2022 (7) TMI 1375 - AT - Income Tax
Income deemed to accrue or arise in India - royalty income received in India as taxable u/s 5(2) of the Act and alternatively taxable as Royalty Income under Section 9(1)(i) of the Act and Article 12(3) of the India-USA DTAA as well - Business profit attributable to the PE of the assessee in India - Royalty received by the assessee from Warner Bros Picture India Ltd in pursuance to the agreement for distribution and exhibition of the films in India - HELD THAT:- As it is an admitted position that issue stood squarely covered in assessee’s favour by the lead decision of this Tribunal in assessee’s own case for the A.Y. 2006-07[2011 (12) TMI 195 - ITAT MUMBAI] wherein it is held 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 vs. Director of Income Tax [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.