Payment for sponsorship rights cannot be termed as royalty

Facts

1. Sahara India Financial Corporation Ltd. (tax payer) had entered into an agreement with IMG Canada, a foreign company through IMC India for sponsorship of the international cricket tournament between India and Pakistan to be played in Canada.

2. The sponsorship benefits inter-alia included:

• the right of renaming of the tournament as “Sahara Cup”;
• incorporation of the Sahara logo as the official logo of the tourna

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