Mr. S. Ravindra Bhat, J. - (1.) This judgment would dispose of three writ petitions: WP 9509 of 2016 (preferred by the Commissioner of Income Tax, hereafter the revenue's petition WP 10145 of 2016 (preferred by Jaypee Sports International Limited, hereafter called Jaypee ) and WP 10307 of 2016 (Formula One World Championship Limited (FOWC) hereafter called the F1 Championship Ltd petition). Both Jaypee and FOWC had filed applications before the Authority for Advance Ruling ( AAR ). The AAR held one question in favour of the revenue and the other question in favour of the said two companies. All three parties have, thus approached this court, under Article 226 of the Constitution.
(2.) A brief background of the facts is necessary. FOWC is a UK tax resident company incorporated on 7 March 2001. Consequent to agreements entered into between the Federation Internationale de I'Automobile ( FIA an international motor sports events regulating association), Formula One Asset Management Limited ('FOAM') and FOWC, FOAM licensed all commercial rights in the FIA Formula One World Championship (Championship') to FOWC for 100-year term effective from 1 January 2011. FOWC entered into a Race Promotion Contract ('RPC') dated 13 September 2011, by which it granted to Jaypee Sports the right ('Right') to host, stage and promote the Formula One Grand Prix of India event for a consideration of USD 40 millions. An Artworks License Agreement (ALA) contemplated in RPC was also entered into between FOWC and Jaypee the same day, i.e. 13.09.2011, permitting the use of certain marks and intellectual property belonging to FOWC for a consideration of USD 1. The RPC of 2011 was preceded by another RPC of 25-10-2007; FOWC and Jaypee signed it.
(3.) FIA is a regulatory body; it regulates the FIA Formula One World Championship which has been the premier form of motor racing since its inception in 1950. The formula, so called is with reference to a set of rules that all participants' cars must conform to. F1 seasons consist of a series of races, known as Grand Prix (from French, meaning grand prizes), held across the world on specially designed and built F1 circuits across 26 different locales.;