Case Law Details
No income deemed to accrue in India from use of satellite outside India to beam TV signals into India even if bulk of revenue arises due to viewers in India.
Delhi High Court in the case of Asia Satellite Telecommunications Co. Ltd. v. DIT [201 1-TII-05-HC-DEL-INTL] (Judgement date: 31 January 2011) held that the payments made for using capacity in a transponder for uplinking/down linking data do not constitute ‘royalty’ under the provisions of the Income-tax Act, 1961 (the Act). The High Court held that the customers did not make payments for the use of any process or equipment, since control over the process or equipment was with the taxpayer and not with the customers.
Facts of the case
• The taxpayer, a company incorporated in Hong Kong, is in the business of providing private satellite communications and broadcasting facilities. The taxpayer provides transponder (See Note-1 at Bottom) capacity of its satellites.
• For providing transponder capacity, the taxpayer enters into contracts with television channels, etc (the customers) and enables them to relay their signals over the footprint (See Note-2 at Bottom) of the satellite, which includes India.
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