Payments for Overseas ‘Live Sports Broadcasting Rights’ Not Taxable as Royalty: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the deletion of a disallowance of ₹32.53 crore made against Lex Sportel Vision Pvt. Ltd., holding that payments made to overseas entities for acquisition of “Live Rights” for sports broadcasting do not amount to royalty under Section 9(1)(vi) of the Income Tax Act and therefore do not attract tax deduction obligations under Section 195. The bench of Satbeer Singh Godara (Judicial Member) and Naveen Chandra (Accountant Member) has observed that broadcasting “live events” does not amount to a work in which copyright subsists and therefore payments for acquisition of live broadcasting rights cannot be treated as payments for copyright use. Consequently, such payments do not fall within the definition of royalty. The dispute arose from the assessment proceedings for Assessment Year 2018–19, where the Assessing Officer had invoked Section 40(a)(i) and disallowed expenditure amounting to ₹32,53,98,959 on the ground that the assessee had failed to deduct tax at source on payments made to non-residents for obtaining rights to broadcast live sporting events. According to the department, these payments represented “royalty” payments and therefore required withholding tax compliance. The department argued before the Tribunal that the payments made for live rights represented consideration for a bouquet of rights and involved the use of a “process,” thereby falling within the definition of royalty under Section 9(1)(vi). It further contended that non-deduction of tax on such payments warranted disallowance under Section 40(a)(i). Lex Sportel Vision, however, argued that it was engaged in broadcasting and sublicensing rights relating to sports events and had entered into agreements with overseas entities for two distinct categories of rights—Live Rights and Non-Live Rights. It maintained that agreements clearly bifurcated consideration paid for live broadcasting rights and non-live rights such as recorded content and clips used for highlights or advertisements. The company pointed out that it had already deducted tax on payments relating to Non-Live Rights but had not done so for Live Rights because such payments were not taxable as royalty. The assessee relied heavily on an earlier decision of the ITAT in its own case where identical issues had already been examined. The earlier ruling had considered various judicial precedents including Delhi Race Club, Fox Network Group Singapore, Cricket Australia, ESPN Star Sports, Neo Sports Broadcast, and Nimbus Communications. The Tribunal had also held that where agreements specifically separate Live Rights and Non-Live Rights, the department cannot artificially treat the payment as consideration for a bundle of rights. The Tribunal further observed that the payments in question were made to overseas rights holders and not to satellite operators or for use of satellites. Therefore, such payments could not be characterized as payments for use of a “process” under Section 9(1)(vi). While affirming the order of the Commissioner (Appeals), the Tribunal also took note of the fact that the jurisdictional High Court had dismissed the Revenue’s appeal involving one of the assessee’s payees, Sri Lanka Cricket, for the same assessment year, thereby reinforcing the conclusion that payments for live sports broadcasting rights did not constitute royalty income. The Tribunal held that there was no error in the Commissioner (Appeals)’ finding that the payments under the “Live Rights” head were not made for use of any process and were therefore not chargeable as royalty. Since the payments were not taxable in India in the hands of overseas rights holders, the withholding obligations under Section 195 did not arise and the disallowance under Section 40(a)(i) could not survive. The department’s appeal was accordingly dismissed. Case Details Case Title: ACIT Versus Lex Sportel Vision P. Ltd Citation: JURISHOUR-1311-CES-2026(Ker) Case No.: ITA No.7775/Del/2025 Date: 27/04/2026 Counsel For Appellant: Ajay Vohra, Sr. Advocate Counsel For Respondent: Amisha S Gupta, CIT-DR Click Here To Read Order Read More: No Service Tax on Parent Company’s Un-Invoiced Cost Allocations Without Actual Service or Consideration: CESTAT

Payments for Overseas ‘Live Sports Broadcasting Rights’ Not Taxable as Royalty: ITAT

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