or in dupe Master Negatives or from a positive printof the film or Video compact disc (after 25 years) U matic, LaserDisc, Digital video Disc, copyright, copying rights, sole exclusivecopyright for broadcasting the said film through any Satellitesystem, (Indian or foreign) exclusive World Satellite Rights,Satellite Broadcasting service, Satellite television broadcastingservice, Satellite Radio Broadcasting, Public service broadcasting,Private Communication/broadcast, Terrestrial Broadcasting Service, https://hcservices.ecourts.gov.in/hcservices/ Terrestrial Digital Service/Broadcasting, Cable Television Service,Station, Doordarshan, Direct to Home Service, Airborne rights,Seaborne rights, Railborne rights, pay TV rights, VCD, DVD, LaserDisc, Internet, I P TV, D V B T, Radio (all dimensions), FM,Broadband, telephony, video, local delivery service, MMDS, Cablewire, wireless, any forms of communications like Signs, signals,writing, pictures, images and sounds of all kinds of transmission ofelectro magnetic waves through space or through cable intended to bereceived by general public either directly or indirectly through themedium of relay stations and all its grammatical variations andcognate expressions shall be construed accordingly or any othersystem without restriction of geographical area for a period of 99years of the Telugu Feature Film "BATHUKAMMA" from the date of thisagreement and ASSIGNOR shall permit the ASSIGNEE to telecast the saidfilm after 3(three) months from the date of its first theatricalrelease of the film. 3. The ASSIGNOR shall provide the "U" Censor Certificate and allother papers, documents pertaining to the said film unto ASSIGNEESexclusive possession and enjoyment. 4. The ASSIGNOR shall deliver to the ASSIGNEE the censoredversion of the Picture and Sound Negatives of the said film in goodcondition. 5. The ASSIGNOR shall deliver to the ASSIGNEE along with theNegatives as aforesaid: 3. The ASSIGNOR shall provide the "U" Censor Certificate and allother papers, documents pertaining to the said film unto ASSIGNEESexclusive possession and enjoyment. 4. The ASSIGNOR shall deliver to the ASSIGNEE the censoredversion of the Picture and Sound Negatives of the said film in goodcondition. 5. The ASSIGNOR shall deliver to the ASSIGNEE along with theNegatives as aforesaid: a. Xerox copy of censor certificate of the said film.b. A list of cast and techniciansc. Any other material, document related to the film now assigned to the ASSIGNEES. 6. The ASSIGNOR hereby confirm that they will not violate thisagreement and the ASSIGNOR permits the ASSIGNEE to telecast the filmwithout any liability, and the ASSIGNOR should not sell VCD, DVDRights to any other party in future. 7. The ASSIGNEE shall be entitled to assign their rights underthis agreement in part or full to any other party at their sole andabsolute discretion and the ASSIGNOR shall not have the right toclaim for any revenue or consideration received by the ASSIGNEE. 8. The ASSIGNOR hereby declare that they have not earlierassigned, alienated or in any manner encumbered and they have fulland absolute right to assign the copyright to broadcast the said FILMas aforesaid to the ASSIGNEE and agree to indemnify and keepindemnified the ASSIGNEE against any losses, claims or damages thatmay arise in this regard. https://hcservices.ecourts.gov.in/hcservices/ 9. They have not assigned or granted any licence or parted withtheir interest in the FILM to any Lessee, Rightholder, Financier,Artists, Technicians, Video Right holder or any other personwhomsoever in such a manner as to affect their copyright to Broadcastthe said film as aforesaid and undertake not to do so at any time infuture. 10. They shall indemnify the ASSIGNEE and any person acting ordeemed to be acting on the authority of the ASSIGNEE against anyclaims or damages that may arise by reason of any civil or criminalproceedings that may be instituted against the ASSIGNEE includingdefamation or infringement of copyright assigned to the ASSIGNEEunder this agreement. 11. That this agreement is irrevocable and shall be in force tillthe expiry of the period mentioned herein. This Agreement in all respects shall be subject to the jurisdictionof the Courts of Law in Chennai city only. IN WITNESS WHEREOF THE PARTIES HEREUNTO HAVE SET THEIR HANDS ON THEDAY, MONTH AND YEAR FIRST ABOVE WRITTEN. SCHEDULE TITLE: 'BATHUKAMMA'STARRING: SINDHU THULANI, BHANUCHANDER,NAVABHARAT BALAJI, ALAPATI LAKSHMIetc.DIRECTION: T.PRABHAKARMUSIC: T.PRABHAKARLABORATORY: GEMINI COLOUR LABPERIOD: FOR A PERPETUAL PERIOD OF 99 : GEMINI COLOUR LAB: FOR A PERPETUAL PERIOD OF 99 YEARS FROM THE DATE OF THIS AGREEMENT BANNER : KAKATIYA FILMS Sd/ Sd/ASSIGNORASSIGNEEWITNESSES: 14. From the above conditions of transfer, it is seen that thetotal consideration payable is Rs.40 lakhs. On receipt of thepayment as mentioned in Clause (1) above, M/s.Kakatiya films haveassigned exclusive World Negative (picture and sound) Rightsincluding theatrical and commercial rights of distribution,exhibition and exploitation of 35 mm though valid only after fiveyears from the date of first theatrical release, 16 mm, 8 mm and anydimensions in all media performing rights and reproduce that filmfrom the picture and sound negatives, etc. That apart, worldsatellite rights, satellite broadcasting service and SatelliteTelevision Broadcasting Service and copy rights also stood https://hcservices.ecourts.gov.in/hcservices/ 14. From the above conditions of transfer, it is seen that thetotal consideration payable is Rs.40 lakhs. On receipt of thepayment as mentioned in Clause (1) above, M/s.Kakatiya films haveassigned exclusive World Negative (picture and sound) Rightsincluding theatrical and commercial rights of distribution,exhibition and exploitation of 35 mm though valid only after fiveyears