AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 795
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....granted by NSI a licence for live terrestrial television rights of the cricket series between Sri Lanka and India to be played in Sri Lanka to be telecasted on Doordarshan (Prasar Bharti) for a fee of Rs. 4 crores. The assessee-company filed an application under section 195(2) of the Act seeking a nil deduction certificate in respect of the payment to be made to NSI as per the agreement dated January 21, 2009 on the ground that the payment to be made on account of the broadcast of live match was not covered within the definition of royalty and the same, therefore, was not taxable in India in the hands of NSI. The stand of the assessee was that the broadcast of live signal does not entail the copyright to the broadcaster and the same is not in the nature of royalty. The stand of the assessee was not found acceptable by the Assessing Officer for the following reasons : (a) The matches are to be broadcasted in Indian territory and the income to the applicant is to be by way of advertisement revenue and subscription revenue. The applicant would be paying taxes on this income. Without the receipt of signal on account of the matches to be played, none of this income would accrue to the....
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....is not considered to be a 'work' within the meaning of the Act, there can be no copyright protection for the same. Work is defined in section 2(y) of the Act. Under this definition work is a literary, dramatic, musical or artistic work, a cinematograph film, and a sound recording. It is important to note that the definition is not an inclusive definition. A live feed has to be brought expressly into one of these categories. The feed clearly cannot be a literary, dramatic, musical or artistic work, as no element of originality goes into the same. As far as the definitions of cinematographic films and sound recording are concerned, the Act clearly contemplates that there should be a recording. In other words, there is a requirement under the Act that the sounds and images must be reduced to some tangible form whereupon the works would enjoy copyright protection. The live feed is not recorded on any medium. It is simply transmitted directly from the stadium to the coordination studio and thereon to the originating facility. In such a case, there cannot be any copyright in the live feed itself. This makes it clear that a live feed, where no work within the meaning of the copyright Act ....
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....nless these signals were became in India, the appellant-company would not have been able to sell airtime. Therefore, I am of the view that the NSI has a business connection in India and this ground of appeal is dismissed." Aggrieved by the order of the learned Commissioner of Income-tax (Appeals), both the assessee and the Revenue have preferred their appeals before the Tribunal on the following ground: Ground raised by the assessee: "The learned Commissioner of Income-tax (Appeals) erred in upholding the order passed by the learned Deputy Director of Income-tax, holding that NSI has business connection in India, hence income thereof is deemed to accrued or arise in India, without properly appreciating the facts of the case and law applicable thereto." Ground raised by the Revenue: "In the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in holding that payment made by the assessee to Nimbus Sports International Pte Ltd. (Singapore NS) for the broadcast of live feed is different from that made for the purpose of broadcast of recorded feed, and hence is not in the nature of royalty." We have heard the arguments of both sides and also ....
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....s shall be considered as payment for the use of copyright in such event. It is for this reason and rightly so that the assessee volunteered to include the consideration for the licence of the recorded broadcast as royalty while making application under section 195(2) of the Act." The Tribunal then referred to a book titled "Law of Copyright and Industrial Designs" by P. Narayanan wherein it was stated in paragraph No. 17.02 that a cinematograph film depicting live events like sporting events, horse race, etc., cannot infringe any copyright because there is no copyright in live events. The Tribunal held that there is thus no copyrights in the live events and depicting the same cannot infringe any copyright. The Tribunal also referred to the proposed Direct Tax Code Bill wherein "live coverage of any event" is proposed to be included in the definition of "royalty" and held that if "live coverage" had been a part of copyright of any work as was sought to be contended on behalf of the Revenue, then there was no need to classify live coverage as a separate item. It was held by the Tribunal that the definition of royalty under the Income-tax Act, 1961 thus does not include any considera....
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.... certain operations in India so as to fall within the ambit of section 9(1)(i). 27. The relevant criteria is the carrying on of business operations in India by the non-resident and not the earning of income by any resident from the use of any product acquired from the non-resident. Where the non-resident only allows some resident to exploit certain right vested in it on commercial basis, it cannot be said that the nonresident has carried out any business activity in India. The act of the assessee earning revenues from India cannot lead to a business connection of Nimbus in India as the transaction between assessee and Nimbus is confined to receiving broadcasting right for a consideration. Whether the assessee earns income or suffers losses from the exploitation of such broadcasting is not the concern of Nimbus. Such transaction of the assessee with Nimbus on principal to principal basis cannot be considered as a ground for holding that Nimbus has a business connection in India and hence the income shall accrue to Nimbus through this business connection in India. 28. In the case of CIT v. R. D. Aggarwal and Co. [1965] 56 ITR 20 (SC) the hon'ble Supreme Court has held that the expr....