Discovery Networks Asia Pacific Pte Ltd. Vs ACIT (ITAT Delhi)
ITAT Delhi held that advertisement and distribution revenue earned by Discovery Asia Inc. is taxable as per Mutual Agreement Resolution (MAP) as decided by competent authority of India & USA. Accordingly, appeal allowed partially.
Facts- Discovery Networks Asia Pacific Pte Ltd [DNAP] is a tax resident company of Singapore within the meaning of Article 4 of the India-Singapore Double Taxation Avoidance Agreement (‘the Treaty’). Discovery Communications India (DCIN) is a company incorporated in India and is engaged in the business of distributing the Channels in India through its sub-distributors and selling commercial airtime on the Channels, broadcasting television programmes through linear channels. In accordance with the policy guidelines of Ministry of Information and Broadcasting (‘MIB’) for down linking of television channels in India, DNAP entered into an Agency Agreement (effective from April 01, 2012) with Discovery communications India (‘DCIN’) whereby, inter-alia, it appointed DCIN as an agent for the sale of advertisement airtime and for distribution of the channels in India.
The assessee, during the year under consideration, has received Rs 1,54,70,84,391/- as advertisement revenue and Rs 1,62,94,03,526/-as distribution revenue. The assessee however, has filed ROI on 29.11.2013 for AY 2013-14 declaring nil income. The assessee in its return of income has claimed that the above advertisement revenue of Rs 1,54,70,84,391/- and distribution revenue of Rs 1,62,94,03,526/- is not taxable in India.
