TMI Blog2023 (8) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of section 9 of the Act, would have no application. The AO is therefore, directed to delete the addition. Ground Nos. 1 to 4 raised by the assessee is allowed. Treatment of tournament fees and reimbursement of dinner tickets as Royalty - HELD THAT:- DRP had directed the AO to spell out the reasons for treating the amount in question as Royalty . The AO failed to spell out the reasons in final assessment order. He has simply repeated the findings of draft order. Therefore, in the absence of clear finding on the part of the AO as to how this amount should be treated as Royalty . The findings cannot be sustained. We therefore, direct the AO to delete this addition. Ground No.5 raised by the assessee is thus, allowed. Non-granting credit of tax withheld at source - HELD THAT:- Considering the submissions made by assessee, we hereby, direct the AO to verify the factum of withholding of tax at source amounting and grant credit in accordance with law. Ground No.6 raised by the assessee is thus, allowed. - Shri Kul Bharat, Judicial Member And Shri M. Balaganesh, Accountant Member For the Appellant : Shri Percy Pardiwala, Sr.Adv. And Shri Nitesh Joshi, Adv. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same to the total income of the appellant. 6. Based on the facts and in the circumstances of the case and in law, the Ld. AO erred in not granting credit of taxes withheld at source amounting to Rs. 55,98,776. 7. Based on the facts and circumstances of the case and in law, the learned AO erred in computing interest liability under section 234B of the Act amounting to Rs. 24,61,344. Based on the facts and circumstances of the case and in law, the learned AO erred in computing interest liability under section 234A of the Act amounting to Rs. 51,278. 8. Based on the facts and circumstances of the case and in law, the learned AO erred in initiating penalty proceedings under section 270A of the Act without appreciating the fact that the Appellant has not misreported its income, The appellant craves leave to add to, amend, alter, vary, omit, or substitute the aforesaid grounds of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing of the appeal as they may be advised. 3. Facts giving rise to the present appeal are that the assessee filed its return of income on 31.10.2018, declaring total income of INR 68,66,110/-. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d final assessment order passed by the authorities below. Ld. Counsel laid great emphasis on the argument that live telecast would not fall under the term process. He submitted that have incorrectly relied on explanation 6 to section 9 of the Act. He contended that any change into domestic law would not alter terms of DTAA. He submitted that even otherwise also explanation 6 of section 9 of the Act, cannot be applied under the facts of the present case. 6. On the other hand, Ld.CIT DR vehemently opposed the contentions of Ld. Counsel for the assessee and heavily relied on the impugned order. He submitted that the AO and Ld.DRP have pointed out that it is not a simplicitor live telecast but value addition is made by way of expert comments and advertisements etc. He contended that it is not mere transmission and telecast. He contended that the facts are distinguishable. He placed reliance on the judgmenet of Hon ble Madras High Court rendered in the case of Verizon Communications Singapore Pte Ltd. (formerly MCI Worldcom Asia Pte Ltd.) vs Tax Case (Appeal) Nos.147 to 149 of 2011 and 230 of 2012 connected Miscellaneous Petitions dated 07.11.2013. 7. In re-joinder, Ld. Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no copyright on live events, and therefore, it is not taxable as royalty . Thus, we hold that the fee received towards live transmission cannot be taxed as royalty in terms of Section 9(1)(vi) as held by the Hon ble Jurisdictional High Court and also by the Co-ordinate Bench of ITAT. Accordingly, we decide this issue in favour of the assessee. 8.1. Further, the Co-ordinate Bench of this Tribunal rendered in the case of ESS (Formerly known as ESPN Star Sports) vs ACIT in ITA No.7903/Del/2018 order dated 21.02.2023 followed this decision and the judgement of the Hon ble High Court of Delhi in the case of Director of Income Tax vs New Skies Satellite BV [2016] 68 taxmann.com 8 (Delhi). The Hon ble Delhi High Court has held as under:- 59. On a final note, India's change in position to the OECD Commentary cannot be a fact that influences the interpretation of the words defining royalty as they stand today. The only manner in which such change in position can be relevant is if such change is incorporated into the agreement itself and not otherwise. A change in executive position cannot bring about a unilateral legislative amendment into a treaty concluded betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. The AO is therefore, directed to delete the addition. Ground Nos. 1 to 4 raised by the assessee is allowed. 10. Ground No.5 raised by the assessee is against the holding of tournament fees and reimbursement of dinner tickets amounting to INR 2,48,266/- as Royalty. 11. We have heard Ld. Authorized Representatives of the parties and perused the material available on record. Ld. DRP had directed the AO to spell out the reasons for treating the amount in question as Royalty . The AO failed to spell out the reasons in final assessment order. He has simply repeated the findings of draft order. Therefore, in the absence of clear finding on the part of the AO as to how this amount should be treated as Royalty . The findings cannot be sustained. We therefore, direct the AO to delete this addition. Ground No.5 raised by the assessee is thus, allowed. 12. Ground No.6 raised by the assessee is against the non-granting credit of tax withheld at source. 13. Ld. Counsel for the assessee submitted that appropriate direction may be given to the AO for granting of credit of taxes withheld at source amounting to INR 55,98,776/-. 14. Ld.Sr.DR opposed these submissions and supported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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