Film Rights Sale: ITAT Rules Capital Gains, Rejects Business Income Claim

ACIT Vs Eagle Films (ITAT Mumbai)

Factual Background and Assessment

Eagle Films, a firm engaged in the production and distribution of films since 1953, filed its return for Assessment Year (AY) 2017-18, declaring its income under various heads, including a substantial amount as Long Term Capital Gain on the sale of film rights. The firm had produced 31 feature films and, on April 20, 2016, assigned all their present and future rights, title, and interest in these films to the purchaser in perpetuity via an Assignment Agreement

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