The Income Tax Appellate Tribunal (ITAT), Delhi, has held that Rs. 244.78 crore received by the England and Wales Cricket Board Limited for granting live broadcasting rights cannot be taxed as royalty under the India–United Kingdom Double Taxation Avoidance Agreement (DTAA).
The bench of Vikas Awasthy (Judicial Member) and Krinwant Sahay (Accountant Member) allowed the board’s challenge to the taxation of ₹6.26 crore received from Indian Premier League (IPL) franchises for permitting English players to participate in the tournament.
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The bench distinguished live transmission of cricket matches from recorded broadcasts and highlights. It also found that the player release fees were paid to the cricket board over and above the players’ league fees, rather than being deducted from their remuneration.
The England and Wales Cricket Board, a company incorporated in the United Kingdom, is engaged in the commercial promotion and marketing of cricket, including the organisation, administration and financing of competitive and international cricket in England and Wales.
During the relevant assessment year, the board received ₹14,60,64,457 for non-live broadcasting rights, ₹2,44,78,38,154 for live broadcasting rights and a separately listed amount of ₹4,96,14,735 towards rights fees.
The board offered the non-live broadcasting receipts and the separately listed rights fees to tax in its return. However, it disputed the taxation of the receipts from live broadcasting rights.
The Assessing Officer took the view that there was no difference between live and non-live broadcasting for this purpose and treated the live broadcasting receipts as royalty taxable in India. The officer also brought ₹6,26,00,764 in player release fees to tax under Article 18(2) of the India–UK DTAA.
The board challenged these additions in the final assessment order dated January 16, 2026, passed under Section 143(3), read with Section 144C(13), of the Income-tax Act.
The board relied on its media rights agreement with Sony Pictures Network India Private Limited, executed on March 2, 2018, and a subsequent renewal agreement dated July 29, 2022.
Under the arrangement, Sony obtained the right and licence to exercise live broadcasting rights for the covered matches during the agreed term and within the licensed territory. The board also referred to the intellectual property clause, under which it retained ownership of the relevant intellectual property and archive material.
Senior Advocate Ajay Vohra, appearing for the board, submitted that the consideration for live broadcasting was outside the scope of royalty under the treaty. He relied on the Delhi High Court’s decisions in CIT v. Delhi Race Club (1940) Ltd., CIT v. Fox Network Group Singapore PTE Ltd. and CIT v. Sri Lanka Cricket.
The Revenue defended the assessment, maintaining that the live broadcasting receipts should be taxed as royalty.
The tribunal examined the Delhi High Court’s ruling in Delhi Race Club, which distinguished copyright from broadcasting rights and held that payment for the live telecast of horse races was not royalty.
The bench noted that the High Court had treated live coverage of an event differently from an existing work capable of reproduction, adaptation or other exploitation under copyright law. It also referred to the subsequent decisions concerning Fox Network and Sri Lanka Cricket, which followed that distinction in the context of sports broadcasting.
Applying these authorities, the tribunal held that live broadcasting of a match is a one-time event and does not confer an enduring benefit on the broadcaster. Repeat telecasts and highlights, by contrast, fall within the category of non-live broadcasts.
The board had already offered its non-live broadcasting receipts to tax. The tribunal therefore rejected the Assessing Officer’s treatment of the live broadcasting receipts as royalty.
The bench concluded that live broadcasting was neither a scientific work nor a right in which copyright subsisted for the purpose of the issue before it. Accordingly, the consideration for live broadcasting rights could not be classified as royalty under Article 13(3) of the India–UK DTAA.
The Revenue alternatively challenged the allocation of the rights consideration between live and non-live broadcasting in the ratio of 95:5. It sought a revised allocation of 75:25, which would increase the share attributable to non-live rights.
The departmental representative relied on the tribunal decisions in ADIT (IT) v. Global Cricket Corporation P. Ltd. and Trans World International LLC v. DCIT, where the allocation between live and non-live rights had been modified.
The board opposed the proposed reallocation, arguing that the contractual division could not be changed arbitrarily.
The tribunal accepted the board’s position. It found that the 95:5 allocation had been mutually agreed between the board and Sony and noted that the same ratio had been accepted in the cases involving Fox Network and Sri Lanka Cricket.
The bench held that there was no material establishing that the agreed allocation was unjustified. It further explained that the allocations in the cases cited by the Revenue had been modified because of their particular facts and could not be applied universally.
In Global Cricket Corporation, for example, the agreement did not provide a separate breakup of consideration for live and non-live feeds. The tribunal consequently rejected the Revenue’s alternative request.
The second substantive issue concerned ₹6,26,00,764 received by the board from IPL franchises for granting permission to English players to participate in the tournament.
The Revenue argued that these receipts were closely connected with the players’ sporting activities in India. It emphasised that the release fee was calculated at 10% of the league fee actually payable to each player and contended that the board derived an economic benefit from the players’ participation.
According to the department, Article 18(2) could apply even where the recipient received the amount separately, provided the income arose from the athlete’s personal activities. It also argued that the board’s control over the release of players and the link between participation and payment supported taxation in India.
The board maintained that the release fee was separate from the player’s remuneration. It submitted that the players received their full league fees and that the franchises paid the release fee to the board in addition to those amounts.
The tribunal examined the release letter and found that the board was entitled to a fee equivalent to 10% of the league fee actually paid by the franchise to the player.
Crucially, it found that this amount was payable over and above the player’s league fee and did not form part of the remuneration paid to the player.
Article 18(1) permits taxation of income derived by an athlete from personal activities in the country where those activities are exercised. Article 18(2) addresses income arising from such activities that accrues to another person rather than to the athlete.
On the arrangement before it, the tribunal held that Article 18 did not apply to the board’s release fee receipts. Its conclusion rested on the distinction between the player’s income from sporting activities and the additional payment made to the board for releasing the player.
The bench also relied on the Bombay High Court’s decision in DCIT v. Wizcraft International Entertainment P. Ltd. It noted that, in that case, payment to an overseas agent for bringing artistes to India was held not to arise from the artistes’ personal activities for the purpose of Article 18(2).
The tribunal accordingly allowed the board’s grounds challenging the taxation of the IPL player release fees.
The tribunal granted relief on both substantive additions: the ₹2,44,78,38,154 received for live broadcasting rights and the ₹6,26,00,764 received as IPL player release fees. It also upheld the contractual 95:5 allocation between live and non-live broadcasting rights.
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