New Delhi: The Supreme Court Wednesday said that the Pak-Indo-Lanka joint management Committee (PILCOM), which was formed for the purpose of conducting 1996 cricket World Cup, was liable to deduct tax at source for payments made to non-resident sports associations for the tournament.
PILCOM was a committee formed by the cricket boards or associations of Pakistan, India and Sri Lanka for the purpose of conducting the 1996 cricket world cup tournament which was jointly hosted by these three countries.
The apex court said that payments made to the non-resident sports associations for the cricket world cup tournament represented their income which accrued or deemed to have arisen in India.
A bench comprising Justices U U Lalit and Vineet Saran delivered its judgement on an appeal filed by PILCOM challenging the November 2010 order of the Calcutta High Court in this regard.
"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 (PILCOM) was liable to deduct tax at source in terms of section 194E of the Act," the bench said, while dismissing the appeal of PILCOM.
Section 194E of the Income Tax Act deals with payments to non-resident sportsmen or sports associations.
The verdict noted that out of 37 matches played in all in the world cup tournament, only 17 were played in India.
Detailing the facts, the judgement noted that these three host countries were required to pay varying amounts to cricket boards or associations of different countries as well as to the International Cricket Council (ICC) in connection with conducting the preliminary phases of the tournament and also for promotion of game in their respective countries.
Two bank accounts were opened by PILCOM in London, to be operated jointly by the representatives of Indian and Pakistan cricket boards, in which receipt from sponsorship, TV rights and others were deposited and from which the expenses were met.
The Board of Control for Cricket in India (BCCI) had appointed its committee for the purpose of hosting world cup matches in India.
Since the convener-secretary of the BCCI's committee was functioning from Calcutta, necessary bank accounts were opened there for receipts and expenditure relating to world cup matches to be held in India.