AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 208
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....re as under: "It has been submitted by assessee that IMG Media Limited ("the Company" or "the assessee") is a tax resident of United Kingdom ('UK') as per Article 4 of the India-UK DTAA. It is a world leader in the field of multimedia coverage of sports events, including cricket. It has further been submitted by the assessee that the assessee and the Board of Control for Cricket in India ("BCCI") had entered into an agreement for capturing and delivering of the live audio and visual coverage of the first Indian Premier League ("IPL") 2008 event which was conducted in India during April 18, 2008 - June 01, 2008. Thereafter, the assessee also entered into another agreement dated April 15, 2009 with BCCI for the live audio and visual coverage of the matches for the second IPL 2009 event. The assessee further submitted that for IPL 2008 event, few personnel of the assessee had visited India for the live coverage of the matches and also for the purposes of recce/inspection activities before the commencement of the event. IPL 2009 event was initially supposed to be held in India; accordingly couple of personnel or the assessee was present in India in February/March 2009 for....
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.... DTAA, the provisions of Article 5(2)(k) of the DTAA becomes redundant. The reason for the same being that Article 5(2)(k) of the DTAA specifically excludes the services in the nature of FTS / Royalty (under Article 13 of the DTAA) for the purpose of determination of service PE. The assessee has made detailed submissions factual as well as legal and argued that the receipts from BCCI would not constitute FTS under the provisions of the Act as well as DTAA between India and UK. The AO after considering the arguments of the assessee held that the income of the assessee company is taxable as Fees for Technical services as per the Provisions of the Act as well as the DTAA between India and UK. Alternatively, the AO also held that the same would also be taxable as royalty income in India." 3. However, the Ld. DRP, after considering the submissions of the assessee, held that the fees received by the assessee for the services was neither fees for technical services nor would fall in the definition of royalty. The Ld. DRP upheld the contention of the assessee that it has a service PE in India in terms of Article 5(2)(k) of DTAA between India and UK and income from this service would be ....
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....BCCI. There should not be any dispute that the production of "program content" by using technical expertise is altogether different from the provision of technology itself. In the former case, the recipient would receive only the product and he can use the product according to his convenience, where as in the later case, the recipient would get the technology/knowhow and hence he would be able to use the technology /knowhow on his own in order to produce any other program content of similar nature. In the later case, the technology/knowhow would be "made available" to the recipient, in which case the payment given would fall under the category of "Fee for technical services". However, in the former case, there is no question of making available of any technology/knowhow and hence the payment given would be in the nature of payment made for production of "Program content or live feed" and not for supply of technology. 8. The Ld DRP has observed that the agreement entered between the assessee and BCCI prescribes the quality standards in minute details and the same results in total exchange of technical plans and designs between the assessee and the broadcasters. In our view, there ....
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....ed as "Fee for technical services" in terms of Article 13(4)(c) of the DTAA entered between India and UK. 9. The ld DRP has observed that the live coverage of cricket matches involve instant and continuous production and broadcasting of live matches. The existing program would keep merging with the new work. Further, the broadcasters are able to split the program content in order to insert advertisements. All these aspects, in our view, would not bring the payment under the category of "Fee for technical services". It only shows the technical expertise of the assessee to produce a flexible program content to give enhanced quality of viewing the live matches. 10. Before us, the Ld D.R placed reliance on the decision rendered by the Delhi bench of Tribunal in the case of Nimbus Sport International Pte Ltd (2012)(18 taxmann.com 105), wherein the Tribunal had held that the services or production and generation of live television signal were in the nature of technical services. The Ld A.R contended that the Delhi Tribunal did not examine the principle of "make available‟. We notice that the case of Nimbus Sport International Pte Ltd is covered by India-Singapore DTAA and it al....
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....n payable for the production of live coverage of cricket matches should go up. Thus, in our view, it was a simple case of commercial agreement entered between the parties with regard to the modalities to be followed and the same is not a determinative factor to decide about the nature of payment received by the assessee. 14. The Ld D.R.P. has further observed that the assessee has developed commercial and scientific experience in the field of commercial and scientific experience. The term "royalty" is defined as under in the India- UK DTAA:- 3. For the purposes of this Article, the term "royalties" means: (a) Payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic or scientific work, including cinematography films or work on films, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience; and (b) Payments of any kind received as consideration for the use of, or the right to use, any industrial, commercial or scientific....
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....ght acknowledges the broadcast right as a right as a right similar to 'copyright". In view of the conclusion of this Court in ESPN Star Sports case (supra), such a submission needs to be rejected." Though the above said decision was rendered in the context of provisions of sec. 194J of the Act, yet section imports the definition of the term "royalty" from Explanation 2 to sec. 9(1)(vi) of the Act. Under the definition given in the above said provision also "royalty" means consideration for the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property. 15. In the instant case, we have noticed that the BCCI becomes the owner of the program content produced by the assessee. The job of the assessee ends upon the production of the program content and the broadcasting is carried out by some other entity to which license was given by the BCCI. Hence, in our view, the question of transfer of all or any right does not arise in the facts and circumstances of the instant case. Hence, we are of the view that the payment received by the assessee cannot be considered as "ro....