INDEPENDENT NEWS SERVICE PVT. LTD.,NEW DELHI vs. ITO (INTERNATIONAL TAXATION), NEW DELHI

ORDER PER H.S. SIDHU, JM : These are the bunch of 06 appeals filed by the assessee against the order of the Ld. CIT(A), wherein it has been held that provision of section 195 applies on monies remitted by the assessee to M/s Intelsat Corporation, USA for the use of transponder facility. Various grounds raised in this appeal are as under:-

1. The lower authorities have erred in holding that the provisions of Section 195 of the Income Tax Act, 1961 are applicable to the monies remitted by the appellant to the non-resident payee, viz. M/s Intelsat Corporation, USA.

2 2. The monies remitted to M/s Intelsat Corporation, USA for use of transponder facility is not chargeable to tax under the provisions of Section 195 of the Act.

6. It is contended that in the absence of an amendment in the DTAA between India and the USA, the provisions of Explanation 6 to Section 9(1)(vi) of the Act cannot be applied to the monies remitted to M/s Intelsat Corporation, USA.

3 9. That the above grounds of appeal are independent and without prejudice to one another.

Your appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal at the time of hearing.

2. The grounds for Assessment Year 2013-14 are extracted and grounds for all other appeals are similar.

3. Brief facts of the case shows that the appellant-assessee has paid sum to M/s Intelsat Corporation, USA towards transponder facility and no tax has been deducted thereon for the reasons that, according to the assessee, there is no income chargeable to tax and provisions of section 195 does not apply. The assessee supports its case by stating that according to Article 12 of Indo-USA DTAA, the above facility is neither royalty nor fees for technical services, but a business income. The claim of the Revenue is that tax deducted thereon, as income of the recipient is chargeable to tax in India as ‘Royalty’. Therefore, the AO passed the order u/s. 195(2) of the Act. The same was challenged by the assessee before the Ld. CIT(A), who upheld the finding of the AO.

4. At the time of commencement of hearing, Ld. AR submitted that the issue in dispute is squarely covered in favour of the assessee by the decision of the Coordinate Bench dated 25.01.2018 in assesse’s own case passed in AY 2014-15 & Ors. title ‘Independent News Services Pvt. Ltd. vs. ITO(Intl. Taxation)’ wherein relying on the decision of the Hon’ble Delhi High Court in the case of Asia Satellite Telecommunication Co. Ltd. vs. DIT reported at 332 ITR 340, it was held that the impugned sum was not the ‘royalty’ and therefore, the same was not chargeable to tax in India, according to Article 12 of DTAA.

4 5. On the other hand, Ld. DR vehemently objected and stated that the decision of the Coordinate Bench has not considered the decision of the Hon’ble Delhi High Court in the case of DIT vs. TV Today Network Ltd. (2014) 41 taxmann.com 192 (Delhi).

5 6.1 In other appeals, the facts are identical and even the rival contention were similar, therefore, our aforesaid findings shall apply mutatis mutandis for all other appeals. 7. In the result, all the 06 appeals of the assessee are allowed. Order Pronounced on 04/07/2018.