DCIT(CC)-6(2), MUMBAI, MUMBAI V. INDIAWIN SPORTS PRIVATE LIMITED, MUMBAI

ITA 4576/MUM/2023

AI Insights

The case involves Indiawin Sports Pvt. Ltd., which operates the Mumbai Indians IPL team, and the Deputy Commissioner of Income Tax (DCIT). The primary legal issue was the classification of franchise fees paid for participating in the Indian Premier League (IPL) as either capital or revenue expenditure. The Assessing Officer (AO) initially treated these fees as capital expenditure, but the Ld. CIT(A) reversed this decision, classifying them as revenue expenditure. The Revenue appealed against this decision, leading to the current proceedings. Additionally, there was a dispute over the non-deduction of tax at source (TDS) on payments made to Mr. John Wright, a foreign consultant, which the AO treated as 'fees for technical services' under the India-New Zealand DTAA.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848084 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: Mumbai
• Assessment Year: 2020-2021
• Appeal Filed On: 14-12-2023
• Other Referred Cases: ACIT v. Meru Impex [2011] 49 SOT 62 (Mum-trib.), Susanto Purnamo [2016] 73 taxmann.com 108 (Ahmedabad Trib.), Ram Prashad v. CIT [1972] 86 ITR 122 (SC), Lakshminarayan Ram Gopal & Son Ltd. v. Govt. of Hyderabad [1954] 25 ITR 449 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATYAPAL KUMAR
• Assessee Lawyers: NIMESH VORA AW
• Keywords: Capital asset; Revenue expenditure; Depreciation; Capital expenditure; TDS; Double taxation relief; Non-deduction of tax; Prejudicial to interest
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “I” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA No. 4576/MUM/2023 Assessment Year: 2020-21 DCIT (CC) – 6(2), 1903, 19th floor, Air India Building, Nariman Point, Mumbai-400021. Vs. Indiawin Sports Pvt. Ltd., 3rd floor, Court House, Lokmanyatilak Marg, Dhobi Talao, Mumbai-400 002. PAN NO. AADCR 8195 F Appellant Respondent Assessee by : Mr. Nimesh Vora/ aw Ms. Moksha Mehta Revenue by : Mr. Satya Pal Kumar, CIT-DR Date of Hearing : 30/01/2026 Date of pronouncement : 27/03/2026 ORDER PER OM PRAKASH KANT, AM This appeal by the Revenue is directed against order dated 09.10.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – 54, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2020-21. The relevant grounds raised by the Revenue are reproduced as under: Printed from counselvise.com 1) \"Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in Franchise Fees for securing right to participate in Indian Premier League as revenue expenditure instead of capital expenditure, whereas provisions of section 32(1)(ii) and that of Section 55(2)(a) of the IT Act, 1961 evidently provide that Franchise and right to carry on any business are capital in nature?\" 2) \"Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in not appreciating the fact that the benefits arising out of entering into central rights income, are of enduring nature which will provide long term benefits to the assessee and hence, ought to be treated as a capital expenditure?\" 3) \"Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance made by the AO of the Franchisee payments done by the assessee company as a revenue expenditure and treating the same as capital expenditure & allowi the due depreciation on the same for the year under consideration?\" 4) \"Whether, on the facts and circumstances of the case, the Ld. (IT(A) erred in deleting the disallowance made under section 40(a)(i) of the Act in respect of payments made to Mr. Joh 2. Briefly stated, facts of the case are that the assessee company is engaged in the business of owning, managing and operating the Mumbai Team of the Indian Premier League “Mumbai Indians”. The assessee filed return of income for the assessment year under consideration on 10.02.2021 declaring total income at Rs.72,99,71,420/ scrutiny and statutory notices under the Inc short ‘the Act’) were issued and served upon the assessee. The assessment order u/s 143(3) of the Act was passed on 21.03.2022 assessing the total income at Rs.119,95,38,678/ franchise fees as capital expenditure and foreign consultant for want of TDS. On appeal, the Ld. CIT(A) 1) \"Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in allowing the expenditure incurred on account of Franchise Fees for securing right to participate in Indian Premier League as revenue expenditure instead of capital expenditure, whereas provisions of section 32(1)(ii) and that of Section 55(2)(a) of Act, 1961 evidently provide that Franchise and right to carry on any business are capital in nature?\" 2) \"Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in not appreciating the fact that the benefits arising out of entering into the Franchisee agreement with BCCI i.e., the share in central rights income, are of enduring nature which will provide long term benefits to the assessee and hence, ought to be treated as a capital expenditure?\" 3) \"Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance made by the AO of the Franchisee payments done by the assessee company as a revenue expenditure and treating the same as capital expenditure & allowi the due depreciation on the same for the year under consideration?\" 4) \"Whether, on the facts and circumstances of the case, the Ld. (IT(A) erred in deleting the disallowance made under section 40(a)(i) of the Act in respect of payments made to Mr. John Wright?\" Briefly stated, facts of the case are that the assessee company is engaged in the business of owning, managing and operating the Mumbai Team of the Indian Premier League (IPL) popular name as “Mumbai Indians”. The assessee filed return of income for the assessment year under consideration on 10.02.2021 declaring total income at Rs.72,99,71,420/-. The return of income was selected for scrutiny and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and served upon the assessee. The assessment order u/s 143(3) of the Act was passed on 21.03.2022 assessing the total income at Rs.119,95,38,678/- franchise fees as capital expenditure and disallowing payments to a foreign consultant for want of TDS. On appeal, the Ld. CIT(A) Indiawin Sports Pvt. Ltd 2 ITA No. 4576/MUM/2023 1) \"Whether, on the facts and circumstances of the case, the Ld. allowing the expenditure incurred on account of Franchise Fees for securing right to participate in Indian Premier League as revenue expenditure instead of capital expenditure, whereas provisions of section 32(1)(ii) and that of Section 55(2)(a) of Act, 1961 evidently provide that Franchise and right to carry 2) \"Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in not appreciating the fact that the benefits arising out the Franchisee agreement with BCCI i.e., the share in central rights income, are of enduring nature which will provide long term benefits to the assessee and hence, ought to be treated as a 3) \"Whether, on the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the disallowance made by the AO of the Franchisee payments done by the assessee company as a revenue expenditure and treating the same as capital expenditure & allowing the due depreciation on the same for the year under consideration?\" 4) \"Whether, on the facts and circumstances of the case, the Ld. (IT(A) erred in deleting the disallowance made under section 40(a)(i) of the Briefly stated, facts of the case are that the assessee company is engaged in the business of owning, managing and operating the popular name as “Mumbai Indians”. The assessee filed return of income for the assessment year under consideration on 10.02.2021 declaring total . The return of income was selected for tax Act, 1961 (in short ‘the Act’) were issued and served upon the assessee. The assessment order u/s 143(3) of the Act was passed on 21.03.2022 by treating the disallowing payments to a foreign consultant for want of TDS. On appeal, the Ld. CIT(A) Printed from counselvise.com deleted these additions, placing reliance on the decisions of the Co ordinate Benches in the Assessee’s own case for preceding years. 