New Skies Satellites N.V.,, v. ACIT, Circle-2(1),,

ITA 5385/DEL/2004 | 2000-2001
Pronouncement Date: 11-03-2011 | Result: Allowed

Appeal Details

RSA Number 538520114 RSA 2004
Assessee PAN AABCN7763R
Bench Delhi
Appeal Number ITA 5385/DEL/2004
Duration Of Justice 6 year(s) 3 month(s) 1 day(s)
Appellant New Skies Satellites N.V.,,
Respondent ACIT, Circle-2(1),,
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 11-03-2011
Date Of Final Hearing 01-03-2011
Next Hearing Date 01-03-2011
Assessment Year 2000-2001
Appeal Filed On 10-12-2004
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `D: NEW DELHI BEFORE SHRI C.L.SETHI JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER I.T. A. NOS.5385 5386 5387/DEL/2004 I.T.A. NOS.2623 2624/DEL/2008 & 735/DEL/2010 ASSESSMENT YEARS : 2000-01 TO 2005-06 NEW SKIES SATELLITE N.V. ASSTT. DIRECTOR OF INCO ME-TAX C/O PRICEWATER HOUSE COOPERS VS. CIRCLE 2(1) INTER NATIONAL TAXATION PVT. LTD. SUCHETA BHAWAN NEW DELHI. 11-A VISHNU DIGAMBAR MARG NEW DELHI. PAN: AABCN 7763R I.T. A. NO.736/DEL/2010 ASSESSMENT YEAR : 2005-06 NEW SKIES SATELLITE B.V. ASSTT. DIRECTOR OF INCO ME-TAX C/O PRICE WATER HOUSE COOPERS VS. CIRCLE 2(1) INTE RNATIONAL TAXATION PVT. LTD. SUCHETA BHAWAN NEW DELHI. 11-A VISHNU DIGAMBAR MARG NEW DELHI. PAN: AACCN 1866C I.T. A. NO.5160/DEL/2010 ASSESSMENT YEAR : 2007-08 NEW SKIES SATELLITE B.V. ASSTT. DIRECTOR OF INCO ME-TAX C/O PRICE WATER HOUSE COOPERS VS. CIRCLE 2(1) INTE RNATIONAL TAXATION (P) LTD. BUILDING NO.10 NEW DELHI. TOWER C 18 TH FLOOR DLF CYBER CITY GURGAON. PAN: AACCN 1866C (APPELLANT) (RESPONDENT) 2 APPELLANTS BY: S/SH.M.S. SYALI SR. ADVOCATE S/SH. SANDEEP PURI TARANDEEP SINGH ARVIND RAJAN & ABHIMANYU CA. RESPONDENT BY: SHRI ASHWANI MA HAJAN CIT-DR. O R D E R PER BENCH IN ALL THESE APPEALS FILED BY THE ASSESSEE PERTAINI NG TO THE ASSESSMENT YEARS 2000-01 TO 2005-06 AND 2007-08 A COMMON AND IDENTICAL ISSUE IS INVOLVED REVOLVING AROUND THE FOLLOWING ISSUES RAIS ED BY THE ASSESSEE:- 1. THAT THE LD. CIT(A) ERRED BOTH ON FACTS AND IN LAW IN COMING TO THE CONCLUSION THAT THE INCOME OF THE APP ELLANT FROM PROVIDING SERVICES WAS INCOME CHARGEABLE TO TAX IN INDIA. 2. THAT THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN COMING TO THE CONCLUSION THAT THE INCOME OF THE APPELLANT WAS IN THE NATURE OF `ROYALTY AS PER THE PROVISIONS OF SECTIO N 9(1)(VI) OF THE ACT. 3. THAT THE LD. CIT(A) ERRED IN LAW IN COMING TO TH E CONCLUSION THAT THE APPELLANTS ACTIVITIES WERE IN THE NATURE OF PROCESS AND AS SUCH PAYMENTS FOR THE SAME WERE COVERED WITH IN THE MEANING OF THE TERM `ROYALTY AS DEFINED UNDER SECT ION 9(1)(VI) OF THE ACT. 4. THAT THE LD. CIT(A) GRAVELY ERRED IN LAW WHILE CONCLUDING THAT FOR A PAYMENT TO QUALIFY AS `ROYALTY UNDER TH E PROVISIONS OF SECTION 9(1)(VI) OF THE ACT IT WAS NOT NECESSARY THAT THE `PROCESS FOR WHICH SUCH PAYMENT IS MADE MUST BE US ED BY THE CUSTOMER. 