The Tribunal held that the Revenue failed to examine whether the contracts entered into by Warner Bros. India (WBI) with third parties were entered into on behalf of the assessee and whether the conduct of the parties established a Dependent Agent Permanent Establishment (DAPE). Further, the distribution arrangement and royalty model had remained unchanged since 1-4-2009 and the Transfer Pricing Officer had accepted the international transactions between the assessee and WBI to be at arm’s length in the preceding as well as subsequent assessment years. Following the ratio of DIT v. Morgan Stanley & Co. (292 ITR 416)(SC), the Tribunal held that once the transactions are accepted at ALP, no further profit can be attributed to the alleged PE. It also held that interest on an income-tax refund is taxable at 15% under the India-USA DTAA. (AY.2020-21)