Appeal dismissed: Live telecast payments not considered royalty under Income Tax Act

The appeal by the Revenue challenging the order of the CIT(A) regarding tax deduction u/s.195 for payments to PCB for live telecast was dismissed. The Tribunal upheld the CIT(A)'s decision, citing a similar case precedent where live broadcasting payments were not considered royalty under the Income Tax Act. Consequently, the Tribunal found no grounds for intervention and affirmed the order, concluding that tax deduction u/s.195 was not required for the payments made to PCB.

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Issues involved: Interpretation of u/s.195 of the Income Tax Act regarding deduction of tax at source for payments made to Pakistan Cricket Board (PCB) for live telecast of events.

Summary:
The appeal by the Revenue challenged the order of the CIT(A) which held that payments to PCB for live telecast are not royalty payments, thus no tax deduction u/s.195 required. The assessee, a Mauritius-based company, sought permission u/s.195(2) for payment without tax deduction. The AO initially directed tax deduction, but the CIT(A) ruled in favor of the assessee, stating live telecast payments are not royalty.

Upon review, it was noted that a Tribunal order in a similar case (ADIT(IT) vs. Neo Sports Broadcast Pvt. Ltd.) concluded that live broadcasting payments do not fall u/s.9(1)(vi) of the Act, hence no tax deduction is necessary. Both parties agreed the current case parallels the Neo Sports case. The Tribunal upheld the CIT(A)'s decision based on the Neo Sports precedent, finding no need for intervention.

Therefore, the appeal was dismissed, affirming the CIT(A)'s order.

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