Facts of the Case are
During the previous year 2004-05 relevant to the assessment year 2005-06, the assessee received royalty to the tune of Rs.99,000/- for his book on income tax and claimed deduction under section 80QQB of the Act.
The Assessing Officer disallowed deduction on the ground that the book on income-tax is not a literary work.
Hon’ble Supreme Court in the case of Eastern Book Company & Ors. v. D. B. Modak & Anr.  95 AIR 809 (SC) has also adjudicated identical issue and held that not only the head notes and short notes are literary works but even the judgments cited by the law reporters. Making paragraphs in a judgment could not be called a mechanical process. It requires careful consideration, discernment and choice and thus it can be called as a literary work of an author.
we are of the view that the assessee’s authored book is a literary work in term of section 80QQB of the Act and accordingly, assessee is entitled to deduction u/s. 80QQB of the Act. This issue of assessee’s appeal is allowed.
IN THE ITAT KOLKATA BENCH ‘C’
Assistant Commissioner of Income-tax, Circle -1
AND WASEEM AHMED, ACCOUNTANT MEMBER
IT APPEAL NO. 536 (KOL.) OF 2013
[ASSESSMENT YEAR 2005-2006]
DECEMBER 4, 2015
Smt. Shreya Agarwal, ACA for the Appellant. Prabal Chowdhury, JCIT, Sr. D.R. for the Respondent.
Mahavir Singh, Judicial Member – This appeal filed by the assessee is arising out of the order of Commissioner of Income Tax (Appeals), Asansol(in short “CIT(A)”)in Appeal No. 127/CIT(A)/Asl/Cir-3/Asl/07-08 dated 11.02.2013 for the assessment year 2005-06. The assessment was framed by ACIT, Circle-3, Asansol, u/s 143(3) of the Income Tax Act, 1961(hereinafter called as “the Act”) order dated 24.12.2007 for the assessment year 2005-06.
2. The first issue in this appeal of assessee is against the order of CIT(Appeals) confirming the disallowance of deduction claimed by assessee under section 80QQB amounting to Rs.99,000/-.
3. Briefly stated the facts are that during the previous year 2004-05 relevant to the assessment year 2005-06, the assessee received royalty to the tune of Rs.99,000/- for his book on income tax and claimed deduction under section 80QQB of the Act. The Assessing Officer disallowed deduction on the ground that the book on income-tax is not a literary work. The Assessing Officer quoted Explanation to section 80QQB, clause (b) and held that in view of the above exclusion of printed material the assessee’s claim of the book that is in “question and answer” format cannot be taken as literary works. Accordingly, he disallowed the deduction.
4. Aggrieved, the assessee preferred appeal before the ld. CIT(Appeals), who also confirmed the order of the Assessing Officer by observing in paras 18 to 28 as under:-
“18. I had examined the work. The book consolidates provisions of Income Tax Act 1961, Income Tax Rules, Circulars, Instructions, case decisions etc. topic wise in question answer format. The book is therefore a rearrangement of existing material. In this case, there is no imaginative, creative or a different point of view in the publication. Before I draw my conclusion, I analyse the case decisions submitted by the assessee in the context of the case below:—
|Submission of the assessee||My view|
|Decision in Lal Paharia and Anr. v. Gaya Prasad Gupta ‘Rasal’ on 9th August, 1970||Judgment in context of Indian Copyright Act|
|Infoseek Solutions v. Kerala Law Times on 4th October, 2006||Judgment in context of Indian Copyright Act|
|Eastern Book Company v. Navin J. Desai AIR 2002 (25) PTC 641 (DB)||Judgment in context of Indian Copyright Act|
|Eastern Book company & ors. v. D.B. Modak & Anr.  95 AIR 809 SC||Judgment in context of Indian Copyright Act|
|Satsang and Anr. v. Kiron Chandra Mukhopadhyay And…on 18th July, 1972||Judgment in context of Indian Copyright Act|
|Agarwala Publishing House v. Board of high School and .. on 19th April, 1966||Judgment in context of Indian Copyright Act|
|Caley and Sons ltd. v. Garret and sons Ltd. 1937 Macg. Cop Cas 99||Judgment in context of Copyright, registered designs and patents|
|Hafiz v. Abdurahliman Modhdoomi 1999 3 KLT 384||Judgment in context of Indian Copyright Act|
|British Oxygen Co. Ltd. v. Liquid Air Ltd. 1925 Ch 383||Judgment in context of Copyright Act of United Kingdom|
19. It can be seen that all the decision cited are in the context of Copyright Acts of India and UK and I had come to a firm conclusion that definition of ‘LITERARY WORK’ in context of Copyright Act and Income Tax Act 1961 are entirely different. The case laws cited by assessee does not help assessee in establishing the fact that the book ‘How to handle Income Tax Problems’ as a literary work. Detailed discussion has been made in paragraph 8 to 18 of this order. On the basis of conclusions drawn, I find that the appellant has failed in the test (a) formulated in paragraph 5.
