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2014 (12) TMI 265 - HC - Income TaxRoyalty paid to other centres and live telecast royalty disallowed u/s 40(a)(ia) – TDS not deducted on the expenses u/s 194J – 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” - Held that:- The payment has been made by the assessee to other clubs/centres on account of live telecast of races - The payment of “royalty” is covered u/s 194J which was inserted with effect from 13.07.2006 - the assessee was engaged in the business of conducting horse races and derived income from betting, commission, entry fee etc. and had made payment to other centres whose races were displayed in Delhi - It is not known whether such races had any commentary or analysis of the event simultaneously - the broadcast/live telecast is not a work within the definition of 2(y) of the Copyright Act and also that broadcast/ live telecast doesn’t fall within the ambit of Section 13 of the Copyright Act, it would suffice to state that a live telecast/broadcast would have no “copyright”. In Espn Star Sports Versus Global Broadcast News Ltd. & Others [2008 (9) TMI 916 - DELHI HIGH COURT] it has been held that the legislature itself by terming broadcast rights as those akin to “copyright” clearly brought out the distinction between two rights in Copyright Act, 1957 - it was a clear manifestation of legislative intent to treat copyright and broadcasting reproduction rights as distinct and separate rights - the amendment of the Act in 1994 not only extended such rights to all broadcasting organizations but also clearly crystallized the nature of such rights – thus, the broadcast or the live coverage does not have a “copyright” - the word “Copyright” would encompass all categories of work including musical, dramatic, etc. and also his submission that the Copyright Act acknowledges the broadcast right as a right similar to “copyright”. Clause (v) to explanation 2 to clause (vi) or sub section 1 of Section 9 is an inclusive provision for films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting - It was held by the AO that when any person pays any amount for getting 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 under Section 9(1)(vi) - “scientific work” has not been defined in the Act nor in the Copyright Act - It is not necessary that because the live telecast of an event is being done at a distant place, the same would be a “scientific work” - when reference is made to films or video tapes, then the intent of the provision is related to work of visual recording on any medium or video tape and can be seen on the television - it is not known nor pleaded that the live telecast, in this case, was accompanied by commentary, analysis etc. It is an issue of fact, which cannot be gone into or raised at this stage – thus, no question of law arises for consideration – Decided against revenue.
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