2010 (2) TMI 46

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....bunal that the payment of US $ 9,24,500/- by the assessee, as per the agreement dated 10.07.1996, to IMG Canada through IMC India, did not amount to a royalty payment under Article 13(3)(c) of the Double Taxation Avoidance Agreement entered into between India and Canada (hereinafter referred to as 'the said DTAA'). 3. The respondent/ assessee had entered into an agreement, as aforesaid, on 10.07.1996 with IMG. As per clause 2(a) of the said agreement, IMG was to provide to the assessee "the benefits" for the tournaments, subject to ICC regulations, in connection with the protected categories. The expression "benefits" has been defined in Clause 1(i) of the said agreement to mean the title sponsorship benefits in connection with the tourn....

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....TAA. The Tribunal has examined this submission made by the revenue, which had found favour with the Commissioner of Income Tax (Appeals), who held that the said payment was covered under Article 13(3)(c) of the said DTAA. The Tribunal, however, came to the conclusion that upon reading the various terms of the agreement between the respondent / assessee and IMG, the payment made for the title sponsorship right cannot be said to be a payment made for acquisition of or the right to use any copyright and, therefore, the question of applicability of Article 13(3)(c) of the DTAA would not arise. The Tribunal conclusively held that the payment made by the respondent / assessee to IMG Canada could not be called "royalty" as contemplated under Artic....

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....any kind and which may include rentals, has to be in connection with the right to use any of the rights specified in the three categories mentioned above. 8. It is apparent that the categories (a) and (b) obviously do not arise. It is for this reason that the Commissioner of Income Tax (Appeals) sought to include the payment made by the assessee to IMG Canada under the third category, that is, Article 13 (3)(c) of the said DTAA. Unfortunately, what the Commissioner of Income Tax (Appeals) failed to notice was that before any payment could be termed as a "royalty" under Article 13(3)(c), it would have to be either as consideration for the copyright or for the right to use a copyright in any of the four categories of works mentioned therei....