COMMISSIONER OF INCOME TAX Vs. R RAJINIKANTH

JUDGEMENT

(1.) THE above tax case appeals are directed against the common order of the Income-tax Appellate Tribunal in I. T. A. No. 1629 and 1628/mds/2002 dated 12. 5. 2006.

(2.) THE Revenue is the appellant. During the relevant assessment years, viz. , 1994-95 and 1998-99, the respective assessees claimed deduction under Section 80 HHC in respect of export of film prints to foreign enterprises. Initially, the claim of the assessees was allowed, but on re-opening the assessment, the assessing officer withdrew the deduction on the basis of the order of the Tribunal that the sale of rights does not mean that goods have been exported out of India. Against the said orders of the assessing officer, the assessees preferred appeals before the Commissioner of Income-tax (Appeals), who allowed the appeals, against which, the Revenue filed appeals before the Income-tax Appellate Tribunal and the Tribunal also held the issue in favour of the assessee. Hence, the present tax case appeals by the Revenue raising the following common substantial questions of law: "1. Whether in the facts and circumstances of the case, the Tribunal was right in treating the transfer of the right to exhibit the films, as a sale of goods or merchandise for the purpose of deduction under section 80 HHC ? 2. Whether in the facts and circumstances of the case, a transaction for transfer of exploitation rights, entered into in India can be eligible for the benefit of sec. 80hhc only because the consideration was received in foreign exchange ?"

(3.) MR. J. NARAYANASWAMY, learned standing counsel appearing for the Revenue, fairly submits that the issues raised in the above questions of law are squarely covered against the Revenue by the decision of this Court in COMMISSIONER OF INCOME-TAX v. V. C. KUGANATHAN dated 31. 10. 2006 (T. C. Nos. 224 of 2003, etc. batch ).