THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION-2 vs. NEW SKIES SATELLITE B.V.

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ITA/315/2018HC DelhiDLHC01077640201819 March 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA1 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Delhi held that the question of law regarding whether satellite transmission services rendered by the assessee amounted to royalty under Section 9(1) read with Explanations 5 and 6 of the Income Tax Act, 1961, read with the provisions of the Indo-Netherlands DTAA, is no longer res integra. The Court noted that this issue is covered by its own previous decision in the case of DIT v. New Skies Satellite BV, reported in 2016 (382) ITR 114. Therefore, the appeal was dismissed on the basis of this precedent. No specific amount in dispute was mentioned. The operative direction was the dismissal of the appeal.

What were the facts?

The appeal was filed by the Commissioner of Income Tax - International Taxation-2 against an order of the Income Tax Appellate Tribunal (ITAT). The assessee is New Skies Satellite B.V. The assessment year(s) are not explicitly mentioned but the dispute pertains to satellite transmission services. The core issue is whether these services constitute royalty under the Income Tax Act, 1961, and the Indo-Netherlands Double Taxation Avoidance Agreement (DTAA). The High Court of Delhi is considering the appeal.

What were the issues?

1. Whether the satellite transmission services rendered by the assessee amounted to royalty under Section 9(1) read with Explanations 5 and 6 of the Income Tax Act, 1961, read with the provisions of the Indo-Netherlands DTAA. Assessee's contention: Not recorded in the judgment. Revenue's contention: The satellite transmission services constitute royalty under the relevant provisions of the Income Tax Act and the DTAA. The revenue relies on the High Court's decision for a preceding assessment year.

Which sections of the Income-tax Act were involved?

Section 9(1)

AI-generated summary — verify with the full judgment below

$~55 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 315/2018, C.M. APPL.10605/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION-2

..... Appellant Through : Sh. Ruchir Bhatia, Sr. Standing Counsel.

versus

NEW SKIES SATELLITE B.V.

..... Respondent Through : Sh. Tarun Gulati, Sh. Prashant Tahiliani, Sh. Abhishek Boob and Sh. Pranav Bansal, Advocates.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

19.03.2018

The question of law urged, i.e. whether the satellite transmission services rendered by the assessee amounted to royalty under Section 9(1) read with Explanations 5 and 6 of the Income Tax Act, 1961 read with the provisions of Indo-Netherlands DTAA is no longer res integra. It is covered by this Court for a preceding Assessment Year in DIT v. New Skies Satellite BV 2016 (382) ITR 114.

The appeal is accordingly dismissed along with the pending application.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J MARCH 19, 2018/ajk

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