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TMI Blog2016 (9) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... ing had to the binding circular issued by the CBDT. Mr.Agarwal, learned advocate for the revenue submitted that the tax effect in this case is above Rs. 20 lakhs. There is, as such, no reason why the appeal should not be pressed. In a case where there is a dispute as regards the tax effect involved in an appeal and the dispute cannot be resolved except through a process of complex reasoning, we think, it would not be proper on our part to decide the question as to whether the tax effect is more or less than the sum of Rs. 20 lakhs because the circular does not create any corresponding right in the assessee to have the appeal dismissed. We expressed that view at the beginning and thereafter took up the matter. The appeal is directed against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n company ? 3. Whether on the facts and in the circumstances of the case the ld. Income Tax Appellate Tribunal failed to consider that the 'Satellite Transponder' for the use of which the assessee paid hire charges to the foreign company was also an Industrial, Commercial or scientific equipment and therefore the payments assume the character of royalty under the treaty law?" Mr.Agarwal, learned advocate appearing for the revenue submitted that the questions formulated earlier may be substituted by the following question which covers the entire controversy. Mr.Khaitan, learned Senior Advocate appearing for the assessee has no objection. The questions for determination as formulated earlier, are thus given up and the following question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f explanation 2 of the said section. The appellant's main contention is that payment made to the non resident company will not term as a royalty hence same will not be liable for tax in India as per the DTAA agreement between India and Thailand." The CIT(A) was of the opinion that "The facts of the appellant's case and facts of the case of Pan Amsat International Systems Incorporation (Supra) are identical. Hence, it is held that the payment cannot be regarded as Royalty in terms of article 12(3) between India and Thailand, as the treaty provisions between India and Thailand are similar to that treaty with U.S.A. Hence, following the view taken in the case of Pan Amsat International Systems Inc. by the ITAT (Delhi), the assessee entitles f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r's television programs." 13.1. The above averments in the agreement show that the agreement is not for the use of any equipment but for rendering the service (namely Digital Broadcast Service) and the assessee has not control over the equipments used for the purpose. 14. In our considered opinion, the service agreement with M/s.SSA does not fall within the realm of "use of or the right to use industrial, commercial or scientific equipment: as per Article 12(3) as contended by the ld. DR. We are fortified in our view by the decision of the Mumbai Bench in the case of Kotak Mahindra Primus Ltd. vs. Dy.DIT 11 SOT 578. In view of the discussions made hereinabove, we find no merit in the appeal filed by the revenue." Mr.Agarwal, learned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any copyright of the foreign party, the payment in that case would have taken the character of royalty. But payment was made because the television programmes produced by the assessee were digitally broadcast through the satellite of the foreign party. The foreign party appears to be in the business of broadcasting television programmes through its satellite. The assessee who is a producer of the tele-programmes provides the contents in the form of tapes. The foreign party broadcasts the contents through its satellite and in lieu of such broadcasting, foreign party was paid various sums from time to time. We are, as such, unable to agree with Mr.Agarwal that the payment made by the assessee partakes the character of royalty. In that view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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