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

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ITA/331/2018HC DelhiDLHC01077592201820 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 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, and the Indo-Netherlands DTAA, was no longer res integra. The Court found that this issue was already covered by its own previous decision in the case of DIT v. New Skies Satellite BV (2016) 382 ITR 114. Therefore, the appeals filed by the Revenue were dismissed. The ratio decidendi is that a prior High Court judgment on the same issue for the same assessee is binding precedent for subsequent assessment years.

What were the facts?

The appeals were filed by the Commissioner of Income Tax - International Taxation-2 (Revenue) against the respondent, New Skies Satellite B.V. (Assessee). The appeals challenged decisions concerning assessment years not explicitly stated in the judgment. The core issue revolved around whether satellite transmission services rendered by the assessee constituted royalty under Section 9(1) read with Explanations 5 and 6 of the Income Tax Act, 1961, and the provisions of the Indo-Netherlands Double Taxation Avoidance Agreement (DTAA). The High Court of Delhi was considering these appeals.

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: The judgment does not record specific arguments made by the assessee. Revenue's Contention: The Revenue contended that the satellite transmission services constituted royalty under the specified provisions of the Income Tax Act and the DTAA. The Revenue relied on the High Court's prior decision in DIT v. New Skies Satellite BV (2016) 382 ITR 114.

Which sections of the Income-tax Act were involved?

Section 9(1)

AI-generated summary — verify with the full judgment below

$~50 & 58 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 323/2018, C.M. APPL.10806/2018 + ITA 331/2018, C.M. APPL.10810/2018 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION-2

..... Appellant

versus

NEW SKIES SATELLITE B.V.

..... Respondent Through : Sh. Ruchir Bhatia, Advocate, for Revenue. Sh. Kishore Kunal, Sh. Prashant Tahiliani, Sh. Pranav Bansal, Sh. Abhishek Boob and Sh. Anshul Verma, Advocates, for respondents, in Item Nos. 50 and 58. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

20.03.2018 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 appeals are accordingly dismissed along with the pending applications.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J MARCH 20, 2018/ajk

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