Introduction:

WOVEN around the sports tournaments conducted in our country are few tax litigations that has emanated from them involving tax implications of various types of payments made by Indian entities to foreign sports associations and foreign players. Some of the nomenclature used to describe / characterize the payments in the agreements are very unique and cover specific areas such as media rights, compensatory payments to foreign sports associations for allowing their players to participate in the tournaments In India and various other fees received by them. Of late, one has seen very detailed and reasoned judgments pronounced by Indian courts explaining the tax liability on the variety of payments in the hands of the non-resident entities / persons covering very many sports including cricket.

In this article, the author discusses a Tribunal decision and a High Court decision where the tax Department tried to tax the payments made by the Indian entities to nonresident cricket associations as income accruing or arising in India, but the judiciary did not agree with the Department's views.

England And Wales Cricket Board Limited v ACIT ( 2026-TII-231-ITAT-DEL-INTL) order dated 21-08-2026

Facts in brief:

1 For the AY 2023-24, the assessee filed the return of income disclosing the receipt of the following sums from India, indicating alongside their taxability as detailed below:

In the assessment order, the AO taxed both the fee for grant of live broadcasting rights as well as the sum received for the release of the player as income of the assessee. Thus, the dispute centred around these two items only.

Notes (glossary):

1. The assessee has entered into a media rights agreement with Sony Pictures Network India P. Ltd. (Sony) on 02.03.2018. As per the said agreement, the assessee is entitled to rights fee. In lieu of payment of rights fee, the assessee granted right and license to exercise the Live Rights in any Broadcast format during the term and within the Licensed Territory in respect of Licensee Matches. In terms of the Media Rights Agreement which deals with Intellectual Property Rights (IPR), the assessee would own and retain ownership of all IPR in, and archive data provided by on behalf of or under license issued by t he assessee.

2. Release fee is different from the fee received by the player. It is not part of player fee. Release fee is over and above the League Fee received by the player

Issue No 1: Fee for grant of Broadcasting rights :

AO's two-fold View : (I) The income is royalty and hence taxable (ii) without prejudice, the allocation of income between live -broadcasting and non -live Broadcasting in the ratio of 95: 5 is incorrect proportion adopted by the assessee.

Assessee's contention :

There is a distinction between a copyright and broadcast right, broadcast or live coverage does not have a 'copyright'. Hence, payment made for live telecast is not in the nature of' royalty' as per Explanation 2 to section 9(1)(vi) of the Act. (Refer CIT vs. Delhi Race Club and other - 2014-TIOL-2081-HC-DEL-IT - decisions.) Similarly, the allocation done is correct and is in terms of the agreement entered with Sony.

Hon'ble ITAT's analysis ; To begin with, the approach adopted is to rule out the application of the definition of 'royalty 'as defined under sec 9 (1)(vi) of the income Tax Act 1961 as well as under the definition of 'Royalty 'used in DTAA between India and UK.

Sec 9(1) (vi) Definition of 'royalty' - Explanation 2 (Relevant portions only and at the relevant time)

(v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, [but not including consideration for the sale, distribution or exhibition of cinematographic films; **] or

(vi) the rendering of any services in connection with the activities referred to in sub clauses (I) to (iv)(iva)and (v).

**[

In this case, the Hon'ble Tribunal adopted fully the views of the jurisdictional High Court rendered in Delhi Race Club's case and some of the relevant portions are summarised below:

Difference between Copy right & broadcasting right

(I) A live TV coverage of any event is a communication of visual images to the public and would fall within the definition of the word 'broadcast' in

(ii) Section 13 of the

(iii) Similar is the provision of Section 14 of the Copyright Act which stipulates the exclusive right to do certain acts.

(iv) 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.

(v) A live telecast/broadcast would have no "copyright". This issue is well settled in view of the position of law as laid down by t he Court in ESPN Star Sports case, wherein the 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.

(VI Delhi HC Court in the case of AkuateInternet Services (P) Ltd. & Anr. vs Star India (P) Ltd. & Anr. FA(OS) 153/2013 has applied the test of 'minimum requirement of creativity' for claiming a right under the Copyright Act, which is absent in a 'live telecast of an event'.

VII) In National Basketball Association and NBA Properties NIC vs. Motorola INC 105 F3d841 (1997) held that a sports event is a performance and not a work. It is not copyrightable. - (the United States Court of Appeal Second Circuit Ruling).

(viii), in the case of CIT vs. Sri Lanka Cricket - 2026-TII-18-HC-DEL-INTL, the Hon'ble Delhi High court held reiterated the same view.

(ix) the court also rejected the contention that the live telecast of an event is the outcome of 'scientific work' and payment thereof would be covered under the definition of 'royalty'.

