K.R. Films (P) Ltd. Vs. Income Tax Officer - Court Judgment

Excerpt:
1. this is an appeal filed by the assessee and is directed against the order dt. 1st april, 2005 passed by the cit(a) in the matter of assessment under section 143(3) of the it act, 1961, for the asst. yr.2002-03.2. in substance, the only grievance raised in this appeal is that, on the facts and in the circumstances of the case, the cit(a) erred in upholding disentitlement to deduction under section 80hhf of the act.3. the assessee is engaged in the business of production and distribution of cine films. during the course of scrutiny assessment proceedings the ao noticed that the assessee has for the relevant previous year, claimed a deduction under section 80hhf on account of foreign exchange earning from yashraj films international ltd., uk, relating to export of dvd, vcd and vhs rights of film 'prem rog'. when the assessee was called upon to 'furnish the mode of transport and certificate from telecasting authority along with the extract of log book', it was pointed out that the deduction has been claimed in respect of transfer of dvd/vcd rights and as such the information requisitioned is not relevant for the purpose of this claim of deduction, the assessee also filed a confirmation from yashraj films international ltd. uk (yfil) to the effect that vhs cassette in respect of the film 'prem rog' was, in terms of agreement dt. 19th aug., 1999, was 'transferred to us (i.e. yfil), under our instructions and on your (the assessee's) behalf by yashraj films (p) ltd. by courier'. the ao noted that the assessee did not produce any evidence for the actual exports. the ao then referred to hon'ble bombay high court's judgment in the case of a.a. nadiadwala v. asstt. cit support of his stand that in order to claim a deduction under section 80hhf, the evidence of export or transfer outside india is mandatory.the ao further observed that since the assessee did not file any evidence in support of actual export or transfer of vhf cassette, the assessee is not entitled to deduction under section 80hhf of the act.aggrieved by the action of the ao, the assessee carried the matter in appeal before the cit(a) but without any success. the cit(a) confirmed the action of the ao by observing as follows : i have considered arguments of the appellant and contentions of the ao. the appellant has not adduced any evidence about the vhs cassettes claimed to have been received by yashraj films international, uk. the cassettes, even if they are being sent through courier, have to be screened and cleared by the customs authorities. no evidence to that effect has been produced. sec. 80hhf of it act entitles the appellant for deduction in case exporter or transfer by any means outside india any television software or film software, etc. however, the means of transfer have to be legitimate means and it was essential for the appellant to adduce evidence to the effect that the cassettes were cleared through the official channels.the assessee is not satisfied with the stand so taken by the ao and is in further appeal before us.4. we have heard shri inamdar, learned counsel for the assessee, and shri patel, learned senior departmental representative, for the revenue. we have also carefully perused the material on record and duly considered factual matrix of the case as also the applicable legal position.5. we consider it desirable to reproduce, for ready reference, relevant provisions of section 80hhf of the it act, 80hhf, deduction in respect of profits and gains from export or transfer of film software, etc.-(1) where an assessee, being an indian company or a person (other than a company) resident in india, is engaged in the business of export or transfer by any means out of india, of any film software, television software, music software, television news software, including telecast rights (hereafter in this section referred to as the software or software rights), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction to the extent of the profits, referred to in sub-section (1a), derived by the assessee from such business. (1a)..for the purposes of sub-section (1), the extent of deduction of profits shall be an amount equal to- (i) eighty per cent of such profits for an assessment year beginning on the 1st day of april, 2001; (ii) seventy per cent thereof for an assessment year beginning on the 1st day of april, 2002; (iii) fifty per cent thereof for an assessment year beginning on the 1st day of april, 2003; (iv) thirty per cent thereof for an assessment year beginning on the 1st day of april, 2004, 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. (2) the deduction specified in sub-section (1) shall be allowed only if the consideration in respect of the software or software rights referred to in that sab-section is received in, or brought into, india by 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. (3) for the purposes of sub-section (1), profits derived from the business referred to in that sub-section shall be the amount which bears to the profits of the business, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee. (4) the deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. (5) where a deduction under this section is claimed and allowed in respect of profits of the business referred to in sub-section (1) for any assessment year, no deduction shall be allowed in relation to such profits under any other provision of this act for the same or any other assessment year. (6) notwithstanding anything contained in this section, no deduction shall be allowed in respect of the software or software rights referred to in sub-section (1), if . such business is prohibited by any law for the time being in force. (a) "competent authority" means the reserve bank of india or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange; (b) "convertible foreign exchange" shall have the meaning assigned to it in clause (a) of the explanation to section 80hhc; (c) "export turnover" means the consideration in respect of the software or software rights