5. THAT THE LD. CIT(A) ALSO ERRED ON FACTS WHILE CO NCLUDING THAT CHANGING OF FREQUENCIES AND/OR AMPLIFICATION OF SIG NALS FROM THE SATELLITE JOINTLY OR SEPARATELY AMOUNTS TO A `PROCESS SO AS 3 TO FALL WITHIN THE AMBIT OF THE TERM `ROYALTY AS D EFINED IN SECTION 9(1)(VI) OF THE ACT. 6. THAT THE LD. CIT(A) ERRED IN LAW IN CONCLUDING T HAT MERE AVAILABILITY OF AN INTELLECTUAL PROPERTY WOULD BE S UFFICIENT TO CONSTITUTE THE PAYMENT AS `ROYALTY WITHIN THE MEAN ING OF SECTION 9(1)(VI) OF THE ACT. 7. THAT THE LD. CIT(A) ERRED IN LAW IN CONCLUDING T HAT THE EXPRESSION `SECRET DID NOT QUALIFY `PROCESS AND I S RESTRICTED TO `FORMULA ONLY AS CONTAINED IN SECTION 9(1)(VI) OF THE ACT. 8. THAT THE LD. CIT(A) GRAVELY ERRED ON FACTS AND I N LAW IN CONCLUDING THAT THE APPELLANT CASE WAS NOT THAT OF MAKING AVAILABLE OF SPACE SEGMENT CAPACITY (I.E. THE PROVI DENCE OF A SERVICE) BUT ONE WHERE A `PROCESS HAD BEEN MADE AV AILABLE TO CUSTOMERS. 9. THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONCLUDING THAT THE APPELLANTS SOURCE OF INCOME WAS LOCATED I ON INDIA AS PER THE PROVISIONS OF SECTION 9 OF THE ACT SINCE TH E ACTIVITY WHICH PRODUCED INCOME FOR THE APPELLANT WAS DERIVED FROM VIEWERSHIP BY THE PUBLIC AT LARGE IN INDIA BY RE CEIVING THE UPLINKED SIGNALS AMPLIFYING THEM AND RELAYING THEM AFTER THE CHANGING THE FREQUENCY IN THE FOOT PRINT AREA INCLU DING INDIA. 10. THAT THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN CONCLUDING THAT THE APPELLANT WAS IN THE NATURE OF `ROYALTY A S DEFINED UNDER ARTICLE 12 OF THE DOUBLE TAXATION AVOIDANCE A GREEMENT (DTAA) BETWEEN INDIA AND THE NETHERLANDS. 11. THAT THE LD. CIT(A) ERRED IN LAW IN CONCLUDING THAT THE EXPRESSION `SECRET DID NOT QUALIFY `PROCESS AND I S RESTRICTED TO `FORMULA ONLY AS CONTAINED IN ARTICLE 12 OF THE IN TO- NETHERLANDS DOUBLE TAX AVOIDANCE AGREEMENT. 2. THE AFORESAID ISSUES HAVE BEEN RAISED IN ONE WAY OR THE OTHER BY THE ASSESSEE IN ALL THE YEARS. 4 3. THE ASSESSEE COMPANY IS A SATELLITE COMPANY WHIC H IS HAVING FOOTPRINT IN INDIA AND HAS LEASED OUT THE TRANSPONDERS FOR BE AMING THE PROGRAMMES IN INDIA BY VARIOUS TELECASTING COMPANIES. THE ASSESS ING OFFICER IN HIS ORDER HELD THAT AS PER PROVISION OF SEC. 9(1)(VI) OF THE INCOME-TAX ACT THE ASSESSEES ACTIVITIES WERE IN THE NATURE OF PROCESS AND THE ASSESSEE COMPANY WAS PAID BY THE TELECASTING COMPANIES TO RELAY THEI R PROGRAMMES IN INDIA THROUGH THE SATELLITE. HE THEREFORE STATE THAT E XPLOITATION TERRITORY WAS INDIA AND AS PROCESS HAS TAKEN PLACE IN THE SATELLITE TH E PAYMENTS BY THE TELECASTING COMPANIES TO THE ASSESSEE COMPANY