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This is assessee's appeal for the assessment year 2000-01 against the ld. CIT(A)'s order dated 27.1.2006 confirming the AO's action in holding that the assessee had a business connection in India u/s 9 of the Income Tax Act and that M/s. BBC Worldwide (India)Pvt.Limited ("BWIPL", for short) was the assessee's permanent establishment in India.

2. The brief facts are that the assessee company was incorporated under the laws of England and Wales. It is a part of the BBC Group. During the year under consideration, it was operating as an international consumer media company in the areas of television, publishing and program licensing etc. It also operated the BBC World News Channel ('the Channel', for short), which is a standard international Channel aired in the English language, operated by the assessee through a separate division, i.e., BBC World Division. The assessee had an indirect subsidiary in India, namely, BWIPL. The assessee appointed BWIPL as its authorized agent in India under an airtime sales agreement dated 15.9.2000, effective from 13.11.1998, for dollar denominated deals, to solicit orders for the sale of advertising airtime on the Channel at the rates and on the terms and conditions provided by the assessee and to pass on such orders to the assessee for acceptance and confirmation. The payment from the Indian advertisers for airtime sales and sponsorship was to be received directly by the assessee under this agreement, through EEFC account or specific RBI permission. In consideration for the services provided by BWIPL, it was to receive a 15% marketing commission of the advertisement revenues received by the assessee from Indian advertisers. A second airtime sales agreement dated 1.2.1999 was entered into between the assessee and BWIPL for rupee denominated deals for soliciting orders for Channel airtime sales, as under the first agreement (supra). The second agreement was executed so as to enable BWIPL to collect payments from Indian advertisers on sales of airtime on behalf of the assessee and remit the same to the assessee, after deducting its commission at rate of 15%. While filing its return of income for the year under consideration, it declared an income of rupees nil, the assessee claimed that it would not be taxable in India on its airtime sales income, being business profits, in the absence of a permanent establishment in India. Later, the return of income was revised so as to disclose an income of Rs. 81,86,735/-, i.e., royalty income which had inadvertently not been shown in the original return. Other than the said royalty income, the assessee stated , it did not have any income chargeable to tax in India.