Asia Today Limited Vs ADIT (International Taxation) (ITAT Mumbai)
ITAT Mumbai held that amount received for grant of non-exclusive broadcasting rights of feature films cannot be termed as “royalty” within the parameters of “royalty” as defined in Explanation-2 to section 9(1)(vi) of the Act. Accordingly, the appeal is allowed and order set aside.
Facts- The Assessee, being a foreign telecasting company incorporated in Mauritius and having tax residency certificate of Mauritius , during the AY under consideration was engaged in the production and acquiring rights of various television films including feature films, as a copy right owner/holder of various Hindi feature films produced and censored in India executed on dated 07.04.2003 between Assessee {Licensor} and M/s. Usha Kiron Television {a propriety concern of Shri Ramoji Rao (HUF)} [licensee] for granting non-exclusive license and to give delivery of 100 (one hundred only) Hindi feature films, to the licensee for broadcasting through all channels of E-TV network, as per terms and conditions, set out in the license agreement and its Schedules ‘A, B & C’, on a consideration of Rs.1,00,00,000/- only.
The Assessee claimed the said amount of Rs.1,00,00,000/- being exempt. However, the claim was disallowed by AO. Commissioner ultimately affirmed the decision of the AO in holding the said amount/receipt of Rs.1,00,00,000/- as “royalty”.
