TMI Blog2012 (4) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration paid by the assessee to the non-resident company for acquiring nonexclusive right to distribute TV channels is not in the nature of Royalty but in the nature of business income and hence, it was not subject to withholding tax. Accordingly, we uphold his order by dismissing the grounds taken by the department. - ITA No. 4372/Mum/2004 - - - Dated:- 25-4-2012 - SHRI B.R. MITTAL (JUDICIAL MEMBER) AND SHRI J.SUDHAKAR REDDY (ACCOUNTANT MEMBER) For the Appellant: Shri Narendra Kumar For the Respondent: Shri Sunil M.Lala ORDER Per B.R.Mittal, JM: This appeal filed by the department is against the order dated 8th March, 2004 of the CIT(A)-XXXI, Mumbai. 2. The only issue involved in this appeal is as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to SET Singapore I.E. nonresident company on the ground that it amounts to Royalty taxable on gross basis under Article 12 of the Treaty. Being aggrieved, the assessee preferred appeal before ld CIT(A) and ld CIT(A) vide the impugned order dated 8.3.2004 held that the payment made by the assessee company to the Non-resident company for acquiring nonexclusive right to distribute TV channels is not in the nature of Royalty, but in the nature of business income. Hence, the department is in appeal before the Tribunal. 5. At the time of hearing, learned Departmental Representative relied on the order of the Assessing Officer and whereas ld A.R. supported the order of ld CIT(A). 6. Having heard both the sides, we observe that ld CIT(A) wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not covered under the definition of Royalty under section 9(1)(vi) of the Income tax Act as well as Article 12 of the Treaty. Accordingly, the payment is not in the nature of Royalty but in the nature of business income. 7. It is relevant to state that at the time of hearing, ld A.R. submitted that in the assessment of Non-resident company, the Assessing Officer treated the payment received from the assessee in the nature of Royalty but ld CIT(A) vide its order dated 31.1.2007 held that it is business income and deleted the addition made in the hands of the recipient company i.e. Non-resident company. It is also pointed out that being aggrieved by the order of ld CIT(A), department filed appeal before the Tribunal being Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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