CALICUT UNIVERSITY CENTRAL CO-OP. STORES LTD. Vs. INCOME TAX OFFICER
LAWS(IT)-2014-8-16
INCOME TAX APPELLATE TRIBUNAL
Decided on August 28,2014

Appellant
VERSUS
Respondents

JUDGEMENT

N.R.S.Ganesan, Member (J) - (1.) ALL the three appeals of the assessee are directed against the common order passed by the CIT(A), Kozhikode dated 03 -08 -2013 for the assessment years 2007 -08, 2008 -09 and 2009 -10. Since common issue arises for consideration we heard all the appeals together and are disposed of by this common order. The only issue arises for consideration is disallowance u/s. 40(a)(ia) of the Act for non -deduction of tax u/s. 194J of the Act.
(2.) SHRI CBM Warrier, the ld. representative for the assessee submitted that the assessee is a co -operative society engaged itself in printing and publication of books for the students. According to the ld. representative, the Assessing Officer found that what was paid by the assessee to the authors of the book is royalty and, therefore, the assessee has to deduct tax u/s. 194J. Referring to provisions of section 194J of the Act, the ld. representative submitted that Explanation (ba) to section 194J clearly says that the term "royalty" shall have the same meaning as in Explanation 2 to clause (vi) of sub -section (1) of section 9. Referring to section 9, more particularly, sub section (1) of clause (vi) of Explanation 2, the ld. representative submitted that the amount paid by the assessee to the author of the books would not fall within the definition of royalty, therefore, the assessee is not expected to deduct tax u/s. 194J of the Act. Moreover, the recipient authors are exempted from payment of tax u/s. 80QQB. The ld. representative placed his reliance on the decision of the Mumbai Bench in Majestic Prakashan v. ACIT in ITA No. 2744/M/2010 order dated 29 -06 -2012, copy of which is filed by the ld. representative for the assessee and submitted that section 9(1)(vi) does not apply to publication of books. The Mumbai Bench of this Tribunal found that the literary work of the authors were not used for the television or radio broadcasting and the provisions of section 9(1)(vi) would apply only in respect of transfer of right to television or radio broadcasting. Therefore, the Mumbai Bench found that the provisions of section 194J are not applicable. In view of the above, according to the ld. representative, the assessee is not expected to deduct tax at source. On the contrary, Shri M. Anil Kumar, the ld. DR submitted that admittedly, the assessee paid exceeding Rs. 20,000 without deducting tax to the authors of the book. The assessee has also paid royalty. Payment of royalty in respect of any copyright, literary, artistic or scientific work would fall within the definition of "royalty" as defined in section 9(1)(vi) of the Act. Therefore, according to the ld. DR, the CIT(A) has rightly confirmed the addition.
(3.) WE have considered the rival submissions on either side and also perused the material available on record. It is not in dispute that the assessee paid exceeding Rs. 20,000 to the authors of the book without deducting tax. The business of the assessee is printing and publication of books for the students.;


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