Income Tax Appellate Tribunal - Delhi
Fox Networks Group Singapre Pte Ltd, ... vs Acit Circle (International Taxation)- ... on 15 November, 2019
आयकर अपील य अ धकरण, द ल यायपीठ "श
ु वार-ई", द ल म
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'FRIDAY-E', NEW DELHI
सु ी सष
ु मा चावला, या यक सद!य एवं ी $शांत मह'ष(, लेखा सद!य के सम+
BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER &
SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER
!थगन अपील सं./S.A.No.1025/Del/2019
In
आयकर अपील सं. / ITA No.8683/Del/2019
नधा(रण वष( / Assessment Year: 2015-16
Fox Networks Group Singapre PTE Ltd.,
C/o-Star India Pvt.Ltd., Star House,
Urmi Estate, 95, Ganptrao Kadam Marg,
Lower Panel West, Mumbai-400028.
PAN-AACCF5237D ..........अपीलाथ0/Appellant
vs
The ACIT,
Circle (International Taxation)-1(3)(1),
New Delhi. ............. $1यथ0 / Respondent
अपीलाथ0 क2 ओर से / Appellant by : Sh. Porus Kaka, Adv.
$1यथ0 क2 ओर से / Respondent by : Dr.V.K.Chandra, Sr.DR
सन
ु वाई क2 तार ख / घोषणा क2 तार ख /
Date of Hearing : 15.11.2019 Date of Pronouncement: 15.11.2019
आदे श / ORDER
PER SUSHMA CHOWLA, JM:
The present stay application is moved by the applicant against the recovery of outstanding demand of Rs.178.42 crores.
Page | 1
2. The Ld.AR for the applicant pointed out that only issue which has been raised in the present appeal is whether receipt of 'live' rights was taxable as royalty. In this regard he pointed out that in the case of ESPN, the former company of the applicant, the Hon'ble Delhi High Court in civil proceedings had held that the rights granted to the sports channel for telecasting have no 'copyright' covered under the 'Copyright Act'. He explained that the applicant was a Singapore company which gave 'live' rights to Star India which in turn gave telecasting rights of live matches etc. He further stated that the case of the Revenue was that as per amendment, Explanation 6 to section 9(1)(vi) of the Income Tax Act, 1961 has been inserted, which defines the term 'process' and the receipts in the hands of the applicant were royalty and hence taxable. He pointed out that since no amendment had been made to provisions of Tax Treaty, the ratio laid down by the Hon'ble Delhi High Court in New Skies Satellite BV (ITA No.473/2012 and ITA No.474/2012) would be applicable and the aforesaid receipts were not taxable in the hands of the applicant. Another point which has been raised by the Ld.AR for the applicant is that the AO passed an order on 20.09.2019 and had issued a notice asking the applicant to make the payment of outstanding demand within 20 days. The Ld.AR for the applicant fairly pointed out that in view of the decision of the Hon'ble Bombay High Court in the case of ARCIL Retail Loan Portfolio 001-D-Trust vs Pr.CIT-21, Mumbai [2019] 104 taxmann.com 355 (Bombay) where the issue stands decided in favour of the Page | 2 applicant, though unconditional stay can be granted but in all fairness and because of the CBDT Circular, the assessee is ready to deposit part of the amount due against the applicant.
3. The Ld. DR for the Revenue stressed that the assessee be asked to deposit the outstanding demand.
4. On the perusal of the record and after hearing both the authorized representatives, we are of the view that in the facts and circumstances, the issue of receipt of 'live' rights by the applicant is whether it is royalty and taxable in the hands of the applicant or not taxable in the hands of the applicant. The case of the Revenue is that because of the amendment and insertion of Explanation 6 to section 9(1)(vi) of the Act, the said receipt is taxable in the hands of the applicant as royalty. The case of the applicant is that as no amendment has been made to the Tax Treaty Provisions, then the provision of tax treaty would prevail over the amended Income tax Act. In such facts and circumstances, we are of the view that the applicant has a prima-facie case in its favour, insofar as granting of stay against recovery of outstanding demand is concerned, subject to the condition that part of the demand totaling to Rs.20 crores is paid by the applicant to which the Ld.AR for the applicant agreed. Hence, we direct the applicant to deposit Rs.10 crores by 30.11.2019 and balance Rs.10 crores by 20.12.2019. The recovery of outstanding demand against the applicant is thus stayed for a period of 180 days or till the disposal of appeal, whichever is earlier. The appeal is fixed Page | 3 for hearing on out of turn basis on 14.01.2020, which date is announced in the open Court and no notice shall be issued to any of the parties. The parties are directed to argue the appeals on the slated date of hearing and not to seek frivolous adjournments.
5. In the result, the stay application filed by the applicant is allowed.
Order pronounced in the open court on 15th day of November, 2019.
Sd/- Sd/- (PRASHANT MAHARISHI) (SUSHMA CHOWLA) लेखा सद!य/ACCOUNTANT MEMBER या यक सद!य/JUDICIAL MEMBER द ल / दनांक Dated : 15th November, 2019. * Amit Kumar *
आदे श क2 $ त6ल'प अ7े'षत/Copy of the Order is forwarded to :
1. अपीलाथ0 / The Appellant
2. $1यथ0 / The Respondent
3. आयकर आय9 ु त(अपील) / The CIT(A)
4. म< ु य आयकर आय9 ु त / The Pr. CIT
5. 'वभागीय $ त न ध, आयकर अपील य अ धकरण, द ल / DR, ITAT, Delhi
6. गाड( फाईल / Guard file.
ु ार/ BY ORDER, आदे शानस स1या'पत $ त //True Copy// सहायक रिज!Bार, आयकर अपील य अ धकरण , द ल Assistant Registrar, ITAT, Delhi Page | 4