Income of non-resident for production of television signals for broadcasting of cricket matches in India taxable as fees for technical services on gross basis

Nimbus Sport International Pte. Ltd. v. DDIT (ITAT Delhi) -Coming to the issue about the advertisement revenue received by the assessee in Singapore for matches played abroad, it has not been disputed that the matches in question for which advertisements were given by the Indian company were all played in foreign countries. The assessee does not have a PE in India. In this eventuality, the revenue collected by it for the matches played overseas and telecast at overseas will not attract the theory of force of attraction for taxing them in India. The force of attraction cannot apply on an assumption that some percentage of the viewers may be Indian and the advertisement made have some incremental value in India for the advertising companies. In our view, this is a pure assumption. The clincher to the issue is that the assessee does not have a PE in India, the matches were not played in India, the telecast of the matches was not in India and the indirect benefit which might have been derived by some of the Indian viewers cannot be held to be incremental for Indian companies on assumption. The dominant object of the payment by the Indian companies to assessee’s Singapore office was to advertise their products in foreign territory in foreign cricket matches and the dominant object emerges to be the advertisement in foreign territories. In our view, the advertisement revenue has no attribution to India and in the absence of any PE, we have to hold that this revenue cannot be taxed in India. Our view is supported by the following judgments :-