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2022 (3) TMI 68 - AT - Income TaxIncome accrued in India - subscription/distribution revenue derived by the assessee as assessable to tax as royalty - as per AO assessee had granted various rights relating to its products including the right to sub-license. The Assessing Officer further observed that in allowing TIIPL to sub-distribute the encrypted television signals for commercial exploitation, the assessee has granted the right to communicate the work to public which is defined u/s. 2(ff) of the Copyright Act, 1957 - HELD THAT:- A careful perusal of the clause by clause comparison shows that the terms and clauses are pari materia same except the difference in channels that have been distributed. A similar comparison of the assessment order in the case of TBSAP [2020 (10) TMI 245 - ITAT DELHI] and the assessee has been furnished by the assessee. A perusal of the same shows that the wordings and findings are identical. Tribunal at Bombay in the case of MSM Satellite (Singapore) Pte Limited [2015 (9) TMI 793 - ITAT MUMBAI]had the occasion to consider a similar quarrel in respect of subscription charges collected by MSM which were taxed as royalty for use of copyright and the co-ordinate bench held that the amount received by the Singaporean company cannot be brought to tax in India as royalty and the same is in the nature of business income.This decision has been approved by the Hon'ble High Court of Bombay [2019 (4) TMI 1621 - BOMBAY HIGH COURT] as emphatically observed that there is difference in copyright and broadcast reproduction right As per Circular No. 6/2001, it has been clarified that subscription charges receivable for Foreign Telecasting Companies (FTCs) shall continue to be taxed in accordance with guidelines prescribed for advertisement revenue, i.e. as business income. - Decided in favour of assessee.
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