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TMI Blog2012 (12) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... dian company who obtained the rights is acting independently, Agency PE provisions are not applicable to the assessee company. Incomes arising to a Non-Resident cannot be taxed as business income in India, without a PE. As the assessee does not have any permanent establishment in India, the incomes arising outside Indian Territories cannot be brought to tax. Therefore, there is no need to differ from the findings of the CIT (A) and accordingly Revenue Appeal is dismissed - in favor of assessee. Decision in the case of Ishikawajma-Harima Heavy Industries Ltd v. Director of Income Tax [2007 (1) TMI 91 - SUPREME COURT] followed. - IT Appeal No. 8734 (Mum.) of 2010 - - - Dated:- 10-10-2012 - R. S. Syal And Vijay Pal Rao, JJ. S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order before the DRP. The DRP, while passing the direction u/s 114C(5) rejected the objections raised by the assessee with respect to the treatment of the royalty income as profit from business and taxable under domestic law by holding that the income being generated by the distribution and exhibition of the films in India by the Agent of the assessee WIPL on behalf of the assessee in India. Thus, the income accrues and arises in India as per the meaning of section 5(2) of the Act. The DRP was also of the view that the Explanation to section 9(1)(i) is not applicable in the case of the assessee since the assessee has a business connection in India and the assessee has a distribution agent and PE in the form of Indian company. The Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) as well as the Tribunal on this aspect would not constitute a precedent. 4.2 In rebuttal, the ld AR of the assessee has submitted that for the Assessment Year 2006-07, the department has raised this issue before the Tribunal , which has been considered and adjudicated by the Tribunal. He has referred para 7 of the decision of the Tribunal for the Assessment Year 2006-07 wherein the ld DR has referred the findings of the Commissioner of Income Tax (Appeals) and contended that the Commissioner of Income Tax(Appeals) has erred in not considering the provisions of sec. 5 of the Act and Article 7 of the Treaty while deleting the addition made by the Assessing Officer. Thus, the ld AR has submitted that when the issue raised before the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her held in paras 10 11 as under: 10 The issue can be examined in another dimension whether the amount is taxable under the Indian Income Tax Act in India if not as royalty, but as business income. The CIT (A) finding is that assessee has a business connection in India. However, he considered that there is no PE to the assessee, the fact of which was also accepted by the Assessing Officer as he has invoked only 3 Article 12(2) and not considered the amounts business income as per PE proviso. It was the contention of the learned Departmental Representative that the assessee having business connection, the findings of which was given by the CIT (A), the amount cannot be excluded without examining 'PE proviso' provisions of the DT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed to differ from the findings of the CIT (A) and accordingly the Revenue Appeal is dismissed. 5.3 It is clear from the order of the Tribunal for the Assessment Year 2006-07 that the Tribunal has given a finding on the point that the assessee does not have any PE in India because the Indian company who obtained the rights is acting independently. Therefore, Agency PE provisions are not applicable to the assessee company. Since there is no change in the facts and circumstances of the case,; therefore, by following the order of the Tribunal, we hold that the assessee has no PE in India and accordingly, the amount received under the agreement of distribution is not taxable in India. 6. The other issues raised by the assessee in this ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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