3. Aggrieved the Revenue is in app of raising the grounds as reproduced above. 4. Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 20 and legal Paper Book pages 1 to 95. 5. The ground No. 1 to 3 of the appeal of the Revenu treatment of franchisee fee paid by the assessee. The Assessing Officer held the same to be capital expenditure, on the premise that the assessee had acquired enduring commercial rights in the nature of a franchise or licence, falling within the s under Section 32(1)(ii) of the Act. on the premise that the franchise agreement grants a \"bundle of rights\" of an enduring nature, effectively creating a new business and an intangible asset. Conv these are recurring operational costs. Officer through franchisee agreement, the assessee acquired a bundle of rights which is in the nature right of the nature of lic assets u/s 32(1)(ii) of the Act. The Assessing Officer noticed that the assessee had acquired commercial rights for the conduct of its business activity for the tournament Indian Premium League (IPL) deleted these additions, placing reliance on the decisions of the Co ordinate Benches in the Assessee’s own case for preceding years. Aggrieved the Revenue is in appeal before the Tribunal by way of raising the grounds as reproduced above. Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 20 and legal Paper Book pages 1 to 95. The ground No. 1 to 3 of the appeal of the Revenu treatment of franchisee fee paid by the assessee. The Assessing Officer held the same to be capital expenditure, on the premise that the assessee had acquired enduring commercial rights in the nature of a franchise or licence, falling within the scope of intangible assets under Section 32(1)(ii) of the Act. The AO’s contention is predicated on the premise that the franchise agreement grants a \"bundle of rights\" of an enduring nature, effectively creating a new business and an intangible asset. Conversely, the Assessee maintains that these are recurring operational costs. According to the Assessing Officer through franchisee agreement, the assessee acquired a bundle of rights which is in the nature of commercial or business right of the nature of license or franchise described as intangible assets u/s 32(1)(ii) of the Act. The Assessing Officer noticed that the assessee had acquired commercial rights for the conduct of its business activity for the tournament Indian Premium League (IPL) Indiawin Sports Pvt. Ltd 3 ITA No. 4576/MUM/2023 deleted these additions, placing reliance on the decisions of the Co- ordinate Benches in the Assessee’s own case for preceding years. eal before the Tribunal by way Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 20 and legal Paper Book pages 1 to 95. The ground No. 1 to 3 of the appeal of the Revenue to the treatment of franchisee fee paid by the assessee. The Assessing Officer held the same to be capital expenditure, on the premise that the assessee had acquired enduring commercial rights in the nature cope of intangible assets The AO’s contention is predicated on the premise that the franchise agreement grants a \"bundle of rights\" of an enduring nature, effectively creating a new business ersely, the Assessee maintains that According to the Assessing Officer through franchisee agreement, the assessee acquired a of commercial or business ense or franchise described as intangible assets u/s 32(1)(ii) of the Act. The Assessing Officer noticed that the assessee had acquired commercial rights for the conduct of its business activity for the tournament Indian Premium League (IPL) Printed from counselvise.com in which the assessee is a franchisee holder by the virtue of the agreement dated 10.04.2008 with the BCCI 5.1 The Assessing Officer further noted that i assessee company has acquired a right to operate a team in IPL for profit and as a consideration the company has made the payment of franchisee fees. By making these payments the company has received a right to set up individual business of operating a team in the League. It is setting up a completely new business. Even after expiry of the period of the League there is no embargo on the company to continue to run the business. Thus entire franchisee payment made for setting up such business represents capital expenditure. Merely a condition that these payments are required to be made in annual instalments or at a certain percentage of the future rights income, does not alter the character of these payments from capital to revenue. 5.2 Further, the Assessing Officer noted that the ‘franchise’ itself can be sold, subject to terms and conditi the franchisee and thus right acquired by the assessee is transferable right and the payment made by the franchisee to BCCI to obtain and enjoy the rights and therefore, in the nature of capital expenditure. 5.3 The Assessing Offi there in earlier years where the Ld. CIT(A) and the ITAT has deleted ssessee is a franchisee holder by the virtue of the agreement dated 10.04.2008 with the BCCI-IPL. The Assessing Officer further noted that it emerges that the assessee company has acquired a right to operate a team in IPL for consideration the company has made the payment of franchisee fees. By making these payments the company has received a right to set up individual business of operating a team in the League. It is setting up a completely new business. Even after he period of the League there is no embargo on the company to continue to run the business. Thus entire franchisee payment made for setting up such business represents capital expenditure. Merely a condition that these payments are required to nnual instalments or at a certain percentage of the future rights income, does not alter the character of these payments from capital to revenue. Further, the Assessing Officer noted that the ‘franchise’ itself can be sold, subject to terms and conditions in the agreement, by the franchisee and thus right acquired by the assessee is transferable right and the payment made by the franchisee to BCCI to obtain and enjoy the rights and therefore, in the nature of capital The Assessing Officer further noted that similar issue was there in earlier years where the Ld. CIT(A) and the ITAT has deleted Indiawin Sports Pvt. Ltd 4 ITA No. 4576/MUM/2023 ssessee is a franchisee holder by the virtue of the t emerges that the assessee company has acquired a right to operate a team in IPL for consideration the company has made the payment of franchisee fees. By making these payments the company has received a right to set up individual business of operating a team in the League. It is setting up a completely new business. Even after he period of the League there is no embargo on the company to continue to run the business. Thus entire franchisee payment made for setting up such business represents capital expenditure. Merely a condition that these payments are required to nnual instalments or at a certain percentage of the future rights income, does not alter the character of these payments Further, the Assessing Officer noted that the ‘franchise’ itself ons in the agreement, by the franchisee and thus right acquired by the assessee is transferable right and the payment made by the franchisee to BCCI to obtain and enjoy the rights and therefore, in the nature of capital cer further noted that similar issue was there in earlier years where the Ld. CIT(A) and the ITAT has deleted Printed from counselvise.com the addition but to keep the issue alive and said decision were not accepted by the Department and the matter was pending before the Hon’ble High Court. Therefore, to keep the issue alive, disallowance of franchisee fee may hold to be capital expenditure. 