specified in els. (d), (e), (g), (h) and (i), received in, or brought into, india by the assessee in convertible foreign exchange in accordance with sub-section (2), but does not include freight, telecommunication charges or insurance attributable to the delivery of such software outside india or expenses, if any, incurred in foreign exchange in providing the technical services outside india; (d) "film software" means a copy of a cinematograph film made by any process analogous to cinematography on acetate polyester or celluloid film positive, magnetic tape, digital media or other optical or magnetic devices and certified by the board of film certification constituted by the central government under section 3 of the cinematograph act, 1952 (37 of 1952); (e) "music software" includes series of sounds or music recorded on magnetic tape, cassette, compact discs and digital media which can be played or reproduced on any appropriate apparatus; (f) "profits of the business" means the profits of the business as computed under the head "profits and gains of business or profession" as reduced by- (a) ninety per cent of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and (b) the profits of any branch, office, warehouse or any other establishment of the assessee situated outside india; (g) "telecast rights" means a licence or contract to exhibit motion pictures or television programmes over a television network either through terrestrial transmission or through a satellite broadcast in a specified territory; (h) "television news software" means a collection of sounds and images, reportage, data and voice of actualities broadcast either through terrestrial transmission, wire or satellite, live or pre-recorded on video cassettes or digital media; (i) "television software" means any programme or series of sounds and images recorded on film or tape or digital media or broadcast through terrestrial transmitter, satellite or any other means of diffusion; (a) any sum referred to in els. (iiia), (iiib) and (iiic) of section 28; (b) any freight, telecommunication charges or insurance attributable to the delivery of the film software, music software, telecast rights, television news software, or television software as defined in clause (d), (e), (g), (h) or (i), as the case may be, outside india; (c) expenses, if any, incurred in foreign exchange in providing the technical services outside india.6. a plain reading of this statutory provision shows that the scheme of the provision, so far as relevant to the fact situation before us, is like this. it applies to an assessee who is engaged in the business of "export or transfer by any means out of india", of any film software, television software, music software, television news software, including telecast rights (referred to as the software or software rights)". it not only covers the software but also covers software rights as well, as is specifically provided in section 80hhf(l). the expression 'television software' has been further explained under expln. (i) to the said section, as "any programme or series of sounds and images recorded on film or tape or digital media or broadcast through terrestrial transmitter, satellite or any other means of diffusion". as a corollary to the fact that the scope of section covers not only the software but also the software rights, the expression 'television software' includes television software rights as well. vcd, dvd and vhs cassette rights are in the nature of rights on "any programme or series of sounds and images recorded on film or tape or digital media". revenue does not dispute, and rightly so, that vcd and dvd are in the nature of digital media and vhs cassette is a tape.therefore, any rights in the nature of rights in respect of vcd, dvd and vhs cassette are clearly covered by the scope of section 80hhf. it is important to bear in mind that what is covered by the section is not only the television software i.e., vhs, vcd and dvd programme but also rights in respect of such programme i.e., vhs, vcd and dvd. the next important condition is that the deduction under section 80hhf is to be allowed only if the consideration in respect of the software or software rights referred to in that sub-section is received in, or brought into india, by 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. it thus follows that when an assessee "exports or transfers", inter alia such television software rights including vcd, dvd and vhs rights, "by any means out of india", and when the consideration in respect of the same is received, within stipulated time, in convertible foreign exchange, the same is eligible for deduction under section 80hhf of the act.7. it is important to bear in mind that for eligibility for deduction under section 80hhf, it is not necessary precondition that television software per se is to be 'exported or transferred by any means out of india' but consideration on 'transfer of rights in respect of the television software' will also qualify, subject to fulfilment of other conditions, for deduction under section 80hhf. this is a significant departure from the scheme of sections 80hhc and 80hhb in which transfer of rights is not specifically included. sec. 80hhc requires 'export out of india of any goods or merchandise to which... (section 80hhc) applies', and section 80hhe is available in respect of 'export out of india of computer software or its transmission from india to a place outside india by any means' and in respect of 'providing technical services outside india in connection with the development or production of computer software'. therefore, so far as the question of export of software rights is concerned, the scheme of section 80hhf are quite at variance with the scheme of sections 80hhc and 80hhe. even an 'export or transfer by any means out of india' of a television software can entitle, without essentially involving export or transfer by any means out of india of the television software per se, an assessee to deduction under section 80hhf of the act.8. let us now come to the facts of the present