O R D E R

% 13.02.2024

1. The Commissioner of Income Tax impugns the decision rendered by the Income Tax Appellate Tribunal1 dated 21 November 2022 in ITA 382/2023 for Assessment Year2 [AY 2003- 2004], ITA 381/2023 [AY 2004-2005], ITA 380/2023 [AY 2009- 2010], ITA 344/2023 [AY 2011-2012], ITA 336/2023 [AY 2012- 2013], ITA 773/2023 [AY 2014-2015] and ITA 333/2023 [AY 2014- 2015]. The following questions are proposed for our consideration: - “2.1 Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT is correct in holding that assessee did not have a dependent agent PE (DAPE) in India by observing that the transaction between the assessee and ESPN India is limited to conferring of right to distribute the channels of ESPN Star Sport in India through cable operators in an independent manner when it has been brought out that the assessee had complete control over sale of agent, bore commercial risk on behalf of the agent thereby not appreciating the principle of substance over form?

2.2. Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT is correct in holding that the assessee did not have a fixed place PE in India by observing that there was nothing to suggest that the assessee had any control over the business/premises of ESPN India when it has been clearly brought out that the assessee and ESPN India has common management and identical functions and for all practical purposes the distinction between the two was insignificant?

2.3 Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT is correct in holding that assessee has no business connection in India and is not taxable in terms of section 9(1) of the Income Tax Act when the assessee had complete control over sale of the agent and bore commercial risk on behalf of the agent?

2.4 Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT is correct in holding that if the purported PE is remuneration on arm's length as subsidiary company, no further attribution of profit be made on foreign company, when the

1 ITAT

2 AY ITA 333/2023, ITA 336/2023, ITA 382/2023, ITA 344/2023 ITA 380/2023, ITA 381/2023 & ITA 773/2023 Page 4 of 26 functions performed by the subsidiary company are much more what has been reported before TPO Analysis?

2.5 Whether on the facts and in the circumstances of the case and in law, the Ld. ITAT is correct in holding that no further attribution of profit be made on foreign company when the TP analysis did not adequately reflect the FAR borne by the Indian enterprise, for additional functions/risk performed by it as DAPE?”

2. The appeals emanate from agreements entered into between ESS Distribution (Mauritius) S.N.C. ET Compagnie3, ESPN Star Sports and ESPN Software India Private Limited4. ESS Distribution (Mauritius) holds a valid Tax Residency Certificate5 and claims benefits in terms of the provisions contained in the India -Mauritius Double Taxation Avoidance Agreement6. The subject matter of the agreements executed by it with ESPN Star Sports and ESPN India pertain to distribution of Star Sports and ESPN channels in India. Both ESPN Star Sports and ESPN India are designated as Distributors under the two agreements.

3. The appellants invoke Articles 5 and 12 of the India - Mauritius DTAA asserting that ESS Distribution (Mauritius) has a fixed place Permanent Establishment7 and / or in the alternative by virtue of the distribution agreements with the Indian entities, the Court should recognise the existence of a Dependent Agent PE8. They additionally raise the issue of subscription and distribution revenues generated pursuant under the aforenoted contracts as being liable to be viewed as royalty.

4. Insofar as the issue of a fixed place PE and DAPE is concerned, 3 ESS Distribution (Mauritius)

4 ESPN India

5 TRC

6 DTAA

7 PE

8 DAPE ITA 333/2023, ITA 336/2023, ITA 382/2023, ITA 344/2023 ITA 380/2023, ITA 381/2023 & ITA 773/2023 Page 5 of 26 the ITAT has returned com