Telangana High Court
The Commissioner Of Income Taxiv, Hyd vs A. Kaleshwar, Hyd on 14 February, 2024
Author: P.Sam Koshy
Bench: P.Sam Koshy, N.Tukaramji
THE HONOURABLE SRI JUSTICE P.SAM KOSHY
AND
THE HONOURABLE SRI JUSTICE N.TUKARAMJI
I.T.T.A.No.76 OF 2018, I.T.T.A.No.426 OF 2011 AND
I.T.T.A.No.366 OF 2017
COMMON JUDGMENT:(per Hon'ble Sri Justice P.SAM KOSHY) Heard Mr.J.V.Prasad, learned Senior Standing Counsel for the appellant/Department and Mr.K.Vasantkumar, learned counsel for the respondents. Perused the material available on record.
2. These three appeals are filed by the Revenue against the same assessee for different assessment years. Therefore, the issues involved in these cases being common, all the three appeals have been proceeded to be decided by a common judgment.
3. The Revenue filed these appeals aggrieved by the order passed by the I.T.A.T., in I.T.A.No.368/HYD/2004, I.T.A.No.355/HYD/2004 and I.T.A.No.1236/HYd/2007, decided by a common order dated 31.10.2007. So far as the I.T.T.A.No.76 of 2018 is filed assailing the order passed 2 in I.T.A.No.355/HYD/2004, I.T.T.A.No.462 of 2011 is filed assailing the order passed in I.T.A.No.368/HYD/2004 and I.T.T.A.No.366 of 2017 is an appeal filed assailing the order passed in I.T.A.No.1236/HYD/2007.
4. The question which the appellants tried to canvas in the present case is as to whether I.T.A.T. was justified in holding that the asssessee is entitled for deduction under Section 80RR of the Income Tax Act.
5. The assessee is said to have received certain amount of money in the capacity of a co-author in three foreign books i.e., I. Men are from Mars, Women are from Venus and Children are from Heaven, II. Practical Miracles and III. Truth of Miracles. The main author in the first two books was Dr.John Gray of U.S.A. and in the third book was Kenji Abe of Japan. For the income that the petitioner had received from these authors, who are foreign nationals the petitioner had claimed deduction under Section 80RR of the Income Tax Act. The assessing officer as also the CIT appeals decided the issue in favour of the Revenue holding that since there was not sufficient material to show that 3 the petitioner infact was the co-author of the said books and the benefit under Section 80RR was not granted to the assessee.
6. The assessee subsequently challenged the two orders before the Income Tax Appellate Tribunal (for short I.T.A.T), by way of three appeals for the three different assessment years. The I.T.A.T. vide the impugned order reversed the decision of the assessing officer as also by the CIT appeals holding that the assessee shall be entitled for the deduction under Section 80RR.
7. The learned Senior Standing Counsel for the appellant/Department assailing the said order contended that the finding given by the Appellate Tribunal does not seem to be proper, legal and justified. According to him as is reflected from the order of assessing officer as also that of the CIT appeals, there is no direct evidence available or materials brought on record to show that the assessee has been mentioned as a co-author in the said books which has been published by the two authors referred to in the 4 preceding paragraph. Neither is there any proof of the money received being towards the work of co-author.
8. The learned Senior Standing Counsel for the appellant/Department referred to the provision of 80RR to substantiate his contention on the same. Though these appeals have been filed at different periods i.e., in the years 2011, 2017 and 2018, pending the appeals before this Court for admission, the assessee as such is said to have expired. Subsequently, his wife and daughter have been brought on record as legal heirs and they are represented through Mr.K Vasantkumar, learned counsel in the instant appeal opposing the same.
9. For ready reference, section 80RR is necessary to be reproduced hereunder:
80RR. Deduction in respect of professional income from foreign sources in certain cases. Where the gross total income of an individual resident in India, being an author, playwright, artist, musician, actor or sportsman (including an athlete) includes any income derived by him in the exercise of his profession from the Government of a foreign State or any person not 5 resident in India, there shall be allowed, in computing the total income of the individual, a deduction from such income of an amount equal to-
(i)sixty per cent. of such income for an assessment year beginning on the 1st day of April, 2001;
(ii)forty-five per cent. of such income for an assessment year beginning on the 1st day of April, 2002;
(iii)thirty per cent. of such income for an assessment year beginning on the 1st day of April, 2003;
(iv)fifteen per cent. of such income for an assessment year beginning on the 1st day of April, 2004, as is brought into India by, or on behalf of, the assessee in convertible foreign exchange within a period of six months from the end of the previous year or within such further period as the competent authority may allow in this behalf and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005 and any subsequent assessment year.
