Trans World Intrnational LLC Vs DCIT (ITAT Delhi)
ITAT Delhi held that apportionment of license fees as 10% towards recorded events and 90% towards live coverage instead of 5% and 95% as claimed by sports broadcasters. Accordingly, appeal partly allowed.
Facts- M/s Trans World International, Inc. (TWI Inc.) was a non-resident corporation established in Ohio, USA and was engaged in the business of production of theatrical and non-theatrical motion pictures and video tapes. During the year, the assessee submitted its receipts from resident as well as non-resident for licence and broadcasting rights. Notably, the dispute is only with respect to items, where the consideration has been received for bundled rights i.e. both for broadcasting for live and recorded coverage of Sony Pictures Networks India Pvt. Ltd. and Taj television Private limited. The assessee has offered only 5% of the bundled receipts towards royalty income i.e. it considered only 5% of the consideration receipts towards recorded content and balance 95% towards live coverage of events.
AO held that the assessee’s rationale of apportionment into non live and live component in the ratio of 5%:95% is flawed. AO taxed amount of Rs.2,18,76,078/-, wherein, he taxed the amount of Rs.21,17,085/- received from resident payers and Rs.1,97,05,993/- was received from non-resident payers @15% as per Article 12 of DTAA more beneficial.
