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6. On the other hand, Mr.Satyen Sethi would submit that the right to broadcast/telecast is a special right distinct and different from „copyright‟ and the payment for live telecast was not a payment for transfer of any „copyright‟. According to him, the broadcast/telecast, except labour, skill and capital, does not have any underlying creativity. A sports event is a performance and not a work. It is not copyrightable. According to him, a sporting event is meant for public viewing and payment made for live telecast cannot be said to be a payment for transfer of „copyright‟. He would also state that Section 40(a) (ia) is required to be strictly construed and no disallowance under the said Section is called for as payment made to other clubs for live telecast was not a royalty. He would also point out that the Direct Tax Code Bill, 2010 wherein a proposal has been made to include payment for live coverage in the definition of „royalty‟, which according to him would show that the present definition of „royalty‟ does not include it. He would rely upon the following judgments:-

7. Having considered the rival submissions of the learned counsel for the parties, the issue which arises for consideration is whether payment for live telecast of horse race is a payment for transfer of any „copyright‟ and as such „royalty‟ or in the alternative whether the live telecast of the horse race would be termed as a „scientific work‟ and payment thereof would be „royalty‟. It is not in dispute that the payment has been made by the respondent assessee to other clubs/centres on account of live telecast of races. The payment of „royalty‟ is covered under Section 194J which was inserted with effect from 13.07.2006. The said Section contemplates that in the eventuality a payment is made towards „royalty‟, an amount equal to 10% of such sum needs to be deducted as income tax on income comprised therein. Explanation (ba) to the Section stipulates „royalty‟ shall have the same meaning as in explanation 2 to clause (vi) of sub section (1) of Section 9. Clauses (v) and (vi) to explanation 2 to Section 9 stipulate as under:-

Similar is the provision of Section 14 of the Copyright Act which stipulates the exclusive right to do certain acts. A reading of Section 14 would reveal that „copyright‟ means exclusive right to reproduce, issue copies, translate, adapt etc. of a work which is already existing.

17. Adverting to the facts of this case we note that the assessee was engaged in the business of conducting horse races and derived income from betting, commission, entry fee etc. and had made payment to other centres whose races were displayed in Delhi. It is not known whether such races had any commentary or analysis of the event simultaneously. It is not the case of the Revenue that the live broadcast recorded for rebroadcast purposes. Having held that the broadcast/live telecast is not a work within the definition of 2(y) of the Copyright Act and also that broadcast/ live telecast doesn‟t fall within the ambit of Section 13 of the Copyright Act, it would suffice to state that a live telecast/broadcast would have no „copyright‟. This issue is well settled in view of the position of law as laid down by this Court in ESPN Star Sports case (supra), wherein this Court after analysing the provisions of the Copyright Act was of the view that legislature itself by terming broadcast rights as those akin to „copyright‟ clearly brought out the distinction between two rights in Copyright Act, 1957. According to the Court, it was a clear manifestation of legislative intent to treat copyright and broadcasting reproduction rights as distinct and separate rights. It also held that the amendment of the Act in 1994 not only extended such rights to all broadcasting organizations but also clearly crystallized the nature of such rights. The Court did not accept the contention of the respondent that the two rights are not mutually exclusive by holding that the two rights though akin are nevertheless separate and distinct.

19. Insofar as the submission of Mr.Sawhney that the live telecast of an event is the outcome of „scientific work‟ and payment thereof would be covered under the definition of „royalty‟ is concerned, the said submission is also liable to be rejected first it runs contrary to his earlier submission and also for the simple reason the clause (v) to explanation 2 to clause (vi) or sub section 1 of Section 9 would relate to work which includes films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting. It is to be seen whether consideration for transfer of all or any rights of „scientific work‟ including films or video tapes would include a live telecast. The clause is an inclusive provision for films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting. We note such a case was not set up by the appellant revenue before the authorities below. It was held by the Assessing Officer that when any person pays any amount for getting rights/licence to telecast any event (which is a copyright of particular person i.e. no one can copy it for direct telecast or deferred telecast) then amount so paid is to be treated as „royalty‟ and very much covered under Section 9(1)(vi). In other words, the ground of the Revenue was limited to the aspect of copyright. That apart we find, no such ground has been taken by the appellant/Revenue even in this appeal. The „scientific work‟ has not been defined in the Act nor in the Copyright Act. It is not necessary that because the live telecast of an event is being done at a distant place, the same would be a „scientific work‟. Even otherwise, even by stretching this meaning, it is difficult to include a live broadcast within „scientific work‟. Clause (v) expressly uses the words „including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting‟. These words become relevant to understand the scope of this part of the provision. Suffice to state, when reference is made to films or video tapes, then the intent of the provision is related to work of visual recording on any medium or video tape and can be seen on the television. Surely such a work does not include a live telecast. This submission is also need to be rejected. Insofar as the submission of Mr.Sawhney that analysis, commentary and use of technology to live feed make the broadcast a subject matter of distant copyright is concerned, again neither such a case was set up before the authorities, nor in this appeal. In fact it is not known nor pleaded that the live telecast, in this case, was accompanied by commentary, analysis etc. It is an issue of fact, which cannot be gone into or raised at this stage.