Provided that no deduction under this section shall be allowed unless the assessee furnishes a certificate, in the prescribed form, along with the return of income, certifying that the 6 deduction has been correctly claimed in accordance with the provisions of this section. Explanation. - For the purposes of this section, the expression "competent authority" means the Reserve Bank of India or such other authority as is authorized under any law for the time being in force for regulating payments and dealings in foreign exchange.
10. From the aforesaid reading of the statutory provisions i.e., section 80RR what has been culled out by the Tribunal as the necessary ingredients for attracting Section 80RR are as follows:
(a)The assessee should be an individual resident in India;
(b)The assessee should be an author, playwright etc. as mentioned in the provision;
(c)The assessee's gross total income should include any income derived by him in the exercise of his profession;
(d)Such income should have been received from any foreign Government or any person not resident in India;
(e)Such income is brought into India in convertible foreign exchange within the specified period.
11. From the aforesaid five ingredients, there does not seem to be any dispute so far as the ingredients that is 7 reflected in the above clause a, c, d and e. The only doubt which has been raised by the learned Senior Standing Counsel for the Department while pursuing the appeal was that there does not seem to be any direct evidence or strong materials to show that the actual owner has accepted the assessee to be the co-author of the aforementioned three books. It was in this context that the Revenue has challenged the three orders passed by the Tribunal.
12. However, going through the finding given by the Tribunal what is reflected is that the Central Board of Direct Taxes (C.B.D.T) itself has issued a circular as early as on 17.07.1969, which according to the Board was required to be considered as a parameter so far as availing the benefits under Section 80RR. The pre-dominant consideration being the person's contribution should be reflecting the greater understanding of our country and its culture abroad. The Tribunal further also took the view that in addition to the aforesaid circular which itself has subsequently being diluted when the deduction under 8 Section 80RR was even being given to the candidate participating in an international events, even though there was no spreading of the culture of India as those events and which was explained by the Board vide its circular No.281 dated 22.09.1980, which permitted the professionals upon their authoring or co-authoring a paper in an international seminar and receiving some remuneration for the same also attracting the provisions of Section 80RR so far as the deductions are concerned.
13. Further, from the records it also reflects that there has been strong correspondences made by the original author of the books who have acknowledged the fact that, there has been a direct assistance provided by the assessee which led to the author to writing various sections of the books. They have also acknowledged the fact that without the assistance provided by the assessee those sections would not have been inserted or authored by the actual author. Similarly, there has been special acknowledgement made to the assessee in respect of his wisdom and his experience which has assisted the author in developing 9 practical understanding on the natural healing energy. All of which finds place in the acknowledgment which is part of the books.
14. The contents of these acknowledgment by itself goes to indicate that the assessee has met the pre-requisite as envisaged in the circular No.22, dated 17.07.1969 and which further stood clarified vide the subsequent Circular No.281, dated 22.09.1980 and that in the context of the acknowledgment, it can be safely concluded that the assessee had contributed to a great extent in the publishing of the said book by the author. Therefore, the contribution so made by the assessee has to be accepted enabling him to be treated as the co-author of the said books.
15. Having gone through the contents of the order passed by the I.T.A.T. in the three appeals preferred by the assessee, we are of the considered opinion that the Tribunal has passed a well reasoned and speaking order dealing with all the aspects particularly the contentions and submissions raised by the Revenue in the instant 10 appeals. The contentions and the submissions of the learned counsel having been dealt with by the appellate tribunal extensively forces us also to reach to the conclusion that the matter has been thrashed out factually by the Tribunal while reversing the order passed by the assessing officer as also by the CIT appeals.
16. For the aforesaid reasons, we do not find any substantial question of law made out by the appellants in these appeals. Accordingly, all these appeals are rejected. No order as to costs.
Consequently, miscellaneous petitions pending, if any, shall stand closed.
____________________ P.SAM KOSHY, J ____________________ N. TUKARAMJI, J Date: 14.02.2024 AQS