No PE exists if ESPN India rendering support services to enable NR to render services to their clients abroad: ITAT

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  • Last Updated on 9 February, 2022

Income - Deemed to accrue or arise in India (Permanent establishment - Agency PE)

Case Details: ESPN Star Sports Mauritius SNC et Compagnie v. DCIT - [2022] 134 251 (Delhi - Trib.)

Judiciary and Counsel Details

    • N.K. Billaiya, Accountant Member and Amit Shukla, Judicial Member
    • Poras Kaka, Sr. Adv., Dinesh Chawla, Adv. for the Appellant. 
    • Gangadhar Panda, CIT-DR for the Respondent.

Facts of the Case

The assessee was a partnership firm. It engaged in acquiring and allotting advertisement time (‘Airtime’) from Mauritius in connection with programming via non-standard television on ESPN, Star Sports and Star Cricket Programming services. The assessee had entered into an agreement with Indian company ESPN which was engaged in acquiring the airtime from the assessee and allotting it to various Indian advertisers and advertising agencies. The assessee claimed that the income arising from advertisement airtime was business income, and in the absence of a PE of the assessee in India, the same was not taxable.

The Assessing Officer (AO) held that the premises of ESPN India were a fixed place PE and dependent agent PE of the assessee from where the business of the assessee was being carried out in terms of article 5(2)(a). The CIT(Appeals) upheld an order of the AO that the assessee had a business connection in India.


The Delhi Tribunal has ruled that considering the past history of the assessee in light of the decision of the Tribunal in the assessee’s own case that since ESPN India was remunerated at arm’s length by the assessee, no further attribution of profits is to be made in the hands of the assessee.

The Supreme Court, in the case of Asstt. DIT v. E-funds IT Solutions Inc. [2017] 86 240, has ruled that where an Indian Company only renders support services that enable the assessee to render services to their clients abroad, this outsourcing of work to India would not give rise to a fixed place PE.

In the instant case, the assessee had no business connection in India in terms of section 9(1). Thus no PE exists under articles 5(2), 5(4) and 5(5) of India Mauritius DTAA. Accordingly, no further attribution of profits was to be made.

Case Review

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