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2015 (7) TMI 1286 - AT - Income TaxTransponder fee paid by the assessee to MEASAT Malaysia - whether was in the nature of royalty under the treaty as well as under the Income Tax Act? - Held that - Respectfully following the findings of the Tribunal in assessee s own case 2014 (4) TMI 737 - ITAT MUMBAI we hold that the transponder fee paid by the assessee to MEASAT Malaysia was in the nature of royalty under the treaty as well as under the Income Tax Act. - Decided against the assessee and in favour of the Revenue.
Issues:
Interpretation of transponder fees as royalty under the Income Tax Act and India-Malaysia Tax Treaty. Analysis: The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) regarding the taxability of transponder fees paid to MEASAT Satellite Systems Snd. Bhd, Malaysia for the assessment year 2013-14. The assessee contended that the payments were not taxable under the Income Tax Act and the India-Malaysia Tax Treaty. The grounds of appeal included arguments against the tax withholding under Section 195 of the Act and the classification of transponder fees as royalty. The Tribunal considered the arguments presented by both parties and referred to previous decisions where similar issues were addressed. It was noted that the use of transponders for telecasting/broadcasting involves processes falling within the definition of "royalty" under Explanation 6 of section 9(1)(vi) of the Income Tax Act. The Tribunal relied on previous rulings to determine that the transponder fees paid to MEASAT Malaysia indeed constituted royalty under both the treaty and the Act. Based on the Tribunal's findings and precedents, the appeal was dismissed, and it was held that the transponder fees paid were indeed in the nature of royalty. The decision was made in favor of the Revenue, emphasizing that the grounds of appeal, apart from the issue of transponder fees as royalty, were considered academic and did not require separate adjudication. Consequently, the appeal of the assessee was dismissed, and the order was pronounced in open court on 08.07.2015.
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