Satellite transmission receipts not taxable as royalty where treaty benefits under section 90(2) apply on identical facts.

Receipts from satellite transmission services were treated as not taxable in India as royalty or otherwise under section 9(1)(vi), section 9(1)(vii) and Article 12 of the India-US treaty, because the relevant year involved identical facts already covered by the Tribunal's earlier order and the Delhi High Court ruling in Asia Satellite Telecommunications. Applying section 90(2), the Tribunal held that the assessee was entitled to the more beneficial treaty position. The revenue's reliance on the assessment order did not displace the binding effect of the earlier decision, and the departmental appeal was rejected.

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Issues: Whether the receipts from satellite transmission services were taxable in India as royalty under section 9(1)(vi) and section 9(1)(vii) of the Income-tax Act, 1961, read with Article 12 of the Double Taxation Avoidance Agreement between India and USA, and whether section 90(2) of the Income-tax Act, 1961 entitled the assessee to the more beneficial treaty position.

Analysis: The issue was treated as covered by the Tribunal's own earlier order for the assessee's subsequent assessment year, which had relied on the Delhi High Court decision in Asia Satellite Telecommunications and held that the receipts from satellite transmission services were not exigible to tax in India. The facts for the relevant year were found to be identical. In view of section 90(2) of the Income-tax Act, 1961, the assessee was entitled to the benefit of the provision more beneficial to it, and the revenue's reliance on the assessment order did not displace the binding effect of the earlier decision.

Conclusion: The receipts were not taxable in India as royalty or otherwise under the cited provisions, and the issue was decided in favour of the assessee.

Final Conclusion: The departmental appeal was rejected because the dispute stood concluded by the earlier coordinate and High Court decisions on the same issue and identical facts.

Ratio Decidendi: Where identical facts are governed by an earlier binding decision, and the treaty or domestic provision more beneficial to the assessee applies under section 90(2), receipts from satellite transmission services are not taxable in India as royalty.

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