In Brief
A sports association organized cricket events in India involving non-resident sports teams. The association paid these teams significant sums labeled as "guarantee money." The Income Tax authorities demanded that the association deduct tax at source on these payments. The association argued the payments were not taxable and that tax treaty provisions exempted them. The Supreme Court held that the payments constituted income from matches played in India and were thus subject to tax deduction at source. Although labeled guarantee money, the payments were intrinsically linked to cricket activities in India. The Court ruled that tax deduction obligations are not affected by tax treaties; any treaty benefits must be claimed after deduction.
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