TMI Blog2014 (5) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... manent establishment in India - Since the Indian company who obtained the rights is acting independently, Agency PE provisions are not applicable to the assessee company - 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 - income arising to the assessee cannot be taxed as royalty within the meaning of Income Tax Act or DTAA and it also cannot be taxed in the hands of the assessee as ‘business income’ as assessee does not have any Permanent Establishment in India – Decided in favour of Assessee. - I.T.A. No. 7553/MUM/2012 - - - Dated:- 5-3-2014 - Shri I. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble (ITAT, I Bench, Mumbai vide their order dated 10th October 2012) 3. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in holding that Warner Bros. Pictures (India) Pvt. Ltd is the Dependent Agency Permanent Establishment of the appellant pursuant to the directions given by Dispute Resolution Panel -II, Mumbai vide their order dated 03/09/2012 ignoring the findings given by the Hon ble ITAT, I Bench, Mumbai in the case of Warner Bros. Pictures Inc. (the predecessor company), for assessment year 2006-07 vide their order dated 30th December, 2011 that Warner Bros. Pictures (India) Pvt. Ltd is not the DAPE of the appellant. (Now for AY. 2007-08 the claim of the appellant that W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be royalty and taxed accordingly. The assessee is aggrieved and hence, has raised aforementioned grounds of appeal. 3. During the course of hearing it was brought to our notice that the same issue initially arose in assessment year 2006-07 and has been decided by the Tribunal vide its order dated 30/12/2011 in ITA No.3160/Mum/2010 and C.O No. 17/Mum/2011, whereby the appeal filed by the revenue was dismissed with the following observations. Copy of the order is filed at pages 149 to 161 of the paper book. 9) We have considered the rival contentions and examined the facts on record. There is no dispute with reference to the fact that the assessee has entered into agreement with Warner Brothers Pictures India (P) Ltd. outside India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact of which was also accepted by the Assessing Officer as he has invoked only Article 12(2) and not considered the amounts business income as per PE proviso. It was the contention of the learned Departmental Representative that the assessee having business connection, the findings of which was given by the CIT (A), the amount cannot be excluded without examining PE proviso provisions of the DTAA. In this regard the learned Counsel s submission that under the Income Tax Act as well as under the provisions of DTAA the transaction between the assessee and Indian Company to whom license was granted by virtue of the agreement cannot be considered as Agency PE as the Indian assessee is not exclusively dealing with the assessee and referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed at pages 162 to 167 of the paper book. Thus it was pleaded by Ld. AR that the appeal filed by the assessee should be allowed. 4. Ld. DR did not dispute that the facts relating to aforementioned assessment years and the year under consideration were similar. However, he relied upon the assessment order. 5. In view of the above situation, after hearing both the parties, respectfully following the aforementioned decision of the Tribunal in assessee s own case we hold that income arising to the assessee cannot be taxed as royalty within the meaning of Income Tax Act or DTAA and it also cannot be taxed in the hands of the assessee as business income as assessee does not have any Permanent Establishment in India. 5.1 Before parting, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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