FOR B EAMING ITS PROGRAMMES IN INDIA WERE COVERED UNDER EXPLANATION 2 TO SECTIO N 9(1)(VI) OF THE ACT. THE AO THEREFORE CONCLUDED THAT THE PAYMENT RECEIV ED BY THE ASSESSEE COMPANY IS SQUARELY COVERED UNDER THE TERM `ROYALTY . THE AO ALSO HELD THAT FROM THE POINT OF PROVISIONS CONTAINED IN DTAA BETWEEN INDIA AND NETHERLANDS THE RECEIPTS ARE COVERED UNDER ARTICLE 1 AND HENCE LIABLE TO BE TAXED IN INDIA. IN PARA 4.4 OF THE ASSESSMENT ORDE R THE AO SUMMARIZED THE ENTIRE PROCESS AND HAS REFERRED TO THE DECISION OF DELHI BENCH OF ITAT IN THE CASE OF ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. BY OBSERVING THAT WORD `SECRET IN EXPLANATION 2 TO SEC. 9(1)(VI) DOES NOT QUALIFY THE WORD `PROCESS AND IS RESTRICTED TO `FORMULA ONLY. IN PARA 6.3 O F THE ASSESSMENT ORDER THE AO FURTHER RELIED UPON THE FINDING OF THE ITAT DEL HI BENCH IN THE CASE OF 5 ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. TO ESTAB LISH THAT THE CUSTOMERS OF THE ASSESSEE WERE ALSO USING THE PROCESS PERFORM ED WITHIN THE SATELLITE I.E. OTHER THAN THOSE PERFORMED IN THE TRANSPONDER. THE AOS VIEW HAS BEEN UPHELD BY THE LEARNED CIT(A). THE CIT(A) IN PARA 7 AT PAGE 8 OF THE ORDER HAS STATED THAT THE ASSESSEES CASE IS QUITE SIMILA R TO THE CASE OF ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. VS. DCIT 85 ITD 478 W HICH WAS DECIDED BY THE JURISDICTIONAL ITAT DELHI BENCH. THE CIT(A) RE FERRED TO THE FINDINGS OF THE TRIBUNAL IN THE CASE OF ASIA SATELLITE TELECO MMUNICATIONS CO. LTD. TO DECIDE THE ISSUE AGAINST THE ASSESSEE. IN CONCLUSI ON AT PAGE 11 OF THE ORDER THE LEARNED CIT(A) HAS RELIED UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. AND H ELD THAT THE INCOME OF THE ASSESSEE FROM THE LEASE OF THE TRANSPONDERS FOR UTILIZING THE FOOTPRINT IN INDIA WAS LIABLE TO BE TAXED IN INDIA AND THE AO WA S JUSTIFIED TO TAX THE SAME AS ROYALTY IN INDIA. 4. IN THE COURSE OF HEARING OF THESE APPEALS THE L EARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT SINCE FACTS OF THE PRES ENT CASE BEING IDENTICAL TO THE FACTS IN THE CASE OF ASIA SATELLITE TELECOMMUNI CATIONS CO. LTD. THE VARIOUS ISSUES RAISED REGARDING THE TAXABILITY OF R ECEIPTS ON ACCOUNT OF LEASE OF THE TRANSPONDERS BY THE ASSESSEE IS TO BE DECIDE D IN THE LIGHT OF THE VIEW OF THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI I N THE CASE OF ASIA SATELLITE 6 TELECOMMUNICATIONS CO. LTD. IN ITA 131 & 134 OF 200 3 VIDE DECISION DATED 31 ST JANUARY 2011. IN THIS CONNECTION THE LEARNED CO UNSEL FOR THE ASSESSEE HAS FILED SYNOPSIS IN BRIEF TO HIGHLIGHT T HAT THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS IN THE CASE OF ASIA S ATELLITE TELECOMMUNICATIONS CO. LTD. 5. THE LEARNED DR ON THE OTHER HAND HAS MERELY REL IED UPON THE ORDERS