TaxTMI 
TaxTMI 
2023 (2) TMI 857
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....nder Section 253 of the Income-tax Act, 1961 ('Act') on the following grounds which are independent and without prejudice to each other: On the facts and in the circumstances of the case and in law, the learned DRP and the learned AO has Ground number 1 erred in determining the total income of the Assessee at Rs 842,51,96,560 instead of Rs 90,35,46,340, as declared by the Assessee in its return of income. Ground number 2 erred in characterizing the income earned by the Assessee from sub-licensing of 'Designated Rights' pertaining to 'live' transmissions of sporting events amounting to Rs 752,16,50,223 as *Royalty' under the Act. Ground number 3 erred in holding that the income earned by the Assessee from sub-licensing of 'Designated Rights' pertaining to 'live' transmissions of sporting events is for use of 'Process' as per Explanation 2 to Section 9(l)(vi) of the Act Ground number 4 erred in holding that the income received by the Assessee from sub-licensing of 'Designated Rights' pertaining to 'live' transmissions of sporting events involves transfer of rights in respect of a 'Process' as per Exp....
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.... make the impugned addition and the issue is squarely covered in a catena of decisions in favour of the assessee. In support of his contention, the learned counsel placed reliance on the various case laws, as below: - Fox Network Group Singapore Pte Ltd. [121 taxmann.com 330 (Delhi-Trib.)] - Delhi Race Club (1940) Ltd. [51 taxmann.com 550 (Delhi High Court)] - Neo Sports broadcast (P.) Ltd. [15 taxmann.com 175 (Mumbai-Trib.)] - Nimbus Communications Ltd. [32 taxmann.com 53 (Mumbai-Trib.)] - Taj TV Ltd. [ITA no. 1079/M/2008 and ITA No. 3702/M/2005 (Mumbai-Trib.)] - MSM Satellite (Singapore) Pte. Ltd. [106 taxmann.com 353 (Bombay)] - Set India private Limited [ITA No. 1347 of 2013 (Bombay)] - Set India private Limited [ITA No. 4372 of 2004 (Mumbai-Trib.)] - Star India Private Limited (ITA no. 1536/Mum/2005)] - Taj TV Limited [161 ITD 339 (Mumbai-Trib.)] - Turner Broadcasting System Asia Pacific Inc. [120 taxmann.com 155(Delhi-Trib.] - ESS Distribution (Mauritius) [145 taxmann.com 267 (Delhi-Trib.)] 5. Learned counsel for the assessee submitted that the issue is no more res-i....
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....event possible at a distant place over television and the transaction in the instant case covered. (iii) The 'rights of broadcasting' was akin to 'copyright'. The substantial question of law involved before the Hon'ble High Court was; "Whether payment for live telecast of horse race is a payment for transfer of any 'copyright' and as such 'royalty' or in the alternative whether the live telecast of the horse race would be termed as a 'scientific work' and payment thereof would be 'royalty' 21. After considering the definition of'Royalty' as given in section 9(l)(vz) and relying upon various sections of Copyright Act, Their Lordships held that:-. - It is not in dispute that the payment has been made by the respondent assessee to other clubs/centres on account of live telecast of races. The payment of 'royalty' is covered under section 194J which was inserted with effect from 13-7-2006. The said section, contemplates that in the eventuality a payment is made towards 'royalty', an amount equal to 10 per cent of such sum needs to be deducted as income-tax on income comprised ....
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.... - Accordingly in provision (v) the words 'in respect of any copyright in literary, artistic or scientific work' were read to, inter alia, hold that 'royalty' is payable only on 'transfer of all or any right (including granting of licence) in respect of any copyright in literary, artistic or scientific word including films or videotapes for use in connection were used in connection with radio broadcasting but not including consideration for the distribution or exhibition of cinematographic films' [Para 14] - Now the question which arises is whether live telecast of horse race is a work to have a 'copyright'. [Para 15] - A live TV coverage of any event is a communication of visual images to the public and would fall within the definition of the word 'broadcast' in section 2(dd). That apart it was noted that section 13 does not contemplate broadcast as a work in which 'copyright' subsists as the said section contemplates 'copyright' to subsist in literary, dramatic, musical and artistic work, cinematograph films and sound recording. Similar is the provision of section 14 of the Copyright Act which stipulate....
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....n that the Copyright Act acknowledges the broadcast right as a right similar to copyright needs to be rejected. [Para 18] - Insofar as the submission of revenue that the live telecast of an event is the outcome of 'scientific work' and payment thereof would be covered under the definition of 'royalty' is concerned, the said submission is also liable to be rejected first it runs contrary to his earlier submission and also for the simple reason the clause (v) to Explanation 2 to clause (vz) or subsection (1) of section 9 would relate to work which includes films or videotapes for use in connection with television or tapes for use in connection with radio broadcasting. It is to be seen whether consideration for transfer of all or any rights of 'scientific work' including films or videotapes would include a lie telecast. The clause is an inclusive provision for films or videotapes for use in connection with television or tapes for use in connection with radio broadcasting. It was noted that such a case was not set up by the revenue before the authorities below. It was held by the Assessing Officer that when any person pays any amount for getting rights/licence ....