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2023 (7) TMI 1152 - AT - Income TaxTaxability of income in India - receipts of the assessee from the Customer to make the services of “Maroon 5” available to the Customer for a live musical performance in India - Characterisation of income - fees for technical services or business income or ‘Other Income’ - non satisfy the basic attributes of business i.e. regularity, continuity, frequency and volume - assessee has no PE in India and is a tax resident of USA - assessee is engaged in the business of brand and talent booking agency services and inter alia acts as a mediator, to and in connection with several worldwide event management companies for arranging live performance by renowned artistes from around the world - HELD THAT:- AO arrived at an erroneous conclusion that the impugned receipts from the services rendered by the assessee to the Customer is not business income but ‘Other Income’ which is taxable in India under Article 23 of the India- USA DTAA. Considering the factual matrix of the present case, in our humble opinion, the reliance placed by the Ld. AO in the case of CIT vs. R.D. Aggarwala & Co. [1964 (10) TMI 9 - SUPREME COURT] and GVK Industries Ltd. [1997 (5) TMI 43 - ANDHRA PRADESH HIGH COURT] is misplaced. Article 7(7) of the India-USA DTAA clearly defines ‘business profit’ to mean income derived from any trade or business including income from furnishing of services which are other than specified services (Royalties and FIS). It is not the case of the Ld. AO that the services rendered by the assessee are in the nature of FIS/royalty etc. It cannot be said that the assessee was not engaged in business while rendering talent booking agency services to the Customer and hence the classification of the impugned receipts as ‘Other Income’ which is a residuary head is erroneous. In our considered view the impugned receipts of the assessee from the Customer constitutes business profits and hence are not chargeable to tax in India in the absence of the PE of the assessee in India. Accordingly, ground decided in favour of the assessee.
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