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April 2024

Explanation 5 to Section 9(1)(i) of the Act — Substantial viewership of Channel in India cannot be a reason to hold that Channel is situated in India; situs of intangibles is the situs of owner.

By Geeta Jani | Dhishat B Mehta | Bhaumik Goda, Chartered Accountants
Reading Time 3 mins

16 Star Television Entertainment vs. DCIT

ITA No: 1814/1813/Mum/2014

A.Ys.: 2009-10

Date of Order: 8th December, 2023

Explanation 5 to Section 9(1)(i) of the Act — Substantial viewership of Channel in India cannot be a reason to hold that Channel is situated in India; situs of intangibles is the situs of owner.

FACTS

Assessee, a Hong Kong based company, transferred ‘Star World’ channel vide a business agreement, to one of its sister concerns based in Hong Kong. The Taxpayer did not offer the gain arising out of such transaction to tax in India based on the contention that the transaction was undertaken between two non-residents and the underlying asset (i.e., channel) was not situated in India and, hence, no income accrued or can be deemed to accrue or arise in India.

AO contended that the transfer of the Channel would result in a trigger of indirect transfer provisions under the Act. Further, gains arising from transfer of channel can be deemed to accrue or arise in India and, hence taxable in India basis the following arguments:

• T

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