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Informist, Monday, Jan. 19, 2026

 

NEW DELHI – The Delhi High Court has held that the INR 1.22 billion income earned by Sri Lanka Cricket for granting live telecast rights to Indian company Lex Sportel Vision Pvt. Ltd. does not qualify as "royalty", and is therefore not taxable under the Income Tax Act, 1961, as well as the India–Sri Lanka tax treaty. Dismissing the income tax department's plea, the court upheld a July order of the Income Tax Appellate Tribunal on the same matter.

 

"Since the right to show cricket matches was confined to live telecast and the payment made was only for the match(es) held in the series (within 12 months) and not subsequent matches, such amount paid to the respondent(Sri Lanka) cannot be considered as a royalty. 'Because, royalty presupposes enduring benefits'," said a bench of Justice Dinesh Mehta and Justice Vinod Kumar. 

 

If the licensee has a right to record or preserve the feed and it continues to derive benefit of that recording and has right to re-telecast or show those matches in future, beyond the period or events other than such event, then only, the payment made to the licensee in appropriate case, can be treated as royalty, said the court. However, it is not the case in the present agreement or transaction, hence the amount in question cannot be considered as royalty, the court added.

 

Sri Lanka Cricket, the national association for the sport of cricket in Sri Lanka, had granted broadcasting and certain ancillary rights to Lex Sportel for the live telecast of a particular cricket tournament held in Sri Lanka in the month of March 2018. Thereafter, the income tax department initiated assessment proceedings against Sri Lanka under section 14 of the Income Tax Act. The assessing officer held that the amount received by Sri Lanka cricket from Lex Sportel for broadcasting rights was nothing but in the nature of royalty. Hence the assessing officer taxed the entire receipt of INR 1.22 billion as royalty.  End

 

Reported by Surya Tripathi

Edited by Tanima Banerjee

 

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