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TMI Blog2013 (2) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... tribution of cinematographic films. The assessee has entered into an agreement with Warner Bros Pictures India Pvt Ltd, which is an Indian company for the distribution of the cinematographic films in India and has received royalty at specified rates. The dispute arises on the question whether the payment received by the assessee for distribution of cinematographic films in India is a royalty receipt and is not taxable under the Income Tax Act by virtue of clause (v) of Explanation 2 to section 9(1)(vi) of the IT Act or the said receipt is business income of the assessee and taxable in India being the profit attributable to PE in India as held by the Assessing Officer. 3 We have heard the ld AR as well as the ld DR and considered the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the Assessing Officer by applying the provisions of DTAA; however, alternative plea was taken by the ld DR that the Commissioner of Income Tax(Appeals) has not considered the provisions of sec 5 of the Act and Article 7 of the treaty, which has been referred by this Tribunal in para 7 as under: 7) Learned Departmental Representative referring to various findings of the CIT (A) submitted that the CIT (A) erred in not considering the provisions of section 5 of the ACT and Article 7 of ready while deleting the above as he has held that there is as business connection and accordingly the income is taxable under the Indian Income Tax Act Sec. 9(1)(i) r.w.s Section 5 (2). 5.1 Thus, it is clear that for the Assessment Year 2006-07, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany 20th Century Fox to submit that the assessee is also dealing with the Non Resident Companies, so assessee cannot be considered as Agency PE within the definition of Permanent Establishment. 11) We have examined this aspect also. As rightly held by the CIT (A) even if income arises to the Non-Resident due to the business connection in India, the income accruing or arising out of such business connection can only be taxed to the extent of the activities attributed to permanent establishment. In this case, the assessee does not have any permanent establishment in India. Since the Indian company who obtained the rights is acting independently, Agency PE provisions are not applicable to the assessee company. The assessee relied on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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