20. The finding in paragraph 19 is sufficient for disallowing the deduction under section 80QQB. Since the question as to whether the work is a ‘guide’ has been formulated, I proceed to discuss and decide the matter.
21. The assessee in their written submissions detailed the literary meaning of guide. This is in the back ground of the fact that the Income Tax Act, 1961 has not defined the term ‘guide’. The work of the assessee is publishing a book. It is to be examined whether it is a guide or not. As stated in paragraph 18, the book consolidates provisions of Income Tax Act 1961, Income Tax Rules, circulars, instructions, and case decisions topic wise in question answer format. The book is therefore a rearrangement of existing material. There is no originality.
22. While making written submissions on meaning of’ guide’, the assessee transited to word ‘guidebook’ and argued that guide concerns tourist material. This is on the ground that the Assessing Officer has alleged it as a guidebook. Nowhere the Assessing Officer had concluded that the work is a ‘guide book’. He stated that it is the author who stated it to be a guidebook. The finding of Assessing Officer is as under:
“Hence from the above exclusion of printed material the assessee’s claim of the book that is in question and answer format cannot be taken as literary works. Moreover in the preface of the book the author himself introduce the book as “The book has been presented in style of questions and answers to enable the readers save their precious time and help them directly find the answer to a specific problem without getting through the entire chapter or a lengthy commentary.” The author himself describes the book as a guide book to the reader. On simple reading of the book it is found to be a guide, which does not have any style of its own and just simply an explanation to various provision of the Income Tax Act.
The term’ guide’ in the context of publications, means a. Something, such as a pamphlet, that offers basic information or instruction (www.thefreedictionary.com) a book, pamphlet, etc. giving information, instructions, or advice, handbook: an investment guide.
Even perusing the sources cited by assessee, I find that nowhere it has been stated that guide is always a guidebook.
23. There are numerous other works, again of rearranging existing material in various forms like Master Guide to Income Tax, Ready Reckoners, commentaries etc. The book ‘How to Handle Income Tax Problems’ is structured by rearranging existing material in question answer format and is indubitably a guide. Nowhere it is stated, as argued by assessee, that guide has to be tourist material. I accordingly hold that the publication ‘How to handle Income Tax Problems’ a guide. Accordingly assessee fails in test (b) formulated in paragraph 5, again disentitling eligibility to claim deduction under section 80QQB of Income Tax Act 1961.
24. It is needless to add here that if it is held that the work of the appellant is held as literary work qualifying for deduction under section 80QQB, then every work like ready reckoners, commentaries, compilations not only applicable to Income Tax Act 1961, but in regard to every other Act and every other aspect of life will qualify for such deduction. To thwart the same, strict qualification have been placed in the section by the legislature. These qualifications have not been met by appellant and hence he is not eligible for deduction under section 80QQB of Income Tax Act 1961.
25. The releveance of the claim of assessee that “The assessee has received an award from CBDT (Pratyaksh Kar Sahitya Puruskar) on his Hindi Edition of the same book ‘Kaise Suljhaye Aayekar Samasyein’ as second best literary work on Income Tax in Hindi” is examined next. The award given by CBDT is as part of the effort to promote the use of Official Language of India. The book published by the assessee, when translated to Hindi, in the opinion the Directorate of Income Tax Department, entrusted with the duty of promotion of Hindi for official purpose, has selected the work for the prize. The receipt of this price or its title does not make the work of asseessee otherwise not a literary work within the meaning of section 80QQB of Income Tax Act, 1961, a literary work. Hence this contention of the assessee is not accepted. In the context of the claim of assessee, here Income Tax Department is to be viewed just as a Department of Govt. of India, and the conferment of the prize is not to be taken for the purpose of the judicial decision making process under the Income Tax Act, 1961. The prize is one of the prizes one of the departments of Government of India gives for promotion of official language of India viz. Hindi. Just because its title contains the term literary, it does not mean that the work is literary for the purpose of section 80QQB of Income Tax Act, 1961. Hence this argument is also not accepted.
