Dismissing the appeal of the assessee the Tribunal held that , the payment by an Indian company to a foreign celebrity (Nicholas Cage) for an appearance by him in Dubai, UAE, in a product launch event for promoting the business of the assessee in India, is taxable as arising from a “business connection” and also under Article 23(1) of Inda-USA tax treaty . Accordingly the assessee had the liability to withhold taxes from payment made for appearance made by the celebrity at Dubai A8L launch event, and the CIT(A) was justified in upholding impugned demands raised under section 201 r.w.s 195 of the Income Tax Act,1961. (ITA No. 2195/Mum/2017, Dt. 19/3/2020) (AY. 2015-16)
Volkswagen Finance Pvt Ltd v. ITO( 2020)115 taxmann.com 386 (Mum.)(Trib.); www.itatonline.org
S. 195 :Deduction at source – Non-resident – The payment by an Indian company to a foreign celebrity (Nicholas Cage) for an appearance by him in Dubai, UAE, in a product launch event for promoting the business of the assessee in India, is taxable as arising from a “business connection” and also under Article 23(1) of Inda-USA tax treaty – Liable to deduct tax at source – DTAA- India -USA [ S.5(2)(b) ,9(1), 115BBA,201, Art .23(1) ]