CIT (International Taxation) Vs Sri Lanka Cricket (Delhi High Court)
Live Feed Is Not Royalty: Delhi High Court Dismisses Revenue’s Appeal in Sri Lanka Cricket Case
The Delhi High Court dismissed the Revenue’s appeal and held that fees received by Sri Lanka Cricket for granting rights of live telecast / live feed of cricket matches cannot be treated as “royalty” under Section 9(1)(vi) of the Income-tax Act. Relying on its earlier rulings in Delhi Race Club and Fox Network Group Singapore, the Court reiterated that a live broadcast does not constitute a ‘copyright work’, and mere transmission of live events does not amount to transfer of copyright or use of a “process” attracting royalty taxation. The Court further observed that royalty presupposes enduring rights or continuing benefit, such as rights to record, preserve, or re-telecast in future. Since the agreement allowed only limited live telecast rights for specific matches without any right of recording or future use, the consideration could not be characterised as royalty. With the SLP on identical issue already withdrawn by the Department, the Court found no substantial question of law and dismissed the appeal
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Ajay Vohra, learned senior counsel for the respondent, at the outset submitted that the issue involved in the present case is squarely covered by the judgment of this Court in the case of CIT (International Taxation) v. Fox Network Group Singapore Pte. Ltd. reported in [2024] 158 taxmann.com 434 (Delhi), in which the earlier judgment of this Court rendered in the case of CIT v. Delhi Race Club (1940) Ltd. reported in (2014) 51 taxmann.com 550 (Delhi) involving an identical fact-situation has been dealt with and followed.
