Turner Broadcasting System Vs. ACIT

Parties Involved

Facts Summary

The assessee, a US-based company, entered into an agreement with WarnerMedia India Private Limited (WMIPL) to grant rights to sell advertising and distribute television channels in India. The assessee filed returns of income for the assessment years 2020-21 and 2021-22, offering the revenues from these agreements as business income based on a Mutual Agreement Procedure (MAP) resolution. The Assessing Officer (AO) passed assessment orders taxing the distribution revenues as royalty and attributing 15% of the advertisement revenues to a Permanent Establishment (PE) in India. The assessee appealed against these orders, arguing that the distribution revenues should be taxed as business income and that the PE attribution was incorrect.…

Legal Issues

• 1. Taxability of distribution revenues as royalty or business income.
• 2. Attribution of advertisement revenues to a PE in India.

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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