26. Since I had made a finding that the publication is not a literary work and is a guide and the prize given by a Department of Govt. Of India for promoting Hindi do not make the work of assessee a literary work within the meaning and ambit of clauses of Income Tax Act, 1961, I reject the ground and uphold the decision of Assessing Officer in disallowing claim of assessee under section 80QQB of Income Tax Act, 1961. Accordingly the ground is dismissed.
27. At the conclusion of hearing the appellant has cited a series of decisions and stated that as per these decisions, if at All there are decisions that create doubt, it is a settled law that in case of doubts the construction most beneficial or favourable to the assessee should be adopted even if it results in his obtaining a double advantage and if it is a case of considering the respective hardships of inconveniences of the revenue and the assessee, the court should lean in favour of the assessee. The appellant also produced the decision of Hon. Supreme Court of India in the decision reported in 88 ITR 192.
28. The decisions are applicable in case there is a doubt. My discussion in the preceding paragraphs makes matter unambiguous on the eligibility of deduction under section 80QQB of Income Tax Act, 1961. In absence of doubts or ambiguity, the decisions are not applicable to the case”.
Aggrieved, the assessee is in second appeal before the Tribunal.
5. We have heard rival submissions and gone through facts of this case and also provisions of the Act as well the propositions of law and precedents cited before us by both sides. The facts of the case are that the assessee is an individual, by profession a Chartered Accountant. He has authored books on Income-tax and received royalty on its book “How to Handle Income Tax Problems”. As per the provisions of section 80QQB of the Act claimed deduction for the royalty received on account of his book. The requisite certificate in form No. 10CCD was filed along with the return of income. The assessee claimed before the AO as well as before the CIT(A) that he has received an award from CBDT (Pratyaksh Kar Sahitya Puruskar) on his Hindi Edition of this book “Kaise Suljhaye Aayekar Samasyein” and considered the same as second best literary work on income tax on Hindi. Copy of the same was filed before lower authorities and even now before us. In term of the above facts of the case, whether the assessee is eligible for claim of deduction u/s. 80QQB of the Act on receipt of royalty for literary work?
6. From the above facts now we have to see whether the assessee’s work i.e. authoring of book in Hindi is a literary work or not. We find that the lower authorities have relied on the relevant definition of literary work as defined by Indian Copyright Act, 1857, which reads as under:
“Section 2(o): ‘literary work’ includes tables and compilations including computer databases.
Section 2(y) ‘work’ means any of the following works, namely:—
|(i)||A literary, dramatic, musical or artistic work,|
|(ii)||A cinematograph film,|
|(iii)||A record “|
We find that the CIT(A) considered the explanation to section 80QQB of the Act and noted that, it does not mean everything that is not literary as stated in Explanation to section 80QQB of the Act need be literary, since, anything out of ‘brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text books for schools, tracts and other publications of similar nature, by whatever name called” has to be examined to decide whether it is a literary work or not. He noted that the Indian Copyright Act defines literary work in an extremely general inclusive form. Then he went on to discuss the copyright fee by comparing these two Acts. And he finally held that every literature is not literary work in term of section 80QQB of the Act.
7. The word literary work has not defined under the Act but has been defined by section 2(o) of the Copyright Act, 1957. The expression literary work covers which are expressed in printing or writing irrespective of the question whether the quality or style is high or whether there is any literary merit or not. The expression literary work means not only such work which deals with any particular aspect of literature in poetry but also indicates a work which is literature i.e. anything in writing which could be said to come within the ambit of literary work. Hon’ble Kerala High Court has dealt on this issue in the case of Infoseek Solutions & Anr. v. Kerala Law times  34 PTC 231 (Ker) and observed that a law report is a composite document and its head notes, editorial comments, footnotes, setting, layout, presentation etc. And even the skill and labour involved in choosing as to whether a judgment should be reported is a literary work leading to the reporter and publisher acquiring copyright over such report, as a composite documents including the text of the judgment as so published by the reporter.
8. Similarly, Hon’ble Supreme Court in the case of Eastern Book Company & Ors. v. D. B. Modak & Anr.  95 AIR 809 (SC) has also adjudicated identical issue and held that Affirming the above view the Apex court held that not only the head notes and short notes are literary works but even the judgments cited by the law reporters by (i) segregating the existing paragraphs in the original text by breaking them into separate paragraphs; (ii) adding internal paragraph numbering within a judgment after providing uniform paragraph numbering to the multiple judgments; and (iii) indicating in the judgment the Judges who have dissented or concurred by introducing the phrases like ‘concurring’, ‘partly concurring’, ‘dissenting’, ‘supplementing’, ‘majority expressing no opinion’ etc. have to be viewed in a different light. Hon’ble Supreme Court further explained the literary work in term of legal discourse that the task of paragraph numbering and internal referencing requires skill and judgment in great measure. The editor who inserts para numbering must know how legal argumentation and legal discourse is conducted and how a judgment of a court of law must read. Often legal arguments or conclusions are either clubbed into one paragraph in the original judgment or parts of the same argument are given in separate paragraphs. It requires judgment and the capacity for discernment for determining whether to carve out a separate paragraph from an existing paragraph in the original judgment or to club together separate paragraphs in the original judgment of the court. Setting of paragraphs by the appellants of their own in the judgment entailed the exercise of the brain work, reading and understanding of subject of disputes, different issues involved, statutory provisions applicable and interpretation of the same and then dividing them in different paragraphs so that chain of thoughts and process of statement of facts and the application of law relevant to the topic discussed is not disturbed, would require full understanding of the entire subject of the judgment. Making paragraphs in a judgment could not be called a mechanical process. It requires careful consideration, discernment and choice and thus it can be called as a literary work of an author. Creation of paragraphs would obviously require extensive reading, careful study of subject and the exercise of judgment to make paragraph which has dealt with particular aspect of the case, and separating intermixing of a different subject. Creation of paragraphs by separating them from the passage would require knowledge, sound judgment and legal skill. In our opinion, this exercise and creation thereof has a flavour of minimum amount of creativity. The said principle would also apply when the editor has put an input whereby different Judges’ opinion has been shown to have been dissenting or partly dissenting or concurring, etc. It also requires reading of the whole judgment and understanding the questions involved and thereafter finding out whether the Judges have disagreed or have the dissenting opinion or they are partially disagreeing and partially agreeing to the view on a particular law point or even on facts. In these inputs put in by the appellants in the judgments reported in SCC, the appellants have a copyright and nobody is permitted to utilize the same.
9. It is clear that even the government i.e. CBDT has recognised assessee’s work by awarding him Pratyaksh Kar Sahitya Puruskar on his Hindi Edition of the same book as second best literary work on Income Tax in Hindi. It is a fact that the assessee has authored this book on income tax problems in question answer form. His book is on a complex issue which really needs intellect and knowledge. He has received royalty on the same. The word literary work has been defined by the Law Dictionary “Advance Law Lexicon, edited by Justice Y. V. Chandrachur, former CJI in 3rd Edition of Volume 3” as under:
“Literary and artistic work in the International Copyrights Act, 1886, ‘unless the context otherwise requires, means every book, print, lithograph, article of sculpture, dramatic piece, musIndian Copyright Act composition, painting, drawing, photograph and other work of literature and art to which the Copyrights Acts or the International Copyrights Acts, as the case requires extends.”
“Copyright protection extends to literary works which are defined as works, other than audiovisual work, expressed in words, numbers, or other verbal or numeric symbols or indicia, regardless of the nature of the material objects, such as books periodicals, manuscripts, phone records, films, tapes, disks or cards in which they are embodied. The term ‘literary work’ does not connote any criterion of literary merit or qualitative value and includes catalogues and dictionaries, similar factual, reference or instructional works, compilations of data, computer data bases, and computer programs.”
10. From the above facts and circumstances of the case, the definitions and the precedents of Hon’ble Supreme Court and Kerala High Court, cited supra, we are of the view that the assessee’s authored book is a literary work in term of section 80QQB of the Act and accordingly, assessee is entitled to deduction u/s. 80QQB of the Act. This issue of assessee’s appeal is allowed.
11. The next issue in this appeal of assessee is, whether the assessee can be treated as owner of the property in the absence of probate of the will and consequently, notional rental income can be assessed in the hands of the assessee? For this assessee has raised the following ground No. 4:—
“4. For that upon facts and circumstances of the case, the Ld. CIT(A) was not justified in treating the assessee as the owner of the house property despite the fact that the ‘will’ from which the house was to be inherited was not probated and thereby disallowing deduction u/s. 54F amounting to Rs.29,425/- and assessing a notional income of Rs.48,000/- under the head house property. ”
12. We have heard rival contention of the assessee and gone through facts and circumstances of the case. We find from the case records that the AO noted from the Balance Sheet of the assessee that it has included one house property in the Balance Sheet, which was inherited from his late mother Sita Devi Loyalka, who expired on 08.07.1998. According to AO, the annual value of the house property @ Rs.4000/- per month is to be computed for the purpose of charging of tax and accordingly, he assessed Rs.48,000/- as income from house property. The assessee claimed before the AO that he has got this property as per the will of his late mother but the will has not yet been probated and accordingly, no notional income can be added to the income of the assessee. Aggrieved, against the action of AO, assessee preferred appeal before CIT(A). The CIT(A) also confirmed the action of AO. Aggrieved, assessee preferred second appeal before Tribunal.
13. We find from the facts of the case that though the assessee has disclosed the property received from mother through will in his Balance Sheet but claimed that he is not owner as the will is not probated. There is no doubt that a will exists and it has not been probated. This is a concurrent finding of both the authorities below. In such circumstances, when the will is not granted probate, whether notional income can be assessed in the hands of the assessee. This issue has been answered by Hon’ble Supreme Court in the case of Mrs. Hem Nolini Judah (since deceased) v. Mrs. Isolyne Sarojbashini Bose & ors. 1962 AIR 1471 (SC), wherein Hon’ble Supreme Court held as under:
“Whosoever, wishes to establish that right; whether it be a legatee or an executor himself or somebody else who might find it necessary in order to establish his right to establish the right of some legatee or executor from whom he might derived title, he cannot do so unless the will under which the right as a legatee or executor is claimed has resulted in the grant of a probate or letters of administration. Therefore, as soon as the appellant wanted to establish that Mrs. Mitter was the legatee of Dr. Miss Mitter and was therefore entitled to the whole house she could only do so if the will of Dr. Miss Mitter in favour of Mrs. Mitter had resulted in the grant of probate or letters of administration. Admittedly that did not happen and therefore s. 213(1) would be a bar to the appellant showing that her mother was the full owner of the property by virtue of the will made in her favour by Dr. Miss Mitter. The difference between a right claimed as a legatee under a will and a right which might arise otherwise is clear in this very case. The right under the will which was claimed was that Mrs. Mitter became the owner of the entire house. Of course without the will Mrs. Mitter was an equal heir with her daughters of the property left by Dr. Mitter, as the latter would be taken to have died intestate, and would thus be entitled to one fourth. It will be seen from the judgment of the High Court that it has held that the appellant is entitled to the one fourth share to which Mrs. Mitter was entitled as an heir to Dr. Miss Mitter and granted the plaintiff respondent a declaration with respect to only half the house. Therefore, the High Court was right in holding that s. 213 would bar the appellant from establishing the right of her mother as a legatee from Dr. Miss Mitter as no probate or letters of administration had been obtained of the alleged will of Dr. Miss Mitter in favour of Mrs. Mitter. The contention of the appellant on this head must therefore fail.”
14. From the above admitted facts of the case that the will is not probated and precedent cited, we are of the view that no notional rent can be assessed in the hands of the assessee while computing income of the assessee under the head income from house property because the assessee is not the owner of the house property. Accordingly, we delete this addition and allow this issue of assessee’s appeal.
15. The next issue in this appeal of assessee is as regard to adoption of municipal value of the house property received by assessee through will. For this, assessee has raised following ground no.5:
“5. Without prejudice to Ground no. 4 the Ld. CIT(A) did not consider the municipal value of the house property of Rs.6140 and accepted the arbitrary annual value of Rs.48,000/-.”
16. At the outset, we find that since we have adjudicated the above issue regarding ownership in favour of assessee and against revenue, this issue automatically becomes infructuous and dismissed.
17. In the result, the appeal of assessee is partly allowed.