2022 (7) TMI 1375

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....ssee filed its return of income for the A.Y. 2018-19 on 26.11.2018 declaring total income of Rs..66,67,780/-. The case was selected for scrutiny under CASS and notice u/s. 143(2) and 142(1) of Income-tax Act, 1961 (in short "Act") were issued and served on the assessee. In response AR of the assessee attended and submitted the information as called for. 3. Assessee, Warner Bros. Distributing Inc., is a non-resident corporate entity incorporated in the United States of America. Its activities, inter alia, include, export of films from USA, produced either by its group studios or produced by other third parties. Warner Bros Pictures International, a Division of Warner Bros Distributing Inc. (WBDI) has entered into an agreement with Warner Br....

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....earlier years. However, it was observed that the proceedings before Ld. DRP were continuation of assessment proceedings only and DRP was not an appellate authority and therefore, since the department was under appeal in earlier years before Hon'ble Bombay High Court, the view of Assessing Officer was to be upheld. Resultantly, final assessment order was passed on 28.02.2022, pursuant to the directions of Ld. DRP, assessing the income at Rs..28.35 Crores. Aggrieved, the assessee is under appeal before us. 5. During hearing before us, it is submitted that the issue under appeal is squarely stood covered in assessee's favour by various decisions of this Tribunal right from A.Y. 2006-07 to 2017-18, copies of orders has been placed on record. ....

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....alty under section 9(1)(vi) Explanation 2 to (v) excludes the payment received with reference to sale, distribution and exhibition of cinematographic films. There is also no dispute with reference to the provisions of DTAA entered into by India with USA, notified on 20th December, 1990, that the term royalty used in the Article 12 does not include payment of any gain received as consideration for the use of any copyright or literary, artistic or scientific work including cinematographic films or work on films, tape or other means of production for use in connection with Radio or T.V. broadcasting. In view of this specific provisions, the amount received by the assessee cannot be considered as royalty as was done by the Assessing Officer whi....

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....mpanies, 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 the decision of Ishikawajma-Harima Heavy Industries Ltd vs. Director of Income Tax 2007-(158)-TAX....