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9|Page includes broadcast by any means of wireless diffusion, whether in any one or more of the forms of signs, sounds or visual images, or by wire, and includes a re-broadcast. Thus, extensively referring to the various provisions of the Copyrights Act, learned Commissioner (Appeals) held that events broadcasted/telecasted by the assessee, whether live or in the form of repeat telecast, are in the nature of cinematograph film. He observed, none of the live events can be telecast without first recording them on a medium with the help of camera. Therefore, he held that assessee's claim that it does not have any copyright in the telecast content and that the copyright is that of the event manager/owner, is without any merit. He observed, right to communicate to the public in the case of a cinematographic film, itself, is a copyright as per the definition of copyright under the Copyright Act. He observed, only because the assessee grants rights to ESPN India, cable operators and then the ultimate viewers in India get to view assessee's telecast. In the same process, the consideration paid by viewers for viewing the content of the telecast to the cable operators, then to ESPN India and ultimately to the appellant is nothing but consideration received by the assessee for allowing the use of right to communicate to the public. Thus, in the aforesaid 10 | P a g e premises, learned Commissioner (Appeals) ultimately concluded that the distribution revenue received by the assessee is in the nature of royalty under Article 12(3) of the Tax Treaty and since the assessee has a PE in India, the amount is taxable on net basis as per Article 7 of the Treaty.

7. Before us, learned counsel appearing for the assessee drew our attention to the agreement between the assessee and ESPN 11 | P a g e India and submitted that the terms of the agreement make it clear that the appointment of ESPN India is limited to the extent of making ESPN services available in the specified area through sub- distributors in accordance with terms and conditions of the agreement. He submitted, as per the condition of the agreement, on termination of the agreement all arrangements with sub- distributor would automatically be assigned to the assessee. He submitted, the agreement clearly specifies that the distributor, i.e., ESPN India will have no rights whatsoever to the ESPN service nor convey, confer, grant, assign or otherwise provide distributor with copyright, title or any other proprietary or ownership interest in or to the ESPN Service or any elements thereof. ESPN India cannot use, authorize or permit the use of the ESPN Service or any element thereof for any purpose other than the purpose expressly specified in the agreement. He submitted, agreement makes it clear that neither assessee nor ESPN India shall have any authority to bind the other or to assume, create or incur any liability or any obligation of any kind, express or implied, against or in the name of or on behalf of the other. He submitted, the agreement also made it clear that the transaction between the assessee and ESPN India is on principal to principal 12 | P a g e basis. He submitted, as per the terms of the agreement, the assessee only conferred the distribution right upon ESPN India to broadcast/telecast certain specific sports channels. He submitted, while granting such distribution right the assessee had not transferred any right to use of any copyright to the distributor. Drawing our attention to the Copyright Act, he submitted, broadcasting rights are distinct and different from copyright. In this regard, he drew our attention to section 14 and 37 of Copyright Act defining the meaning of copyright and broadcasting right, respectively. He submitted, what the assessee has granted to ESPN India is the broadcast reproduction right, which cannot be equated with copyright as defined under the Copyright Act. He submitted, the distribution/subscription revenue received by the assessee cannot be treated as royalty under Article 12(3) of the India - Mauritius Tax treaty. In any case of the matter, he submitted, the right to distribution of sports channels cannot be equated with cinematograph films as defined under Explanation 2(v) to section 9(1)(vi) of the Copyright Act. He submitted, when the Assessing Officer accepts that all rights associated with the ESPN channels remains with ESPN Star Sports, Singapore and there has been no transfer of such right to the assessee and 13 | P a g e consequently to ESPN India, then it cannot be said that the subscription/distribution revenue received by the assessee from ESPN India towards distribution right granted to the ESPN India is in the nature of royalty coming within the ambit of Article 12(3) of India-Mauritius Tax Treaty. Thus, he submitted, in absence of PE in India, the amount received towards distribution/subscription revenue, being in the nature of business income is not taxable in India. In support of such contention, learned counsel relied upon the following decisions:

8. Strongly relying upon the observations of Assessing Officer and learned Commissioner (Appeals), learned Departmental Representative submitted that along with the distribution right the assessee has transferred the right to broadcast and telecast sports channels, which amounts to transfer of copyright. He submitted, by acquiring the distribution right the assessee is also deriving commission income while procuring advertisement to be shown at the time of broadcasting/telecasting channels. Thus, he submitted, the distribution rights transferred to ESPN Indian brings along with it the copyright in the broadcast/telecast 15 | P a g e material/content, which is in the nature of copyright as defined under the Copyright Act read with Explanation 2(v) of section 9(1)(vi) of the Act as well as Article 12(3) of India - Mauritius Tax Treaty. Thus, he submitted, the distribution revenue has been correctly treated as royalty and assessed at the hands of the assessee.

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16. Similar to the case of DDIT Vs. Set India Pvt. Ltd. (supra), referred to above, in assessee's case also there is no transfer of any right to use of any copyright and there is specific restriction imposed upon ESPN India that it has to provide the ESPN services through sub-distributors without any editing, interruption, deletions, additions etc. It is relevant to observe, in case of Set Satellite (Singapore) Pte Ltd. Vs. DDIT (supra), the Hon'ble Bombay High Court while dealing with the issue, whether identical nature of distribution rights granted to an entity in India is in the nature of royalty, has held that consideration received is in respect of a commercial transaction, hence, distinct and different from copyright as defined under Copyright Act. In case of NGC Network Asia LLC Vs. DCIT (supra), the issue involved was whether revenue received by the non-resident company from NGC India from distribution right granted in respect of telecast/broadcast of certain channels in India through cable operators would be in the nature of royalty. While dealing with the issue, the Tribunal, after taking note of the difference between the meaning of copyright and broadcast reproduction right under the Copyright Act has held that the right granted to the Indian 25 | P a g e entity is a commercial right and not copyright. Identical view has been expressed by the Coordinate Bench in a catena of decisions cited before us, including, in the case of Turner Broadcasting System Asia Pacific Inc. Vs. DDIT (supra). In case of CIT Vs. MSM Satellite (Singapore) Pte. Ltd. (supra), the Hon'ble Bombay High Court has held as under: