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 c

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