DIRECTOR OF INCOME TAX Vs. BBC WORLDWISE LTD

JUDGEMENT

(1.) In these three appeals common issue is raised in respect of the same assessee, pertaining to three assessment years. The proposed question of law is as under:

(2.) Before we advert to the aforesaid issue, we deem it apposite to take note of some relevant facts. The assessee is a nonresident. It is a company incorporated under the laws of England and Wales and is a part of BBC Group. This BBC group has a company incorporated in India as well, known as M/s. BBC Worldwide India Pvt. Ltd. (hereafter referred to as =the BWIPL').

(3.) During the year under consideration, BWIPL was operating as international consumer media company in the areas of television, publishing and programme (for short =the channel'), which is a standard international channel aired in the English language, operated by the assessee through a separate division, i.e., BBC World Division. The assessee appointed BWIPL as its authorized agent in India under an airtime sales agreement dated 19.9.2000, effective from 13.11.1998, for dollar denominated deals, to solicit orders for the sale of advertising airtime on the channel at the rates and on the terms and conditions provide by the assessee and to pass on such orders to the assessee for acceptance and confirmation. The payments form the Indian advertisers for airtime sales and sponsorship was to be received directly by the assessee under this agreement, through EEFC account or specific RBI permission. In consideration for the services provided by BWIPL, it was to receive a 15% marketing commission of the advertisement revenues received by the assessee from Indian advertisers. A second airtime sales agreement dated 01.2.1999 was entered into between the assessee and BWIPL for rupee denominated deals for soliciting orders for channel airtime sales, as under the first agreement. The second agreement was executed so as to enable BWIPL to collect payments from Indian advertisers on sales of airtime on behalf of the assessee and remit the same to the assessee, after deducting its commission @ 15%.