ACIT Vs Times Content Limited (ITAT Delhi Bench)
Live Cricket Is a Performance, Replay Is Copyright — Delhi ITAT Draws the Royalty Boundary at 93:7 u/s 9(1)(vi), 195 & 40(a)(i)
Summary: The Delhi ITAT dealt with an interesting question concerning taxation of payments for live & non-live broadcasting rights of cricket matches. The assessee was engaged in live streaming of sporting events outside India & had acquired media rights from Willow TV International Ltd., British Virgin Islands, which in turn had obtained rights originating from ICC through Star Middle East FZ LLC. The rights enabled broadcasting of cricket matches in specified territories including USA & certain US territories. For AY 2016-17, the assessee paid composite rights fees of USD 30.40 lakh for live as well as non-live/post-match broadcasting.
The AO took the view that payment made to the non-resident represented royalty on which tax ought to have been deducted u/s 195. Since no TDS was deducted, the AO invoked section 40(a)(i) & made disallowance of ₹15.19 crore.
Live Broadcast — Where Is the Copyright Before the Event Happens?
CIT(A) substantially accepted the assessee’s case. It held that payment attributable to live sporting events could not constitute royalty because there was no copyright in a live event. However, the media rights agreement was composite since it also permitted recording, duplication, replay & exploitation of the programme after the live event.
