2021 (11) TMI 1137 - AT - Income Tax
Income deemed to accrue or arise in India - Taxability of income generated in India - appellant has received revenue from cinema halls/theatres in India - PE in India under the India-USA Tax Treaty - AO concluding that the income has directly accrued and arisen in India - AO royalty received by the appellant from Warner Bros. Pictures (India) Pvt. Ltd. as business income u/s 9(1)(i) - HELD THAT:- We find the Hon’ble Tribunal in assessee’s own case for the earlier years has allowed the claim in favour of the assessee.
We considered the decision of the Coordinate Bench of this Honble Tribunal for the A.Y 2014-15 [2019 (10) TMI 1543 - ITAT MUMBAI] as rightly held by the CIT (A) even if income arises to the Non-Resident due to the business connection in India, the income accruing or arising out of such business connection can only be taxed to the extent of the activities attributed to permanent establishment. In this case, the assessee does not have any permanent establishment in India. Since the Indian company who obtained the rights is acting independently, Agency PE provisions are not applicable to the assessee company. The assessee relied on the decision of Ishikawajma-Harima Heavy Industries Ltd [2007 (1) TMI 91 - SUPREME COURT] that incomes arising to a Non-Resident cannot be taxed as business income in India, without a PE. As the assessee does not have any permanent establishment in India, the incomes arising outside Indian Territories cannot be brought to tax. Therefore, there is no need to differ from the findings of the CIT (A) and accordingly the Revenue Appeal is dismissed.