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TMI Blog2023 (2) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... ('Act') on the following grounds which are independent and without prejudice to each other: On the facts and in the circumstances of the case and in law, the learned DRP and the learned AO has Ground number 1 erred in determining the total income of the Assessee at Rs 842,51,96,560 instead of Rs 90,35,46,340, as declared by the Assessee in its return of income. Ground number 2 erred in characterizing the income earned by the Assessee from sub-licensing of 'Designated Rights' pertaining to 'live' transmissions of sporting events amounting to Rs 752,16,50,223 as *Royalty' under the Act. Ground number 3 erred in holding that the income earned by the Assessee from sub-licensing of 'Designated Rights' pertaining to 'live' transmissions of sporting events is for use of 'Process' as per Explanation 2 to Section 9(l)(vi) of the Act Ground number 4 erred in holding that the income received by the Assessee from sub-licensing of 'Designated Rights' pertaining to 'live' transmissions of sporting events involves transfer of rights in respect of a 'Process' as per Explanation 6 to Section 9(l)(vi) of the Act Ground number 5 failed to appreciate the fact that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed reliance on the various case laws, as below: - Fox Network Group Singapore Pte Ltd. [121 taxmann.com 330 (Delhi-Trib.)] - Delhi Race Club (1940) Ltd. [51 taxmann.com 550 (Delhi High Court)] - Neo Sports broadcast (P.) Ltd. [15 taxmann.com 175 (Mumbai-Trib.)] - Nimbus Communications Ltd. [32 taxmann.com 53 (Mumbai-Trib.)] - Taj TV Ltd. [ITA no. 1079/M/2008 and ITA No. 3702/M/2005 (Mumbai-Trib.)] - MSM Satellite (Singapore) Pte. Ltd. [106 taxmann.com 353 (Bombay)] - Set India private Limited [ITA No. 1347 of 2013 (Bombay)] - Set India private Limited [ITA No. 4372 of 2004 (Mumbai-Trib.)] - Star India Private Limited (ITA no. 1536/Mum/2005)] - Taj TV Limited [161 ITD 339 (Mumbai-Trib.)] - Turner Broadcasting System Asia Pacific Inc. [120 taxmann.com 155(Delhi-Trib.] - ESS Distribution (Mauritius) [145 taxmann.com 267 (Delhi-Trib.)] 5. Learned counsel for the assessee submitted that the issue is no more res-integra, has already been decided in favour of the assessee. Learned counsel took us through the decision of the Tribunal rendered in the case of Fox Network Group Singapore Pte Ltd. Vs. ACIT (International Taxation) New Delhi. He drew our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was; "Whether payment for live telecast of horse race is a payment for transfer of any 'copyright' and as such 'royalty' or in the alternative whether the live telecast of the horse race would be termed as a 'scientific work' and payment thereof would be 'royalty' 21. After considering the definition of'Royalty' as given in section 9(l)(vz) and relying upon various sections of Copyright Act, Their Lordships held that:-. - It is not in dispute that the payment has been made by the respondent assessee to other clubs/centres on account of live telecast of races. The payment of 'royalty' is covered under section 194J which was inserted with effect from 13-7-2006. The said section, contemplates that in the eventuality a payment is made towards 'royalty', an amount equal to 10 per cent of such sum needs to be deducted as income-tax on income comprised therein. Explanation (ba) to the section stipulates 'royalty' shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9. [Para 7] - A perusal of clause (v) would reveal that consideration for transfer of all or any rights in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n literary, artistic or scientific word including films or videotapes for use in connection were used in connection with radio broadcasting but not including consideration for the distribution or exhibition of cinematographic films' [Para 14] - Now the question which arises is whether live telecast of horse race is a work to have a 'copyright'. [Para 15] - A live TV coverage of any event is a communication of visual images to the public and would fall within the definition of the word 'broadcast' in section 2(dd). That apart it was noted that section 13 does not contemplate broadcast as a work in which 'copyright' subsists as the said section contemplates 'copyright' to subsist in literary, dramatic, musical and artistic work, cinematograph films and sound recording. Similar is the provision of section 14 of the Copyright Act which stipulates the exclusive right to do certain acts. A reading of section 14 would reveal that 'copyright' means exclusive right to reproduce, issue copies, translate, adapt etc. of a work which is already existing. [Para 16] - Adverting to the facts of the instant case, it was noted that the assessee was en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned, the said submission is also liable to be rejected first it runs contrary to his earlier submission and also for the simple reason the clause (v) to Explanation 2 to clause (vz) or subsection (1) of section 9 would relate to work which includes films or videotapes for use in connection with television or tapes for use in connection with radio broadcasting. It is to be seen whether consideration for transfer of all or any rights of 'scientific work' including films or videotapes would include a lie telecast. The clause is an inclusive provision for films or videotapes for use in connection with television or tapes for use in connection with radio broadcasting. It was noted that such a case was not set up by the revenue before the authorities below. It was held by the Assessing Officer that when any person pays any amount for getting rights/licence to telecast any event (which is a copyright of particular person i.e. no one can copy it for direct telecast or deferred telecast) then amount so paid is to be treated as 'royalty' and very much covered under section 9(l)(vz). In other words, the ground of the revenue was limited to the aspect of copyright. That apart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and Nimbus Communication Ltd. {supra) have held that there is no copyright on live events, and therefore, it is not taxable as 'royalty' Thus, we hold that the fee received towards live transmission cannot be taxed as 'royalty' in terms of Section 9(l)(vi) as held by the Hon'ble Jurisdictional High Court and also by the Coordinate Bench of ITAT. Accordingly, we decide this issue in favour of the assessee." 8. In the present case the facts and issues are identical. We do not see any reason to deviate from the reasoning of Hon'ble Co-ordinate bench in the case of Fox Network Group Singapore Pte. Ltd. (supra). We, therefore, direct the Assessing Officer to delete the impugned addition. 9. As regards the issue raised in ground no. 7, relating to grant of short credit of taxes deducted at source amounting to 2,03,36,66,125, though reflected in Form 26AS, we direct the Assessing officer to verify the same and grant correct credit of taxes deducted at source. Ground is allowed for statistical purposes. 10. Ground no. 8, relating to charging of interest of interest u/s 234B is consequential. The Assessing officer will recalculate the charging of interest, if any, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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