case. a perusal of agreement dt. 19th aug., 1999 entered into between the assessee and yash raj films international ltd. of uk shows that by the virtue of the said agreement the assessee has transferred, on sole and exclusive basis, "dvds, vcds and vhs cassette rights" for a period of five years.this agreement further provides that the 'producer (i.e. the assessee) shall provide either a good digital beta cassette of the film or allow them to use the negative of the film to provide a positive print of the film for making a digital beta cassette to enable the distributor (i.e.yrfil) to manufacture dvds, vcds and vhs cassettes". there is no dispute that this agreement was before the ao and is part of the assessment records. there is also no dispute that under this agreement the transfer of rights has taken place in the asst. yr. 2000-01 but the consideration in respect of the same, which is worked out on the basis of net surplus sales revenue generated, is to accrue and is to be received on quarterly basis over the entire contract period. it is also an undisputed position that the assessee had claimed deduction under section 80hhf in respect of the same in the earlier years and the same was allowed, though under summary assessment scheme under section 143(l)(a), by the authorities. the agreement provides that out of the sale revenues of such dvds, vcds and vhs cassettes, and after providing for the costs associated with manufacturing and promotion of the same, the producer (i.e. the assessee) will get 85 per cent of surplus amount. this agreement also casts a duty on the yrifl to send a quarterly business statement, and to remit the dues, in convertible foreign exchange, as may become payable to the producer under the said agreement. it is thus not in doubt that there was a transfer of software rights to the yash raj films international ltd., uk, and that the amount in question was received in consideration of transfer of such rights. the question of export or transfer out of india of the television software per se is, therefore, not at all relevant. we have taken note of the fact that, as provided in residual clause 12 of the agreement, "all other terms in trade practice are applicable". we have also take note of assessee's uncontroverted stand that the normal practice in the export of these rights is that the beta tape is handed over to the representative of the buyer of television software rights, and that, in the present case, yash raj films international ltd, of uk has categorically confirmed that the assessee had handed over the said tape to their representative in india namely yash raj films (p) ltd., and that, subsequently, the tape was couriered by yash raj films (p) ltd. to yash raj films international ltd., uk. the 'export or transfer out of india by any means outside india' of cassette is anyway not relevant because the claim for deduction under section 80hhf is not in respect of television software per se but is on account of transfer of television software "rights". the agreement in question pertains to the transfer of rights and not the software. in this background, it is difficult to comprehend as to on what basis the cit(a) comes to the conclusion that "the cassettes, even if they are being sent through courier, have to be screened and cleared by the custom authorities". as for the ao's reliance on hon'ble bombay high court's judgment in the case of a.a. nadiadwala (supra), we find that it is wholly misconceived inasmuch as, in the said case, their lordships were dealing with deduction under section 80hhc which has materially different requirements. the cassette being sent out of india, in our humble understanding, is not at all a precondition for grant of deduction under section 80hhf. there is thus no need on the part of the assessee to produce any evidence for the same. it is sufficient for the assessee to demonstrate that the television software "rights" are transferred and that the receipts in convertible foreign exchange are in respect of such transfer. the rights are transferred by means of a lawful agreement which was available for verification of.the ao. the cit(a)'s observation that "the means of transfer have to be legitimate means and it was essential for the appellant to adduce evidence to the effect that the cassettes were cleared through the official channels" is also thus devoid of any legally sustainable basis. the cit(a) has completely ignored the crucial distinction between 'transfer of television software rights' and 'transfer of television software'.9. on the facts of the present case, and on appreciation of material before us, we are satisfied that the assessee has, by the virtue of agreement dt. 19th aug., 1999 entered into with yashraj films international ltd., uk, transferred out of india 'television software rights'. accordingly, in our considered view, the objections taken by the authorities below are devoid of any legally sustainable merits. we reject the same. we direct the ao to delete the impugned disallowance of deduction under section 80hhf. the assessee gets relief accordingly.10. before parting with the matter, we may also mention that, during the course of hearing, our attention was also invited to certain other orders passed by the same cit(a), on materially identical facts, in which the conclusions arrived at by him were diametrically opposed to the conclusions arrived at in this case. it is also pointed out that these earlier decisions have been ignored by the cit(a). having decided the issue in appeal on merits and in favour of the assessee, however, we see no need to deal with those orders or to even examine whether material facts were indeed the same as in this case. it is certainly desirable that the appellate authorities maintain consistency in their approach, and that the appellate authorities, without placing on record cogent reasons to do so, do not deviate from the conclusions arrived at in other similar cases at least on purely legal issues. we need not go any further into the matter and beyond making these general observations.

