Law:

Section:

Section 180 of the Income-tax Act, 1961 (Corresponding to section 12AA of the Indian Income-tax Act, 1922) - Royalties or copyright fees for literary or artistic work - Assessment year 1959-60 - Assessee an author of book, entered into agreement with Government of Kerala whereby he undertook to print edition of book called Kerala edition and supply copies of that edition to State Government only - Assessee's claim was that agreement resulted in assignment of right in copy right of book and as a result section 12AA of 1922 Act applied - From records, it was seen that printer and publisher was assessee himself and not State Government - Only right acquired by State Government was right to obtain from assessee copies of book at certain price - Whether, on aforesaid facts, it could be said that provisions of section 12AA of 1922 Act did not apply and that income of assessee was income from business - Held, yes FACTS The assessee, who was an author, sold the copyright of a book to 'P' in 1956 and the book was published by them in 1956 itself. Subsequently, in 1958, the assessee obtained a reconveyance of the copyright from 'P' Brothers. He then entered into an agreement, on 18-6-1958, with the Government of Kerala, whereby he undertook to print an edition of the book called the Kerala edition and supply the copies of that edition to the Government of Kerala. The agreement entered into stated that no sale of book would be made to any outside agency. It was further provided that assessee would be given an overriding commission of 25 per cent on the books sold. For the assessment year 1959-60 the assessee claimed that the agreement resulted in an assignment of the right in the copyright of the book-the right of publishing the Kerala edition of the book-and that as a result section 12AA of 1922 Act came into the picture. The department disallowed the assessee's claim. On appeal, the Tribunal held that the provisions of section 12AA of the 1922 Act did not apply and that the income of the assessee was income from business. On reference: HELD In instant case, under the agreement, both the printer and the publisher of the Kerala edition would be the assessee himself and…

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