9911796707
TMI Blog2024 (8) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... cted and deposited and the refund thus being computed in light of what had been claimed in the original Return of Income. For the purposes of disposal of the instant writ petition, we take note of the following salient facts. 3. For Assessment Year [AY] 2014-15, the petitioner had furnished a Return of Income declaring its total income therein to be INR 90,35,46,340/-. It had also claimed a refund in the sum of INR 3,65,970/-. The said Return was selected for scrutiny on an issue raised as to whether the revenue earned by the writ petitioner, including the consideration with respect to live feed, would constitute royalty and thus be taxable. 4. On 31 December 2017, a draft assessment order came to be framed with the AO holding that the consideration received by the petitioner towards live feed was taxable as royalty under the Act. Aggrieved by the aforesaid, the petitioner filed objections before the Dispute Resolution Panel [DRP] which affirmed the view taken in the draft assessment order in terms of a direction dated 05 September 2018.Pursuant to the aforesaid determination, a final assessment order came to be framed on 08 October 2018. 5. The petitioner assailed the view as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer of any 'copyright' and as such 'royalty' or in the alternative whether the live telecast of the horse race would be termed as a 'scientific work' and payment thereof would be 'royalty' 21. After considering the definition of Royalty' as given in section 9 (1) (vz) and relying upon various sections of Copyright Act, their Lordships held that:- - It is not in dispute that the payment has been made by the respondent assessee to other clubs/centres on account of live telecast of races. The payment of 'royalty' is covered under section 1941 which was inserted with effect from 13-7-2006. The said section, contemplates that in the eventuality a payment is made towards 'royalty', an amount equal to 10 percent of such sum needs to be deducted as income-tax on income comprised therein. Explanation (ba) to the section stipulates 'royalty' shall have the same meaning as in Explanation 2 to clause (vi) of sub-section (1) of section 9. [Para 7] - A perusal of clause (v) would reveal that consideration for transfer of all or any rights in respect of any 'copyright' and the word 'copyright' is followed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection were used in connection with radio broadcasting but not including consideration for the distribution or exhibition of cinematographic films' [Para 14] - Now the question which arises is whether live telecast of a horse race is a work to have a 'copyright'.[Para 15] - A live TV 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 it was noted 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. [Para 16] - Adverting to the facts of the instant case, it was noted that the assessee was engaged in the business of inducting horse races and derived income from betting, commission, en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier submission and also for the simple reason the clause (v) to Explanation 2 to clause (vz) or subsection(1) of section 9 would relate to work which includes films or videotapes 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 videotapes would include a lie telecast. The clause is an inclusive provision for films or videotapes for use in connection with television or tapes for use in connection with radio broadcasting. It was noted that such a case was not set up by the revenue before the authorities below. It was held by the Assessing Officer that when any person pays any amount forgetting rights/licence to telecast any event (which is a copyright of particular person i.e. no one can copy it for direct telecast or deferred telecast) then amount so paid is to be treated as 'royalty' and very much covered under section 9 (1) (vz). In other words, the ground of the revenue was limited to the aspect of copyright. That apart we find, no such ground has been taken by the revenue even in this appeal. The 'sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 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 Coordinate Bench of ITAT Accordingly, we decide this issue in favour of the assessee. 8. In the present case the facts and issues are identical. We do not see any reason to deviate from the reasoning of Hon'ble Co-ordinate bench in the case of Fox Network Group Singapore Pte. Ltd. (supra). We, therefore, direct the Assessing Officer to delete the impugned addition. 9. As regards the issue raised in ground no. 7, relating to grant of short credit of taxes deducted at source amounting to 2,03,36,66, 125, though reflected in Form 26AS, we direct the Assessing officer to verify the same and grant correct credit of taxes deducted at source. Ground is allowed for statistical purposes." 7. As is manifest from the above, the Tribunal had framed an unequivocal direction for the AO to verify and attend to the grievance of short credit of TDS, bearing in mind what stood reflected in Form 26AS, and which amount was quantified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a direction framed by the Tribunal. Viewed in that light, the stand as taken by the AO is clearly rendered unsustainable insofar as it restricts the claim of the petitioner to the disclosures made in the Return of Income. 13. In our considered opinion, it would be wholly illegal and inequitable for the respondents to give short credit to the tax duly deducted and deposited based on the claim that may be made in a Return of Income. It is pertinent to note that insofar as the question of rights to live feed being treated as royalty is concerned and other allied issues pertaining to the merits of the dispute stand settled right up to this Court by virtue of the judgment rendered by us in ITA 812/2023. 14. The reliance placed on the decision of the Supreme Court in Goetze (India) Ltd. vs. Commissioner of Income Tax 2006 SCC OnLine SC 1446 is also clearly misconceived and rendered unsustainable bearing in mind the following principles which have come to be enunciated by us in our recent decision in Mitsubishi Corporation vs. Commissioner of Income Tax 2024 SCC OnLine Del 5164. While dealing with a similar objection in Mitsubishi Corporation, we had held as follows:- "16. Any doubt w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had placed reliance on the decision of this court in Goetze (India) Ltd. v. CIT in support of the objection pressed before us that it is not open to entertain fresh claim before the Income-tax Appellate Tribunal. According to him, the decision in National Thermal Power Co. Ltd. merely permits raising of a new ground concerning the claim already mentioned in the returns and not an inconsistent or contrary plea or a new claim. We are not impressed by this argument. For, the observations in the decision in Goetze (India) Ltd. itself make it amply clear that such limitation would apply to the "assessing authority", but not impinge upon the plenary powers of the Income-tax Appellate Tribunal bestowed under section 254 of the Act. In other words, this decision is of no avail to the Department." 18. As is evident from the enunciation of the legal position in the decisions aforenoted, while ordinarily an assessee may be bound by the Return of Income as furnished, in case the Tribunal were to admit a question and proceed to accord relief, the same cannot be denied or be made subject to a Return of Income being revised. The insistence of the respondents on a revision of the return being a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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