from the date of first theatrical release, 16 mm, 8 mm and anydimensions in all media performing rights and reproduce that filmfrom the picture and sound negatives, etc. That apart, worldsatellite rights, satellite broadcasting service and SatelliteTelevision Broadcasting Service and copy rights also stood https://hcservices.ecourts.gov.in/hcservices/ transferred in favour of the assessee. Furthermore, such transfer waswithout restrictions to geographical area for a period of 99 yearsfrom the date of transfer deed. The Censor Certificate and all otherpapers and documents were also handed over to the assessee for theirexclusive possession and enjoyment. The transferor undertook thatthey will not violate the agreement and permit the assessee totelecast the film without any liability and also undertook that theywill not sell the VCD, DVD rights to any other party in future.Furthermore, on such transfer the assessee was entitled to assigntheir rights in part or full to other party at their sole andabsolute discretion and the transferor was not entitled to claim forany revenue or consideration received by the assessee. There was afurther declaration that they have not earlier transferred orassigned or alienated any right to third parties and the assesseewill have full and absolute right to assign the copy right tobroadcast the said film and there was also indemnity executed by thetransferor in favour of the assessee. The said deed of transfer wasirrevocable till the expiry of the period for 99 years. The scheduleof the agreement also states that the period of the agreement is fora perpetual period of 99 years from the date of the said agreement. 15. It has to be seen as to whether the transfer effected infavour of the assessee would fall within Section 9(1) r/w Explanation(2)(v) to of the Act. Clause (vi) to Explanation (2) defines the"Royalty" to mean consideration (including any lump sumconsideration, but excluding any consideration, which would be theincome of the recipient chargeable under the Head Capital Gains) andin terms of Clause (v) to Explanation 2 of Section 9(1)of the Act,the transfer of all or any rights (including the granting of alicence) in respect of any copy right, literary, artistic orscientific work including films or video tapes for use in connectionwith television or tapes for use in connection with radiobroadcasting, but not including consideration for the sale,distribution or exhibition of cinematographic films. Therefore, tofall within the exclusion, as defined under clause (v) to Explanation(2) to Section 9(1) of the Act, if the consideration received as forthe sale, distribution or exhibition of a cinematography film, thenit would fall outside the scope of "Royalty" as defined underExplanation (2) in the proceedings. 16. In the preceding paragraphs, we have made an elaboratereference to the nature of transaction entered into by the assesseewith the third parties. The sample transfer deed, clearly statesthat the transfer in favour of the assessee is for a perpetual periodof 99 years. The party, who executed the agreement in favour of theassessee was desirous of disposing World Negative Rights, SatelliteTelevision Rights and all other rights pertaining to the picture andthe assessee enjoys the exclusive status, as the World Negativerights including theatrical rights owner. The assessee was alsoentitled to assign the said rights, which was transferred in theirfavour. Further the agreement was irrevocable and shall remain inforce for a period of 99 years. In such a factual situation the https://hcservices.ecourts.gov.in/hcservices/ nature of transaction, being a perpetual transfer for a period of 99years, would undoubtedly fall within the scope of sale. 17. We have seen the various conditions contained in the sampletransfer deed and there is a transfer of copy right in favour of theassessee. Though the agreement speaks of perpetual transfer for aperiod of 99 years, in terms of Section 26 of the Copy Right Act,1957, in the case of cinematographic film, copy right shall subsistuntil 60 years from the beginning of the calendar year next followingthe year in which the film is published. Therefore, the agreement inthe case on hand, is beyond the period of 60 years, for which thecopy right would be valid, the document could only be treated as oneof sale. 18. As far as the decision of the Co-ordinate Bench in the caseof Balaji Communications (cited supra), the rights which was thesubject matter of the said decision were only for a period of 20 to25 years and not of permanent nature. Therefore, the said decisionis clearly distinguishable on facts and cannot be applied to theassessee's case. 19. In the light of the above discussion, we have no hesitationto hold that the findings of the First Appellate Authority wasperfectly justified in holding that the transfer in favour of theassessee as sale and therefore, excluded from the definition of"Royalty" as defined under clause (v) to Explanation (2) of Section 9(1) of the Act. 20. In the light of the above decision, there would be nonecessity for us to go into the other questions, which have beenraised by the assessee. In the result, the order of the Income TaxAppellate Tribunal shall stand set aside and the Tax Case(Appeal) isallowed. No costs. Consequently, the connected miscellaneouspetition is closed. Sd/- Assistant Registrar vj2 /true copy/Sub. Assistant Registrar To 1. The Income Tax Appellate Tribunal, Madras "D" Bench, Chennai. Madras "D" Bench, Chennai. 2. The Commissioner of Income Tax (APpeals)VI 121, Mahatma Gandhi Road, Chennai 600 034. 3. The Deputy Commissioner of Income Tax Media Circle-I, Chennai. Media Circle-I, Chennai. + 1 cc to Mr. Suhrith Parthasarathy, Advocate Sr.63059 + 1 cc to Mr.M. Swaminathan, Advocate Sr.62958 T.C.(A) No.748 of 2013 KU(CO)EU 03.01.14