2023 (12) TMI 717 - HC - Income Tax

Income taxable in India - revenue earned from distribution rights transferred by assessee in favour of BBC Worldwide (India) Pvt. Ltd. BWIPL concerning the distribution of the subject channel to cable operators, DTH operators, hotels, etc - HELD THAT - Tribunal has concluded that the distribution fee could not be construed as royalty and hence was not taxable. Received of distribution fee - whether in the period in issue i.e., AY 2008-09, it had received any distribution fee? - A finding of fact has been returned, which is that in the period in issue i.e., AY 2008-09, the assessee did not receive any distribution fee and therefore, no profit could be attributed to it. In our view, if one were to take into account the finding of fact returned qua the second issue, clearly, no case for interference with the impugned order is made out by the appellant/revenue. No substantial question of law arises for our consideration.

Summary

Issues Involved:
- Condonation of delay in filing and re-filing appeals
- Taxability of revenue earned from distribution rights
- Receipt of distribution fee in Assessment Year 2008-09

Condonation of Delay:
The appellant/revenue sought condonation of delay of 05 days in filing the appeal and 96 days in re-filing. The respondent/assessee did not object to the condonation of delay. The court allowed the delay in filing and re-filing applications, disposing of them accordingly.

Taxability of Revenue from Distribution Rights:
The appeal concerned Assessment Year 2008-09 and aimed to challenge the order passed by the Income Tax Appellate Tribunal. The Tribunal considered two main issues. Firstly, it analyzed whether revenue earned from distribution rights transferred by the respondent/assessee to BBC Worldwide (India) Pvt. Ltd. could be treated as royalty. The Tribunal ruled in favor of the respondent/assessee, concluding that the distribution fee was not taxable as royalty. Secondly, it examined whether the assessee received any distribution fee in the relevant period. The Tribunal found that no distribution fee was received in AY 2008-09, leading to the absence of attributable profit. The court upheld the Tribunal's decision, stating that no substantial question of law warranted interference with the impugned order, and subsequently closed the appeal.

Receipt of Distribution Fee in AY 2008-09:
The Tribunal's factual finding that the assessee did not receive any distribution fee during AY 2008-09 was crucial in determining the tax implications. As no profit could be attributed to the assessee in this regard, the court found no grounds for challenging the Tribunal's decision. Consequently, the appeal was closed, and parties were instructed to act based on the digitally signed copy of the order.