TMI Blog2014 (12) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... ight 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t (P) Ltd. 133 ITD 468 (Mumbai) and holding that there was no creation of work as defined under Section 2(y) of the Copyright Act, 1957. 4. Mr.Kamal Sawhney, learned Senior Standing Counsel for the appellant revenue would submit that Clause (v) to Explanation 2 to clause (vi) of sub section (1) of Section 9 is not restricted to Copyright alone as the commas are used between the words Copyright , literary and artistic and further disjunctive conjunction or is used between the words artistic and scientific work . Had the intention of the legislation being to include only copyright work alone, there was no reason to include other words. The mere fact that scientific work had been joined in the clause with disjunctive conjunction or manifest the intention of legislation to extend it beyond copyright. According to him, such inference can be drawn because of the inclusion of scientific work which is not covered by the Copyright Act and inclusion of Cinematographic films . He would further submit that the use of words literary and artistic in Clause (v) cannot be understood to have been used for excluding Copyright in the areas of drama, music etc. In other words ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore would be covered within the definition of royalty . 6. On the other hand, Mr.Satyen Sethi would submit that the right to broadcast/telecast is a special right distinct and different from copyright and the payment for live telecast was not a payment for transfer of any copyright . According to him, the broadcast/telecast, except labour, skill and capital, does not have any underlying creativity. A sports event is a performance and not a work. It is not copyrightable. According to him, a sporting event is meant for public viewing and payment made for live telecast cannot be said to be a payment for transfer of copyright . He would also state that Section 40(a) (ia) is required to be strictly construed and no disallowance under the said Section is called for as payment made to other clubs for live telecast was not a royalty. He would also point out that the Direct Tax Code Bill, 2010 wherein a proposal has been made to include payment for live coverage in the definition of royalty , which according to him would show that the present definition of royalty does not include it. He would rely upon the following judgments:- (a) ESPN Star Sports vs. Global Broadcast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the intention of the legislature was to include other works like dramatic, musical etc. the legislature would have said so or would not have qualified the word copyright with the words literary and artistic as the word copyright encompasses in itself all the categories of work. Having not done, it is a case of Expressio Unis . (The mention of one thing is the exclusion of the other). We also note that the word copyright does not synchronize with the word literary , artistic as they are the works in which copyright exists. The provision if read as suggested by the revenue to that extent would be meaningless. We, are thus of the view that the provision would be more meaningful if the word in is read by implication in between the words copyright and literary . 9. We know the limitation of the Court in adding and rejecting a word in the provision and the statute. Presumption is there that the legislature inserted every part of the statute for a purpose with an intention that every part thereof should have effect. At the same time, it is also a settled law that a construction which attracts redundancy, will not be accepted except for compelling reasons. Where alt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt interpreted the words any person interested in a Waqf as meaning any person interested in what is held to be a waqf . The Supreme Court in this judgment further held that, [W]here literal meaning of the words used in a statutory provision would defeat its object by making a part of it meaningless and ineffective, it is legitimate and even necessary to adopt the rule of liberal construction so as to give meaning to all parts of the provision and to make the whole of it effective and operative. 12. Further the Supreme Court in its opinion reported as State Bank of Tranvancore vs. Mohammad, AIR 1981 SC 1744 construed the words any debt due before the commencement of this Act to any banking company as occurring in Section 4(1) of the Kerala Agriculturist Debt Relief Act, 1970 to mean any debt due at and before the commencement of this Act . The Supreme Court here held, [w]e would have normally hesitated to fashion the clause by so construing it but we see no escape from that course since that is the only rationale manner by which we can give meaning and content to it so as to further object of the Act. 13. Similarly the Supreme Court in the case reported as Champa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing classes of works, that is to say,- (a) original literary, dramatic, musical and artistic works; (b) cinematograph films; and (c) *[sound recording]. (2) Copyright shall not subsist in any work specified in subsection (1), other than a work to which the provisions of Section 40 or Section 41 apply, unless,- (i) in the case of a published work, the work is first published in India, or where the work is first published outside India, the author is at the date of such publication, or in a case where the author was dead at that date, was at the time of his death, a citizen of India; (ii) in the case of an unpublished work other than *[work of architecture], the author is at the date of the making of the work a citizen of India or domiciled in India; and (iii) In the case of *[work of architecture], the work is located in India. Similarly Section 14 of the Copyright Act defines the meaning of copyright and the said provision is reproduced as under:- 14. Meaning of copyright. for the purposes of this Act, copyright means the exclusive right subject to the provisions of this Act, to do or authorise the doing of any of the following acts in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation. For the purposes of this section, a copy which has been sold once shall be deemed to be a copy already in circulation.] 16. A live T.V coverage of any event is a communication of visual images to the public and would fall within the definition of the word broadcast in Section 2(dd). That apart we note that Section 13 does not contemplate broadcast as a work in which copyright subsists as the said Section contemplates copyright to subsist in literary, dramatic, musical and artistic work, cinematograph films and sound recording. Similar is the provision of Section 14 of the Copyright Act which stipulates the exclusive right to do certain acts. A reading of Section 14 would reveal that copyright means exclusive right to reproduce, issue copies, translate, adapt etc. of a work which is already existing. 17. Adverting to the facts of this case we note that 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. It is not the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ball Association and NBA Properties NIC vs. Motorola INC 105 F3d 841 (1997) held that a sports event is a performance and not a work. It is not copyrightable. 19. Insofar as the submission of Mr.Sawhney that the live telecast of an event is the outcome of scientific work and payment thereof would be covered under the definition of royalty is concerned, the said submission is also liable to be rejected first it runs contrary to his earlier submission and also for the simple reason the clause (v) to explanation 2 to clause (vi) or sub section 1 of Section 9 would relate to work which includes films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting. It is to be seen whether consideration for transfer of all or any rights of scientific work including films or video tapes would include a live telecast. The clause is an inclusive provision for films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting. We note such a case was not set up by the appellant revenue before the authorities below. It was held by the Assessing Officer that when any person pays any amount for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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