OF THE AUTHORITIES BELOW AND HAS NOT BEEN ABLE TO P OINT OUT ANY MATERIAL AS TO WHY THE DECISION OF HONBLE HIGH COURT IN THE CASE OF ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. (SUPRA) SHOULD NOT BE F OLLOWED IN THIS CASE. 6. IT WAS FURTHER POINTED OUT BY THE LEARNED COUNSE L FOR THE ASSESSEE THAT SPECIAL BENCH DECISION IN THE ASSESSEES OWN CASE O N IDENTICAL ISSUE HAS BEEN SET ASIDE BY THE HONBLE DELHI HIGH COURT VIDE ORDER DATED 17.02.2011 AND THE MATTER HAS BEEN REMITTED BACK TO THE TRIBUN AL TO DECIDE THE CASE AFRESH IN THE LIGHT OF THE JUDGMENT IN THE CASE OF ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. VS. DIRECTOR OF INCOME- TAX IN ITA 131 OF 2003. 7. WE HAVE HEARD BOTH THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. 8. AFTER HEARING BOTH THE PARTIES AND CONSIDERING T HE FACTS OF THE CASE IT IS BEYOND DOUBT THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE CASE OF 7 ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. IT IS N OW CLEAR THAT THE DECISION OF DELHI BENCH OF TRIBUNAL IN THE CASE OF ASIA SATE LLITE TELECOMMUNICATIONS CO. LTD. HAS BEEN REVERSED BY THE HONBLE DELHI HIG H COURT VIDE THEIR LORDSHIPS ORDER DATED 31 ST JANUARY 2011 IN ITA NOS.131 & 134 OF 2003. THE STATEMENT OF FACTS HAS BEEN NARRATED BY THE HON BLE DELHI HIGH COURT IN PARA 5 OF THEIR ORDER. THE ACTIVITY OF THAT ASSESS EE NAMELY ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. HAS BEEN DISCUSSED BY T HE HONBLE DELHI HIGH COURT IN PARA 5 TO 9 OF THEIR ORDER AS UNDER:- 5. THE APPELLANT/ASSESSEE VIZ. ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. IS A COMPANY INCORPORA TED IN HONG KONG AND CARRIES ON BUSINESS OF PRIVATE SATELL ITE COMMUNICATIONS AND BROADCASTING FACILITIES. THIS C OMPANY WAS FORMED IN 1988 AND IT CLAIMS THAT IT HAD NO OFFICE IN INDIA. APPEALS PERTAINS TO THE ASSESSMENT YEAR 1997-98 AND IT IS ALSO CLAIMED THAT DURING THE RELEVANT PREVIOUS ASSESSMEN T YEAR I.E. 1996-97 THE ASSESSEE HAD NO CUSTOMERS WHO ARE RES IDENTS OF INDIA. DURING THE PREVIOUS YEAR RELEVANT TO THE A SSESSMENT YEAR UNDER APPEAL THE APPELLANT WAS THE LESSEE OF A SATELLITE CALLED ASIA SAT I WHICH WAS LAUNCHED IN APRIL 1990 AND WAS THE OWNER OF A SATELLITE CALLED ASIA SAT 2 WHICH WAS LA UNCHED IN NOVEMBER 1995. THESE SATELLITES WERE LAUNCHED BY T HE APPELLANT AND WERE PLACED IN A GEOSTATIONARY ORBIT IN ORBITAL SLOTS WHICH INITIALLY WERE ALLOTTED BY THE INTERNA TIONAL TELECOMMUNICATION UNION TO UK AND SUBSEQUENTLY HAN DED OVER THE CHINA. THESE SATELLITES NEITHER USE INDIA N ORBITAL SLOTS NOR ARE THEY POSITIONED OVER INDIAN AIRSPACE. THE FOOTPRINTS OF ASIASAT 1 AND ASIASAT 2 EXTEND OVER FOUR CONTINENTS VIZ. ASIA AUSTRALIA EASTERN EUROPE AND NORTHERN AFRICA. THE FOOTPRINT IS THAT AREA OF THE EARTHS SURFACE OVER WHICH A SI GNAL RELAYED FROM THE APPELLANTS SATELLITE CAN BE RECEIVED. AS IASAT 1 COMPRISES OF A SOUTH BEAM AND A NORTH BEAM AND ASIA SAT 2 COMPRISES OF THE C BAND AND THE KU BAND. THE TERRI TORY OF 8 INDIA FALLS WITHIN THE FOOTPRINT OF THE SOUTH BEAM OF ASIASAT 1 AND THE C BAND OF ASIASAT 2. 