Live transmission rights receipts were not royalty because live broadcast is not a copyrightable work.

Receipts from sub-licensing live transmission rights were held not taxable as royalty under the Income-tax Act or the India-Singapore DTAA because royalty under Explanation 2 to section 9(1)(vi) requires a transfer of rights in a copyright or similar protected property. Live telecast or live broadcast was treated as outside copyright protection, which subsists in specified works such as literary, dramatic, musical, artistic works, cinematograph films and sound recordings. The distinction between copyright and broadcasting right was applied to exclude live coverage from the royalty definition, and Explanation 6 on process and satellite transmission was held inapplicable because the assessee was not the transmitter. The addition was deleted.

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Issues: Whether the receipts from sub-licensing of live transmission rights were taxable as royalty under the Income-tax Act and the India-Singapore DTAA.

Analysis: The agreements specifically apportioned consideration between live and non-live transmissions, and the dispute concerned only the live transmission component. Royalty under Explanation 2 to section 9(1)(vi) requires a transfer of rights in a copyright or other specified property. Referring to the Copyright Act, the Court held that live telecast or live broadcast is not a copyrightable work, as copyright subsists in defined works such as literary, dramatic, musical, artistic works, cinematograph films and sound recordings, not in a live broadcast as such. The Court further relied on the distinction between copyright and broadcasting right and held that live coverage does not fall within the royalty definition. Explanation 6, dealing with process and transmission by satellite, was held inapplicable on the facts because the assessee itself was not the transmitter.

Conclusion: The live transmission receipts were not chargeable as royalty and were not taxable on that basis.

Final Conclusion: The appeal succeeded and the addition treating the live transmission receipts as royalty was deleted.

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