TaxTMI 
TaxTMI 
2024 (8) TMI 1126
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.... the AO had failed to take into consideration the total TDS which had been deducted and deposited and the refund thus being computed in light of what had been claimed in the original Return of Income. For the purposes of disposal of the instant writ petition, we take note of the following salient facts. 3. For Assessment Year [AY] 2014-15, the petitioner had furnished a Return of Income declaring its total income therein to be INR 90,35,46,340/-. It had also claimed a refund in the sum of INR 3,65,970/-. The said Return was selected for scrutiny on an issue raised as to whether the revenue earned by the writ petitioner, including the consideration with respect to live feed, would constitute royalty and thus be taxable. 4. On 31 December 2017, a draft assessment order came to be framed with the AO holding that the consideration received by the petitioner towards live feed was taxable as royalty under the Act. Aggrieved by the aforesaid, the petitioner filed objections before the Dispute Resolution Panel [DRP] which affirmed the view taken in the draft assessment order in terms of a direction dated 05 September 2018.Pursuant to the aforesaid determination, a final assessment or....
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....uestion 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 (1) (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 1941 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 percent of such sum needs to be deducted as income-tax on income comprised therein. Explanation (ba) to the section stipulates 'royalty' shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9. [Para 7] - A perusal of clause (v) woul....
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....er 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 a 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 stipulates the exclusive right to do certain acts. A reading of section 14 would reveal that 'copyright' means exclusive right to reproduce, issue copies, translate, adapt etc. of a work which is already existing. [Para 16] ....
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....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 forgetting rights/licence to telecast any event (which is a copyright of particular person i.e. no one can copy it for direct telecast or deferred telecast) then amount so paid is to be treated as 'royalty' and very much covered....
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....on similar set of issues on live broadcast of sporting and cricket events, ITAT Mumbai Bench in the case of Neo Sports Broadcast (P.) Ltd. (supra) and Nimbus Communication Ltd. (supra) have held that there is no copyright on live events, and therefore, it is not taxable as 'royalty' Thus, we hold that the fee received towards live transmission cannot be taxed as 'royalty' in terms of Section 9 (1) (vi) as held by the Hon'ble Jurisdictional High Court and also by the Coordinate Bench of ITAT Accordingly, we decide this issue in favour of the assessee. 8. In the present case the facts and issues are identical. We do not see any reason to deviate from the reasoning of Hon'ble Co-ordinate bench in the case of Fox Network Group Singapore Pte. Ltd. (supra). We, therefore, direct the Assessing Officer to delete the impugned addition. 9. As regards the issue raised in ground no. 7, relating to grant of short credit of taxes deducted at source amounting to 2,03,36,66, 125, though reflected in Form 26AS, we direct the Assessing officer to verify the same and grant correct credit of taxes deducted at source. Ground is allowed for statistical purposes.....
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....tention of the respondents, therefore, that interest would flow only from the date of the order of the Tribunal is thoroughly misconceived. 12. We bear in mind the undisputed position that in the present case the AO was called upon to give effect to a direction framed by the Tribunal. Viewed in that light, the stand as taken by the AO is clearly rendered unsustainable insofar as it restricts the claim of the petitioner to the disclosures made in the Return of Income. 13. In our considered opinion, it would be wholly illegal and inequitable for the respondents to give short credit to the tax duly deducted and deposited based on the claim that may be made in a Return of Income. It is pertinent to note that insofar as the question of rights to live feed being treated as royalty is concerned and other allied issues pertaining to the merits of the dispute stand settled right up to this Court by virtue of the judgment rendered by us in ITA 812/2023. 14. The reliance placed on the decision of the Supreme Court in Goetze (India) Ltd. vs. Commissioner of Income Tax 2006 SCC OnLine SC 1446 is also clearly misconceived and rendered unsustainable bearing in mind the following principl....
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....g the appellant to set up the fresh claim to treat the amount declared as capital expenditure in the returns (as originally filed), as revenue expenditure. As a result, the objection now taken by the Department cannot be countenanced. 11. Learned Additional Solicitor General had placed reliance on the decision of this court in Goetze (India) Ltd. v. CIT in support of the objection pressed before us that it is not open to entertain fresh claim before the Income-tax Appellate Tribunal. According to him, the decision in National Thermal Power Co. Ltd. merely permits raising of a new ground concerning the claim already mentioned in the returns and not an inconsistent or contrary plea or a new claim. We are not impressed by this argument. For, the observations in the decision in Goetze (India) Ltd. itself make it amply clear that such limitation would apply to the "assessing authority", but not impinge upon the plenary powers of the Income-tax Appellate Tribunal bestowed under section 254 of the Act. In other words, this decision is of no avail to the Department." 18. As is evident from the enunciation of the legal position in the decisions aforenoted, while ordinarily....