Case Law Details
ACIT Vs Viacom 18 Media Pvt. ltd. (ITAT Mumbai)
The assessee has made payment for transponder service fees to three entities namely (1) intelsat Corporation, USA, (2) Intelsat global sales and marketing, UK and (3) MEAST satellite system, Malaysia. Assessee applied for an order u/s 195 (2) for Nil withholding tax certificates for payment of transponder services fees payable to the service providers.
The learned assessing officer rejected it holding that these payments are chargeable to tax as royalty on the basis of the order of coordinate bench in the case of the assessee wherein the case of Intelsat it was held that the payments are royalty on the basis of explanation to Section 9 (1) (vi) of the act. Subsequently on the basis of the decision of the honourable Delhi High Court Asia satellite communication Co Ltd (2011) 332 ITR 340, it was held that the income of Intelsat is not taxable in India and these payments are not subject to tax deduction at source.
Ld. CIT(A) has followed binding precedents of jurisdictional High Court in the case of New Sports Broadcast Pvt Ltd (supra), wherein it is held that transponder charges are not in the nature of ‘Royalty income in the hands of recipients despite amendment to section 9(1)(vi of the Act.
Therefore, respectfully following the decision of the coordinate bench in assessee‘s own case, which also judicially binds us, we are of the view that there is no infirmity in the order of The ld CIT (A) in holding that payment by assessee to a foreign company for utilization of transponder centered on a satellite is not in the nature of Royalty in terms of various Article of above Three DTAAs.
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