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Commissioner Of Income Tax v. International Audio Visual Co

Commissioner Of Income Tax v. International Audio Visual Co

(High Court Of Delhi)

Income Tax Appeal No. 1271 of 2006 | 31-08-2006

1. The revenue is aggrieved by an order dated 18-5-2005, passed by the Income Tax Appellate Tribunal, Delhi Bench "C" in Income Tax Act No. 4716/Del/2004 relevant for the assessment year 1989-90.

2. The assessed had claimed a deduction under Section 80HHC of the Income Tax Act in respect of dubbing rights of Hindi films, which it says, it had sold to some foreign company. The assessing officer did not agree that it was a sale by the assessed and concluded that it was not a sale of goods or merchandise but a receipt of royalty for transfer of dubbing rights.

3. Accordingly, he disallowed the claim for deduction under Section 80HHC of the. The assessing officer also initiated penalty proceedings under Section 271(1)(c) of the.

4. In response to the notice for initiating penalty proceedings, the assessed reiterated that it had not concealed any income nor had it furnished any inaccurate particulars of income and prayed that the penalty proceedings be dropped. The assessing officer rejected the contention of the assessed and imposed penalty under Section 271(1)(c) of the.

5. The appeal filed by the assessed before the Commissioner (Appeals) was also dismissed. The second appeal filed by the assessed before the Tribunal was, however, accepted and that is how the revenue is before us.

6. Having examined the record and heard learned Counsel for the revenue, we are of the opinion that there is nothing to suggest that the assessed was in any manner trying to mislead the assessing officer. It appears that he had a bona fide belief that by selling dubbing rights to a foreign company, he was selling goods or merchandise within the meaning of Section 80HHC of the.

7. The assessing officer did not agree with this contention and concluded that the payment received by the assessed was towards royalty and not sale of goods or merchandise. The contention urged by the assessed may have been incorrect but there does not appear to be anything to suggest that it reflected on the particulars of the income of the assessed or any concealment of his true income.

8. Under the circumstances, since there was no concealment of primary facts, it cannot be said that the assessed was liable to suffer a penalty under the provisions of Section 271(l)(c) of the.

9. We do not find any error in the view taken by the Tribunal in concluding that the assessed was not liable to be penalised for raising a contention which was not acceptable to the assessing officer. No substantial question of law arises for our consideration.

10. Dismissed.

Advocate List
Bench
  • HON'BLE JUSTICE MADAN B. LOKUR
  • HON'BLE JUSTICE VIPIN SANGHI
Eq Citations
  • (2007) 208 CTR DEL 328
  • [2007] 288 ITR 570 (DEL)
  • LQ/DelHC/2006/1799
Head Note

A. Income Tax — Penalty — Deduction under S. 80HHC — Duplication of dubbing rights — Bona fide belief of assessee that by selling dubbing rights to foreign company, he was selling goods or merchandise within meaning of S. 80HHC — Held, there was no concealment of primary facts and assessee was not liable to suffer penalty under S. 271(1)(c) — Income Tax Act, 1961, S. 80HHC or S. 271(1)(c) (Paras 6 to 8) B. Income Tax — Penalty — Deduction under S. 80HHC — Duplication of dubbing rights — Bona fide belief of assessee that by selling dubbing rights to foreign company, he was selling goods or merchandise within meaning of S. 80HHC — Held, there was nothing to suggest that assessee was in any manner trying to mislead assessing officer — Assessing officer did not agree with this contention and concluded that payment received by assessee was towards royalty and not sale of goods or merchandise — His contention may have been incorrect but there does not appear to be anything to suggest that it reflected on particulars of income of assessee or any concealment of his true income — Income Tax Act, 1961, S. 80HHC or S. 271(1)(c)