Satellite Transmission Services Not “Royalty” as per Indo-US Treaty, Not Taxable in India: ITAT [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the satellite transmission services would not be taxable in India as royalty under Indo-US treaty.

The assessee Intelsat US LLC, challenges the final assessment order passed under section 143(3) read with section 144C (13) of the Income-tax Act, 1961 pertaining to assessment year 2019-20, in pursuance to the direction of learned Dispute Resolution Panel (DRP). 

The assessee challenged whether the receipt from Satellite Transmission Services were in the nature of royalties as defined in Explanation II to section 9(1)(vi) of the Act and Article 12(3) of India – USA Double Taxation Avoidance Agreement (DTAA). 

Vishal Kalra, appeared on behalf of the assessee and Gangadhar Panda appeared for the revenue.

The Delhi Bench of G.S. Pannu, (President) And Saktijit Dey, (Judicial Member) found that the issue was a recurring issue between the parties from assessment year 2006-07 onwards and had been consistently decided in favour of the assessee, not only by the Tribunal, but even by Hon’ble Jurisdictional High Court. 

The Bench further referred to the decision in assessee’s own case in which a similar issue was raised and held that the amount received by the assessee from Satellite Transmission Services would not be taxable in India as royalty. 

The Bench allowed the appeal and deleted the penalty

To Read the full text of the Order CLICK HERE

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