COMMISSIONER OF INCOME TAX Vs. KRISHNA TALKIES

JUDGEMENT

(1.) IN pursuance of the directions of this court in the judgment dated July 11, 1991, in O. P. No. 4924 of 1987, on a reference by the INcome-tax Appellate Tribunal,. Cochin Bench, the answer to the following question which involves three independent aspects is expected from us ;

(2.) THE facts take us to the film world of the producer in the name and style of R. C. Combines at Madras. THE producer entered into an agreement dated August 4, 1980, regarding the distribution, exhibition and exploitation rights of the film with a glamorous name "Swargadevatha", This agreement was for a period of five years from the date of its first release in the State of Kerala. This was on August 23, 1980. A little over a year thereafter, the present assessee Krishna Talkies, Quilon, entered into another agreement, to be precise on December 1, 1981, with the producer R. C. Combines. Both the documents are annexures D and E to the paper book respectively. Shri Maheswari Films purchased distribution, exhibition and exploitation rights for a period of five years on and from August 23, 1980, for payment of Rs. 4,10,000 to be paid in four instalments.

(3.) THE preamble itself would make it clear that the life of the agreement commenced on August 23, 1980, when "Swargadevatha" was released in Kerala for a period of five years thereafter up to August 22, 1985. THE second agreement dated December 1, 1981, covered the remaining period up to August 22, 1985, and apart from owning the rights and liabilities under the first agreement, an added consideration of Rs. 2,26,829.17 is at the base of the second agreement.