Judgment:
1. This is an appeal filed by the assessee and is directed against the order dt. 1st April, 2005 passed by the CIT(A) in the matter of assessment under Section 143(3) of the IT Act, 1961, for the asst. yr.

2002-03.

2. In substance, the only grievance raised in this appeal is that, on the facts and in the circumstances of the case, the CIT(A) erred in upholding disentitlement to deduction under Section 80HHF of the Act.

3. The assessee is engaged in the business of production and distribution of cine films. During the course of scrutiny assessment proceedings the AO noticed that the assessee has for the relevant previous year, claimed a deduction under Section 80HHF on account of foreign exchange earning from Yashraj Films International Ltd., UK, relating to export of DVD, VCD and VHS rights of film 'Prem Rog'. When the assessee was called upon to 'furnish the mode of transport and certificate from telecasting authority along with the extract of log book', it was pointed out that the deduction has been claimed in respect of transfer of DVD/VCD rights and as such the information requisitioned is not relevant for the purpose of this claim of deduction, The assessee also filed a confirmation from Yashraj Films International Ltd. UK (YFIL) to the effect that VHS cassette in respect of the film 'Prem Rog' was, in terms of agreement dt. 19th Aug., 1999, was 'transferred to us (i.e. YFIL), under our instructions and on your (the assessee's) behalf by Yashraj Films (P) Ltd. by courier'. The AO noted that the assessee did not produce any evidence for the actual exports. The AO then referred to Hon'ble Bombay High Court's judgment in the case of A.A. Nadiadwala v. Asstt. CIT support of his stand that in order to claim a deduction under Section 80HHF, the evidence of export or transfer outside India is mandatory.

The AO further observed that since the assessee did not file any evidence in support of actual export or transfer of VHF cassette, the assessee is not entitled to deduction under Section 80HHF of the Act.

Aggrieved by the action of the AO, the assessee carried the matter in appeal before the CIT(A) but without any success. The CIT(A) confirmed the action of the AO by observing as follows : I have considered arguments of the appellant and contentions of the AO. The appellant has not adduced any evidence about the VHS cassettes claimed to have been received by Yashraj Films International, UK. The cassettes, even if they are being sent through courier, have to be screened and cleared by the Customs authorities. No evidence to that effect has been produced. Sec.

