Case Law Details
DCIT (International taxation) Vs Thaicom Public Co. Ltd. (ITAT Delhi)
The issue under consideration is that Whether the receipts of the assessees from transponder is royalty under the Income Tax Act, 1961, and if the answer is in the affirmative, whether it is taxable?
ITAT states that India’s change in position to the OECD Commentary cannot be a fact that influences the interpretation of the words defining royalty as they stand today. The only manner in which such change in position can be relevant is if such change is incorporated into the agreement itself and not otherwise. A change in executive position cannot bring about a unilateral legislative amendment into a treaty concluded between two sovereign states. Hence, by applying the said proposition to the facts and circumstances of the case, ITAT hold that the income received by the assessee non-resident on account of transponder charges from the customers in India amounting to was not taxable as royalty in its hands. The same is also not taxable under the provisions of DTAA between India and Thailand. Consequently, the grounds of appeal raised by the Revenue are dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
The present appeal filed by assessee is against order of CIT(A)-43, New Delhi dated 21.06.2016 relating to assessment year 2012-13 against order passed under section 144C(1) r.w.s 143(3) of the Income-tax Act, 1961 (in short ‘the Act’).
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