6. IT ENTERS INTO AN AGREEMENT WITH TV CHANNELS COMMUNICATION COMPANIES OR OTHER COMPANIES WHO DESI RE TO UTILIZE THE TRANSPONDER CAPACITY AVAILABLE ON THE A PPELLANTS SATELLITE TO RELAY THEIR SIGNALS. THE CUSTOMERS HA VE THEIR OWN RELAYING FACILITIES WHICH ARE NOT SITUATED IN INDI A. FROM THESE FACILITIES THE SIGNALS ARE BEAMED IN SPACE WHERE T HEY ARE RECEIVED BY A TRANSPONDER LOCATED IN THE APPELLANT S SATELLITE. THE TRANSPONDER RECEIVES THE SIGNALS AND ON ACCOUNT OF THE DISTANCE THE SIGNALS HAVE TRAVELED THEY ARE REQUIR ED TO BE AMPLIFIED. THE AMPLIFICATION IS A SIMPLE ELECTRICA L OPERATION. THEREAFTER THE FREQUENCY ON WHICH THE SIGNALS ARE TO BE DOWNLINKED IS CHANGED ONLY IN ORDER TO FACILITATE T HE TRANSMISSION OF SIGNALS SO THAT THERE IS NO DISTORT ION BETWEEN THE SIGNALS THAT ARE BEING RECEIVED AND THE SIGNALS THAT ARE BEING RELAYED FROM THE TRANSPONDER. THE TRANSPONDE R OPERATIONS ARE COMMONLY KNOWN WHICH ARE CARRIED OU T NOT ONLY IN SATELLITE TRANSMISSION BUT ALSO IN THE CASE OF TERRESTRIAL TRANSMISSION. THERE IS NO CHANGE IN THE CONTENT OF THE SIGNALS WHATSOEVER THAT IS CARRIED OUT BY THE APPELLANT IN THE TRANSPONDER. THEREAFTER THE SIGNALS LEAVE THE TRA NSPONDER AND ARE RELAYED OVER THE ENTIRE FOOTPRINT AREA WHERE TH EY CAN BE RECEIVED BY THE FACILITIES OF THE APPELLANTS CUSTO MERS OR THEIR CUSTOMERS. 7. IT IS THE CASE OF THE ASSESSEE THAT IT HAS NO RO LE WHATSOEVER TO PLAY EITHER IN THE UPLINKING ACTIVITY OR IN THE RECEIVING ACTIVITY. ITS ROLE IS CONFINED IN SPACE WHERE THE TRANSPONDER WHICH IT MAKES AVAILABLE TO ITS CUSTOME RS PERFORMS A FUNCTION WHICH IT IS DESIGNED TO PERFORM. THE ON LY ACTIVITY THAT IS PERFORMED BY THE APPELLANT ON EARTH IS THE TELEMETRY TRACKING AND CONTROL OF THE SATELLITE. THIS IS CAR RIED OUT FROM A CONTROL CENTRE AT HONG KONG. 8. FOR THIS REASON IT IS CLAIMED BY THE APPELLANT THAT NO PART OF THE INCOME GENERATED BY IT FROM THE CUSTOME RS TO WHOM THE AFORESAID SERVICES ARE PROVIDED WAS CHARGEABLE TO TAX IN INDIA AND FOR THIS REASON NO RETURN INCOME WAS FILE D IN INDIA. 