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TMI Blog2023 (8) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;live' transmissions of the programmes i.c., cricket matches held in Australia as "Royalty" under the Act as well as under the India - Australia Double Tax Avoidance Agreement. 2. Based on facts and circumstances of the case and in law, the Ld. AO, pursuant to the directions of the Ld. DRP erred in holding that the receipts amounting to Rs. 5,12,77,558 from Sony Pictures pertaining to 'live' transmissions of the programmes i.e., cricket matches held in Australia involves transfer of rights in respect of a 'Process' as per Explanation 6 to Section 9(1)(vi) of the Act as well as under Article 12 of India-Australia Tax Treaty. 3. Based on facts and circumstances of the case and in law, the Ld. AO, pursuant to the directions of the Ld. DRP erred in holding that a unilateral amendment of the term 'process' under the Act would get imported into the definition of 'royalty' given under Article 12 of the India- Australia Tax Treaty. 4. Based on the facts and circumstances of the case and in law, the Ld. AO, pursuant to the directions of the Ld. DRP erred in not following the ratio laid down by the decision of the jurisdictional High Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse fee of INR 5,12,77,558/-. Against the draft assessment order, the assessee filed its objections before Ld. Dispute Resolution Panel ("DRP") who vide its direction dated 10.02.2022 issued u/s 144C(5) of the Act, disposed off the objection of the assessee. Thereby, Ld.DRP sustained the findings of the AO related to license fee received for live and nonlive transmissions rights. However, in respect of Royalty, the AO was directed to pass a speaking order in accordance with law. In pursuance of the direction of Ld.DRP, the impugned assessment order was passed. The AO sustained its findings and made addition of Royalty of INR 2,48,266/- and license fee of INR 5,12,77,558/-. 4. Aggrieved against this, the assessee preferred appeal before this Tribunal. 5. Apropos to Grounds of appeal Nos. 1 to 4, Ld. Counsel for the assessee vehemently argued that the authorities below failed to appreciate the facts and made the impugned additions contrary to the judicial pronouncements on the issues. Ld. Counsel for the assessee took us through the findings of the AO and also relied upon various case laws during the course of hearing. At the outset, he submitted that issue in question is squarely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO, there is a value addition in live transmission likely there are studios having hosts speaking vernacular languages, interviewing experts and celebrity guests and playing short bites of replay of important moments in the game/match even as the game continues. The Co-ordinate Bench of the Tribunal in the case of Fox Network Group Singapore Pte. Ltd. vs ACIT (International Taxation), Circle 1(3)(1), New Delhi [2020] 121 taxmann.com 330 (Delhi-Trib.) [20.03.2020] examined this aspect wherein it has been held as under:- 22. "The aforesaid principle and sequitur of the judgment of the Hon'ble Jurisdictional High Court clearly clinches the issue in favour of the assessee, wherein it has been categorically held that there is a clear distinction between a copyright and a broadcasting right, broadcast or live coverage which does not have a copyright, and therefore, payment for live telecast is neither payment for transfer of any copyright nor any scientific work so as to fall under the ambit of royalty under Explanation 2 to Section 9(1)(vi). 23. In so far as reference of phrase 'process' in Explanation 6, the same will not be applicable in the case of the assessee, because admittedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any contouring explanations), will continue to hold the field for the purpose of assessment years preceding the Finance Act, 2012 and in all cases which involve a Double Tax Avoidance Agreement, unless the said DTAAS are amended jointly by both parties to incorporate income from data transmission services as partaking of the nature of royalty, or amend the definition in a manner so that such income automatically becomes royalty. It is reiterated that the Court has not returned a finding on whether the amendment is in fact retrospective and applicable to cases preceding the Finance Act of 2012 where there exists no Double Tax Avoidance Agreement. 61. For the above reasons, it is held that the interpretation advanced by the Revenue cannot be accepted. The question of law framed is accordingly answered against the Revenue. The appeals fail and are dismissed, without any order as to costs." 9. In the light of above-mentioned binding precedents, more particularly ratio laid down by Hon'ble Jurisdictional High Court in the case of Director of Income Tax vs New Skies Satellite BV (supra), we are of the considered view that the AO was not justified in making the impugned addition. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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