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2015 (9) TMI 16 - AT - Income TaxNature of payment received - royalty or Fee for Technical services (FTS) - DRP/AO held that the amount received by the assessee from Board of Control of Cricket in India (BCCI) is assessable to tax as “Fee for technical services” and alternatively as “Royalty” also - India–UK Double Taxation Avoidance Agreement - Held that:- “Royalty” means consideration for the transfer of all or any rights (including the granting of a licence) in respect of a patent, invention, model, design, secret formula or process or trade mark or similar property. In the instant case, we have noticed that the BCCI becomes the owner of the program content produced by the assessee. The job of the assessee ends upon the production of the program content and the broadcasting is carried out by some other entity to which license was given by the BCCI. Hence, in our view, the question of transfer of all or any right does not arise in the facts and circumstances of the instant case. Hence, we are of the view that the payment received by the assessee cannot be considered as "royalty" in terms of the India-UK DTAA. Though, it is not necessary to examine about the applicability of provisions of sec. sec. 9(1)(vi) of the Act, yet the facts discussed above would show that the payment received by the assessee cannot fall within the purview of sec. 9(1)(vi) of the Act also. Question of existence of “permanent establishment” and taxability of "reimbursement of expenses" grounds were not considered by the Ld DRP/AO, since they proceeded to assess the receipts as “fee for technical services”/royalty. Hence we set aside both the issues to the file of the AO for consideration of the same afresh. - Decided in favour of assessee for statistical purposes.
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