5.4 On further appeal, the Ld. CIT(A) following the decision of the Co-ordinate Bench of the Tribunal in earlier years deleted the addition observing as under: “5.2 The submissions of the appellant have been carefully considered. The issue under dispute pertains to the treatment of franchisee fees paid by the assessee as capital expenditure by the AO. This is a recurring issue in the appellant's o 2009-10 onwards. My predecessor CIT(A) had deleted similar addition for AY 2016 judgement of the Hon'ble ITAT, Mumbai, in the appellant's own case for earlier years AYs. 2009 dated 22.07.2016 wherein the Hon'ble ITAT, Mumbai, had held that as this franchisee fees is in the nature of revenue expenditure, the same has to be allowed as such. The same view was also held by me in AY 2018 jurisdictional ITAT and, the facts remaining the same, I have no reason to deviate from the above stand. Thus, the addition made by the AO of Rs. Rs. 61,11,05,781/ judgement of the Hon'ble ITAT, Mumbai, in the appel for earlier years on identical facts. This ground of appeal is thus allowed.” 5.6 The claim of the infructuous observing as under: “6.1 Since the AO held the Franchisee Fee payment as a capital expenditure, he allowed depreciation @25% on this \"intangible capital asset\". In the assessment order the AO has held that \".....cost of the asset to the franchisee is, therefore, the cost paid during the year by the franchise on which depreciation would be allowable at the prescribed rate in that year. The adjusted cost after depreciation would be the WDV of the block of intangible asset at the end year if the right is the lone asset in the block. Every year the addition but to keep the issue alive and said decision were not accepted by the Department and the matter was pending before the Court. Therefore, to keep the issue alive, disallowance of franchisee fee may hold to be capital expenditure.. On further appeal, the Ld. CIT(A) following the decision of the ordinate Bench of the Tribunal in earlier years deleted the rving as under: 5.2 The submissions of the appellant have been carefully considered. The issue under dispute pertains to the treatment of franchisee fees paid by the assessee as capital expenditure by the AO. This is a recurring issue in the appellant's own case from AY 10 onwards. My predecessor CIT(A) had deleted similar addition for AY 2016-17 and 2017-18 relying on the binding judgement of the Hon'ble ITAT, Mumbai, in the appellant's own case for earlier years AYs. 2009-10 and 2010-11 in ITA No. 5 dated 22.07.2016 wherein the Hon'ble ITAT, Mumbai, had held that as this franchisee fees is in the nature of revenue expenditure, the same has to be allowed as such. The same view was also held by me in AY 2018-19 based on the binding judgment o jurisdictional ITAT and, the facts remaining the same, I have no reason to deviate from the above stand. Thus, the addition made by the AO of Rs. Rs. 61,11,05,781/- is deleted in view of the binding judgement of the Hon'ble ITAT, Mumbai, in the appellant's own case for earlier years on identical facts. This ground of appeal is thus The claim of the consequent depreciation was also held infructuous observing as under: “6.1 Since the AO held the Franchisee Fee payment as a capital penditure, he allowed depreciation @25% on this \"intangible capital asset\". In the assessment order the AO has held that \".....cost of the asset to the franchisee is, therefore, the cost paid during the year by the franchise on which depreciation would be allowable at the prescribed rate in that year. The adjusted cost after depreciation would be the WDV of the block of intangible asset at the end year if the right is the lone asset in the block. Every year Indiawin Sports Pvt. Ltd 5 ITA No. 4576/MUM/2023 the addition but to keep the issue alive and said decision were not accepted by the Department and the matter was pending before the Court. Therefore, to keep the issue alive, disallowance . On further appeal, the Ld. CIT(A) following the decision of the ordinate Bench of the Tribunal in earlier years deleted the 5.2 The submissions of the appellant have been carefully considered. The issue under dispute pertains to the treatment of franchisee fees paid by the assessee as capital expenditure by the wn case from AY 10 onwards. My predecessor CIT(A) had deleted similar 18 relying on the binding judgement of the Hon'ble ITAT, Mumbai, in the appellant's own case 11 in ITA No. 5290 & 5291 dated 22.07.2016 wherein the Hon'ble ITAT, Mumbai, had held that as this franchisee fees is in the nature of revenue expenditure, the same has to be allowed as such. The same view was also held by 19 based on the binding judgment of the jurisdictional ITAT and, the facts remaining the same, I have no reason to deviate from the above stand. Thus, the addition made by is deleted in view of the binding lant's own case for earlier years on identical facts. This ground of appeal is thus depreciation was also held to be “6.1 Since the AO held the Franchisee Fee payment as a capital penditure, he allowed depreciation @25% on this \"intangible capital asset\". In the assessment order the AO has held that \".....cost of the asset to the franchisee is, therefore, the cost paid during the year by the franchise on which depreciation would be allowable at the prescribed rate in that year. The adjusted cost after depreciation would be the WDV of the block of intangible asset at the end year if the right is the lone asset in the block. Every year Printed from counselvise.com the payment made towards franchise payment would b the opening WDV of the intangible asset for that year and depreciation would be allowed accordingly at the prescribed rate on the so adjusted WDV. If no payment is made in that year, depreciation shall be allowed only on the opening WDV if there other addition to the block.\" The AO accordingly allowed deprecation @ 25% on this intangible capital asset amounting to Rs. 61,11,05,781/ was accordingly allowed by the AO. 6.2 The appellant submitt grounds no. 2, 3 and 4 as under: This ground that the depreciation should be allowed on the total accumulated cost of asset of Rs. 639.44 croresis an alternate ground and without prejudice to Appellant's contention 1 above regarding the Appellants claim for deduction of the said payment as an allowable revenue expenditure. In order of Hon'ble Commissioner of Income 2011- 12, AY 2012 AY 2016-17, while deciding similar ground on same set of facts, it was held that the alternate ground need not be adjudicated since the Franchisee fees have been held as revenue in nature. 6.3 Since the expenditure towards franchise fee payments has been held as revenue in nature, there is no question of allowing depreciation on revenue expenditure and so these grounds regarding the claim of depreciation and method of calculation of depreciation become academic in nature and hence infructuous. These grounds are ac 5.7 We have heard rival submissions of the parties and perused the relevant materials on record. the issue stands squarely covered by the decisions of the Tribunal in the assessee’s own case for prec identical facts. The Revenue has not brought on record any distinguishing feature, nor has it been shown that the earlier decisions have been reversed or stayed by any higher forum. Ld. CIT(A), in allowing the Assessee’s claim the payment made towards franchise payment would b the opening WDV of the intangible asset for that year and depreciation would be allowed accordingly at the prescribed rate on the so adjusted WDV. If no payment is made in that year, depreciation shall be allowed only on the opening WDV if there other addition to the block.\" The AO accordingly allowed deprecation @ 25% on this intangible capital asset amounting to Rs. 61,11,05,781/- and depreciation amounting to Rs. 15,27,76,445/ was accordingly allowed by the AO. 6.2 The appellant submitted the written submissions in respect of grounds no. 2, 3 and 4 as under:- This ground that the depreciation should be allowed on the total accumulated cost of asset of Rs. 639.44 croresis an alternate ground and without prejudice to Appellant's contention 1 above regarding the Appellants claim for deduction of the said payment as an allowable revenue expenditure. In order of Hon'ble Commissioner of Income-tax (Appeals) for AY 12, AY 2012-13, AY 2013-14, AY 2014-15, AY 2015 17, while deciding similar ground on same set of facts, it was held that the alternate ground need not be adjudicated since the Franchisee fees have been held as revenue in nature. 6.3 Since the expenditure towards franchise fee payments has been revenue in nature, there is no question of allowing depreciation on revenue expenditure and so these grounds regarding the claim of depreciation and method of calculation of depreciation become academic in nature and hence infructuous. These grounds are accordingly dismissed.” We have heard rival submissions of the parties and perused the relevant materials on record. It is an undisputed position that the issue stands squarely covered by the decisions of the Tribunal in the assessee’s own case for preceding assessment years on identical facts. The Revenue has not brought on record any distinguishing feature, nor has it been shown that the earlier decisions have been reversed or stayed by any higher forum. Ld. CIT(A), in allowing the Assessee’s claim, adhered to the principle Indiawin Sports Pvt. Ltd 6 ITA No. 4576/MUM/2023 the payment made towards franchise payment would be added to the opening WDV of the intangible asset for that year and depreciation would be allowed accordingly at the prescribed rate on the so adjusted WDV. If no payment is made in that year, depreciation shall be allowed only on the opening WDV if there is no other addition to the block.\" The AO accordingly allowed deprecation @ 25% on this intangible capital asset amounting to Rs. and depreciation amounting to Rs. 15,27,76,445/- ed the written submissions in respect of This ground that the depreciation should be allowed on the total accumulated cost of asset of Rs. 639.44 croresis an alternate ground and without prejudice to Appellant's contention in paragraph 1 above regarding the Appellants claim for deduction of the said tax (Appeals) for AY 15, AY 2015-16 and 17, while deciding similar ground on same set of facts, it was held that the alternate ground need not be adjudicated since the Franchisee fees have been held as revenue in nature. 6.3 Since the expenditure towards franchise fee payments has been revenue in nature, there is no question of allowing depreciation on revenue expenditure and so these grounds regarding the claim of depreciation and method of calculation of depreciation become academic in nature and hence infructuous. We have heard rival submissions of the parties and perused It is an undisputed position that the issue stands squarely covered by the decisions of the Tribunal eding assessment years on identical facts. The Revenue has not brought on record any distinguishing feature, nor has it been shown that the earlier decisions have been reversed or stayed by any higher forum. The , adhered to the principle Printed from counselvise.com of judicial discipline by following the binding precedents set by this Tribunal in the Assessee’s own case for AYs 2009 19. The Tribunal has consistently held that such franchise fees are revenue in nature. 5.8 While the Revenue contends that the matter is pending before the Hon’ble High Court, it is a settled position of law that the mere pendency of an appeal in a higher forum does not dilute the binding nature of an existing Co has been stayed or overturned. Finding no change in the material facts or the legal landscape for the year under consideration, we find no infirmity in the Ld. CIT(A)’s order the same. The ground No. 1 to 3 of the appeal of accordingly dismissed. 6. The ground No. 4 of the appeal of the assessee disallowance of ₹70,29,018/ resident of New Zealand, on account of non source under Section 195 of the the payment as “fees for technical services” under Article 12 of the India–New Zealand DTAA, while the Assessee invokes Article 14 (Independent Personal Services) of the India 6.1 The facts in brief are Wright, a tax resident from New Zealand, as Talent Scout for the IPL Team of Mumbai Indians. The assessee had made of judicial discipline by following the binding precedents set by this Tribunal in the Assessee’s own case for AYs 2009-10 through 2018 19. The Tribunal has consistently held that such franchise fees are ile the Revenue contends that the matter is pending before the Hon’ble High Court, it is a settled position of law that the mere pendency of an appeal in a higher forum does not dilute the binding nature of an existing Co-ordinate Bench decision unless the has been stayed or overturned. Finding no change in the material facts or the legal landscape for the year under consideration, we find no infirmity in the Ld. CIT(A)’s order and we accordingly uphold the same. The ground No. 1 to 3 of the appeal of the Revenue are accordingly dismissed. The ground No. 4 of the appeal of the assessee 70,29,018/- paid to Mr. John Wright, a tax resident of New Zealand, on account of non-deduction of tax at source under Section 195 of the Act. The Assessing Officer treated the payment as “fees for technical services” under Article 12 of the aland DTAA, while the Assessee invokes Article 14 (Independent Personal Services) of the India-New Zealand DTAA. The facts in brief are that assessee had appointed Mr. Jhon tax resident from New Zealand, as Talent Scout for the IPL Mumbai Indians. The assessee had made Indiawin Sports Pvt. Ltd 7 ITA No. 4576/MUM/2023 of judicial discipline by following the binding precedents set by this 10 through 2018- 19. The Tribunal has consistently held that such franchise fees are ile the Revenue contends that the matter is pending before the Hon’ble High Court, it is a settled position of law that the mere pendency of an appeal in a higher forum does not dilute the binding ordinate Bench decision unless the same has been stayed or overturned. Finding no change in the material facts or the legal landscape for the year under consideration, we and we accordingly uphold the Revenue are The ground No. 4 of the appeal of the assessee relates to paid to Mr. John Wright, a tax deduction of tax at Act. The Assessing Officer treated the payment as “fees for technical services” under Article 12 of the aland DTAA, while the Assessee invokes Article 14 New Zealand DTAA. that assessee had appointed Mr. Jhon tax resident from New Zealand, as Talent Scout for the IPL Mumbai Indians. The assessee had made had made Printed from counselvise.com payment of Rs. 70,29,018/ taxes i.e without TDS. While payment as Independent Personal Service (IPS), the AO held the same to “Fee for Technical Services the Article 12 of the Double Taxation Avoidance Agreement (DTAA) between India and New Zeala agreement pertaining to Mr. Mahela Jayawardene where deducted by the assessee. Accordingly, the AO held that the assessee had failed to deduct TDS as per the provisions of section 195 of the Act and accordingly t 70,29,018/- was disallowed section 40(a)(i) of the Act. 6.2 Before the Ld. CIT(A), the assessee argued that services provided by Mr. John Wright were in the nature of Independent Personal Services (IPS) and fall under the purview of Article 14 of the India-New Zealand DTAA. Since Mr. John Wright was a tax resident of New Zealand, the relevant payments