9911796707
TMI Blog2011 (5) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts in brief are that the assessee (formerly known as Satellite Television Asian Region Advertising Sales B.V.) a company incorporated in Netherlands, was granted exclusive rights for sale of advertising time in India on the channels. The assessee had appointed Star India Ltd. (SIPL) (formerly known as News Television (India) Ltd.) as its collecting agent in India with respect to advertising charges from Indian advertisers for advertisement placed on the channels. SIPL was entitled to a commission of 15% on the receipts from Indian advertisers net of advertising agency commissions. The assessee has been returning income in India on receipt basis on deemed profit rate of 10% under the provisions of Circular No. 742 dated 2.5.1996 of CB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contract between assessee and STAR Ltd. was valid and bona fide arrangement driven solely on commercial consideration. It was also submitted that in case the Assessing Officer's contentions were accepted and STAR Ltd. were to be taxed on advertisement revenue, the basis of taxation of STAR would be no different from the basis of taxation of the assessee and there was thus no tax avoidance. It was further submitted that the assessee could claim the benefit of DTAA which was not done and the assessee was returning income based on Circular 742 which also showed that the assessee had no intention of evading any tax. The CIT did not however accept the contention raised following the decision in Assessment Year 1998-99. It was held by him that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to amount of profit which is attributable to the agent's services. The advertisement revenue in this case had been generated through commission agent i.e. SIPL and income in case of SIPL had already been taxed. Therefore, in terms of Circular 23 which was in force in that year taxability in respect of such sales cannot extend beyond that income. Therefore, whether advertisement revenue was taxed in the hands of the assessee company or STAR Ltd. there was no tax avoidance. The Tribunal further observed 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 existe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
