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2007] 293 ITR 301 [2008] 166 Taxman 30 (Madras) HIGH COURT OF MADRAS Commissioner of Income-tax v. Giza Impex (P.) Ltd.* P.D. DINAKARAN AND P.P.S. JANARTHANA RAJA, JJ. T.C.(A) NOS. 639 TO 642 OF 2007 JUNE 15, 2007 Section 80HHC, read with section 80HHF, of the Income-tax Act, 1961 - Deductions - Exporters - Assessment years 1994-95 to 1997-98 - Whether transfer/export of master copies of film songs and music along with rights to make copies and sell cassettes outside India would be a sale of goods or merchandise for purpose of deduction under section 80HHC - Held, yes - Whether merely because section 80HHF was not on statute book during assessment years in question and it came to be inserted with effect from 1-4-2000, that, by itself, does not mean that benefit of section 80HHC could be denied to assessee in respect of transactions which are governed under section 80HHF - Held, yes FACTS The assessee-company was engaged in the business of export of Digital Audio Tape Master containing the recorded version of film songs from Tamil feature films for exploitation overseas. It claimed deduction under section 80HHC. The Assessing Officer, however, disallowed the claim of the deduction on the ground that the exploitation rights in the film songs and music in feature films to overseas assignee would not constitute export of goods for the purpose of deduction under section 80HHC. The Commissioner (Appeals) as well as the Tribunal allowed the claim of the assessee. On appeal, the revenue contended that the deduction under section 80HHC is applicable only for profit derived from export of goods and merchandise, and, thus, could not apply to the transaction of the assessee, who had not exported any goods or merchandise, but only the master copies of film songs and music along with the rights to make copies and sell cassettes outside India. Alternatively, it was contended by the revenue that the deduction could be claimed by the assessee only under section 80HHF but not under section 80HHC, and that since section 80HHF was inserted by the Finance Act, 1999, with effect from 1-4-2000, the assessee was not entitled to deduction even under section 80HHF for the assessment…

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