made to him were not liable for TDS. According to the provided by Mr. Wright in his independent capacity involving professional skills. The agreement with Mr. John Wright did not dictate as to how to provide the scouting services and the non compete clause in the agreement was only to avo any conflict of interest and to ensure complete dedication of Mr. Wright towards team building. The assessee also argued that the payment of Rs. 70,29,018/- to Mr. John Wright without withholding taxes i.e without TDS. While the assessee had classified the payment as Independent Personal Service (IPS), the AO held the Fee for Technical Services” and hence liable for TDS as per the Article 12 of the Double Taxation Avoidance Agreement (DTAA) between India and New Zealand. The AO also relied on a similar agreement pertaining to Mr. Mahela Jayawardene where by the assessee. Accordingly, the AO held that the assessee had failed to deduct TDS as per the provisions of section 195 of the Act and accordingly the relevant amount of Rs. was disallowed by the Assessing Officer invoking section 40(a)(i) of the Act. Before the Ld. CIT(A), the assessee argued that services provided by Mr. John Wright were in the nature of Independent s (IPS) and fall under the purview of Article 14 of New Zealand DTAA. Since Mr. John Wright was a tax resident of New Zealand, the relevant payments made to him were not liable for TDS. According to the assessee, the services were provided by Mr. Wright in his independent capacity involving professional skills. The agreement with Mr. John Wright did not dictate as to how to provide the scouting services and the non compete clause in the agreement was only to avoid the situation of any conflict of interest and to ensure complete dedication of Mr. Wright towards team building. The assessee also argued that the Indiawin Sports Pvt. Ltd 8 ITA No. 4576/MUM/2023 to Mr. John Wright without withholding the assessee had classified the payment as Independent Personal Service (IPS), the AO held the and hence liable for TDS as per the Article 12 of the Double Taxation Avoidance Agreement (DTAA) nd. The AO also relied on a similar agreement pertaining to Mr. Mahela Jayawardene where tax was by the assessee. Accordingly, the AO held that the assessee had failed to deduct TDS as per the provisions of section he relevant amount of Rs. by the Assessing Officer invoking Before the Ld. CIT(A), the assessee argued that services provided by Mr. John Wright were in the nature of Independent s (IPS) and fall under the purview of Article 14 of New Zealand DTAA. Since Mr. John Wright was a tax resident of New Zealand, the relevant payments made to him were , the services were provided by Mr. Wright in his independent capacity involving professional skills. The agreement with Mr. John Wright did not dictate as to how to provide the scouting services and the non- id the situation of any conflict of interest and to ensure complete dedication of Mr. Wright towards team building. The assessee also argued that the Printed from counselvise.com comparison with the TDS done in the case of Mr. Mahela Jayawardene was also not correct as Mr. Mahale Jaya not able to produce the Tax Residency Certificate in his case and so the benefit of DTAA was not extended to him. Therefore, according to the assessee, the disallowance made u/s 40(a)(i) of the Act was unwarranted. The Ld. CIT(A) concurred with assessee that Mr. John Wright personnel services and therefore, he was entitled to the benefit of Article 14 of the Act DTAA between India and New Zealand. learned Commissioner (Appeals), on app and surrounding facts, held that the services rendered were in the nature of independent personal services the DTAA, and therefore not chargeable to tax in India in the absence of a fixed base or pres observation of the Ld. CIT(A) as under: “8.6 In this regard it is observed that Mr. John Wright was a professional cricketer of international repute who represented New Zealand in his playing days. He also was the Nation Coach of the Indian Team from 2000 to 2005. It was because of his knowledge, expertise, skills and experience in the field of cricket that he was appointed for scouting good talent for the Mumbai Indians IPL team. 8.6.1 There is also no dispute resident of New Zealand. A perusal of his agreement dated 02.04.2018, shows that his appointment was contractual, for a period of two years. The agreed fees was to be paid to him on quarterly basis. The agreement also n scouting services have to performed. Thus, the level of control exercised over him cannot lead to the inference that there was any employer-employee relationship. Infact, the AO has also never said that there was any employer comparison with the TDS done in the case of Mr. Mahela Jayawardene was also not correct as Mr. Mahale Jaya not able to produce the Tax Residency Certificate in his case and so the benefit of DTAA was not extended to him. Therefore, according to the assessee, the disallowance made u/s 40(a)(i) of the Act was unwarranted. The Ld. CIT(A) concurred with the submission of the assessee that Mr. John Wright rendered services in the nature of services and therefore, he was entitled to the benefit of Article 14 of the Act DTAA between India and New Zealand. learned Commissioner (Appeals), on appreciation of the agreement and surrounding facts, held that the services rendered were in the independent personal services, falling under Article 14 of the DTAA, and therefore not chargeable to tax in India in the absence of a fixed base or prescribed period of stay. observation of the Ld. CIT(A) as under: 8.6 In this regard it is observed that Mr. John Wright was a professional cricketer of international repute who represented New Zealand in his playing days. He also was the Nation Coach of the Indian Team from 2000 to 2005. It was because of his knowledge, expertise, skills and experience in the field of cricket that he was appointed for scouting good talent for the Mumbai Indians IPL team. 8.6.1 There is also no dispute regarding the fact that he is a tax resident of New Zealand. A perusal of his agreement dated 02.04.2018, shows that his appointment was contractual, for a period of two years. The agreed fees was to be paid to him on quarterly basis. The agreement also nowhere says as to \"how\" the scouting services have to performed. Thus, the level of control exercised over him cannot lead to the inference that there was any employee relationship. Infact, the AO has also never said that there was any employer-employee relationship. It is also seen Indiawin Sports Pvt. Ltd 9 ITA No. 4576/MUM/2023 comparison with the TDS done in the case of Mr. Mahela Jayawardene was also not correct as Mr. Mahale Jayawardene was not able to produce the Tax Residency Certificate in his case and so the benefit of DTAA was not extended to him. Therefore, according to the assessee, the disallowance made u/s 40(a)(i) of the Act was the submission of the rendered services in the nature of services and therefore, he was entitled to the benefit of Article 14 of the Act DTAA between India and New Zealand. The reciation of the agreement and surrounding facts, held that the services rendered were in the , falling under Article 14 of the DTAA, and therefore not chargeable to tax in India in the cribed period of stay. The relevant 8.6 In this regard it is observed that Mr. John Wright was a professional cricketer of international repute who represented New Zealand in his playing days. He also was the National Cricket Coach of the Indian Team from 2000 to 2005. It was because of his knowledge, expertise, skills and experience in the field of cricket that he was appointed for scouting good talent for the Mumbai regarding the fact that he is a tax resident of New Zealand. A perusal of his agreement dated 02.04.2018, shows that his appointment was contractual, for a period of two years. The agreed fees was to be paid to him on owhere says as to \"how\" the scouting services have to performed. Thus, the level of control exercised over him cannot lead to the inference that there was any employee relationship. Infact, the AO has also never said ployee relationship. It is also seen Printed from counselvise.com that Clause No. 8 of the agreement is in the nature of a non clause which says that Mr. John Wright would not engage in any other sport for any other team/club/organization to avoid the situation of any conflict placed over reliance on this non services rendered were not \"independent\" without anywhere asserting or proving that the services rendered were in the nature of employer-employe categorize the services as not being \"independent\" only on the basis of the \"non-compete\" clause of the agreement, while ignoring all other clauses, cannot be accepted. It is common knowledge that such non-compete c agreements and their existence in the agreement would not, per se, change the nature of the services offered form \"independent\" to \"dependent\". Also, the comparison made by the AO with the case of Mr. Mahela Jayaw the case of Mr. Jayawardene, the DTAA benefits were not extended in the absence of the tax residency certificate. 8.6.2 The fact remains that Mr. John Wright, a tax resident of New Zealand, was appointed as good quality players for the Mumbai Indians IPL team. He was appointed on the basis of his knowledge, expertise and skills as a professional international ex agreement specified \"what\" Hence no control was exercised over Mr. Wright as to how to scout the new talent. The services rendered were indeed professional services or, alternatively, activities of independent character. No inference can be relation neither has any such assertion been made by the AO. Reliance is placed in this regard on the case of ACIT v. Meru Impex [2011] 49 SOT 62 (Mum taxmann.com 108 (Ahmedab case of Ram Prashad v. CIT [1972] 86 ITR 122 (SC) and Lakshminarayan Ram Gopal & Son Ltd. v. Govt. of Hyderabad [1954] 25 ITR 449 (SC). Thus, the underlying facts clearly establish that the services rendered by Mr independent personal services, which fell within the purview of Article 14 of the India established that that the services rendered were independent personal services, the relevant payme definition of \"Fess for technical services\" as per Article 12 of the DTAA. 8.6.3 The extract of Article 14 of the India under: that Clause No. 8 of the agreement is in the nature of a non clause which says that Mr. John Wright would not engage in any other sport for any other team/club/organization to avoid the situation of any conflict of interest with any other team. The AO has placed over reliance on this non-compete clause to assert that the services rendered were not \"independent\" without anywhere asserting or proving that the services rendered were in the nature of employee relationship and hence \"dependent\". To categorize the services as not being \"independent\" only on the basis compete\" clause of the agreement, while ignoring all other clauses, cannot be accepted. It is common knowledge that compete clauses do feature routinely in contractual agreements and their existence in the agreement would not, per se, change the nature of the services offered form \"independent\" to \"dependent\". Also, the comparison made by the AO with the case of Mr. Mahela Jayawardene cannot be accepted as it is clear that in the case of Mr. Jayawardene, the DTAA benefits were not extended in the absence of the tax residency certificate. 8.6.2 The fact remains that Mr. John Wright, a tax resident of New Zealand, was appointed as a talent scout for identifying potential good quality players for the Mumbai Indians IPL team. He was appointed on the basis of his knowledge, expertise and skills as a professional international ex-cricketer and coach. While his agreement specified \"what\" to do, it did not specify \"how\" to do it. Hence no control was exercised over Mr. Wright as to how to scout the new talent. The services rendered were indeed professional services or, alternatively, activities of independent character. No inference can be drawn that there was any employer relation neither has any such assertion been made by the AO. Reliance is placed in this regard on the case of ACIT v. Meru Impex [2011] 49 SOT 62 (Mum-trib.) and Susanto Purnamo [2016] 73 taxmann.com 108 (Ahmedabad Trib.). Also, reliance is placed on the case of Ram Prashad v. CIT [1972] 86 ITR 122 (SC) and Lakshminarayan Ram Gopal & Son Ltd. v. Govt. of Hyderabad [1954] 25 ITR 449 (SC). Thus, the underlying facts clearly establish that the services rendered by Mr John Wright were in the nature of independent personal services, which fell within the purview of Article 14 of the India-New Zealand DTAA. Also, once it is established that that the services rendered were independent personal services, the relevant payments get excluded from the definition of \"Fess for technical services\" as per Article 12 of the 8.6.3 The extract of Article 14 of the India-New Zealand DTAA is as Indiawin Sports Pvt. Ltd 10 ITA No. 4576/MUM/2023 that Clause No. 8 of the agreement is in the nature of a non-compete clause which says that Mr. John Wright would not engage in any other sport for any other team/club/organization to avoid the of interest with any other team. The AO has compete clause to assert that the services rendered were not \"independent\" without anywhere asserting or proving that the services rendered were in the nature of e relationship and hence \"dependent\". To categorize the services as not being \"independent\" only on the basis compete\" clause of the agreement, while ignoring all other clauses, cannot be accepted. It is common knowledge that lauses do feature routinely in contractual agreements and their existence in the agreement would not, per se, change the nature of the services offered form \"independent\" to \"dependent\". Also, the comparison made by the AO with the case of ardene cannot be accepted as it is clear that in the case of Mr. Jayawardene, the DTAA benefits were not extended 8.6.2 The fact remains that Mr. John Wright, a tax resident of New- a talent scout for identifying potential good quality players for the Mumbai Indians IPL team. He was appointed on the basis of his knowledge, expertise and skills as a cricketer and coach. While his to do, it did not specify \"how\" to do it. Hence no control was exercised over Mr. Wright as to how to scout the new talent. The services rendered were indeed professional services or, alternatively, activities of independent character. No drawn that there was any employer-employee relation neither has any such assertion been made by the AO. Reliance is placed in this regard on the case of ACIT v. Meru Impex trib.) and Susanto Purnamo [2016] 73 ad Trib.). Also, reliance is placed on the case of Ram Prashad v. CIT [1972] 86 ITR 122 (SC) and Lakshminarayan Ram Gopal & Son Ltd. v. Govt. of Hyderabad [1954] 25 ITR 449 (SC). Thus, the underlying facts clearly establish John Wright were in the nature of independent personal services, which fell within the purview of New Zealand DTAA. Also, once it is established that that the services rendered were independent nts get excluded from the definition of \"Fess for technical services\" as per Article 12 of the New Zealand DTAA is as Printed from counselvise.com \"1. Income derived by an individual who is a resident of a Contracting State in activities of an independent character shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other Contracting State : (a) if he has a fixed base regula Contracting State for the purpose of performing his activities: in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or (b) if his stay in the other Contracting S amounting to or exceeding in the aggregate 183 days in any consecutive twelve income as is derived from his activities performed in that other State may be taxed in that other 2. The term \"professional services\" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants.\" 8.6.4 The relevant extracts of Article 12 of the India DTAA are as under : \"1......... 2.......... 3.......... 4. The term \"fees for technical services\" as used in this article means payments of any kind to any person, other than payments to an employee of the persons making the payments and to any individual for independent personal services mentioned in Article 14, in consideration for services of a managerial, technical or consultancy nature, including the provision of services of technical or other personnel\". 8.6.4 Thus, once it is established that income is derived by a tax resident of New Zealand from any professional service or any other activity of an independent character, such income will be taxable in New Zealand only. This becomes very clear from the pl of Article 12 and Article 14 of the DTAA. Since, such income would not be taxable in India, the liability for withholding taxes or doing TDS will not arise in India. Therefore, it is clear the payment of Rs. 70,29,018/- made to Mr. John Wright personal services not liable for TDS as per Article 14 of the DTAA \"1. Income derived by an individual who is a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other Contracting State : (a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities: in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or (b) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any consecutive twelve-month period; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State. 2. The term \"professional services\" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants.\" .4 The relevant extracts of Article 12 of the India- DTAA are as under : 4. The term \"fees for technical services\" as used in this article means payments of any kind to any person, other than payments to ployee of the persons making the payments and to any individual for independent personal services mentioned in Article 14, in consideration for services of a managerial, technical or consultancy nature, including the provision of services of technical ther personnel\". 8.6.4 Thus, once it is established that income is derived by a tax resident of New Zealand from any professional service or any other activity of an independent character, such income will be taxable in New Zealand only. This becomes very clear from the pl of Article 12 and Article 14 of the DTAA. Since, such income would not be taxable in India, the liability for withholding taxes or doing TDS will not arise in India. Therefore, it is clear the payment of Rs. made to Mr. John Wright was payment for independent personal services not liable for TDS as per Article 14 of the DTAA Indiawin Sports Pvt. Ltd 11 ITA No. 4576/MUM/2023 \"1. Income derived by an individual who is a resident of a respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances when such income may rly available to him in the other Contracting State for the purpose of performing his activities: in that case, only so much of the income as is attributable to that fixed tate is for a period or periods amounting to or exceeding in the aggregate 183 days in any month period; in that case, only so much of the income as is derived from his activities performed in that other State 2. The term \"professional services\" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, -New Zealand 4. The term \"fees for technical services\" as used in this article means payments of any kind to any person, other than payments to ployee of the persons making the payments and to any individual for independent personal services mentioned in Article 14, in consideration for services of a managerial, technical or consultancy nature, including the provision of services of technical 8.6.4 Thus, once it is established that income is derived by a tax resident of New Zealand from any professional service or any other activity of an independent character, such income will be taxable in New Zealand only. This becomes very clear from the plain reading of Article 12 and Article 14 of the DTAA. Since, such income would not be taxable in India, the liability for withholding taxes or doing TDS will not arise in India. Therefore, it is clear the payment of Rs. was payment for independent personal services not liable for TDS as per Article 14 of the DTAA Printed from counselvise.com and hence the disallowance made u/s 40(a)(i) of the Act cannot be sustained. Hence, these grounds of appeal are allowed. 6.3 We have heard rival submissions of the relevant materials on record assessee has referred to Article 14 of the DTAA. For ready reference said Article is reproduced as under: “INDEPENDENT PERSONAL SERVICES 1. Income derived by an in Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other (a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities in that case, only so much of the income as is attributable to that fixed base may be taxed in that other State; or (b) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any consecutive twelve much of the income as is derived from his activities perfo in that other State may be taxed in that other State. 2. The term \"professional services\" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants.” 6.4 On perusal of the above, of Article 14 an individual must to resident of a contracting state and income derived should be in respect of professional services or other activities of an independent character. consideration of the mate and hence the disallowance made u/s 40(a)(i) of the Act cannot be sustained. Hence, these grounds of appeal are allowed. We have heard rival submissions of the parties and perused the relevant materials on record. Before us, the Ld. counsel for the assessee has referred to Article 14 of the DTAA. For ready reference said Article is reproduced as under: “INDEPENDENT PERSONAL SERVICES 1. Income derived by an individual who is a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances when such income may also be taxed in the other Contracting State: (a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities in that case, only so much of the income as is attributable to that fixed base may be taxed in that other (b) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days in any consecutive twelve-month period; in that case, only so much of the income as is derived from his activities perfo in that other State may be taxed in that other State. 2. The term \"professional services\" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, ngineers, architects, dentists and accountants.” On perusal of the above, we find that for eligibility of the benefit of Article 14 an individual must to resident of a contracting state and income derived should be in respect of professional services or other activities of an independent character. consideration of the material on record, it is evident that Mr. Indiawin Sports Pvt. Ltd 12 ITA No. 4576/MUM/2023 and hence the disallowance made u/s 40(a)(i) of the Act cannot be sustained. Hence, these grounds of appeal are allowed.” the parties and perused Before us, the Ld. counsel for the assessee has referred to Article 14 of the DTAA. For ready reference “INDEPENDENT PERSONAL SERVICES dividual who is a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State except in the following circumstances when such Contracting State: (a) if he has a fixed base regularly available to him in the other Contracting State for the purpose of performing his activities in that case, only so much of the income as is attributable to that fixed base may be taxed in that other (b) if his stay in the other Contracting State is for a period or periods amounting to or exceeding in the aggregate 183 days month period; in that case, only so much of the income as is derived from his activities performed in that other State may be taxed in that other State. 2. The term \"professional services\" includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, ngineers, architects, dentists and accountants.” we find that for eligibility of the benefit of Article 14 an individual must to resident of a contracting state and income derived should be in respect of professional services or other activities of an independent character. Upon rial on record, it is evident that Mr. Printed from counselvise.com John Wright was engaged as a talent scout based on his professional expertise and experience. The agreement delineates the scope of work but does not prescribe the manner in which such services are to be performed. Th suggest the existence of an employer control indicative of dependent services. The presence of a non compete clause, by itself, does not alter the independent character of the engagement. 6.5 Further, we find derived by a resident of a Contracting State from professional services is taxable only a fixed base regularly available in the other State; or (b) The stay in the other State exceeds 6.6 The Ld. counsel for the assessee filed before the duration of various visit carried out in India by Mr John Wright. The relevant details is reproduced as under: Mr. John Wright during FY 2019 aggregate stay in India was for 88 days as under: Particulars Date of arrival Visit 1 25-04- Visit 2 25-09- Visit 3 13-11- Total number of days of stay John Wright was engaged as a talent scout based on his professional expertise and experience. The agreement delineates the scope of work but does not prescribe the manner in which such services are to be performed. There is no material to suggest the existence of an employer–employee relationship or control indicative of dependent services. The presence of a non compete clause, by itself, does not alter the independent character of the engagement. we find that under Article 14 of the DTAA, income derived by a resident of a Contracting State from professional only in that State, unless: (a) The individual has regularly available in the other State; or (b) The stay in er State exceeds 183 days in a twelve-month period The Ld. counsel for the assessee filed before the duration of various visit carried out in India by Mr John Wright. The relevant details is reproduced as under: Mr. John Wright during FY 2019-20 had visited India 3 times and his aggregate stay in India was for 88 days as under: Date of arrival Date of departure Number of days of stay -2019 14-05-2019 21 -2019 24-10-2019 31 -2019 17-12-2019 36 88 Indiawin Sports Pvt. Ltd 13 ITA No. 4576/MUM/2023 John Wright was engaged as a talent scout based on his professional expertise and experience. The agreement delineates the scope of work but does not prescribe the manner in which ere is no material to employee relationship or control indicative of dependent services. The presence of a non- compete clause, by itself, does not alter the independent nder Article 14 of the DTAA, income derived by a resident of a Contracting State from professional in that State, unless: (a) The individual has regularly available in the other State; or (b) The stay in month period The Ld. counsel for the assessee filed before the duration of various visit carried out in India by Mr John Wright. The relevant visited India 3 times and his Annexure reference Annexure 1 & 2 Annexure 1 Annexure 1 & 3 Printed from counselvise.com 6.7 The assessee has filed his passport details According to details filed as reproduced above aggregate stay in India during the relevant period was 88 days, which is below the threshold of 183 days prescribed under Article 14. Thus, prima facie, the condition relating to duration of stay stands satisfied in favour of the assessee. 6.8 However, one of the essential conditions under Article 14 is the absence of a “fixed base” in India for the purpose of rendering such services. This aspect requires proper factual verification. certificate filed of no fixed base by mr Wright need v 6.9 In the interest of justice, we deem it appropriate to restore this limited issue to the file of the Assessing Officer for the purpose of examining whether Mr. John Wright had a fixed base in India within the meaning of Article 14 of the D determine the extent of income attributable thereto in accordance with law. The AO shall verify the duration of stay and examine whether the Assessee’s activities constituted a \"fixed base\" in India as per the Treaty protocols. If the co no TDS liability shall arise. 6.10 Accordingly, the ground No. 4 of the appeal of the Revenue is allowed for statistical purposes. he assessee has filed his passport details details filed as reproduced above aggregate stay in India during the relevant period was 88 days, which is below the threshold of 183 days prescribed under Article 14. Thus, prima facie, the condition relating to duration of stay stands satisfied in favour of the assessee. However, one of the essential conditions under Article 14 is the absence of a “fixed base” in India for the purpose of rendering such services. This aspect requires proper factual verification. certificate filed of no fixed base by mr Wright need verification. In the interest of justice, we deem it appropriate to restore this limited issue to the file of the Assessing Officer for the purpose of examining whether Mr. John Wright had a fixed base in India within the meaning of Article 14 of the DTAA, and if so, to determine the extent of income attributable thereto in accordance The AO shall verify the duration of stay and examine whether the Assessee’s activities constituted a \"fixed base\" in India as per the Treaty protocols. If the conditions of Article 14 are met, no TDS liability shall arise. Accordingly, the ground No. 4 of the appeal of the Revenue is allowed for statistical purposes. Indiawin Sports Pvt. Ltd 14 ITA No. 4576/MUM/2023 he assessee has filed his passport details before us. details filed as reproduced above Mr. Wright’s aggregate stay in India during the relevant period was 88 days, which is below the threshold of 183 days prescribed under Article 14. Thus, prima facie, the condition relating to duration of stay However, one of the essential conditions under Article 14 is the absence of a “fixed base” in India for the purpose of rendering such services. This aspect requires proper factual verification. The erification. In the interest of justice, we deem it appropriate to restore this limited issue to the file of the Assessing Officer for the purpose of examining whether Mr. John Wright had a fixed base in India TAA, and if so, to determine the extent of income attributable thereto in accordance The AO shall verify the duration of stay and examine whether the Assessee’s activities constituted a \"fixed base\" in India nditions of Article 14 are met, Accordingly, the ground No. 4 of the appeal of the Revenue is Printed from counselvise.com 7. In the result, the appeal of the Revenue is partly allowed for statistical purposes. Order pronounced in the open Court on Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 27/03/2026 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// In the result, the appeal of the Revenue is partly allowed for ounced in the open Court on 27/03/2026. Sd/ (SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Indiawin Sports Pvt. Ltd 15 ITA No. 4576/MUM/2023 In the result, the appeal of the Revenue is partly allowed for /03/2026. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "