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2016 (2) TMI 923 - ITAT MUMBAI

2016 (2) TMI 923 - ITAT MUMBAI - TMI - Taxability of advertisement revenue - Held that:- So far as the issue relating to addition on account of "advertisement revenue" and "distribution revenue" the same stands decided in favour of the assessee by the Tribunal, which has been affirmed by the Hon‟ble High Court in AY 1999-2000 and also in subsequent years. As regards the issue of "distribution receipts" treated as "royalty income", we find that this has been treated as business income and s .....

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axability of interest received u/s 244A, it is admitted that, so far as taxability of interest u/s 244 is concerned, under Article 11(4) of India Singapore Treaty, the same is now covered by the decision of the Hon‟ble Special Bench in the case of ACIT vs Clough Engineering Ltd, reported in [2011 (5) TMI 562 - ITAT, DELHI ]. - ITA No.8748/Mum/2011 & ITA No.7639/Mum/2012 - Dated:- 29-2-2016 - SHRI G.S.PANNU, AM & SHRI PAWAN SINGH, JM For The Assessee : Shri Nishant Thakkar For The Reven .....

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sideration and the same are reproduced hereunder :- Taxability of Advertisement Revenues 1. On the facts and circumstances of the case and in law, the Learned Assistant Director of Income Tax (International Taxation), Range 4(1), Mumbai ("AO") erred in holding, and, further, the Hon'ble Dispute Resolution Panel ("DRP") erred in confirming, that the Appellant has a business connection in India. 2. On the facts and circumstances of the case and in law, the Learned AO erred .....

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Screen Media Private Limited ("MSMI") in relation to the marketing of airtime extinguishes the tax liability of the Appellant in India. 4. Without prejudice to the above, on the facts and circumstances of the case and in law, the Learned AO erred in estimating, and the Hon'ble DRP erred in confirming, that 10% of the advertisement revenues are taxable in India even though the Appellant had suffered losses during the year. 5. Without prejudice to the above, on the facts and circumst .....

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assessing them at 10% on a gross basis under Article 12 of the Treaty. 7. Without prejudice to the above, even assuming (without admitting) that the distribution revenues are in the nature of royalty income, on the facts and circumstances of the case and in law, where it is held that the Appellant has a PE in India in respect of its broadcasting activities, the Learned AO and the Hon'ble DRP erred in not treating the distribution revenues as effectively connected with the alleged PE and taxi .....

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ces of the case and in law, the Learned AO erred in holding, and the Hon'ble DRP erred in confirming, that the interest received under Section 244A of the Income Tax Act, 1961, of India (the "Act") on tax refunds for various assessment years is taxable in the year under consideration without appreciating the fact that the same cannot be said to have accrued to the Appellant as the tax liability for those assessment years has not yet attained finality. 9. Without prejudice to above, .....

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dmitting) that the interest received under Section 244A of the Act is effectively connected with the Appellant's alleged PE in India, on the facts and circumstances of the case and in law, the Learned AO and the Hon'ble DRP ought to have held that the interest income is not taxable in the hands of the Appellant as the Appellant had suffered losses during the year. 11. Without prejudice to above, even assuming (without admitting) that the interest received under Section 244A of the Act is .....

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and in law, the Learned AO erred in not granting additional TDS credit of ₹ 76,209,382 claimed with respect to the revised return of income filed on March 27, 2009, TDS credit of ₹ 2,215,682 claimed with respect to the letter dated March 29, 2010 and TDS credit of ₹ 115,910 claimed with respect to the letter dated November 22, 2010, ignoring the specific directions given by Hon'ble DRP in this regard. 3. In brief the facts of the case are that M/s MSM Satellite (Singapore) .....

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deration were selected for scrutiny and the AO made a draft order u/s.144C of the Act, which was forwarded to the assessee and the assessee filed its objections along with Form No.35A in respect of various additions made by the AO in the draft order. The matter was referred to the Dispute Resolution Panel (in short DRP), Mumbai and the DRP confirmed the action of the AO. Now, the assessee is in appeals before us for both the assessment years under consideration. 4. Ld. AR, at the outset, placed .....

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submissions advanced at the hands of learned counsel for the assessee and learned DR for the revenue as well as gone through the order of the Tribunal in assessee s own case for the previous years. We find that all the three issues i.e. taxability of advertisement revenue, taxability on distribution revenue and taxability of interest received u/s.244A have been decided by the Tribunal in its order dated 28-8-2015, passed in ITA No.2870/Mum/2010 and ITA No.2523/Mum/2010. 6.1 In regard to taxabili .....

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the Hon‟ble High Court in AY 1999-2000 and also in subsequent years. As regards the issue of distribution receipts‟ treated as royalty income‟, we find that this has been treated as business income and such a finding or conclusion now have attained finality, as pointed out by the Ld. Senior Counsel. Thus, finding of the CIT(A) on both the issues are affirmed and ground no. 1 & 2 are dismissed. 6.2 In regard to taxability on distribution revenue, the Tribunal has decided th .....

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