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Times Content Wins Partial Relief as Delhi ITAT Applies 93:7 Split for Live Broadcast Royalty
The has delivered a significant ruling on the tax treatment of payments for sports broadcasting rights, holding that fees for live cricket broadcasts do not constitute under Indian tax law. However, the portion attributable to repeat or remains taxable as .
A bench comprising Judicial Member Sudhir Kumar and Accountant Member Manish Agarwal was hearing the Revenue's appeals for assessment years to concerning (now ), which had obtained media rights to broadcast cricket matches in overseas territories through digital platforms.
Live vs. Non-Live: The Core Dispute
Times Content entered into a with , a British Virgin Island corporation, which had been assigned rights by . The agreement covered both live broadcasts and subsequent non-live or post-match broadcasts. For AY , the company paid a composite fee of approximately ₹20.26 crore.
The treated the entire payment as and disallowed about ₹15.19 crore under for . The later held that payments for live events do not carry and thus cannot be taxed as , applying a 95:5 split between live and non-live rights.
Revenue's Case and Tribunal's Reasoning
The Revenue argued that the agreement granted the company rights to distribute, transmit, exhibit, duplicate, promote, telecast and otherwise exploit each live program, suggesting the entire payment should be treated as . However, the Tribunal observed that the Revenue failed to controvert the fundamental finding that live broadcasts do not carry .
"The
of a match or any other event cannot be considered as
in such match,"
the Tribunal noted, citing the
's ruling in
CIT v. Sri Lanka Cricket
(
). The apex court had confirmed that consideration received for enabling
does not constitute
under
or
, where rights granted do not extend beyond live feed.
93:7 Ratio Adopted Based on Viewership Data
While the CIT(A) had applied a 95:5 ratio, the Tribunal modified this based on viewership data, which showed live broadcasts accounted for 93% of viewership and 7%. The company's authorized representative accepted that the revenue could be bifurcated in the same ratio.
"Accordingly, we hold that the ld. CIT(A) has rightly held the
as not the
u/s 9(1)(vi) of the Act. However, the
i.e. non
is not out of the scope of
,"
the bench stated.
The Tribunal directed that 7% of the total payment be allocated to non-live broadcast rights and treated as . Since no TDS was deducted on this portion, the under was confirmed to that extent. The was directed to recompute the accordingly.
Final Order and Implications
Applying the same reasoning to assessment years and , the Tribunal partly allowed all three Revenue appeals. The decision reinforces the principle that live broadcasting of sports events does not involve and thus falls outside the net, providing clarity for companies engaged in acquiring and sub-licensing sports media rights.
The ruling also underscores the importance of bifurcating composite payments based on objective viewership data, rather than treating entire payments as or accepting arbitrary allocations.
