PILCOM versus WEST BENGAL-

Citation: [2020] 6 S.C.R. 620 · Decided: 29-04-2020 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Dismissed
cites 3 · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

A
B
C
D
E
F
G
H
620
SUPREME COURT REPORTS
[2020] 6 S.C.R.
PILCOM
v.
C.I.T. WEST BENGAL-VII
(Civil Appeal No. 5749 of 2012)
APRIL 29, 2020
[UDAY UMESH LALIT AND VINEET SARAN, JJ.]
Income Tax Act, 1961 – s.115BBA and s.194E – Assesse-
PILCOM, a committee formed by the Cricket Control Boards/
Associations of three countries viz. Pakistan, India and Sri Lanka
for purpose of conducting the World Cup tournament, 1996 – I.T.O
found that PILCOM had made payments to ICC as well as to the
Cricket Control Boards/Associations of the different member
countries of ICC from its two London Bank Accounts, consequent
to which a show cause notice was issued u/s.194E – The principal
issue is whether any income accrued or arose or was deemed to
have accrued or arisen to said Non-resident Sports Associations in
India – If the answer is in the affirmative, the next question would
be about the liability on part of the PILCOM to deduct Tax at Source
and make appropriate deposit in accordance with s.194E of the Act
– Held: The Non-Resident Sports Associations had participated in
the event, where cricket teams of these Associations had played
various matches in the country – The payments were intricately
connected with the event where various cricket teams were scheduled
to play – The source of income was in the playing of the matches in
India – The mandate u/s.115 BBA(1)(b) is also clear – The payments
made to the Non-Resident Sports Associations in the present case
represented their income which accrued or arose or was deemed to
have accrued or arisen in India – Consequently, the PILCOM was
liable to deduct Tax at Source in terms of s.194E of the Act.
Dismissing the appeal and special leave petitions, the Court
HELD: 1. In the present case, the Non-resident Sports
Associations had participated in the event, where cricket teams
of these Associations had played various matches in the country.
Though the payments were described as Guarantee Money, they
were intricately connected with the event where various cricket
teams were scheduled to play and did participate in the event.
[2020] 6 S.C.R. 620
620
A
B
C
D
E
F
G
H
621
The source of income, as rightly contended by the Revenue, was
in the playing of the matches in India. [Para 13][635-A-B]
2. The mandate under Section 115 BBA (1)(b) of Income
Tax Act, 1961 is also clear in that if the total income of a Non-
resident Sports Association includes the amount guaranteed to
be paid or payable to it in relation to any game or sports played in
India, the amount of income tax calculated in terms of said Section
shall become payable. The expression ‘in relation to’ emphasises
the connection between the game or sport played in India on one
hand and the Guarantee Money paid or payable to the Non-
resident Sports Association on the other.  Once the connection
is established, the liability under the provision must arise.
[Para 14][635-F-G]
3. The obligation to deduct Tax at Source under Section
194E of the Act is not affected by the DTAA and in case the
exigibility to tax is disputed by the assesse on whose account the
deduction is made, the benefit of DTAA can be pleaded and if the
case is made out, the amount in question will always be refunded
with interest.  But, that by itself, cannot absolve the liability under
Section 194E of the Act. [Para 18][640-H; 641-A-B]
4. In the premises, it must be held that the payments made
to the Non-Resident Sports Associations in the present case
represented their income which accrued or arose or was deemed
to have accrued or arisen in India. Consequently, the Appellant
was liable to deduct Tax at Source in terms of Section 194E of
the Act. [Para 19][641-B-C]
G.E. India Technology Centre Pvt. Ltd.  v.  Commissioner
of Income Tax and Another (2010) 10 SCC 29 : [2010]
10 SCR 1142; Metallurgical and Engineering
Consultant (India) Ltd. v. Commissioner of Income Tax
(1999) 238 ITR 208 (Pat); Commissioner of Income
Tax  v.  Manjoo and Co. (2011) 335 ITR 527 (Ker) –
inapplicable.
Performing Right Society Ltd. v. CIT (1976) 4 SCC 37
: [1977] 1 SCR 171; CIT v. Eli Lilly and Co. (India)
Pvt. Ltd. (2009) 15 SCC 1 : [2009] 5 SCR 20 – referred
to.
PILCOM v. C.I.T. WEST BENGAL-VII
A
B
C
D
E
F
G
H
622
SUPREME COURT REPORTS
[2020] 6 S.C.R.
Case Law Reference
[2010] 10 SCR 1142
inapplicable
Para 7
[1977] 1 SCR 171
referred to
Para 7
[2009] 5 SCR 20
referred to
Para 15
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5749
of 2012.
From the Judgment and Order dated 11.11.2010 of the Calcutta
Excerpt shown. Read the full judgment & AI analysis in Lexace.