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Issues involved: The judgment involves the following issues: 1. Whether the payment towards live telecast of events constitutes royalty payments. 2. Whether the payments made to content providers can be said to arise in India under Article 12(7) of the treaty between India and Mauritius. 3. Whether the assessee was liable to the provisions of section 201(1) and 201(1A) of the Act.
Issue 1 - Live Telecast Payments: The Revenue appealed against the order of the Commissioner (Appeals) regarding the classification of payment towards live telecast of events as royalty payments. The Tribunal, based on a previous decision, upheld that such payments do not fall under u/s 9(1)(vi) of the Act, leading to the dismissal of the Revenue's appeal. Issue 2 - Payments to Content Providers: The Revenue challenged the holding of the CIT(A) that payments made to content providers do not arise in India under Article 12(7) of the India-Mauritius treaty. Citing a previous case, the Tribunal ruled in favor of the assessee, emphasizing that the economic link between the payment of royalties and the Permanent Establishment (PE) in India was lacking, thus concluding that the royalties did not arise in India as per the treaty provisions. Consequently, the ground raised by the Revenue was dismissed. Issue 3 - Liability under Section 201(1) and 201(1A) of the Act: The Revenue contended that the assessee was liable under section 201(1) and 201(1A) of the Act. However, this issue was deemed consequential in nature and was consequently dismissed. In conclusion, the Appellate Tribunal ITAT MUMBAI upheld the decisions in favor of the assessee on both issues related to the classification of payments, based on previous rulings and the interpretation of relevant legal provisions. The Revenue's appeal was dismissed, and the order was pronounced on 18th May 2012.
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