POMEGRANATE MEDIA (PTY) LTD (FORMERLY KNOWN AS ENDEMOL SOUTH AFRICA (PROPRIETARY) LTD), BRYANSTON GAUTENG V. ASST CIT (IT)-3(3)(2), MUMBAI

ITA 6658/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6839 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 24-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SUBRAMANIYAM
• Keywords: Double taxation relief; Permanent establishment; Advance ruling; Set aside
• Section: 143(3); 195; 143(2); 13; 147

Judgement Text

ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I MUMBAI BEFORE SHRI RAJESH KUMAR (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) ITA NO S.6658 & 6659 /MUM/2019 (ASSESSMENT YEAR S : 2011 - 12 & 2016 - 17 ) POMEGRANATE MEDIA (PTY) LTD. [FORMERLY KNOWN AS ENDEMOL SOUTH AFRICA (PROPRIETARY) LTD.] 272 KENT AVENUE, RANDBURG, GAUTENG, 2194, PO BOX, 71917, BRYANSTON, GAUTENG 2012 VS. ASSISTANT COMMISSIONER OF INCOME TAX, INTERNATIONAL TAXATION 3(3)(2), AIR INDIA BUILDING, NARIMAN POINT, MUMBAI 400 021 PAN NO. AACCE7009G (ASSESSEE) (REVENUE) ASSESSEE BY : SHRI SIDDESH CHAUGULE , A.R REVENUE BY : SHRI VIJAY KUMAR SUBRAMANIYAM , SR. D.R DATE OF HEARING : 15 /07/2021 D ATE OF PRONOUNCEMENT : 26 /07/2021 ORDER PER RAVISH SOOD, J.M: THE CAPTIONED APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS PASSED BY THE A.O U/S 143(3) R.W.S 144C(13) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 31.07.2019 AND 27.08.2019 FOR A.Y. 2011 - 12 AND A.Y. 2015 - 16, RESPECTIVELY. AS A COMMON ISSUE IS INVOLVED IN THE AFOREMENTIONED APPEALS, THEREFORE, THE SAME ARE BEING TAKEN UP AND DISPOSED OF F TOGETHER BY WAY OF A CONSOLIDATED ORDER. WE SHALL FIRST TAKE UP THE APPEAL FOR A.Y. 2011 - 12. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS BEFORE US : ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 2 1 ON THE FACTS AND CIRCUMSTANCES, OF THE CASE AND IN LAW, (HE HON'BLE DISPUTE RESOLUTION PANEL ('DRP') ERRED IN DISMISSING THE APPLICATION FILED BY THE APPELLANT IN FORM 35A IN LIMINE BY HOLDING [HAT [HE APPLICATION IS INVALID AND NON - EST. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE DRP FAILED TO APPRECIAT E THAT ME DEFECT POINTED OUT WAS CURABLE DEFECT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BL E DRP FURTHER ERRED IN NOT ADJUDICATING THE MATTER ON MERITS [I.E. NOT ADJUDICATING ON TAXABILITY OF INCOME RECEIVED BY THE APPELLANT FOR LINE PRODUCTION SERVICES FROM ENDE MOL INDIA PRIVATE LIMITED OF RS. 1,57,31,566]. IT IS PRAYED THAT THE HON'BLE DRP BE DIRECTED TO NOT DISMISS THE APPLICATION IN LIMINE OF THE APPELLANT AND CONSIDER T HE APPLICATION ON MERITS . 4. WITHOUT PREJUDICE LO ABOVE, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED ASSESSING OFFICER (AO) HAS ERRED IN HOLDING THAT THE INCOME RECEIVED BY THE APPELLANT FOR LINE PRODUCTION SERVICES FROM ENDEMOL INDIA PRIVATE LIMITED OF RS.1,5 7,31,566/ - SHOULD BE TAXED AT THE RATE OF 10% UNDER ARTICLE 12 OF THE INDIA - SOUTH AFRICA TAX TREATY. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ALL OR ANY OF THE GROUNDS OF APPEAL HEREIN AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE APPEAL HEARING. 2. BRIEFLY STATED, THE ASSESSEE IS A FOREIGN COMPANY INCORPORATED UNDER THE LAWS OF REPUBLIC OF SOUTH AFRICA AND IS ENGAGED IN THE BUSINESS OF DEVELOPING AND PRODUCING ENTERTAINMENT SERIALS FOR AUDIO - VISUAL PLATFORMS. AS PER THE ITD SYSTEM THE ASSESSEE HAD FILED ITS RETURNS OF INCOME FOR A.Y 2012 - 13 ONWARDS. OBSERVING, THAT THE ASSESSEE COMPANY DESPITE HAVING ENTERED INTO TRANSACTIONS AGGREGATING TO RS.1,57,31,566/ - ON WHICH TAX WAS DEDUCTED AT SOURCE U/S 195 OF THE ACT HAD NOT FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THE A.O REOPENED ITS CASE U/S 147 OF THE ACT . ACCORDINGLY, A NOTICE U/S 148, DATED 26.03.2018 WAS ISSUED AND SERVED UPON THE ASSESSEE . 3. AS IS D ISCERNIBLE FROM THE RECORDS, THE A.O HOLDING A CONVICTION THAT THE AMOUNT OF RS.1,57,31,566/ - THAT WAS RECEIVED BY THE ASSESSEE FROM ENDEMOL INDIA PVT. LTD. ( I.E AFTER DEDUCTION TAX AT SOURCE U/S 195 OF THE ACT) WAS IN THE NATURE OF FEES FOR TECHNICAL SE RVICES (FTS) , THEREFORE, VIDE HIS DRAFT ASSESSMENT ORDER PASSED U/S 143(3) R.W.S 144C(1), DATED 10.12.2018 PROPOSED TO ASSESS THE SAME AS FTS AND SUBJECT IT TO TAX @ 10% AS PER THE INDIA - SOUTH AFRICA TAX TREATY. ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 3 4. OBJECTING TO THE DRAFT ASSESSMENT ORDER PASSED U/S 143(3) R.W.S 144C(1), DATED 10.12.2018 , THE ASSESSEE FILED OBJECTIONS WITH THE DISPUTE RESOLUTION PANEL - 2, MUMBAI (FOR SHORT DRP) . IT WAS OBSERVED BY THE DRP THAT THE FORM NO. 35A FILE D BY THE ASSESSEE ON 10.01.2019 WAS NOT VERIFIED AS PER THE MANDATE OF LAW AS THE SIGNATURE OF THE PERSON ON THE VERIFICATION PAGE WAS A SCANNED COPY. ON BEING CONFRONTED WITH THE AFORESAID FACT THE ASSESSEE FILED ANOTHER FORM NO. 35A ON 19.02.2019 I.E BEYOND THE STIPULA TED TIME PERIOD PRESCRIBED FOR FILING THE SAME. OBSERVING, THAT THE FORM NO. 35A THAT WAS FILED BY THE ASSESSEE ON 10.01.2019 WAS NOT MAINTAINABLE, THE DRP AFTER EXHAUSTIVE DELIBERATIONS AND DRAWING SUPPORT FROM A HOST OF JUDICIAL PRONOUNCEMENTS DECLINED TO ADMIT THE SAME. INSOFAR THE FORM NO. 35A THAT WAS FILED BY THE ASSESSEE ON 19.02.2019 , THE DRP WAS OF THE VIEW THAT AS IT WAS NOT VESTED WITH ANY JURISDICTION TO CONDONE THE DELAY IN VOLVED IN FILING OF THE SA ME , THEREFORE, REJECTED THE SAME IN LIMIN E . 5. AFTER RECEIVING THE ORDER PASSED BY THE DRP WHEREIN IT HAD DIRECTED THE A.O TO FRAME THE ASSESSMENT IN TERMS OF THE PROVISIONS OF SEC. 144C(13) OF THE ACT, THE A.O VIDE HIS ORDER PASSED U/S 143(3) R.W.S 144C(13), DATED 31.07.2019 FRAMED THE ASSESSMENT AS WAS SO ASSESSED BY HIM VIDE HIS DRAFT ASSESSMENT ORDER DATED 10.12.2018 , AND TREATING THE AMOUNT OF RS. 1,56,31,566/ - THAT WAS RECEIVED BY THE ASSESSEE FROM ENDEMOL INDIA PVT. LTD. A S FTS SUBJECTED THE SA ME TO TAX @ 10% AS PER THE INDIA - SOUTH AFRICA TAX TREATY. 6. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER PASSED BY THE A.O U/S 143(3) R.W.S 144C(13) , DATED 31.02.2019 HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE VERY OUTSET OF THE HEARING OF THE APPEAL SUBMITTED , THAT THE ISSUE , AS TO WHETHER OR NOT THE AMOUNT RECEIVED BY THE ASSESSEE VIZ. M/S POMEGRANATE MEDIA ( P T Y . ) LIMITED [EARLIER KNOWN AS ENDEMOL SOUTH AFRICA ( P ROPRIETARY) LIMIT ED] FROM M/S ENDEMOL INDIA PVT. LTD. COULD BE HELD AS FTS WAS SQUARELY COVERED BY THE ORDER ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 4 PASSED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE SUCCEEDING YEAR S I.E A.Y. 2012 - 13 IN ITA NO. 1732/MUM/2016, DATED 03.10.2018 AND THAT FOR A.Y. 2014 - 15 AND A.Y. 2015 - 16 IN ITA NOS. 698 & 808/MUM/2019, DATED 30.06.2020. IT WAS SUBMITTED BY THE LD. A.R THAT THE TRIBUNAL VIDE ITS CONSOLIDATED ORDER PASSED WHILE DISPOSING OFF THE APPEALS FOR A.Y. 2014 - 15 AND A.Y. 2015 - 16 IN ITA NOS. 698 & 808/MUM/2018, DATED 30. 06.2020 HAD FOLLOWED ITS EARLIER VIEW FOR A.Y 2012 - 13 IN ITA NO. 1732/MUM/2016 , DATED 03.10.2018. IN SUPPORT OF ITS AFORESAID CLAIM THE LD. A.R TOOK US THROUGH THE RELEVANT ORDERS OF THE TRIBUNAL FOR THE AFOREMENTIONED YEARS. 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 8. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD, AS WEL L AS CONSIDERED THE JUDICIAL PRONOUNCEMENTS THAT HAVE BEEN RELIED UPON BY THEM TO DRIVE HOME THEIR RESPECTIVE CONTENTIONS. AS STATED BY THE LD. A.R , AND RIGHTLY SO, THE SOLITARY ISSUE INVOLVED IN THE PRESENT APPEAL I.E AS TO WHETHER OR NOT THE AMOUNT OF RS .1,57,31,566/ - RECEIVED BY THE ASSESSEE FROM ENDEMOL INDIA PVT. LTD. COULD BE HELD TO BE FTS IS SQUARELY COVERED BY THE ORDER PASSED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 2012 - 13, DATED 03.10.2018 AND THAT FOR A.Y. 2014 - 15 AND A.Y. 2015 - 16, D ATED 30.06.2020. ON A PERUSAL OF THE RECORDS, WE FIND THAT THE TRIBUNAL WHILE DISPOSING OFF THE APPEALS FOR A.Y. 2014 - 15 IN ITA NO. 698/MUM/2019 AND A.Y. 2015 - 16 IN ITA NO. 808/MUM/2019, DATED 30.06.2020 HAD FOLLOWED ITS EARLIER ORDER PASSED FOR A.Y. 2012 - 13 IN ITA NO. 1732/MUM/2016 , WHEREIN IT WAS, INTER - ALIA, OBSERVED BY THE TRIBUNAL THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM ENDEMOL INDIA PVT. LTD. COULD NOT BE HELD AS FTS, AS UNDER: 9. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDISPUTEDLY, THE CONTRACT BETWEEN ENDEMOL INDIA PVT. LTD. AND THE ASSESSEE FOR ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 5 RENDERING OF CERTAIN SERVICES RELATING TO FILMING OF AN ENTERTAINMENT PROG RAM CALLED FEAR FACTOR HAS REMAINED THE SAME FROM THE VERY BEGINNING. THEREFORE, THE CONTRACTUAL TERMS AND OTHER RELEVANT FACTS ON THE BASIS OF WHICH THE TRIBUNAL HAS DECIDED THE ISSUE IN ASSESSMENT YEAR 2012 13 REMAINS UNCHANGED/UNALTERED IN THE IMPUGNE D ASSESSMENT YEAR AS WELL. EVEN, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT DISPUTED THE AFORESAID FACTUAL POSITION. THE ONLY SUBMISSION MADE BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR NOT FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2012 13 IS, THE TRIBUNAL HAS NOT APPRECIATED THE FACTS IN RIGHT PERSPECTIVE. HOWEVER, IN OUR CONSIDERED VIEW, WHILE DISCHARGING JUDICIAL FUNCTION WE, AS A MATTER OF PROPRIETY, CANNOT FIND FAULT WITH THE DECISION OF ANOTHER COORDINATE BENCH RENDERED IN CASE OF THE VERY SAME ASSESSEE ON IDENTICAL ISSUE WITHOUT ANY