The Income Tax Appellate Tribunal Delhi ruled that the satellite telecommunication services are not considered as royalty.
Facts
The appeal is filed by the assessee against the order of the Assessing Officer passed under section 143(3) read with section 144C(13) read with the directions of the DRP under section 144C of the Income Tax Act for assessment year 2018-19.
Submissions
Senior Advocate for the assessee, submitted that the issue in appeal is squarely covered by the decision of the Tribunal in assessee’s group cases in the case of Inmarsat Global Limited Vs. CIT for various assessment years right from 2001- 02 to 2018-19 wherein the Tribunal following the decisions of the Delhi High Court in the case of DIT Vs. New Skies Satellite and Asia Satellite Communication Co. Ltd. held that the amounts received by the assessee company from providing satellite telecommunication services are not in the nature of royalty as per India UK DTAA.
Decision
The division bench of G. S. Pannu, President and Challa Nagendra Prasad, Judicial Member noticed that the assessee derived income from transmitting of satellite signals from ship to the customers and vice versa. Equipment is located on a ship which captures the satellite signals. For provision of such services the assessee purchased airtime on the satellite from Inmarsat Global Ltd., which is the group concern of the assessee and owns the satellite and is based in the UK.
The tribunal held that the amounts received by the assessee for the use of transponder of tele-communication service charges are not royalty under section 9(1)(vi) of the Act and also under Article 12(8) of Indo Netherland DTAA.
Case title: Inmarsat Solutions BV v/s ACIT
Citation: I.T.A No. 1717/Del/2022
