2022 (11) TMI 1315 - AT - Income Tax

Income deemed to accrue or arise in India - taxability of amount received from broadcasting companies towards leasing/rental of transponders located in satellites of the assessee - HELD THAT - A reading of the impugned assessment order and the directions of DRP would clearly reveal that by relying upon the approach adopted by them in assessee s case in preceding assessment years beginning from assessment year 2006-07 onwards, they have concluded that the receipts of the assessee from Satellite Transmission Services are in the nature of royalty. However, it is a fact on record that disputing the decision of the departmental authorities assessee carried appeals to the Tribunal in preceding assessment years. While deciding identical issue arising in assessee s own case in the immediately preceding assessment year, 2022 (5) TMI 1504 - ITAT DELHI the Tribunal has followed its earlier decision and held that the amount received from Satellite Transmission Services is not taxable in India as royalty. Thus, respectfully following the consistent view of the Tribunal and the Hon ble Jurisdictional High Court in assessee s own case, as discussed above, we hold that the amount received by the assessee from Satellite Transmission Services is not taxable in India as royalty. Grounds are allowed.

Summary

Issues:
Taxability of amount received from broadcasting companies towards leasing/rental of transponders located in satellites.

Analysis:
The appeal was filed challenging the final assessment order passed under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 for the assessment year 2017-18. The dispute centered around the taxability of the amount received from broadcasting companies for leasing/rental of transponders located in satellites. The assessee, a non-resident corporate entity from the USA, provides Satellite Transmission Services globally. The Assessing Officer treated the receipts from Satellite Transmission Services as royalty, resulting in a total income determination of Rs. 88,03,86,325/-. The assessee contended that similar issues in preceding years were decided in its favor by the Tribunal and the High Court, establishing a precedent. The Tribunal reviewed the impugned assessment order and the directions of the Dispute Resolution Panel (DRP) and noted that the Tribunal had consistently held that the amount received by the assessee is not taxable as royalty in India. The Tribunal's decision in previous assessment years was upheld by the Jurisdictional High Court. Therefore, based on the precedent and consistent view, the Tribunal held that the amount received from Satellite Transmission Services is not taxable in India as royalty, allowing the appeal.

In conclusion, the Tribunal ruled in favor of the assessee, holding that the amount received from Satellite Transmission Services is not taxable in India as royalty. The decision was based on the consistent view of the Tribunal and the Jurisdictional High Court in previous assessment years, establishing a precedent in the assessee's favor. The appeal was allowed, and the order was pronounced on 11th November 2022.