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TMI Blog2016 (11) TMI 1679X X X X Extracts X X X X X X X X Extracts X X X X ..... as upheld by the Tribunal by making a modification, viz., the Tribunal held that the provisions of Article 5(4)(a) of India-US DTAA shall be applicable. Thus we notice that the Tribunal has taken a conscious view in the matter. In view of the above, there was no necessity to deal with other submissions made by the assessee.We do not find any merit in the contentions of the assessee that there was incorrect appreciation of facts. Whether advertisement airtime is Goods or not? - We notice that the assessing officer has discussed at length about this issue in the assessment order. We notice that the Tribunal has considered this issue in paragraph 18 19 of the order and has taken a conscious view that the advertisement airtime is not goods , by duly considering the characteristics of airtime . We notice that the Tribunal has taken into consideration the above said decisions in paragraph 18 of the order. In effect, the Tribunal has come to the conclusion that the airtime is not goods, since it is only allocation of a portion of telecasting time.Since the Tribunal has taken a view in this matter, the same cannot be considered to be a mistake apparent from record. Taxability of Distributi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment years 2007-08 and 2008-09 respectively by a common order dated 16.12.2015. The issues that were considered were (a) Whether the assessee is having a Permanent Establishment (PE) in India in terms of India-USA DTAA and whether the revenue generated through advertisements is taxable in India. (b) Whether the income generated through distribution of channels falls within the meaning of "Royalty" under Article 12 of India-USA DTAA and also u/s 9(1)(vi) of the Act and hence the same is also taxable in India. The Tribunal decided the first issue against the assessee and the second issue was set aside to the file of AO for fresh consideration. 3. The first mistake pointed out by the assessee is that certain facts relating to the case has been incorrectly recorded. It is submitted that the Tribunal has observed as under in paragraph 4 of its order (Page 2):- "4. The assessee is the owner of two television channels, viz., The National Geographical Channel and FOX International Channel" It was submitted that the FOX International Channel is not owned by the assessee. 3.1 We notice that the Tribunal has committed an error in making above said observation, since the assessee he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld by the Tribunal by making a modification, viz., the Tribunal held that the provisions of Article 5(4)(a) of India-US DTAA shall be applicable. Thus we notice that the Tribunal has taken a conscious view in the matter. In view of the above, there was no necessity to deal with other submissions made by the assessee. 4.2 In view of the above, we do not find any merit in the contentions of the assessee that there was incorrect appreciation of facts.. 5. Next point submitted by the assessee is that the Tribunal, while dealing with issue as to whether "advertisement airtime" is "Goods" or not, has failed to distinguish following decisions:- (a) Tata Consultancy Services vs. State of Andhrapradesh (271 ITR 401) (b) CST Vs. Madhya Pradesh Electricity Board (1969)(1 SCC 200) (c) Ambient Space Sellers Ltd Vs. Asia Industrial Technology P Ltd (1998 PTC 18)(Bom) (d) CIT Vs. Sun TV Ltd (196 ITR 274)(Mad) 5.1 We notice that the assessing officer has discussed at length about this issue in the assessment order. We notice that the Tribunal has considered this issue in paragraph 18 & 19 of the order and has taken a conscious view that the advertisement airtime is not "goods", by duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her margin in line with higher risks assumed by it. Since NGC India has been remunerated at arm's length basis by the assessee, no further profit can be attributed in the hands of assessee. It was submitted that the assessee has placed reliance on various case laws to support the above said proposition, but the Tribunal did not consider the same. It was further submitted that the Tribunal has made following observations, even though neither of parties has argued this matter:- "We wish to clarify here that the ratio laid down on the above said case has application while examining the existence of PE under Article 5(5) of the Act. Once the foreign company is held to have PE in India, then the taxability of business income is required to be determined in terms of Article 7 of the India-US treaty." 7.1 In paragraph 27 of the order, the Tribunal has discussed about the decision rendered by Hon'ble Supreme Court in the case of Morgan Stanely & Co. Inc (292 ITR 416), since it was argued that no further profit can be attributed in the hands of the assessee since the payment made to NGC India was held to be at arms length by the TPO. We notice that the Tribunal has only extracted its und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee by NGC India was held to be at arms length, yet the Tribunal has taken the view that the taxability of receipt of money by the assessee by way of lump sum consideration is required to be examined in the hands of the assessee, since NGC India was held to be a dependent agent and constitutes PE. 8.2 Thus, we notice that the Tribunal has taken a conscious decision by considering the peculiar facts available in the instant case. Accordingly we are of the view that the same cannot be interfered with by the Tribunal u/s 254(2) of the Act. 9. With regard to the decision rendered by the Tribunal in respect of taxability of "Distribution revenue", we notice that the Tribunal has restored the matter to the file of the AO with the observation that the AO has not critically examined the provisions of India-US DTAA and also the provisions of sec. 9(1)(vi) of the Act. It is the contention of the assessee that the AO has made detailed examination of the issue and hence the observations so made by the Tribunal were factually incorrect. It has been further submitted that the Tribunal has given importance to the word "Process", which was never argued by both the parties. It was also submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not adjudicated Ground No.6 urged by the assessee in ITA No.7631/Mum/2012 relating to AY 2008-09. We notice that the Tribunal has omitted to adjudicate the Ground No.6 urged in ITA No.7631/Mum/2012 relating to AY 2008-09. 15. In view of the foregoing discussions, we are unable to accept various pleas put forth by the assessee except certain items, which are stated below:- (a) In the column of "Date of hearing" in the cause title, the dates "04.06.2015, 05.06.2015 and" shall be added prior to 04-09-2015. (b) The first line in paragraph 4 of the order shall be modified as under:- "4. The assessee is the owner of a television Channel, viz., National Geographical Channel." (c) In Page 25 of the order, the following lines suffers from certain mistakes:- "……..If the TPO determines the ALP of the transactions at ₹ 1.50 lakhs, then there is shifting of Indian profits to the foreign soil to the extent of ₹ 0.50 lac and hence the foreign company is liable to assessed in respect of the above said amount of ₹ 0.50 lac". Hence the above said line shall be replaced by the following lines:- "………If the TPO determines the ALP o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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