MATERIAL DIFFERENCE IN FACTS. FURTHER, ON CAREFUL PERUSAL OF THE EARLIER ORDER PASSED BY THE BENCH, WE FIND THAT IT HAS DEALT WITH THE ISSUE EXHAUSTIVELY AFTER TAKING INTO CONSIDERATION ALL MATERIAL FACTS, THE SUBMISSIONS MADE BY THE PARTIES AS WELL AS THE JUDICIAL PRECEDENTS CITED BEFORE IT. THE FINDING OF THE TRIBUNAL ON THE ISSUE IS REPRODUCED HEREUNDER FOR BETTER APPRECIATION: 13. WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION IN THE BACKDROP OF THE CONTENTIONS ADVANCED BY THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES. WE FIND, THAT FROM A PERUSAL OF THE VARIOUS CLAUSES OF THE AGREEMENT DATED 19.04.2011, IT CAN SAFELY BE GATHERED THAT THE SAME IS A CONTRACT FOR PROVIDING SE RVICES, AND NOT FOR GRANTING A RIGHT IN ANY COPYRIGHT. WE SHALL NOW DELIBERATE ON THE OBSERVATIONS OF THE LOWER AUTHORITIES THAT THE ASSESSEE HAD TRAVERSED BEYOND THE TERMS OF THE AFORESAID AGREEMENT DATED 18.04.2011, AND HAD RENDERED MANAGERIAL/TECHNICAL SERVICES TO ENDEMOL INDIA PVT. LTD. WE FIND, THAT THE A.O/DRP HAD BROUGHT THE AMOUNT OF RS.9,60,23,838/ - TO TAX BY CONCLUDING THAT THE SAID SUM RECEIVED BY THE ASSESSEE WAS TAXABLE AS FTS AS ALSO ROYALTY, BOTH UNDER THE ACT AND THE INDIA - SOUTH AFRICA TAX TREATY. IN THE BACKDROP OF THE AFORESAID OBSERVATIONS OF THE LOWER AUTHORITIES, WE SHALL NOW LOOK INTO THE ASPECT AS TO WHETHER THE NATURE OF SERVICES RENDERED BY THE ASSESSEE WOULD BRING THEM WITHIN THE SWEEP OF FTS AND ROYALTY, OR NOT. 14. WE SH ALL FIRST LOOK INTO THE CHARACTERISATION OF THE FEES RECEIVED BY THE ASSESSEE, AS FTS BY THE A.O/DRP. WE FIND THAT IN TERMS OF EXPLANATION 2 TO SECTION 9(1)(VII) OF THE ACT, THE TERM FTS MEANS ANY CONSIDERATION (INCLUDING ANY LUMP SUM CONSIDERATION) FOR THE RENDERING OF ANY MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES (INCLUDING THE PROVISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL), BUT DOES NOT INCLUDE CONSIDERATION FOR ANY CONSTRUCTION, ASSEMBLY, MINING OR LIKE PROJECT UNDERTAKEN BY THE RECIPIENT OR CONSIDERATION WHICH WOULD BE INCOME OF THE RECIPIENT CHARGEABLE UNDER THE HEAD SALARIES. FURTHER, IN SIMILAR TERMS, AS PER ARTICLE 12 OF THE INDIA - SOUTH AFRICA TAX TREATY, THE FTS IS DEFINED TO MEAN PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE SERVICES OF A MANAGERIAL, TECHNICAL OR CONSULTANCY NATURE, INCLUDING THE PROVISION OF SERVICES BY TECHNICAL OR CONSULTANCY PERSONNEL. THUS, ON A PERUSAL OF THE DEFINITION OF FTS, IT EMERGES THAT THE SAME ENCOMPASSES CONSIDERATION WHICH IS RECEIVED FOR RENDERING OF SERVICES OF A MANAGERIAL, TECHNICAL OR CONSULTANCY NATURE. WE MAY HEREIN OBSERVE, THAT THE ASSESSEE AS A LINE PRODUCER HAD ON A PRINCIPAL TO PRINCIPAL BASIS RENDERED VARIOUS COORDINATION/FACILITATION SERVICES TO ENDEMOL INDIA PVT. LTD., IN PRODUCING THE TELEVISION SERIES VIZ. FEAR FACTOR, VIZ. ARRANGING ALL PRODUCTION FACILITIES AND LOCATION FILMING SERVICES; PROVIDING A LINE PRODUCER, PRODUCTION STAFF, LOCAL CREW FOR PROVIDING STUNT SERVICES, TRANSPORT NECESSARY FOR STUNTS FOR PRODUCTION OF THE SHOW; PROVIDING AND ARRANGING FOR A DIRECTOR, STAFF, ART DEPARTMENT AND PRODUCTION STAFF TO SET UP AND FILM THE SERIES; PROVIDING FOR ALL REQUIRED PAPER WORK AND DECLARATION REGARDING FAIR TREATMENT METED OUT TO ANIMALS, INSECTS ETC. DURING THE PROD UCTION OF THE SHOW ETC; PROVIDING FILM PRODUCERS INDEMNITY INSURANCE FOR ALL RESOURCES INCLUDING THE FILMING OF THE STUNTS; AND PROVIDING FOR AN APPROPRIATE STORAGE SPACE FOR ENDEMOL INDIA PVT. LTD TO ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 6 STORE THE FOOTAGE. IN THE BACKDROP OF OUR AFORESAID OB SERVATIONS, WE SHALL NOW DELIBERATE ON THE ASPECT, THAT AS TO WHETHER THE SERVICES RENDERED BY THE ASSESSEE TO ENDEMOL INDIA PVT. LTD CAN BE CHARACTERISED AS SERVICES OF A MANAGERIAL, TECHNICAL OR CONSULTANCY NATURE, WHICH THEREIN WOULD BRING THE SAME WITH IN THE SWEEP OF FTS. FOR THIS, WE SHALL LOOK INTO THE SCOPE AND GAMUT OF MANAGERIAL, TECHNICAL AND CONSULTANCY SERVICES, AS UNDER: (I) MANAGERIAL SERVICES : THE TERM MANAGERIAL SERVICES, ORDINARILY MEANS HANDLING MANAGEMENT AND ITS AFFAIRS. AS PER THE CON CISE OXFORD DICTIONARY, THE TERM MANAGERIAL SERVICES MEANS RENDERING OF SERVICES WHICH INVOLVES CONTROLLING, DIRECTING, MANAGING OR ADMINISTERING A BUSINESS OR PART OF A BUSINESS OR ANY OTHER THING. HOWEVER, THE SERVICES PROVIDED BY THE ASSESSEE ARE CLEARL Y FOUND TO BE IN THE NATURE OF ADMINISTRATIVE SERVICES (SUCH AS MAKING LOGISTIC ARRANGEMENTS ETC.). ACCORDINGLY, THE SERVICES RENDERED BY THE ASSESSEE WOULD NOT TANTAMOUNT TO PROVIDING OF ANY MANAGERIAL OR MANAGEMENT FUNCTIONAL SERVICES TO ENDEMOL INDIA PV T. LTD. THUS, AS THE SERVICES RENDERED BY THE ASSESSEE IN NO WAY INVOLVES CONTROLLING, DIRECTING, MANAGING OR ADMINISTERING THE BUSINESS OR PART OF A BUSINESS OF ENDEMOL INDIA PVT. LTD, THEREFORE, IT CAN SAFELY BE CONCLUDED THAT THE SAME DOES NOT FALL WITH IN THE REALM OF THE TERM MANAGERIAL SERVICES. (II) TECHNICAL SERVICES: - THE TERM TECHNICAL SERVICES TAKES WITHIN ITS SWEEP SERVICES WHICH WOULD REQUIRE THE EXPERTISE IN TECHNOLOGY OR SPECIAL SKILL OR KNOWLEDGE RELATING TO THE FIELD OF TECHNOLOGY. AS PER THE CONCISE OXFORD DICTIONARY, THE TERM TECHNICAL SERVICES MEANS BELONGING OR RELATING TO ART, SCIENCE, PROFESSION OR OCCUPATION INVOLVING MECHANICAL ARTS AND APPLIED SCIENCES. WE ARE OF THE CONSIDERED VIEW, THAT AS THE ADMINISTRATIVE SERVICES VIZ. ARRANGING FOR LOGISTICS ETC. BY THE ASSESSEE DOES NEITHER INVOLVE USE OF ANY TECHNICAL SKILL OR TECHNICAL KNOWLEDGE, NOR ANY APPLICATION OF TECHNICAL EXPERTISE ON ITS PART WHILE RENDERING SUCH SERVICES, HENCE THE SAME CANNOT BE CHARACTERISED AS TECHNICAL SERVICES. (III) CONSULTANCY SERVICES: THE TERM CONSULTANCY SERVICES, IN COMMON PARLANCE, MEANS PROVIDING ADVICE OR ADVISORY SERVICES BY A PROFESSIONAL. USUALLY CONSULTANCY SERVICES ARE PROFESSIONAL SERVICES REQUIRING SPECIALIZED QUALIFICATION, KNOWLEDGE, EXPERTISE OF A PROFESSIONAL PERSON, AND ARE MORE DEPENDENT ON SKILL, INTELLECT AND INDIVIDUAL CHARACTERISTICS OF THE PERSON RENDERING IT. WE ARE OF THE CONSIDERED VIEW THAT AS THE SERVICES RENDERED BY THE ASSESSEE DO NOT INVOLVE PROVIDING OF ANY ADVICE OR CONSULTANCY TO ENDEMOL INDIA PVT. LTD., THUS, THE SAME CANNOT BE BROUGHT WITHIN THE PURVIEW OF CONSULTANCY SERVICES. 15. WE THUS, IN TERMS OF OUR AFORESAID OBSERVATIONS, ARE OF THE CONSIDERED VIEW THAT AS THE VARIOUS COORDINATION/FACILITATION SERVICES RENDERED BY THE ASSESSEE VIZ. ARRANGING FOR LOCATIONAL CREW, PRODUCER, TRANSPORTATION, PAPER WORK FOR VARIOUS STUNTS TO BE PERFORMED AND OTHER REQUIREMENTS FOR SETTING UP AND FILMING THE SERIES ETC, ARE IN THE NATURE OF LINE PRODUCTION SERVICES, THUS, THE SAME CANNOT BE TERMED AS TECHNICAL, MANAGERIAL OR CONSULTANCY SERVICES. THUS, THE CONSIDERATION RECEIVED BY THE ASSESSEE FOR RENDERING OF THE AFORESAID SERVICES, WHICH ARE PURELY ADMINISTRATIVE IN NATURE, CANNOT BE BROUGHT WITHIN THE SWEEP OF THE DEFINITI ON OF FTS WITHIN THE MEANING OF EXPLANATION 2 TO SEC.9(1)(VII) OF THE ACT OR ARTICLE 12 OF THE INDIA - SOUTH AFRICA TAX TREATY. WE THUS, IN THE BACKDROP OF OUR AFORESAID DELIBERATIONS ARE OF THE CONSIDERED VIEW, THAT THE AMOUNT RECEIVED BY THE ASSESSEE FOR RENDERING OF THE AFORESAID ADMINISTRATIVE SERVICES CANNOT BE CHARACTERISED AS FTS. 16. WE MAY HEREIN OBSERVE, THAT A SIMILAR VIEW HAD EARLIER BEEN ARRIVED AT BY THE ITAT, MUMBAI, IN THE CASE OF YASHRAJ FILM PVT. LTD. VS. ITO (IT) (2012) 231 ITR (T) 125 (MUM.). ON A PERUSAL OF THE FACTS INVOLVED IN THE AFOREMENTIONED CASE, IT EMERGES THAT THE ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 7 TRIBUNAL HAD OBSERVED THAT AS THE SERVICES RENDERED BY THE NON - RESIDENT SERVICE PROVIDERS FOR MAKING LOGISTIC ARR ANGEMENTS WERE IN THE NATURE OF COMMERCIAL SERVICES, THUS, THE SAME CANNOT BE TREATED AS MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES WITHIN THE MEANING GIVEN IN EXPLANATION 2 TO SEC. 9(1)(VII) OF THE ACT. IN THE AFOREMENTIONED CASE, THE ASSESSEE HAD MADE PAYMENTS TO VARIOUS OVERSEAS SERVICES PROVIDERS BELONGING TO U.K, POLAND, BRAZIL, CANADA & AUSTRALIA FOR SERVICES AVAILED IN CONNECTION WITH THE SHOOTING OF DIFFERENT FILMS. THE SERVICES RENDERED BY THE AFOREMENTIONED NON - RESIDENT SERVICE PROVIDERS INCLUD ED ARRANGING FOR EXTRAS, ARRANGING FOR THE SECURITY, ARRANGING FOR LOCATIONS, ARRANGING FOR THE ACCOMMODATIONS FOR THE CAST AND CREW, ARRANGING FOR NECESSARY PERMISSIONS FROM LOCAL AUTHORITIES, ARRANGING FOR MAKEUP OF THE STARS, ARRANGING FOR INSURANCE COV ER ETC. THE TRIBUNAL AFTER DELIBERATING ON THE NATURE OF THE AFOREMENTIONED SERVICES CONCLUDED, THAT AS THE SAME WERE PURELY COMMERCIAL SERVICES FALLING IN THE CATEGORY OF LOGISTIC ARRANGEMENT SERVICES, THUS, THE CONSIDERATION RECEIVED AS REGARDS RENDERING OF SUCH SERVICES WOULD CONSTITUTE BUSINESS PROFITS OF THE SAID OVERSEAS SERVICE PROVIDERS. IT WAS FURTHER OBSERVED, THAT AS THE SAID SERVICE PROVIDERS HAD NO PERMANENT ESTABLISHMENT (P.E) IN INDIA DURING THE YEAR UNDER CONSIDERATION, HENCE THE BUSINESS PR OFITS WERE NOT TAXABLE IN INDIA IN THEIR HANDS AS PER ARTICLE 7 OF THE RESPECTIVE TAX TREATIES BETWEEN INDIA AND THE ABOVEMENTIONED COUNTRIES. WE HAVE DELIBERATED AT LENGTH ON THE FACTS INVOLVED IN THE CASE BEFORE US, AND FIND THAT THE NATURE OF SERVICES R ENDERED BY THE OVERSEAS SERVICE PROVIDERS IN THE AFOREMENTIONED CASE OF YASHRAJ FILMS PVT. LTD.(SUPRA) ARE SOMEWHAT SIMILARLY PLACED AND RATHER OVERLAPPING TO SOME EXTENT, AS IN COMPARISON TO THE SERVICES RENDERED BY THE ASSESSEE IN THE CASE BEFORE US. IN TERMS OF OUR AFORESAID OBSERVATIONS, WE FIND THAT OUR VIEW THAT THE SERVICES RENDERED BY THE ASSESSEE ARE ADMINISTRATIVE SERVICES AND NOT IN THE NATURE OF MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICES, ALSO STANDS FORTIFIED BY THE AFORESAID ORDER OF THE C OORDINATE BENCH OF THE TRIBUNAL. WE THUS, IN THE BACKDROP OF OUR AFORESAID DELIBERATIONS, AND FINDING OURSELVES TO BE IN AGREEMENT WITH THE VIEW TAKEN BY THE TRIBUNAL IN THE AFORESAID CASE VIZ. YASHRAJ FILMS PVT. LTD. (SUPRA), HEREIN CONCLUDE THAT THE CONS IDERATION RECEIVED BY THE ASSESSEE FOR RENDERING OF THE SERVICES TO ENDEMOL INDIA PVT. LTD. CANNOT BE HELD AS FTS. 17. STILL FURTHER, WE ALSO FIND THAT THE ISSUE OF TAXABILITY OF AMOUNT RECEIVED OUTSIDE INDIA FOR RENDERING LINE PRODUCTION SERVICES TO TH E ASSESSEE COMPANY VIZ. ENDEMOL INDIA PVT. LTD, HAD ALSO BEEN CONSIDERED AND DECIDED BY THE HONBLE AUTHORITY FOR ADVANCE RULING (FOR SHORT AAR), VIDE ITS RULINGS RENDERED IN THE CASE OF ENDEMOL ARGENTINA (NON - RESIDENT) [AAR NO. 1082 OF 2011; DATED 13.12 .2013] AND UTOPIA FILMS (NON - RESIDENT) [AAR NO. 1081 AND 1082 OF 2011; DATED 19.02.2014]. IN THE AFOREMENTIONED RULINGS, IT WAS OBSERVED, THAT THE CONSIDERATION RECEIVED OUTSIDE INDIA BY THE CONCERNED OVERSEAS SERVICE PROVIDERS BY PROVIDING LINE PRODUCTION SERVICES TO THE ASSESSEE, VIZ. PROVIDING LINE PRODUCER, LOCAL CREW, STUNT SERVICES, TRANSPORT ETC. WOULD NOT QUALIFY AS FTS UNDER THE ACT. WE FIND THAT IN THE PRESENT CASE, THE A.O/DRP HAD DECLINED TO RELY ON THE AFORESAID RULINGS OF THE AAR, FOR THE RE ASONS VIZ. (I). THAT AS PER SEC. 245S, THE ADVANCE RULING IS PRONOUNCED ON THE BASIS OF FACTS OF A PARTICULAR CASE AND HENCE, IT IS BINDING ON ONLY THE APPLICANT IN RESPECT OF THE TRANSACTIONS IN RELATION TO WHICH ADVANCE RULING WAS SOUGHT; AND (II). THAT THE RULING WAS RENDERED BY THE HONBLE AAR IN CONTEXT OF DIFFERENT DTAAS, AS AGAINST THAT INVOLVED IN THE CASE OF THE ASSESSEE. WE HAVE DELIBERATED AT LENGTH ON THE AFORESAID OBSERVATIONS OF THE LOWER AUTHORITIES AND ARE UNABLE TO PERSUADE OURSELVES TO AC CEPT THE SAME. WE FIND THAT THOUGH IT IS AN ADMITTED FACT THAT AN ADVANCE RULINGS HAVING BEEN RENDERED ON THE BASIS OF THE FACTS OF A PARTICULAR CASE, THUS, WOULD ONLY BE BINDING ON THE APPLICANT, AND THAT TOO IN RESPECT OF THE TRANSACTIONS IN RELATION T O WHICH THE SAME WAS OBTAINED, HOWEVER, SUCH RULING WOULD STILL HAVE A PERSUASIVE VALUE IN RESPECT OF OTHER PARTIES AS WELL AND ACCORDINGLY, MAY BE RELIED UPON BY THE AUTHORITY ITSELF OR BY THE APPLICANT/DEPARTMENT. WE FIND THAT OUR AFORESAID VIEW IS FORTI FIED BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF COLUMBIA SPORTSWEAR COMPANY VS. DIT, BANGALORE (2012) 346 ITR 161 (SC). WE ARE FURTHER OF THE CONSIDERED VIEW, THAT THOUGH THE LOWER AUTHORITIES HAD DECLINED TO TAKE COGNIZANCE OF THE OBSERVA TIONS OF THE ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 8 HONBLE AAR ON THE GROUND THAT THE TAX TREATIES INVOLVED IN THE SAID CASE WERE DIFFERENT AS AGAINST THAT INVOLVED IN THE PRESENT CASE, HOWEVER, THERE IS NO MENTION OF ANY SUCH MATERIAL FACT WHICH COULD PERSUADE US TO CONCLUDE THAT THE DEFINI TION OF FTS IN THE SAID RESPECTIVE TAX TREATIES WOULD BE ABSOLUTELY UNWORKABLE, AND HENCE COULD NOT BE APPLIED IN THE CASE BEFORE US. WE THUS, ARE OF THE CONSIDERED VIEW, THAT THE LOWER AUTHORITIES HAD ERRED IN FAILING TO APPRECIATE THAT THE RULING RENDE RED BY THE HONBLE AAR IN THE CASE OF ENDEMOL ARGENTINA AND UTOPIA FILMS, THOUGH WAS NOT BINDING, BUT DID HAVE A PERSUASIVE VALUE WHILE ADJUDICATING THE ISSUE UNDER CONSIDERATION. BE THAT AS IT MAY, WE ARE NOT IMPRESSED BY THE OUTRIGHT SCRAPPING BY THE LOW ER AUTHORITIES OF THE AFORESAID RULINGS RENDERED BY THE HONBLE AAR IN CONTEXT OF TAXABILITY OF LINE PRODUCTION SERVICES PROVIDED BY THE OVERSEAS SERVICE PROVIDERS VIZ. (I). ENDEMOL ARGENTINA (NON - RESIDENT);AND (II). UTOPIA FILMS (NON - RESIDENT) TO THE ASSE SSEE COMPANY VIZ. ENDEMOL INDIA PVT. LTD. HOWEVER, WE ARE OF THE CONSIDERED VIEW, THAT AS WE HAVE ALREADY OBSERVED THAT THE SERVICES RENDERED BY THE ASSESSEE TO ENDEMOL INDIA PVT. LTD. ARE NOT IN THE NATURE OF A MANAGERIAL, TECHNICAL OR CONSULTANCY SERVICE S, THEREFORE, WE REFRAIN FROM FURTHER ADVERTING TO AND ADJUDICATING UPON THE OBSERVATIONS ARRIVED AT BY THE A.O/DRP IN CONTEXT OF THE RULINGS OF THE HONBLE AAR. 18. WE SHALL NOW ADVERT TO THE OBSERVATIONS OF THE A.O/DRP THAT THE SUM RECEIVED BY THE ASSES SEE COMPANY WAS ALSO IN THE NATURE OF ROYALTY, BOTH UNDER THE ACT AND THE INDIA - SOUTH AFRICA TAX TREATY. WE FIND THAT THE A.O HAS STATED IN HIS ORDER THAT THE CONSIDERATION RECEIVED BY THE ASSESSEE WAS TOWARDS ROYALTY FOR COPYRIGHT. ON THE OTHER HAND, IT IS CONTENDED BY THE ASSESSEE THAT THE CONSIDERATION RECEIVED FROM ENDEMOL INDIA PVT. LTD., CANNOT BE CONSTRUED AS ROYALTY WITHIN THE MEANING OF ARTICLE 12 OF THE INDIA - SOUTH AFRICA TAX TREATY. WE FIND THAT THE ASSESSEE HAS ASSAILED THE TREATING OF THE CONSIDERATION RECEIVED BY THE ASSESSEE AS ROYALTY BY THE LOWER AUTHORITIES ON VARIOUS GROUNDS VIZ. (I) THE AGREEMENT IN LIEU WHEREOF CONSIDERATION WAS RECEIVED BY THE ASSESSEE WAS A CONTRACT FOR PROVIDING SERVICES AND NOT FOR GRANTING OF ANY RIGHTS IN A PROGRAMME; (II) IT IS IN CONSIDERATION FOR SUCH SERVICES RENDERED THAT IT WAS AGREED BY THE PARTIES THAT THE ASSESSEE WILL BE REMUNERATED BY WAY OF PRODUCTION FEE/PRODUCTION COST; (III) THAT AS PER THE TERMS AGREED BETWEEN THE PARTIES IN THE AGREEMENT THE ENTIRE PAYMENT WAS TOWARDS PRODUCTION COST/PRODUCTION FEES, AND NOT FOR LICENSING OF RIGHTS IN ANY PROGRAMME; (IV) THAT ASSUMING (WITHOUT ADMITTING) THAT THERE WAS ALSO A GRANT OF COPYRIGHT, THEN IN THE ABSENCE OF ANY MENTION OF CONSIDERATION UNDER THE AG REEMENT WHICH CLEARLY STATES THAT THE ENTIRE CONSIDERATION IS ONLY FOR SERVICES RENDERED BY THE ASSESSEE, NO PART OF SUCH CONSIDERATION COULD BE RELATED TO ROYALTY FOR COPYRIGHT; (V) THAT BY ASSUMING THAT THE PAYMENT RECEIVED BY THE ASSESSEE WAS FOR TRANS FER OF RIGHTS IN THE PROGRAMME, THE SAME WOULD TANTAMOUNT TO RE - WRITING OF THE CONTRACT; (VI) THAT AS PER SEC. 17 OF THE INDIAN COPYRIGHT ACT, 1957 AND SOUTH AFRICA COPYRIGHT ACT NO. 98 OF 1978, WHERE THE WORK IS SPECIFICALLY COMMISSIONED UNDER THE CONTRA CT OF SERVICE AT THE INSTANCE OF A PERSON, SUCH PERSON SHALL BE THE FIRST OWNER OF THE COPYRIGHT, THUS, NOW WHEN THE WORK VIZ. THE TELEVISION SERIES FEAR FACTOR IS COMMISSIONED BY ENDEMOL INDIA PVT. LTD. UNDER THE CONTRACT OF SERVICE, THEREFORE, IT WOULD ALWAYS BE THE FIRST OWNER OF THE WORK PRODUCED BY THE ASSESSEE AND THE OWNER OF THE COPYRIGHT AND THE QUESTION OF ASSIGNING ANY COPYRIGHT UNDER THE COPYRIGHT LAW WOULD NOT ARISE; AND (VII) THAT AS THE TERM ROYALTY DEFINED IN ARTICLE 12 OF THE INDIA - SOUT H AFRICA TAX TREATY INCLUDES ONLY PAYMENT FOR USE AND RIGHT TO USE ANY COPYRIGHT, THUS, THE CLAIM OF THE A.O/DRP THAT THE CONSIDERATION RECEIVED BY THE ASSESSEE WAS FOR TRANSFER OF THE COPYRIGHTS BY THE ASSESSEE TO ENDEMOL INDIA PVT. LTD. WOULD NOT FALL WITHIN THE REALM OF THE DEFINITION OF ROYALTY IN THE TAX TREATY. 19. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ISSUE BEFORE US, IN THE BACKDROP OF THE CONTENTIONS RAISED BY THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES AND THE MATERIAL AVAILABLE ON RECORD. WE FIND, THAT THE TERM ROYALTY AS DEFINED IN ARTICLE 12 OF THE INDIA - SOUTH AFRICA TAX TREATY, READS AS UNDER: - 3. THE TERM ROYALTIES AS USED IN THIS ARTICLE MEANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FOR THE USE OF OR T HE RIGHT TO USE, ANY COPYRIGHT OF LITERARY, ARTISTIC OR ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 9 SCIENTIFIC WORK (INCLUDING CINEMATOGRAPH FILM AND FILM, TAPES OR DISCS FOR RADIO OR TELEVISION BROADCASTING), ANY PATENT, TRADE MARK, DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, OR FOR THE USE O F, OR THE RIGHT TO USE, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE. IT IS THE CONTENTION OF THE ASSESSEE THAT THE CONSIDERATION RECEIVED IN TERMS OF THE AGREEMENT WAS FOR RENDERING OF THE LINE PRODUCTION SERVICES, AND NOT FOR GRANTING ANY RIGHT IN ANY COPYRIGHT TO ENDEMOL INDIA PVT. LTD. WE FIND THAT ADMITTEDLY, AS PER THE AGREEMENT BETWEEN THE ASSESSEE AND ENDEMOL INDIA PVT. LTD., THE ENTIRE CONSIDERATION TO BE PAID TO THE ASSESSEE WAS IN RESPECT OF THE PRODUCTION COST OR PRODUCTION FEES AND NOT FOR ANY LICENSING RIGHTS IN ANY PROGRAMME. FURTHER, CLAUSE 1 TO 6 OF THE AGREEMENT, SPECIFICALLY SPELLS OUT THE VARIOUS COORDINATION / FACILITATION SERVICES WHICH WERE TO BE RENDERE D BY THE ASSESSEE AS LINE PRODUCER VIZ. ARRANGING FOR LOCATIONAL CREW, PRODUCER, TRANSPORTATION, PAPER WORK FOR VARIOUS STUNTS TO BE PERFORMED AND OTHER REQUIREMENTS FOR SETTING UP AND FILMING THE SERIES ETC. IN SUM AND SUBSTANCE, THE AGREEMENT WAS FOR REN DERING OF LINE PRODUCTION SERVICES BY THE ASSESSEE TO ENDEMOL INDIA PVT. LTD., IN ORDER TO FACILITATE AND ENABLE THE LATTER TO PRODUCE THE TELEVISION SERIES VIZ. FEAR FACTOR. WE ALSO FIND THAT SEC. 17 OF THE INDIAN COPYRIGHT ACT, 1957 STATES, THAT WHERE THE WORK IS SPECIFICALLY COMMISSIONED UNDER THE CONTRACT OF SERVICE AT THE INSTANCE OF A PERSON, THEN SUCH PERSON WOULD BE THE FIRST OWNER OF THE COPYRIGHT. FURTHER, AS PER THE SOUTH AFRICA COPYRIGHT ACT NO. 98 OF 1978, THE PERSON WHO COMMISSIONED THE MAKI NG OF A CINEMATOGRAPH FILM SHALL BE THE OWNER OF THE COPYRIGHT SUBSISTING IN THE WORK MADE IN PURSUANCE OF THAT COMMISSION. IN THE BACKDROP OF THE AFORESAID MANDATE OF LAW, WE ARE OF THE CONSIDERED VIEW THAT SINCE THE WORK (THAT IS THE TELEVISION SERIES) W AS COMMISSIONED BY ENDEMOL INDIA PVT. LTD. UNDER THE CONTRACT OF SERVICE THUS, AS AVERRED BY THE LD. A.R, ENDEMOL INDIA PVT. LTD. SHALL BE THE FIRST OWNER OF THE WORK PRODUCED BY THE ASSESSEE, AND THE OWNER OF THE COPYRIGHT. WE FIND SUBSTANTIAL FORCE IN TH E AFORESAID CONTENTION OF THE ASSESSEE, THAT NOW WHEN AS PER THE MANDATE OF LAW THE OWNERSHIP OF THE COPYRIGHT REMAINS VESTED WITH ENDEMOL INDIA PVT. LTD, HENCE THE QUESTION OF ASSIGNING OF THE SAME BY THE ASSESSEE IN FAVOUR OF ENDEMOL INDIA PVT. LTD WOULD NOT ARISE AT ALL. WE THUS, ARE OF THE CONSIDERED VIEW THAT NOW WHEN IN TERMS OF OUR AFORESAID OBSERVATIONS, IT CAN SAFELY BE CONCLUDED THAT THERE WOULD BE NO OCCASION FOR ASSIGNING OF ANY COPYRIGHT BY THE ASSESSEE TO ENDEMOL INDIA PVT. LTD. (I.E THE FIRST OWNER OF THE COPYRIGHT), THEREFORE, NO PAYMENT OF CONSIDERATION IN LIEU OF TRANSFER OF ANY COPYRIGHT CAN BE COMPREHENDED. 20. WE FURTHER FIND THAT THE A.O/DRP HAD BROUGHT THE CONSIDERATION RECEIVED BY THE ASSESSEE WITHIN THE SWEEP OF THE TERM OF ROYALTY, ON THE GROUND THAT THE ASSESSEE HAD TRANSFERRED THE COPYRIGHT IN THE PROGRAM VIZ. FEAR FACTOR TO ENDEMOL INDIA PVT. LTD. THE ASSESSEE HAS VEHEMENTLY ASSAILED THE SAID OBSERVATIONS OF THE LOWER AUTHORITIES. IT IS THE CONTENTION OF THE ASSESSEE, THAT AS T HE AMOUNT RECEIVED FROM ENDEMOL INDIA PVT. LTD. WAS IN LIEU OF LINE PRODUCTION SERVICES RENDERED, AND NOT FOR LICENSING OF RIGHTS IN ANY PROGRAMME, THUS, THE CONSIDERATION RECEIVED BY THE ASSESSEE WAS WRONGLY ASSUMED BY THE A.O/DRP TO HAVE BEEN RECEIVED IN RESPECT OF TRANSFER OF COPYRIGHT. BE THAT AS IT MAY, WE ARE OF THE CONSIDERED VIEW THAT AS THE TERM ROYALTY UNDER ARTICLE 12 OF THE INDIA - SOUGHT AFRICA TAX TREATY, TAKES WITHIN ITS SWEEP ONLY CONSIDERATION RECEIVED FOR THE USE OR RIGHT TO USE, ANY COPYRIG HT, THUS, THE OBSERVATIONS OF THE LOWER AUTHORITIES THAT THE CONSIDERATION RECEIVED BY THE ASSESSEE WAS FOR TRANSFER OF THE COPYRIGHT TO ENDEMOL INDIA PVT. LTD., IN ANY WAY, WOULD ON THE SAID COUNT ALSO FALL BEYOND THE SWEEP OF THE TERM ROYALTY AS DEFI NED IN ARTICLE 12 OF THE INDIA SOUTH AFRICA TAX TREATY. WE THUS, AFTER DELIBERATING ON THE CONTENTIONS ADVANCED BY THE ASSESSEE TO BUTTRESS ITS CLAIM THAT THE LOWER AUTHORITIES HAD WRONGLY CHARACTERISED THE AMOUNT RECEIVED FROM ENDEMOL INDIA PVT. LTD. AS ROYALTY, ARE INCLINED TO ACCEPT THE SAME. 21. IN TERMS OF OUR AFORESAID OBSERVATIONS, WE ARE OF THE CONSIDERED VIEW THAT THE LOWER AUTHORITIES HAD ERRED IN CHARACTERISING THE CONSIDERATION RECEIVED BY THE ASSESSEE FOR ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 10 PROVIDING LINE PRODUCTION SERVICES A S ROYALTY AND FEES FOR TECHNICAL SERVICES. WE THUS, SET ASIDE THE ORDER OF THE A.O AND DELETE THE ADDITION OF RS. 9,60,23,838/ - .THE GROUNDS OF APPEAL NO. 1 AND 2 ARE ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. 10. ON A CAREFUL READING OF THE AFOR ESAID OBSERVATIONS, IT IS VERY MUCH CLEAR THAT WHILE DECIDING THE ISSUE ON THE BASIS OF IDENTICAL FACTS AND ON THE SAME CONTRACTUAL TERMS, THE TRIBUNAL HAS COME TO A CATEGORICAL CONCLUSION THAT THE AMOUNT RECEIVED BY THE ASSESSEE IS NEITHER IN THE NATURE O F ROYALTY NOR FEES FOR TECHNICAL SERVICES. FACTS BEING IDENTICAL, THE AFORESAID DECISION OF THE TRIBUNAL WOULD BE CLEARLY APPLICABLE TO THE ISSUE RAISED IN THE PRESENT APPEALS ALSO. THEREFORE, ADHERING TO THE NORMS OF THE JUDICIAL DISCIPLINE, WE RESPECTFUL LY FOLLOW THE AFORESAID DECISION OF THE TRIBUNAL TO HOLD THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM ENDEMOL INDIA PVT. LTD. IN BOTH THE ASSESSMENT YEARS IS NEITHER ROYALTY NOR FEES FOR TECHNICAL SERVICES, HENCE, CANNOT BE TAXED IN INDIA EITHER UNDER THE PROVISIONS OF THE ACT OR UNDER THE TAX TREATY IN THE ABSENCE OF A PE. 11. AS REGARDS THE ALTERNATIVE CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE ISSUE MAY BE REFERRED TO THE SPECIAL BENCH, WITH DUE RESPECT, WE ARE UNABLE TO ACCEPT THE SAME. THIS IS FOR THE SIMPLE REASON THAT, FIRSTLY, WE DO NOT FIND ANY VALID REASON TO DEVIATE FROM THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2012 13 WHEREIN IDENTICAL FACTS WERE INVOLVED AND SECONDLY, AS PER THE SUBMISSIONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE, AGAINST THE ORDER OF THE TRIBU NAL IN ASSESSMENT YEAR 2012 13, THE REVENUE HAS ALREADY PREFERRED AN APPEAL BEFORE THE HONBLE HIGH COURT. FOR THESE REASONS, WE ARE NOT INCLINED TO ACCEDE TO THE REQUEST OF THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR REFERRING THE ISSUE TO THE PRESIDENT F OR CONSTITUTION OF A SPECIAL BENCH TO DECIDE THE APPEALS. WITH THE AFORESAID OBSERVATIONS, THE GROUNDS RAISED ARE ALLOWED. 12. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. AS THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT APPEAL REMAINS THE SAME AS WERE INTER - ALIA THERE BEFORE THE TRIBUNAL IN ITS AFOREMENTIONED CASE FOR A.Y. 2014 - 15 AND A.Y. 2015 - 16, THEREFORE, FINDING NO REASON TO TAKE A DIFFERENT VIEW, WE RESPECTFULLY FOLLOW THE SAME. ACCORDINGLY, ON THE SAME TERMS WE HEREIN CONCLUDE THAT THE AMOUN T OF RS.1,57,31,566/ - RECEIVED BY THE ASSESSEE FROM M/S ENDEMOL INDIA PVT. LTD. COULD NOT BE HELD TO BE FTS IN THE HANDS OF THE ASSESSEE. THE GROUND OF APPEAL NO. 4 IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. 9. AS WE HAVE ALLOWED THE APPEAL ON MERITS, THEREFORE, WE REFRAIN FROM DEALING WITH THE CLAIM OF THE ASSESSEE THAT THE DRP HAD ERRED IN DISMISSING ITS OBJECTIONS IN LIMINE I.E WITHOUT CONSIDERING THE SAME ON MERITS , WHICH THUS IS LEFT OPEN. ACCORDINGLY, THE G ROUND S OF APPEAL NOS. 1 TO 3 ARE DISPOSED OFF IN TERMS OF OUR AFORESAID OBSERVATIONS. ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 11 10. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ITA NO.6659/MUM/2019 ( ASSESSMENT YEAR: 2016 - 17 ) 1 1 . WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y 2016 - 17. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS BEFORE US: 1. ON THE FACTS AND CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LEARNED AS S ES S ING OFFICER ( AO ) HAS ERRED IN PROPOSING AND T HE HON'BLE DISPUTE RESOLUTION PANEL ( DRP ) FURTHER ERRED IN CONFIRMING THAT THE INCOME RECEIVED BY THE APPELLANT FOR LINE PRODUCTION SERVICES FROM ENDE MOL INDIA PRIVATE LIMITED OF RS.3,89,27,405 / - SHOULD BE T AXED AT 10% UNDER ARTICLE 12 OF THE INDIA - SOUTH AFRICA TAX TREAT. IT IS PRAYED THAT THE LEARNED AO BE DIRECTED T O HOLD THAT PAYMENTS ARE NEITHER TAXABLE UNDER ARTICLE 12 OF THE INDIA - SOUTH AFRICA TAX TREATY NOR UNDER SECTION 9 OF THE INCOME TAX ACT, 1961. THE APPELLANT CRAVES LEAVE TO ADD, AFTER, AMEND OR WITHDRAW ALL OR ANY OF THE GROUNDS OF APPEAL HEREIN AND LO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE T HE APPEAL HEARING, 1 2 . BRIEFLY STATED, THE ASSESSEE HAD E - FILED ITS RETUR N OF INCOME FOR A.Y. 2016 - 17 ON 29.11.2016, DECLARING NIL INCOME. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT U/S 143(2) OF THE ACT. 1 3 . THE A.O VIDE HIS DRAFT ASSESSMENT ORDER PASSED U/S 143(3) R.W.S 144C, DATED 21.12.2018, THEREIN PROPOSED TO ASSESS THE AMOUNT OF RS.3,89,27,405/ - RECEIVED BY THE ASSESSEE FROM M/S ENDEMOL INDIA PVT. LTD. AS FTS AND SOUGHT TO SUBJECT THE SAME TO TAX @ 10% AS PER THE INDIA - SOUTH AFRICA TAX TREATY. 1 4 . AGGRIEVED, THE ASSESSEE FILED OBJECTIONS BEFORE THE DRP, WHICH VIDE ITS ORDER PASSED U/S 144C(5), DATED 25.06.2019 AFTER DEALING THEM ON MERITS REJECTED THE SAME . 1 5 . AFTER RECEIVING THE ORDER PASSED BY THE DRP U/S 144C(5) OF THE ACT, THE A.O VIDE HIS ORDER PASSED U/S 143(3) R. W.S 144C(13) , DATED 27.08.2019 ASSESSED THE AMOUNT OF RS.3,89,27,405/ - RECEIVED BY THE ASSESSEE FROM M/S ENDEMOL ITA NOS. 6658 &6659/MUM/2019 A.YS. 2011 - 12 & 2016 - 17 POMEGRANATE MEDIA (PTY) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX, IT - 3(3)(2) 12 INDIA PVT. LTD. AS FTS AND SUBJECTED THE SAME TO TAX @ 10% AS PER THE INDIA - SOUTH AFRICA TAX TREATY. 1 6 . THE ASSESSEE BEING AGGRIEVED WITH THE ASSESSMENT ORDER PASSED BY THE A.O U/S 143(3) R.W.S 144C(13), DATED 27.08.2019 HAS CARRIED THE MATTER IN APPEAL BEFORE US. AS THE FACTS AND THE ISSUE INVOLVED IN THE PRESENT APPEAL REMAINS THE SAME AS WERE THERE BEFORE US IN THE ASSESSEES APPEAL FOR A.Y. 2011 - 12 IN ITA NO. 6658/MUM/2019, THEREFORE, OUR ORDER THEREIN PASSED SHALL APPLY MUTATIS MUTANDIS FOR THE PURPOSE OF DISPOSAL OF THE PRESENT APPEAL. ACCORDINGLY, ON THE SAME TERMS, WE HEREIN CONCLUDE THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM M/S ENDEM OL INDIA PVT. LTD. COULD NOT BE HELD TO BE FTS IN THE HANDS OF THE ASSESSEE. 1 7 . ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. 1 8 . RESULTANTLY, BOTH THE APPEALS OF THE ASSESSEE FOR A.Y. 2011 - 12 AND A.Y. 2016 - 17 I.E ITA NOS. 6658 & 6659/MUM/2019 ARE ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 26 .07.2021 SD/ - SD/ - (RAJESH KUMAR) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 26 .07.2021 PS: ROHIT COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI