Income from Film Distribution was not ‘Royalty’ under India-US DTAA

Warner Bros Distributing Inc. Vs ACIT (ITAT Mumbai) Conclusion: Revenue from film distribution was specifically excluded from the definition of “royalty” under both the Act and the India-USA DTAA and interest earned on income tax refund was not effectively connected with any permanent establishment in India and should be taxed at 15% as per Article 11(2) of the India-US DTAA. Held: Assessee, a tax resident of the USA, was engaged in the distribution of films and had entered into an agreement with Warner Bros. Pictures (India) Pvt. Ltd. (“WBPIPL”) granting exclusive distribution rights ...