THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -2 vs. LEX SPORTEL VISION PVT. LTD.

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ITA/334/2026HC DelhiDLHC01132231202427 April 2026Author: HON'BLE MR. JUSTICE DINESH MEHTA,HON'BLE MR. JUSTICE VINOD KUMAR3 pages
AI SummaryDismissed

What did the High Court hold?

The Delhi High Court, in its order dated 27.04.2026, dismissed the appeal filed by the revenue. The Court referred to its own judgment dated 15.01.2026 in ITA 4/2026 (The Commissioner of Income Tax - International Taxation -3 v. Sri Lanka Cricket), which held that 'live feed' does not attract royalty. The Court noted that in the Sri Lanka Cricket case, the revenue had withdrawn its Special Leave Petition (SLP) on an identical issue. The Court found that the rights granted in the present case were confined to 'live telecast' and did not extend beyond the 'live feed'. The reasoning was that royalty presupposes enduring benefits, and if the licensee's rights are limited to a specific event and do not involve recording or re-telecasting for future benefits, the payment cannot be considered royalty. The Court found no substance or merit in the present appeal in light of the aforementioned precedent. The operative direction was to dismiss the appeal.

What were the facts?

The appellant, the Commissioner of Income Tax - International Taxation -2, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 26.12.2023 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘D’. The appeal was filed with a delay of 656 days, for which condonation was sought and granted. The appeal challenges the ITAT's decision regarding the taxability of foreign remittances as royalty under Section 9(1)(vi) of the Act. The assessee is Lex Sportel Vision Pvt. Ltd.

What were the issues?

1. Whether, in the facts and circumstances and in law, the ITAT erred in treating foreign remittances not chargeable to tax as royalty under section 9(1)(vi) of the Income Tax Act, 1961? 2. Whether, in the facts and circumstances and in law, the ITAT erred in treating the payment made for 'live rights' as not being made for a bouquet of rights? 3. Whether, in the facts and circumstances and in law, the ITAT erred in holding that the payments in dispute were not made for the use of any process as defined under section 9(1)(vi) of the Act and thus cannot be charged to tax as 'royalty' in the hands of the overseas rights holder? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The revenue, through Mr. Ruchir Bhatia, SSC, argued that the ITAT erred in its findings on the above questions of law. The revenue contended that the payments made for live rights should be treated as royalty under Section 9(1)(vi).

Which sections of the Income-tax Act were involved?

Section 260A,Section 9(1)(vi)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~277 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 334/2026 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -2 .....Appellant Through: Mr. Ruchir Bhatia, SSC versus LEX SPORTEL VISION PVT. LTD. .....Respondent Through: Mr. S.Vasudevan, Adv. CORAM: HON'BLE MR. JUSTICE DINESH MEHTA HON'BLE MR. JUSTICE VINOD KUMAR

O R D E R %

27.04.

2026 CM APPL. 27667/2026 (delay in re-filing)

1.

This is an application filed by the appellant seeking condonation of delay of 656 days in re-filing the appeal.

2.

For the reasons stated in the application, the same is allowed and the delay of 656 days in re-filing the appeal stands condoned. ITA 334/2026

3.

The present appeal has been preferred under Section 260A of the Income Tax Act, 1961 by the appellant-Department challenging the order dated 26.12.2023 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘D’, New Delhi.

4.

The following questions of law have been proposed by the appellant:

1.

Whether in the facts and circumstances of the case and in law, the ITAT has erred in treating foreign This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/04/2026 at 13:04:52

remittance not chargeable to tax as royalty under section 9(l)(vi) of the Income Tax Act,1961?

2.

Whether in the facts and circumstances of the case, and in law, the ITAT has erred in treating the payment made for 'live rights to have not been made for a bouquet of rights?

3.

Whether in the facts and circumstances of the case, and in law, the ITAT has erred in holding that the payments in dispute are not made for use of any process as defined under section 9(l)(vi) of the Act and can't be charged to tax as 'royalty' in the hands of the overseas rights holder?

5.

On perusal of the questions, we are reminded of our judgment dated 15.01.2026 rendered in ITA 4/2026 titled The Commissioner of Income Tax - International Taxation -3 v. Sri Lanka Cricket reported in 2026 SCC OnLine Del 242, wherein this Court has held that ‘live feed’ does not attract royalty. The operative part of the aforesaid judgment reads thus:

“4. We have perused the judgment of CIT v. Fox Network Group Singapore Pte. Ltd. and also considered the fact that even the SLP involving identical question filed by the department had been withdrawn.

5.

That apart, Mr. Ruchir Bhatia, learned counsel for the appellant has not been able to point out any fact which shows that the rights of exhibition given by the respondent Sri Lanka Cricket exceeded beyond the ‘live feed’.

6.

Since the right to show cricket matches was confined to live telecast and the payment made was only for the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/04/2026 at 13:04:52

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 has 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.”

6.

In light of the above judgment, we do not find any substance and merit in the present appeal, accordingly, it is hereby dismissed. DINESH MEHTA, J VINOD KUMAR, J APRIL 27, 2026 kk This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 29/04/2026 at 13:04:52

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