ASST. COMMISSIONER OF INCOME TAX, (INTERNATIONAL TAXATION)-4(3)(1), MUMBAI, MUMBAI vs. UNITED HOME ENTERTAINMENT PVT LTD., MUMBAI

ITA 1559/MUM/2025Status: DisposedITAT Mumbai27 May 2025AY 2016-1714 pages
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What did the Tribunal hold?

The Tribunal followed its own previous decisions and the Delhi High Court's ruling in the case of Intelsat Corporation. It held that payments for transponder services to Intelsat Global Sales and Marketing Limited were not royalty and therefore, the assessee was not liable to deduct tax at source under Section 195.

What were the facts?

The Revenue appealed the CIT(A)'s decision that the assessee was not liable to deduct tax at source on payments made to Intelsat Global Sales and Marketing Limited for transponder charges. The assessee argued these payments were not royalty under domestic law or the India-UK DTAA, as they did not involve the use of a process. The Assessing Officer had held the payments were royalty due to Explanation 6 to Section 9(1)(vi) of the Income Tax Act, which includes transmission by satellite in the definition of 'process'.

What were the issues?

Whether payments for transponder services constitute royalty under the Income Tax Act and the relevant DTAA, and consequently, whether tax is deductible at source on such payments.

Which sections of the Income-tax Act were involved?

Section 195,Section 9(1)(vi)

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Income Tax Appellate Tribunal, MUMBAI I BENCH : MUMBAI

Before: SHRI VIKRAM SINGH YADAV & SHRI RAHUL CHAUDHARY

PER VIKRAM SINGH YADAV, A.M :

This is an appeal filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [‘Ld.CIT(A)'], dated 19-12-2024, pertaining to Assessment Year (AY) 2016-17, wherein the Revenue has taken the following grounds of appeal:

1.

"Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in holding that the assessee was not liable to deduct tax at source u/s 195 of the Act on payments made to Intelsat Global Sales and Marketing Limited for transponder charges on th

The order continues below.

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