Payment of commission to Indian agent at arm’s length price does not relieve non-resident from further attribution of profits to PE in India

MTV Asia LDC Vs. DCIT (ITAT Mumbai); ITA Nos. 3530/Mum/2006 and others, order dated 31 January 2012

Assessee had appointed MTV India (P) Ltd. as its advertising agent in India by agreement dated 25-06-1996 for promoting and selling advertising time of MTV channels to prospective advertiser and advertisement agencies in India. It was also noted by the AO that MTV India (P) Ltd. was entitled to 15% commission of the gross advertisement revenue secured for the assessee company.

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