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Income Tax Appellate Tribunal, DELHI BENCH “H”: NEW DELHI
Before: Shri G.S. Pannu, Hon’ble & Shri Anubhav Sharma
O R D E R PER ANUBHAV SHARMA, J. M.:
1.
The appeal has been preferred by the revenue against the order dated 26.07.2019 of Ld. Commissioner of Income Tax (Appeals), New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. 'FAA') in appeal No. 10140/2018-19 arising out of an appeal before it against the order dated 18.12.2018 passed u/s 143(3) r.w.s 144C of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the Id Assessing Officer, Deputy Commissioner of Income Tax, Circle-3(1)(1), International Taxation, New Delhi (hereinafter referred as the Ld. AO).
2. Facts in brief are that the Assessee is a company incorporated under the laws of Thailand, and is engaged in the business of providing digital broadcast service through its transponders to its customers, both residents in India as well as non-residents. It renders these services to its customers through the satellite THAICOM-7, which has a footprint over a wide geographical region including India. It had disclosed receipts of Rs. 9,46,77,053/- from two customers in India while declaring Nil total income. The case was selected for complete scrutiny and statutory notices were issued. The Id AO observed that the payment received by the Assessee from the customers is on account of use of process involved in the transponders and its amounts to royalty within the meaning of section 9(l)(vi) of the Act and also amounts to royalty within the meaning of respective articles of DTAA. Accordingly, the receipts were held to be taxable @10% under 115A as royalty. Draft assessment order dated 13.11.2018 was passed u/s 144C(1)/143(3) of the Act and communicated to the Assessee. The Assessee had not filed its objections before DRP as it intended to file an appeal before the Id CIT(A). Accordingly, vide the assessment order dated 18.12.2018, the draft order was confirmed. In appeal the Id CIT(A) had taken into consideration the fact being similar to those of Assessment Year 2013-14 and following the judgment of Hon'ble Delhi High Court in Assessee's own case that the services rendered by the Assessee is not taxable in India allowed the grounds raised and now the revenue is in appeal raising following grounds:- "1) Whether the CIT(A) has erred in law in holding that the Finance Act 2012 will not affect Article 12 of the DTAA and the interpretation of the term 'Royalty' given by the Hon'ble Delhi High Court in the case of Asia Satellite will continue to hold the field in the absence of any amendment in DTAA and thereby in holding that receipts of the assessee earned from providing data transmission services do not fall within the term 'Royalty' under the relevant DTAA? 2) Whether, the CIT(A) has erred in law in holding that the income earned by the assessee from providing digital broadcasting services through its transponders to customers in India was not taxable in India under the relevant DTAA."