Case nº A.A.R. No. 1076 of 2011 of Authority for Advance Rulings, December 06, 2013 (case Endemol India Private Limited Vs Commissioner of Income Tax-XI)

JudgeFor Appellant: Mr. Rajan Vora, C.A., SRBC & Asso. Mr. Ashish Gupta, Endemol India, Mumbai Mr. Sachin Shah, C.A., SRBC & Asso., Mr. Aditya Modani, C.A. and Ms. Priyanka Minawala and For Respondents: Mr. R.S. Rawal, CIT-DR (AAR) and Mr. Raj Kumar, ACIT-II(I)
PresidentArijit Pasayat, J. (Chairman) and T.B.C. Rozara, Member
DefenseIncome Tax Act, 1961 - Section 195
Resolution DateDecember 06, 2013

Order:

T.B.C. Rozara, J.

  1. The applicant M/s. Endemol India Private Limited (EIPL) is a resident company incorporated under the Companies Act, 1956. It is engaged in the business of producing and distributing television programmes. It mainly produces reality shows and has also ventured into soap operas. The applicant started its operation in 2006 with the non-fiction format show Big Boss (Big Brother) and has produced also other reality shows in India such as Fear Factor - Khatron Ke Khiladi etc. During the financial year 2010-11 the applicant had produced the reality show 'Khatron Ke Khiladi - Series 3' i.e. India's version of Fear Factor ('the show'), which was aired on Colors Channel. As per the format of the show, the shooting was to take place outside India (primarily Brazil). For the purpose of shooting the show outside India, the Applicant engaged Noise Associates to procure the services of Ms. Chantal Prud' Homme as an executive producer for the show. An agreement was signed between M/s. Noise Associates Private Limited (hereinafter referred to as 'NAPL'), a company incorporated under the laws of Singapore and having its registered office at 350, Orchard Road, Park Ave Suites #11-26/27, Shaw House, Singapore 238868 and the applicant, Endemol India Private Limited (Endemol) on 1st June 2010. NAPL is a tax resident of Singapore. As per the terms of the agreement, NAPL is responsible for the overall production and also for handling business issues. The agreement also provides that NAPL will provide specialized services to Endemol to aid in the production of Endemol Show programmes for which NAPL agreed to commission its representative to Ms. Chantal Prud' Homme who is an executive producer for the Endemol India Private Limited shows/programmes). As per the agreement the applicant was to pay a total consideration of US Dollar 49,000 to NAPL for their services for the show titled "Fear Factor - Khatron Ke Khiladi level 3.

  2. Presenting the facts and circumstances of the case, the applicant seeks ruling from the Authority for Advance Ruling on the following questions:--

    1) Whether the payments made by the applicant to Noise Associates, for services rendered as detailed in the Agreement are chargeable to tax in India as "fees for technical services" which is expressed under Article 12 of the Agreement for avoidance of double taxation between Government of the Republic of India and the Government of the Republic of Singapore ('India-Singapore Tax Treaty')?

    2) If the answer to the Question above is in negative, will such payment be treated as Business Income, and in view of the facts as stated in Annexure III, and also in light of the declaration provided by Noise Associates, since it does not have a Permanent Establishment ('PE') in India in terms of the India-Singapore Tax Treaty, whether the payments made by the Applicant to Noise Associates would be chargeable to tax in India?

    3) If the answer to Question 1 and 2 are in negative, would the payments made by the...

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