TaxTMI 
TaxTMI 
2026 (7) TMI 1955
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....oreign remittances not chargeable to tax as royalty under section 9(1)(vi) of the Income Tax Act, 1961? 2. Whether in the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the payment made for "Live Rights" to have not been made for a bouquet of rights? 3. Whether in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the payments in dispute are not made for the use of any "process" as defined u/s. 9(1)(vi) of the Act and can't be charged to tax as "Royalty" in the hands of the overseas rights holders? 4. Whether in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the provisions of Section 195 r.w.s. 40(a)(i) of the Act are not applicable to the payments made under the head 'Live Rights"?" 3. Suffice to say, it transpires during the course of hearing that the learned Assessing Officer has framed his assessment in the assessee's case on 27.04.2021 inter alia invoking section 40(a)(i) disallowance for the reason that it had failed to deduct TDS on various payments made to non-residents involving the corresponding "live rights" which allegedly amounted to roy....
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....adcast News Ltd. 2008 (38) PTC 477 (ITA T Delhi) vi. ADIT (IT) vs. Neo Sports Broadcast Pvt. Ltd. (2011) 133 ITD 468 (ITAT Mumbai) vii. DDIT(IT) vs. Nimbus Communications Ltd (2013) 20 ITR(T) 754 (ITAT Mumbai), we hold that broadcasting "Live events" does not amount to a work in which copyright subsists, meaning thereby right to broadcast live events i.e., "Live Rights", is not "copyright" and therefore any payment made thereto can't be said to be chargeable to tax as royalty under section 9(1)(vi). Further the courts have held that when the agreements clearly bifurcate the consideration paid towards Live and "Non-Live Rights", the Department can't deem the payment made for "Live Rights" to have been made for a bouquet of rights. 15. The other issue examined during the hearing was, whether the payments were made for the use of "process" or not? 16. We find that the payments in dispute are made to overseas rights holder. The said payments are neither made to any satellite operators nor for use of any satellite. Thus, the payments in dispute are not made for use of any "process" as defined u/s. 9(1)(vi) of the Act and can't be ....
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....the CIT(A)'s detailed discussion reversing the assessment findings treating his "Live Rights" payments as "Royalty" u/s. 9(1)(vi) of the Act. The Revenue fails in its instant sole substantive grievance in very terms. 6. This Revenue's appeal is dismissed. Order pronounced in the open court on 27/04/2026 ============= Document 1 LEX SPORTEL VISION PRIVATE LIMITED 08.01.2024 To. The National Faceless Appeal Centre (NFAC). Income Tax Department, Delhi. Appellant : PAN : AACCL7867K M/s Lex Sportel Vision Private Limited Assessment Year (AY) : 2019-20 Appeal Reference Number : NFAC /2017-18 / 10088442 Subject : Supplementary written submissions with respect to the captioned appellate proceedings. Respected Mu'um / Sir. 1. In the present case. National Faceless Assessment Centre (the "Ld. AO") passed the order dated 24.09.2021 (the "Impugned Order") under section 143(3) read with section 144B of the Income Tax Act. 1961 (the "Aet"), disallowing an amount of Rs. 32,53,98,959/- under section 40(a)(i) of the Act and raised a demand of Rs. 8,50,67,470/- ("Disputed Demand") vide a notice of demand issued under section....
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....er Section 40(a)(i) of the Act. 4.5. That section 40(a)(i) of the Act provides that if any interest or royalty, fees for technical services or other sum chargeable under the Act is payable by an assessce, inter-alia. to a non-resident on which tax is deductible under Chapter XVII-B of the Act and such tax has Document 3 not been so deducted at source, then the entire amount payable by the assessce shall be disallowed. 4.6. Further, section 195 of the Act provides for the obligation to deduct tax at source on payments made to a non-resident. Accordingly, if payment to a non-resident is exigible to TDS under section 195 and the same is not deducted then the said payment would be disallowed under section 40(a)(i) of the Act. 4.7. It is humbly submitted that disallowance under section 40(a)(i) of the Act is attracted only when tax is required to be withheld under section 195 of the Act and the said withholding has not been done by the Assessee. Thus. if the amount payable to the non-resident does not warrant withholding of tax under section 195 of the same, the said amount cannot be disallowed under section 40(a)(i) of the Act. 4.8. Reliance in this regard is also place....
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....herefore any payment made thereto can't be said to be chargeable to tax as royalty under section 9(1)(vi). Further the courts have held that when the agreements clearly bifurcate the consideration paid to wards Live and "Non-Live Rights", the Department can't deem the payment made for "Live Rights" to have been made for a bouquet of rights. 15. The other issue examined during the hearing was, whether the payments were made for the use of "process" or not? 16. We find that the payments in dispute are made to overseas rights holder. The said payments are neither made to any satellite operators nor for use of any satellite, Thus, the payments in dispute are not made for use of any "process" as defined us 9 (1)(vi) of the Aet and can't be charged to tax as "Royalty" in the hands of the overseas rights Document 5 holders. Accordingly, we hold that the AO while passing the order u/s 201 of the Act has erred in law by treating the remittances to have been made for use of a "Process". 17. In the result, the appeal of the axsessee is allowed. Order Pronounced in the Open Court on 26/12/2023." (Emphasis Supplied) The copy of the order dated 26.12.2023 passed....