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2011 (5) TMI 650 - ITAT MUMBAIDouble Tax Avoidance agreement – assessee, foreign company, being subsidiary of STAR Ltd held as its conduit by Revenue – assessee had exclusive rights for sale of advertising time in India on the channels – assessee working through collecting agents - The assessee has been returning income in India on receipt basis on deemed profit rate of 10% under the provisions of Circular No. 742 of CBDT – Held that:- The assessee company was formed not only for procuring advertisement business from India but also from other countries and therefore, it was not driven by Indian Tax considerations alone. There were no good reasons to disregard the existence of assessee company. Therefore, assessee is not a conduit of STAR Ltd. and that income from sales revenue of advertisement belonged to assessee and had to be assessed in its name. It was also observed that whether advertisement revenue was taxed in the hands of the assessee company or STAR Ltd. there was no tax avoidance. Other grounds of appeal are restored to the file of CIT(A) for adjudication on merit. - Decided partly in favor of assessee.
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