9 HOWEVER DEPUTY COMMISSIONER OF INCOME TAX (NON-RES IDENT CIRCLE) NEW DELHI AS ASSESSING OFFICER ISSUED A LE TTER NOTICE DATED 20.10.1999 UNDER SECTION 142(1) STATING THAT THE ASSESSEE HAD ENTERED INTO AGREEMENTS WITH VARIOUS COMPANIES FOR LEASE OF TRANSPONDERS FOR DOWNLINKING PROGRAMMES TO VARIO US COUNTRIES INCLUDING INDIA AND THEREFORE INCOME OF THE ASSESSEE WAS CHARGEABLE IN INDIA. THE APPELLANT WAS ACCORDI NGLY CALLED UPON TO FILE ITS RETURN. THE ASSESSEE RESPONDED BY THE QUESTIONING THE AUTHORITY OF THE AO AND EXPLAINING AS TO WHY ITS INCOME WAS NOT CHARGEABLE TO TAX IN INDIA. IT ALSO SOUGHT SOME TIME TO FILE ITS RETURN OF INCOME. ULTIMATELY THE RETURN WAS FILED ON 30.12.1999 REITERATING THAT NO INCOME EARNED BY THE APPELLANT WAS CHARGEABLE TO TAX IN INDIA. 9. THE AO HOWEVER WENT AHEAD WITH THE ASSESSMENT PROCEEDINGS. THE ASSESSMENT ORDER DATED 29.03.2000 WAS PASSED ASSESSING THE INCOME OF THE ASSESSEE AT RS.160 28 03 316. ACCORDING TO THE AO THE APPELLA NT HAD A BUSINESS CONNECTION IN INDIA AND THEREFORE WAS CH ARGEABLE TO TAX IN INDIA. HE REJECTED THE APPELLANTS CONTENTI ON THAT ITS REVENUES OUGHT TO BE APPORTIONED HAVING REGARD TO T HE NUMBER OF COUNTRIES COVERED BY THE FOOTPRINT. ACCORDING T O HIM THE REVENUES WOULD HAVE TO BE APPORTIONED ON THE BASIS OF COUNTRIES TARGETED BY THE T.V. CHANNELS WHO WERE TH E APPELLANTS CUSTOMERS. ON THIS BASIS HE ESTIMATED THAT NINETY PERCENT OF THE APPELLANTS REVENUE WAS ATTRIBUTABLE TO INDIA. AFTER ARRIVING AT THE INCOME OF THE APPELLANT HE H ELD THAT EIGHTY PER CENT THEREOF WAS APPORTIONED TO INDIA AS MOST O F THE CHANNELS WERE INDIA SPECIFIC AND THEIR ADVERTISEMEN T REVENUE WAS FROM INDIA. 9. AFTER CONSIDERING THE FACTS OF THE CASE AND ORDE R OF THE CIT(A) AS WELL AS TRIBUNAL AND AFTER TAKING NOTE OF THE RELEVANT STATUTORY PROVISIONS OF SEC. 4 5 9 & 90 OF THE INCOME-TAX ACT 1961 AND PROVI SION OF DTAA HIGHLIGHTING FEATURES OF THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THE CLIENT THE HONBLE HIGH COURT DID NOT AGREE TO THE VIEW TAKEN BY THE 10 TRIBUNAL ON THE INTERPRETATION OF SEC. 9(1)(VI) OF THE ACT. ACCORDINGLY QUESTION NO.3 WHETHER ON THE FACTS AND CIRCUMS TANCES OF THE CASE THE TRIBUNAL WAS JUSTIFIED IN HOLDING THAT THE AMOUNT P AID TO THE ASSESSEE BY ITS CUSTOMERS REPRESENTED INCOME BY WAY OF ROYALTY AS T HE SAID EXPRESSION IS DEFINED IN EXPLANATION 2 TO SEC. 9(1)(VI) OF THE AC T WAS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE HON BLE HIGH COURT AND SET ASIDE THE ORDER OF THE TRIBUNAL ON THIS ASPECT. 10. THE HONBLE HIGH COURT OF DELHI IN THE ABOVE RE FERRED CASE OF ASIA SATELLITE TELECOMMUNICATION CO. LTD. IN ITA NOS. 13 1 TO 134/2003 HAS HELD THAT RECEIPTS EARNED FROM PROVIDING DATA TRANSMISSI ON SERVICES THROUGH PROVISION OF SPACE SEGMENT CAPACITY ON SATELLITES D OES NOT CONSTITUTE ROYALTY WITHIN THE MEANING OF SEC. 9(1)(VI) OF THE ACT. IN DOING SO THE HONBLE HIGH COURT HAS CONCLUSIVELY HELD THAT WHILE PROVIDI NG TRANSMISSION SERVICES TO ITS CUSTOMERS THE CONTROL OF THE SATELLITE OR T HE TRANSPONDER ALWAYS REMAINS WITH THE SATELLITE OPERATOR AND THE CUSTOME RS ARE