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ii. The term "arise is to be understood as per the domestic law under Article 3(2) of the treaty.
iii. Alternately, the payment is borne by the PE of SET in India since the same has been claimed as deduction out of the total revenue by SET Further, the advertisement rate were much higher than normal rate during the period of telecasting of matches showing a close link with the P.E.

5.2. The Learned Counsel for Revenue submitted that the case of the Revenue is that the royalty income from SET arose in India ITA. No. 3135 & 3130/Mum/2006 & CO No. 324/Mum/2006 ITA No. 1510 & 1444/Mum/2009 & CO No. 160/Mum/2009 Assessment Years: 2002-03 & 2003-04 as per Article 12(2) of DTAA read with Article 3(2) and Section 5 & 9 of the Act.

5.3. The Learned Counsel for Revenue submitted that SET had obtained the rights in respect of the India territory and the matches were telecasted in India from which advertisement and distribution income was earned by SET from India. Elaborating upon the aforesaid, he submitted that there existed an intricate web of complex agreements forming part of the same activity which must be read together to construe and determine the effect of such agreements. All the agreements (including the two sponsorship agreements with LGEIL and HH) when read together conjunctively help in appreciating the 'real' effect of the agreements. Examined thus, the agreements show that the royalty income arose in India in view of the following:

5.41. This takes us to the judgment of the Ho‟ble Delhi High Court which has been relied upon on behalf of the GCC to contend that the „broadcasting rights‟ are not „copyright‟. In order to appreciate the proposition of law laid down by the Hon‟ble High Court it would be pertinent to consider the facts of the case. This judgment was rendered in regular first appeal arising from the order dismissing suit for permanent injunction filed by ESPN Star Sports (ESS), holding exclusive right to broadcast some cricket matches at the relevant time, against Global Broadcast News Limited and other broadcasters having news channels (hereinafter referred to as the „New Broadcaster‟. ESS had alleged that the News Broadcasters were making unauthorized telecast of signals to the cricket matches. The Ld. Single Judge dismissed the suit as not maintainable on the ground that Section 61(1) of ICA, requiring the owner of copyright to be made a party to infringement suit, was applicable to a claim of infringement of broadcast reproduction rights and non-impleadment of the owner of copyright was fatal to the maintainability of suit. In appeal, ESS contended that provisions of Section 61 of ICA were not applicable to a case of infringement of broadcast reproduction rights. In addition, as an alternative argument, it was contended by ESS that ESS would get separate ITA. No. 3135 & 3130/Mum/2006 & CO No. 324/Mum/2006 ITA No. 1510 & 1444/Mum/2009 & CO No. 160/Mum/2009 Assessment Years: 2002-03 & 2003-04 copyright in the final feed telecasted after making its own additions/alterations etc. in the live feed received from the host broadcaster. Thus, it was contended by ESS that there were two separate rights, broadcast reproduction right (which was separate right of ESS independent of the copyright in the feed received from host broadcaster), and the cinematographic copyright in the final feed, giving rise to two distinct causes of actions. The Hon‟ble High Court concluded the final feed/transmission made by ESS, particularly the non-live portion, was substantially different from the feed received from the host broadcaster and the same resulted in independent copyright in the final feed „whether it be treated and termed as broadcasting reproduction rights or copyright‟. Therefore, the Hon‟ble High Court held that the mandate of Section 61, even if held to be applicable, would stand fulfilled with ESS being owner of the independent copyright in the final feed. The issue whether „right to broadcast‟ or „broadcast reproduction rights‟ was a species of copyright was not examined/decided as is clear from the following observations of the Hon‟ble Delhi High Court:

"25. Even if we accept the respondent's plea on the presumption that copyright includes broadcasting rights and section 61 applies, since we have found the eventual telecast of the appellant to be distinct and different from as received by the host broadcaster, the independent copyright owner of the modified product is the appellant itself and not C.A. and the dismissal of the suit on the ground of maintainability by application of Section 61 of the Act is thus not warranted. This issue does not find mention in the learned Single Judge's judgment and we have therefore, dealt with it on the existing pleadings. It is amply clear from the Act itself, as the proviso to Section 39A in Chapter VIII relating to broadcasting reproduction rights specifically lays down, that ITA. No. 3135 & 3130/Mum/2006 & CO No. 324/Mum/2006 ITA No. 1510 & 1444/Mum/2009 & CO No. 160/Mum/2009 Assessment Years: 2002-03 & 2003-04 where copyright subsists in respect of any work or performance that has been broadcast, no license of the reproduction of such broadcast will be permitted without the consent of the owner of the Rights. The Legislative intent can be clearly discerned from the proviso to Section 39A which specifically mentions various Sections of the Act which apply to broadcasting rights with necessary modifications and adaptations and the proviso specifically mentions that where in any case an element of copyright subsists in respect of any work that has been broadcast, the license to reproduce such broadcast will take effect only with the consent of the owner of the right. In our view, in the present case the copyright owner of the new product, after additions/alterations, which makes the appellant's telecast significantly different from the original feed of the cricket match as received from the host broadcaster, Channel 9, on behalf of Cricket Australia (C.A.), can only be the appellant and not the C.A. or channel 9. Thus, any unauthorized and prolonged telecast/replay of the cricket match or portion thereof falling beyond the concept of fair dealing without the permission of the appellant, amounts to infringement of the broadcasting reproduction right, the monopoly of which belongs to the appellant as above. However, we make it clear that this position of law does not apply to news coverage falling within the ambit of 'fair dealing' by the respondent T.V. Channel." (Emphasis Supplied) 5.42. Before moving further, we would like to observe that the Revenue had also placed reliance on the above judgment of the Hon‟ble Delhi High Court to contend that the „live‟ Feed was a modified one in which copyright subsisted as per the above judgment. At this junction it would be pertinent to note that the „Live‟ Feed that we are concerned with is the one delivered by GCC or delivered by producer in behalf of GCC to SET and not the final Feed broadcasted by SET (hereinafter referred to as „Broadcasted Feed‟).