Case Law Details
Punjab & Haryana High Court held In the case of Principal CIT vs. M/s Mobisoft Tele Solutions Pvt. Ltd. that Tarun Mohan had obtained the copyright in respect of the artistic work comprised in the name phoneytunes.com. Registration of the copyright is, however, not compulsory. In any event, phoneytunes.com was a part of his trading style and constitutes a trade mark. This is not a ground for challenging his entitlement to the trade mark. The assessee was entitled, therefore, to use the trade mark as a licensee thereof. The payment of royalty for the same is nothing unusual or out of place and allowable under section 37(1) of Income Tax Act,1961.
Facts of the Case
In this case, a royalty payment has been made to one person named Tarun Mohan. Tarun Mohan is also a Director in the assessee-company. He and his family members are the only share-holders of the assessee-company. Tarun Mohan carried on business in the name and style of phoneytunes.com as the sole proprietor thereof. The business comprised of providing value added telecom services to various mobile companies for ring tones, images, wall papers etc. He had entered into agreements with various music companies under which he acquired their rights as also the right to make ring tones on the basis thereof. In turn, he provided individual mobile users the tones through cellular operating companies. He paid royalty to the music companies in consideration of these agreements. He in turn was remunerated by collecting fees from the customers for downloading the ring tones etc.
Held by CIT (A)
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