There Can’t Be Any Copyright on Broadcasting Live Events, No Royalty on Sum Received by Cricket Australia from Sony

Case Details: Cricket Australia v. Assistant Commissioner of Income-tax - [2023] 153 taxmann.com 630 (Delhi-Trib.)

Judiciary and Counsel Details

• • Kul Bharat, Judicial Member & M. Balaganesh, Accountant Member
  • Percy Pardiwala, Sr. Adv. & Nitesh Joshi, Adv. for the Appellant.
  • Vizay B. Vasanta, CIT DR for the Respondent.

Facts of the Case

Assessee-Cricket Australia received license fees from Sony Pictures Networks India Private Limited pertaining to ‘live’ transmissions of the programmes, i.e., cricket matches held in Australia. During the scrutiny proceedings, the Assessing Officer (AO) contended that such receipt pertaining to live transmission of the cricket matches involves transfer of rights in respect of a ‘Process’ as per Section 9(1)(vi) and India-Australia DTAA.

Considering the receipt as ‘process’, the AO added to the assessee’s income as it gets covered under the term ‘Royalty’. The Dispute Resolution Panel (DRP) upheld the additions made by AO. Aggrieved by the order, an appeal was filed to the Delhi Tribunal.

ITAT Held

The Tribunal held that the Co-ordinate Bench in the case of Fox Network Group Singapore Pte. Ltd. [2020] 121 taxmann.com 330 (Delhi-Trib.) has ruled that there is a clear distinction between a copyright and a broadcasting right. Broadcast or live coverage does not have a copyright. Therefore, payment for the live telecast is neither payment for transfer of any copyright to fall under the ambit of royalty under Explanation 2 to Section 9(1)(vi).

There is no copyright on live events; therefore, it is not taxable as ‘royalty’. Thus, the fee received towards live transmission cannot be taxed as ‘royalty’ in terms of Section 9(1)(vi). Accordingly, the assessee’s appeal was allowed, and the AO was directed to delete the relevant additions.