ITAT Delhi Holds Sports ‘Live Rights’ Broadcasting Fees Not Taxable As Royalty

The Delhi Bench “E” of the Income Tax Appellate Tribunal (ITAT) on 27 April 2026 held that payments made by a broadcaster to overseas entities for acquiring live telecast rights of sports events do not qualify as “Royalty” under Section 9(1)(vi) of the Income-tax Act, 1961. A Bench comprising Judicial Member Shri Satbeer Singh Godara and Accountant Member Shri Naveen Chandra dismissed the Revenue’s appeal filed against Lex Sportel Vision Pvt. Ltd. and upheld the deletion of disallowance made under Section 40(a)(i) for non-deduction of tax at source. The Court hilighted that

“Acquiring ‘Live Rights’ does not involve the use of any process as defined under Section 9(1)(vi) of the Act.”

The assessee, Lex Sportel Vision Pvt. Ltd., is engaged in sports broadcasting and television media operations. During Assessment Year 2018-19, the company made remittances to various non-resident overseas rights holders for obtaining live broadcasting rights relating to international sporting events. The Assessing Officer (AO), while framing assessment under Section 143(3), held that the payments represented consideration for use of a “process” and therefore constituted royalty under Section 9(1)(vi). Since no tax was deducted under Section 195, the AO disallowed the expenditure under Section 40(a)(i).

The Revenue argued that live sports broadcasting arrangements involved a bundled bouquet of commercial and transmission rights, including technical processes used in transmitting live feeds. According to the department, these rights amounted to the use of industrial, commercial or scientific processes falling within the expanded scope of royalty provisions.

Before the ITAT, the assessee contended that it merely acquired rights to broadcast live sporting events and did not obtain any right to use a process, patent, equipment, or intellectual property. It further submitted that similar issues had already been decided in its favour in connected litigation involving the same assessment year.

The Tribunal noted that the jurisdictional Delhi High Court had recently dismissed the Revenue’s appeal in ITA No. 4/2026 concerning one of the non-resident payees, namely Sri Lanka Cricket, for the same assessment year. The High Court had held that payments for live sports broadcasting rights could not be treated as royalty income.

“There is no transfer of intellectual properties or standalone process usage involved when a broadcaster merely displays a live feed.”

Relying on the High Court ruling and earlier decisions on identical agreements, the Tribunal held that acquisition of live telecast rights does not amount to the use of a “process” under Section 9(1)(vi). Consequently, the payments were not chargeable to tax in India as royalty, and no obligation to deduct TDS under Section 195 arose.

Thus, the ITAT upheld the order of the CIT(A) deleting the disallowance made under Section 40(a)(i) and dismissed the Revenue’s appeal.

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