No TDS on minimum guarantee royalty paid by distributor for acquiring exhibition rights of movie

ITO Vs Yashovardhan Tyagi (ITAT Delhi) Conclusion: Minimum guarantee amount which was paid by the distributor for acquiring the exhibition rights of a movie was a fixed expenditure for the distributor that was paid to producers irrespective of the fact whether the film generated a profit or incurs losses. Hence, the payments made by assessee did not fall under the term “Royalty” and did not attract the provisions of TDS. Held: Assessee had paid an amount of Rs.2 crores as Minimum Guarantee Royalty (MGR) and had not deducted TDS. AO held that the payment would fall within the definition of ...