The Mumbai Income Tax Appellate Tribunal (ITAT) has deleted a ₹34.78 crore addition made by the Revenue on Warner Bros. Distributing Inc., rejecting the claim that distribution income from its Indian associate, Warner Bros. India, should be taxed as additional business income.

The Tribunal, comprising Vikram Singh Yadav (Accountant Member) and Sandeep Singh Karhail (Judicial Member), ruled that once transactions between a foreign parent and its Indian affiliate are conducted at arm’s length, there is no need for further profit attribution.

While the ITAT did not conclusively decide whether Warner Bros. India constitutes a Dependent Agent Permanent Establishment (DAPE), it emphasised that consistent arm’s length pricing over multiple years was sufficient to preclude additional tax liabili

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