(X) Even by stretching this meaning, itis 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 it to state that 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 work does not include a live telecast.

Definition Of royalty Under India-UK DTAA

XI T he term 'royalty' as defined in India UK DTAA Article 13 is as under:

"13. For the purposes of this Article, the term "royalties" means:

(a) payments of any kind received as a consideration for the use of, or the right to use, any copyright of a literary, artistic or scientific work, including cinematography films or work on films, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience; and

(b) payments of any kind received as consideration for the use of, or the right to use, any industrial, commercial or scientific equipment, other than income derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic."

Thus, it was held:

"Broadcasting of a Live match is a onetime event. Live transmission does not bring enduring benefit to the broadcaster. The repeat broadcast of match or any highlights of the match falls under the category of non-live broadcast, the revenue from non-live broadcast has already been offered to tax by the assessee. As explained by the Court in the cases referred above, live Broadcasting is neither 'scientific work' nor any 'copyright' subsists in such rights. Therefore, any fee received towards live broadcasting rights cannot be classified."

On allocation of revenue between non live broadcasting and live Broad casting :

The court observed:

(xi) "We find that the allocation of rights fee between the live rights and non-live rights in the ratio 95:5 has been mutually decided between assessee and Sony. The said ratio has been accepted by the revenue in the case CIT vs. Fox Network Singapore Pte. Ltd.(2024-TII-09-HC-DEL-INTL), as well as in the case of CIT vs. Sri Lanka Cricket (2026-TII-18-HC-DEL-INTL). We see no reason to disturb the ratio of allocation of rights fee mutually agreed between two parties by virtue of agreement without there being any material to substantiate that the ratio mutually decided is unjustified. The DR has referred to the decision in the case of Trans World International LLC vs. DCIT (supra) and ADIT vs. Global Cricket Corporation P. Ltd. (supra) wherein the allocation was modified from 95:5 to 90:10 and 75 : 25 respectively. We find that the ratio of allocation in the aforesaid cases was changed in peculiar facts of the said cases and, hence, the said principle cannot be applied universally. In the case of Global Cricket Corporation Ltd, the agreement did not provide any breakup of consideration for live and non-live feed".

ISSUE No 2 - Release fee :

This was paid by the IPL Franchisees to the assessee and the contract provided that the assessee is entitled to receive release fee which shall be equivalent to 10% of the League Fee that is actually paid by the franchise to the player. The said amount received by the assessee is over and above, the League Fee paid to the player and is not part of the fee paid to the player by franchise.

According to the AO Article 18 of the India-UK DTAA will be applicable on this payment:

The provisions of Article 18 of India-UK DTAA are extracted below: -

ARTICLE 18

ARTISTES AND ATHLETES

1. Notwithstanding the provisions of Articles 15 (Independent personal services) and 16 (Dependent personal services) of this Convention, income derived by entertainers (such as stage, motion picture, radio or television artistes and musicians) or athletes, from their personal activities as such may be taxed in the Contracting State in which these activities are exercised.

2. Where income arising from personal activities are such exercised in a Contracting State by an entertainer or athlete accrues not to that entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7 (Business profits), 15 (Independent personal services) and 16 (Dependent personal services) of this convention be taxed in that Contracting State.

3. The provisions of paragraphs 1 and 2 of this Article shall not apply if the visit to a Contracting State of the entertainer or the athlete is directly or indirectly supported, wholly or substantially, from the public funds of the other Contracting State, including a political sub-division or local authority of that other State.

The Hon'ble Tribunal held:

"A bare perusal of Article 18 would show that it refers to the amount received or accrued to the athlete/player only and not to any other person or body. As per Article 18(1) income derived by athlete/player from his personal activities may be taxed in contracting state in which these activities are exercised. Thus, it is the amount received by the player which is taxable in India and the provision of Article 18 are not attracted in the case of assessee. In the case

In a short judgment, the Delhi HC again held that broadcasting rights are not royalty. The operative part of the judgment Is extracted below:

"Since the right to show cricket matches was confined to live telecast and the payment made was only for the match(es) held in the series (within 12 months) and not subsequent matches, such amount paid to the respondent cannot be considered as a royalty. 'Because royalty presupposes 'enduring benefits'. In case the licensee has a right to record or preserve the feed and he continues to derive benefit of that recording and is right to re-telecast or show those matches in future, beyond the period or event(s) other than such event, then only, the payment made to the licensee in appropriate case, can be treated as 'royalty'. However, it is not the case in the present agreement or transaction, hence the amount in question cannot be considered as royalty.

Conclusion: In the Delhi HC - Sri Lanka case, the HC noted that Special Leave Petition in another similar case before the Hon'ble SC was withdrawn by the tax department. [