It was ruled by the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) that the sale of the sports channel is not taxable in India.
Zee and Sony entered into a business acquisition agreement in 2016 following Zee's sale of Ten Sports to Sony through Taj TV, a fully-owned subsidiary of Zee in Mauritius.
According to the reports, the income tax division would appeal to the Bombay High Court a decision that exempts a Mauritian corporation connected to Zee Entertainment from paying capital gains tax on the sale of Ten Sports to Sony Pictures Network.
The deal was made seven years ago for about Rs 1,800 crore. Following the sale of Zee's Ten Sports division to Sony via Taj TV, a fully-owned subsidiary of Zed in Mauritius, the two companies entered into a business acquisition agreement in 2016.
According to a decision by the Income Tax Appellate Tribunal (ITAT), the sale of the sports channel is not taxable in India. According to the assessment, Taj TV lacks a permanent establishment, which entitles it to the treaty benefit provided by the Double Taxation Avoidance Agreement.
As per the ITAT, gains of around Rs 1,7980 crore from the sale of the property are not subject to taxation in India