80HHF of IT Act entitles the appellant for deduction in case exporter or transfer by any means outside India any television software or film software, etc. However, the means of transfer have to be legitimate means and it was essential for the appellant to adduce evidence to the effect that the cassettes were cleared through the official channels.

The assessee is not satisfied with the stand so taken by the AO and is in further appeal before us.

4. We have heard Shri Inamdar, learned Counsel for the assessee, and Shri Patel, learned senior Departmental Representative, for the Revenue. We have also carefully perused the material on record and duly considered factual matrix of the case as also the applicable legal position.

5. We consider it desirable to reproduce, for ready reference, relevant provisions of Section 80HHF of the IT Act, 80HHF, Deduction in respect of profits and gains from export or transfer of film software, etc.-(1) Where an assessee, being an Indian company or a person (other than a company) resident in India, is engaged in the business of export or transfer by any means out of India, of any film software, television software, music software, television news software, including telecast rights (hereafter in this section referred to as the software or software rights), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction to the extent of the profits, referred to in Sub-section (1A), derived by the assessee from such business.

(1A)..For the purposes of Sub-section (1), the extent of deduction of profits shall be an amount equal to- (i) eighty per cent of such profits for an assessment year beginning on the 1st day of April, 2001; (ii) seventy per cent thereof for an assessment year beginning on the 1st day of April, 2002; (iii) fifty per cent thereof for an assessment year beginning on the 1st day of April, 2003; (iv) thirty per cent thereof for an assessment year beginning on the 1st day of April, 2004, 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.

(2) The deduction specified in Sub-section (1) shall be allowed only if the consideration in respect of the software or software rights referred to in that sab-section is received in, or brought into, India by 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.

(3) For the purposes of Sub-section (1), profits derived from the business referred to in that sub-section shall be the amount which bears to the profits of the business, the same proportion as the export turnover bears to the total turnover of the business carried on by the assessee.

(4) The deduction under Sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below Sub-section (2) of Section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section.

(5) Where a deduction under this section is claimed and allowed in respect of profits of the business referred to in Sub-section (1) for any assessment year, no deduction shall be allowed in relation to such profits under any other provision of this Act for the same or any other assessment year.

(6) Notwithstanding anything contained in this section, no deduction shall be allowed in respect of the software or software rights referred to in Sub-section (1), if . such business is prohibited by any law for the time being in force.

(a) "competent authority" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange; (b) "convertible foreign exchange" shall have the meaning assigned to it in Clause (a) of the Explanation to Section 80HHC; (c) "export turnover" means the consideration in respect of the software or software rights specified in els. (d), (e), (g), (h) and (i), received in, or brought into, India by the assessee in convertible foreign exchange in accordance with Sub-section (2), but does not include freight, telecommunication charges or insurance attributable to the delivery of such software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India; (d) "film software" means a copy of a cinematograph film made by any process analogous to cinematography on acetate polyester or celluloid film positive, magnetic tape, digital media or other optical or magnetic devices and certified by the Board of film certification constituted by the Central Government under Section 3 of the Cinematograph Act, 1952 (37 of 1952); (e) "music software" includes series of sounds or music recorded on magnetic tape, cassette, compact discs and digital media which can be played or reproduced on any appropriate apparatus; (f) "profits of the business" means the profits of the business as computed under the head "profits and gains of business or profession" as reduced by- (A) ninety per cent of any receipts by way of brokerage, commission, interest, rent, charges or any other receipt of a similar nature included in such profits; and (B) the profits of any branch, office, warehouse or any other establishment of the assessee situated outside India; (g) "telecast rights" means a licence or contract to exhibit motion pictures or television programmes over a television network either through terrestrial transmission or through a satellite broadcast in a specified territory; (h) "television news software" means a collection of sounds and images, reportage, data and voice of actualities broadcast either through terrestrial transmission, wire or satellite, live or pre-recorded on video cassettes or digital media; (i) "television software" means any programme or series of sounds and images recorded on film or tape or digital media or broadcast through terrestrial transmitter, satellite or any other means of diffusion; (A) any sum referred to in els. (iiia), (iiib) and (iiic) of Section 28; (B) any freight, telecommunication charges or insurance attributable to the delivery of the film software, music software, telecast rights, television news software, or television software as defined in Clause (d), (e), (g), (h) or (i), as the case may be, outside India; (C) expenses, if any, incurred in foreign exchange in providing the technical services outside India.

6. A plain reading of this statutory provision shows that the scheme of the provision, so far as relevant to the fact situation before us, is like this. It applies to an assessee who is engaged in the business of "export or transfer by any means out of India", of any film software, television software, music software, television news software, including telecast rights (referred to as the software or software rights)". It not only covers the software but also covers software rights as well, as is specifically provided in Section 80HHF(l). The expression 'television software' has been further explained under Expln. (i) to the said section, as "any programme or series of sounds and images recorded on film or tape or digital media or broadcast through terrestrial transmitter, satellite or any other means of diffusion". As a corollary to the fact that the scope of section covers not only the software but also the software rights, the expression 'television software' includes television software rights as well. VCD, DVD and VHS cassette rights are in the nature of rights on "any programme or series of sounds and images recorded on film or tape or digital media". Revenue does not dispute, and rightly so, that VCD and DVD are in the nature of digital media and VHS cassette is a tape.

Therefore, any rights in the nature of rights in respect of VCD, DVD and VHS cassette are clearly covered by the scope of Section 80HHF. It is important to bear in mind that what is covered by the section is not only the television software i.e., VHS, VCD and DVD programme but also rights in respect of such programme i.e., VHS, VCD and DVD. The next important condition is that the deduction under Section 80HHF is to be allowed only if the consideration in respect of the software or software rights referred to in that sub-section is received in, or brought into India, by 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. It thus follows that when an assessee "exports or transfers", inter alia such television software rights including VCD, DVD and VHS rights, "by any means out of India", and when the consideration in respect of the same is received, within stipulated time, in convertible foreign exchange, the same is eligible for deduction under Section 80HHF of the Act.

7. It is important to bear in mind that for eligibility for deduction under Section 80HHF, it is not necessary precondition that television software per se is to be 'exported or transferred by any means out of India' but consideration on 'transfer of rights in respect of the television software' will also qualify, subject to fulfilment of other conditions, for deduction under Section 80HHF. This is a significant departure from the scheme of Sections 80HHC and 80HHB in which transfer of rights is not specifically included. Sec. 80HHC requires 'export out of India of any goods or merchandise to which... (Section 80HHC) applies', and Section 80HHE is available in respect of 'export out of India of computer software or its transmission from India to a place outside India by any means' and in respect of 'providing technical services outside India in connection with the development or production of computer software'. Therefore, so far as the question of export of software rights is concerned, the scheme of Section 80HHF are quite at variance with the scheme of Sections 80HHC and 80HHE. Even an 'export or transfer by any means out of India' of a television software can entitle, without essentially involving export or transfer by any means out of India of the television software per se, an assessee to deduction under Section 80HHF of the Act.

8. Let us now come to the facts of the present case. A perusal of agreement dt. 19th Aug., 1999 entered into between the assessee and Yash Raj Films International Ltd. of UK shows that by the virtue of the said agreement the assessee has transferred, on sole and exclusive basis, "DVDs, VCDS and VHS cassette rights" for a period of five years.

This agreement further provides that the 'producer (i.e. the assessee) shall provide either a good digital beta cassette of the film or allow them to use the negative of the film to provide a positive print of the film for making a digital beta cassette to enable the distributor (i.e.

YRFIL) to manufacture DVDs, VCDS and VHS cassettes". There is no dispute that this agreement was before the AO and is part of the assessment records. there is also no dispute that under this agreement the transfer of rights has taken place in the asst. yr. 2000-01 but the consideration in respect of the same, which is worked out on the basis of net surplus sales revenue generated, is to accrue and is to be received on quarterly basis over the entire contract period. It is also an undisputed position that the assessee had claimed deduction under Section 80HHF in respect of the same in the earlier years and the same was allowed, though under summary assessment scheme under Section 143(l)(a), by the authorities. The agreement provides that out of the sale revenues of such DVDs, VCDs and VHS cassettes, and after providing for the costs associated with manufacturing and promotion of the same, the producer (i.e. the assessee) will get 85 per cent of surplus amount. This agreement also casts a duty on the YRIFL to send a quarterly business statement, and to remit the dues, in convertible foreign exchange, as may become payable to the producer under the said agreement. It is thus not in doubt that there was a transfer of software rights to the Yash Raj Films International Ltd., UK, and that the amount in question was received in consideration of transfer of such rights. The question of export or transfer out of India of the television software per se is, therefore, not at all relevant. We have taken note of the fact that, as provided in residual Clause 12 of the agreement, "all other terms in trade practice are applicable". We have also take note of assessee's uncontroverted stand that the normal practice in the export of these rights is that the beta tape is handed over to the representative of the buyer of television software rights, and that, in the present case, Yash Raj Films International Ltd, of UK has categorically confirmed that the assessee had handed over the said tape to their representative in India namely Yash Raj Films (P) Ltd., and that, subsequently, the tape was couriered by Yash Raj Films (P) Ltd. to Yash Raj Films International Ltd., UK. The 'export or transfer out of India by any means outside India' of cassette is anyway not relevant because the claim for deduction under Section 80HHF is not in respect of television software per se but is on account of transfer of television software "rights". The agreement in question pertains to the transfer of rights and not the software. In this background, it is difficult to comprehend as to on what basis the CIT(A) comes to the conclusion that "the cassettes, even if they are being sent through courier, have to be screened and cleared by the Custom authorities". As for the AO's reliance on Hon'ble Bombay High Court's judgment in the case of A.A. Nadiadwala (supra), we find that it is wholly misconceived inasmuch as, in the said case, Their Lordships were dealing with deduction under Section 80HHC which has materially different requirements. The cassette being sent out of India, in our humble understanding, is not at all a precondition for grant of deduction under Section 80HHF. There is thus no need on the part of the assessee to produce any evidence for the same. It is sufficient for the assessee to demonstrate that the television software "rights" are transferred and that the receipts in convertible foreign exchange are in respect of such transfer. The rights are transferred by means of a lawful agreement which was available for verification of.the AO. The CIT(A)'s observation that "the means of transfer have to be legitimate means and it was essential for the appellant to adduce evidence to the effect that the cassettes were cleared through the official channels" is also thus devoid of any legally sustainable basis. The CIT(A) has completely ignored the crucial distinction between 'transfer of television software rights' and 'transfer of television software'.

9. On the facts of the present case, and on appreciation of material before us, we are satisfied that the assessee has, by the virtue of agreement dt. 19th Aug., 1999 entered into with Yashraj Films International Ltd., UK, transferred out of India 'television software rights'. Accordingly, in our considered view, the objections taken by the authorities below are devoid of any legally sustainable merits. We reject the same. We direct the AO to delete the impugned disallowance of deduction under Section 80HHF. The assessee gets relief accordingly.

10. Before parting with the matter, we may also mention that, during the course of hearing, our attention was also invited to certain other orders passed by the same CIT(A), on materially identical facts, in which the conclusions arrived at by him were diametrically opposed to the conclusions arrived at in this case. It is also pointed out that these earlier decisions have been ignored by the CIT(A). Having decided the issue in appeal on merits and in favour of the assessee, however, we see no need to deal with those orders or to even examine whether material facts were indeed the same as in this case. It is certainly desirable that the appellate authorities maintain consistency in their approach, and that the appellate authorities, without placing on record cogent reasons to do so, do not deviate from the conclusions arrived at in other similar cases at least on purely legal issues. We need not go any further into the matter and beyond making these general observations.