MERELY GIVEN ACCESS TO THE TRANSPONDER CAPACITY. ACCORDINGLY SINCE TH E CUSTOMER DOES NOT UTILIZE THE PROCESS OR EQUIPMENT INVOLVED IN ITS OPERATIONS THE CHARGES PAID TO THE SATELLITE OPERATORS ARE NOT COVERED WITHIN THE MEAN ING OF ROYALTY AS PROVIDED UNDER EXPLANATION 2 TO SEC. 9(1)(VI) AND THEREFORE THE SAME CANNOT BE TREATED AS ROYALTY. IN THIS CASE THE REVENUE ALSO RAISED THE QUESTION 11 REGARDING APPLICABILITY OF SEC. 9(1)(VII) FOR THE F IRST TIME BEFORE THE TRIBUNAL. ALTHOUGH THIS GROUND WAS ADMITTED IT WAS NOT DECI DED AS THE RECEIPT WAS HELD TO BE ASSESSABLE UNDER SEC. 9(1)(VI) OF THE AC T BY THE TRIBUNAL. NO ARGUMENT WAS ADVANCED BY THE LEARNED COUNSEL FOR TH E REVENUE BEFORE THE HONBLE HIGH COURT IN THIS MATTER. THEREFORE THE SUBMISSION OF THE REVENUE REGARDING APPLICABILITY OF SEC. 9(1)(VII) WAS NOT A CCEPTED. THE RESULT OF THE DECISION OF THE HONBLE HIGH COURT IS THAT THE RECE IPT RECEIVED BY THE ASSESSEE IS NOT TAXABLE EITHER UNDER SEC. 9(1)(VI) OR SEC. 9(1)(VII) OF THE ACT. 11. AS A RESULT THE APPEAL PREFERRED BY THE ASSESS EE BEFORE THE HONBLE HIGH COURT WAS ALLOWED AND THE JUDGMENT OF THE TRIB UNAL WAS SET ASIDE. 12. THEREFORE IN THE LIGHT OF THE DISCUSSIONS MADE ABOVE AND IN THE LIGHT OF THE FACT THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THAT OF THE CASE DECIDED BY THE HONBLE HIGH COURT IN THE CASE OF AS IA SATELLITE TELECOMMUNICATION CO. LTD. (SUPRA) AND RESPECTFULLY FOLLOWING THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE ABOVE REFERRE D CASE OF ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. WE HOLD THAT THE SERVI CE CHARGES RECEIVED BY THE ASSESSEE FROM VARIOUS TV CHANNELS ON ACCOUNT OF PROVIDING FACILITY OF BROADCASTING THEIR PROGRAMMES THROUGH THE TRANSPOND ERS LOCATED IN THE SATELLITES ARE NOT LIABLE TO BE TAXED AS ROYALTY IN INDIA. 12 13. AT THIS STAGE IT IS PERTINENT TO NOTE THAT A C OORDINATE BENCH OF INCOME- TAX APPELLATE TRIBUNAL I.E. DELHI BENCH `C NEW DE LHI IN THE CASE OF M/S. INTEL SAT CORPORATION VS. ADIT IN ITA NO. 543/DEL/2 010 PERTAINING TO THE ASSESSMENT YEAR 2007-08 VIDE ORDER DATED 04.03.2011 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AFTER FOLLOWING THE DECIS ION OF HONBLE DELHI HIGH COURT IN THE CASE OF ASIA SATELLITE TELECOMMUNICATI ONS PVT. LTD. (SUPRA). 14. WE THEREFORE SET ASIDE THE ORDERS OF THE AUTHO RITIES BELOW AND DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER ON THIS ACCOUNT. 15. IN THE RESULT ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED IN THE MANNER AS INDICATED ABOVE. 16. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 11 TH MARCH 2011. SD/- SD/- (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH MARCH 2011. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.