Live broadcasting payments not royalty, and treaty royalties did not arise in India absent nexus with an Indian permanent establishment.

Consideration for live broadcasting of events was held not to fall within royalty under section 9(1)(vi), following the co-ordinate bench view applied in the assessee's own case. On the treaty issue, payments to content providers were held not to arise in India under Article 12(7) of the India-Mauritius treaty because the payer was not a resident of India and the liability was neither incurred in connection with, nor borne by, a permanent establishment in India. The Revenue's challenge therefore failed, and the consequential issue under sections 201(1) and 201(1A) did not survive independently.

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Issues: (i) Whether consideration paid for live telecast of events constituted royalty under section 9(1)(vi) of the Income-tax Act, 1961. (ii) Whether payments made to content providers could be said to arise in India under Article 12(7) of the India-Mauritius treaty.

Issue (i): Whether consideration paid for live telecast of events constituted royalty under section 9(1)(vi) of the Income-tax Act, 1961.

Analysis: The issue was covered by a co-ordinate bench decision in the assessee's own case, following the view that consideration for live broadcasting does not fall within the scope of royalty under section 9(1)(vi). On the same reasoning, the impugned view taken by the first appellate authority required no interference.

Conclusion: The payment for live telecast of events was not royalty.

Issue (ii): Whether payments made to content providers could be said to arise in India under Article 12(7) of the India-Mauritius treaty.

Analysis: The issue was treated as covered by a co-ordinate bench decision holding that royalties do not arise in India where the payer is not a resident of India and the liability is neither incurred in connection with, nor borne by, a permanent establishment in India. Applying that principle, the tribunal followed the earlier view and rejected the Revenue's contention.

Conclusion: The payments to content providers could not be said to arise in India under Article 12(7).

Final Conclusion: The Revenue's challenge failed on both substantive grounds, and the consequential ground under sections 201(1) and 201(1A) did not survive independently.

Ratio Decidendi: Consideration for live broadcasting is not royalty, and under the treaty royalties arise in India only when the payer's liability is connected with and borne by a permanent establishment in India.

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