Satellite transponder and bandwidth receipts were not royalty or fees for technical services, leaving them outside Indian tax.

Receipts from leasing transponder capacity and bandwidth for satellite transmission were held not taxable in India as royalty under Section 9(1)(vi) or as fees for technical services under Section 9(1)(vii) of the Income-tax Act. The Delhi High Court applied the earlier binding ruling that consideration for satellite transponder and telecommunication transmission services does not amount to royalty, and the same reasoning also excluded taxability as technical services on the facts found. The Revenue's appeal therefore failed, and the receipts remained outside Indian tax under both provisions.

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Issues: Whether receipts from leasing transponder capacity and bandwidth for satellite transmission were taxable in India as royalty under Section 9(1)(vi) of the Income-tax Act, 1961, or as fees for technical services under Section 9(1)(vii) of the Income-tax Act, 1961.

Analysis: The appeal was covered by the earlier binding decision holding that consideration received for satellite transponder and telecommunication transmission services did not constitute royalty and did not fall within the scope of Section 9(1)(vi). The same reasoning also negatived taxability under Section 9(1)(vii), as the receipts were not exigible to tax in India on the facts found.

Conclusion: The receipts were not taxable in India under either provision, and the Revenue's appeal failed.

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