TaxTMI 
TaxTMI 
2026 (9) TMI 518
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 12,40,54,987/-. The case was selected for limited scrutiny. The assessee was engaged in the business of live streaming of sports events outside India, rights of such sports events were also purchased from outside India. The assessee has entered into the media rights agreement with the company namely Willow TV International Limited, a British Virgin Island Corporation (Licensor) who had been assigned the rights by the Star Middle East FZ LLC ("STAR") located at UAE. As per the agreement, that STAR was having certain rights for exploitation of broadcasting delivery system and digital delivery system which has been assigned to the Licensor and who has sub licensed the same to assessee company for a particular territory. It is further observed that rights with the STAR are in turn granted from ICC (Internationals Cricket Council) and assessee company is having sub-licensed for broadcasting/ life telecast cricket matches in the territory of USA, Puerto Rico, Guam, Northern Mariana Island and the US Virgin Islands and American Samoa. The assessee has paid total composite rights fees of USD 30,40,000 (INR 20,25,55,200/-) for live and non-live (post-match) broadcasting. The AO alleged th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....record including agreement executed between the parties dated 01.05.2016 placed in the paper book. It is observed that the Ld. CIT(A) vide its order has held that the payments made for live events there was no copyright, therefore, cannot be taxed as 'Royalty' however, has restricted the disallowance to 5% of the total Revenue being in the nature of the royalty u/s 9(1)(vi) for non-live rights and has deleted the balance being the nature of payment towards the live feed. The relevant observations of the Ld. CIT(A) as contained in pages 12 to 15 are as under: "Having considered the submissions of the assessee and in light of the material placed on record, it is observed that. Licensor, Willow TV International Ltd has granted media rights to assessee (being a sub licensor) of the live Program (as defined in Media Right Agreement-MRA) rights to distribute the program(s) in accordance with the terms of agreement, in the basic provisions clause 1. The MRA defines broadcasting of cricket tournaments hosted by International Cricket Council-ICC as Live Feed/ Live Programme. The MRA also defines assessee's designated website and/or the designated mobile platform being ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....17-18 and 2018-19, it has allocated 5% of total consideration towards non live rights and balance 95% of consideration towards live rights. The assessee further submitted that a bifurcation of consideration towards Non Live and Live rights has been accepted by AO in principle in assessment orders of AY 2017-18 and 2018-19. The principle of treating such agreements as composite and offering a certain part of total consideration towards non-live rights as Royalty has also been upheld in [2011] 15 taxmann.com 17 in Assistant Director of Income-tax (International Taxation) (2) Mumbai v. Neo Sports Broadcast (P.) Ltd. also as below; "13 ---In our considered opinion the live telecast of a match or any other event cannot be considered as transfer of copyright in such match. It is only when the live telecast of a match is done that the question of creation of copyright in such match arises. The second or later telecasting of such event shall be considered as use of the "work" and consideration for the broadcasting of such recorded matches shall be considered as payment for the use of copyright in such event. It is for this reason and rightly so that the Assessee volunteer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to section 9(1)(vi). This principle has also been upheld in the case of Asstt. DIT (II) v. Neo Sports Broadcast (P.) Ltd. [2011] 15 taxmann.com 175/133 ITR 468 (Mum.) and Dy. DIT (IT) v. Nimbus Communication Ltd. [2013] 32 taxmann.com 53/57 SOT 92 (Mum.) The assessee had paid a total consideration of Rs 15,19,16,400/- during the year under consideration towards acquisition of composite media rights under MRA. Considering the principle laid down in various judgments discussed above, it is held that there is no copyright on live events, and therefore, it is not taxable as 'royalty'. Accordingly, it is just and fair to restrict the addition made by AO @100% of amount paid, to 5%. Accordingly the addition of Rs. 75,95,820/- being 5% of total consideration is upheld, being in nature of Royalty u/s 9(1)(vi) and balance Rs 14,43,20,580/- is deleted being in the nature of payment made towards Live feed (not in nature of Royalty u./s 9(1)(vi) therefore not liable to deduction of tax u/s 195)." 7. Before us, the Revenue has failed to controvert the findings of Ld. CIT(A) that live broadcast of the matches do not carry any copyright and, therefore, these payments could not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Delhi High Court and coordinate benches of Tribunal has held that live broadcast cannot be termed as Royalty in terms of section 9(1)(vi) of the Act and further confirmed the bifurcation of gross Revenue from Live and non-live broadcast in 95:5 ratio. The issue whether the live broadcast is Royalty or not, recently the hon'ble Supreme court in the case CIT Vs. Sri Lanka Cricket reported in [2026] 189 Taxmann.com 687 (SC) has confirmed the order of hon'ble jurisdictional high court as reported in [2026] 182 Taxmann.com 537(Delhi) by making following observations: Section 9 of the Income-tax Act, 1961 / Section 9 of the Income-tax Act, 2025, read with Article 12 of the DTAA between India and Sri Lanka - Income - Deemed to accrue or arise in India (Royalties/fees for technical services - Broadcasting services) - High Court held that consideration received by a non-resident for enabling live telecast of cricket matches does not constitute royalty under section 9(1)(vi) or Article 12, where rights granted do not extend beyond live feed and no copyright or derivative exploitation rights are transferred - Further, revenue having failed to show that rights of exhibition exceeded b....