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Informist, Monday, Dec. 23, 2024

 

NEW DELHI – The Delhi High Court on Monday issued a notice to Cricket Australia on a plea by the Commissioner of Income Tax-International Taxation-1 against an order by the Income Tax Appellate Tribunal that held that licence fees received by the assessee towards live transmission of cricket matches held in Australia were not taxable as royalty in India. The high court will hear the case next on Apr. 28.

 

Cricket Australia had received INR 3.51 billion from Culver Max Entertainment Pvt. Ltd. for live transmission rights of cricket matches held in Australia. Questioning Cricket Australia's receipts, the assessing officer said that it amounted to licence fee and be treated as royalty income under the Income Act, 1961, and the India–Australia Double Tax Avoidance Agreement. The assessing officer had also questioned the receipts of INR 137 million from Balkrishna Industries "in lieu" of commercial partnership agreement to treat the same also as royalty under the 1961 Act and avoidance agreement. 

 

Not finding Cricket Australia's submission satisfactory, the assessing officer made an addition on account of licence fee of INR 3.51 billion received from Culver Max. The assessing officer also added an amount of INR 40.57 million on the basis of differences in the amounts reported by Cricket Australia and that reported by Culver Max Entertainment in Form 15CA/CB, the tax documents used when sending money abroad. The assessing officer added INR 137.05 million on account of consideration received from Balkrishna Industries.

 

Cricket Australia had entered into a commercial partnership agreement with Balkrishna Industries. Under this, Cricket Australia had given Balkrishna Industries certain sponsorship and advertisement benefits to be used by the latter in Australia only to grow the international business and revenue of Balkrisha from Australia. The assessing officer said the payment received by Balkrishna Industries, "in lieu" of the right to use the logo and images of Big Bash League as sponsor, amounts to royalty under the avoidance agreement. The appellate tribunal had rejected various additions by the income tax department, after which the case moved to the Delhi High Court.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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