Satellite transmission receipts not taxable in India as royalty where treaty protection and binding precedent applied.

Satellite transmission receipts of a US tax resident were held not taxable in India as royalty under the Income-tax Act or the India-USA DTAA, because binding jurisdictional High Court rulings in the assessee's own and similar cases had already settled the issue. The Tribunal accepted that the Assessing Officer's and DRP's contrary view could not stand against the settled legal position and treated the treaty position as available to the assessee. The addition was deleted.

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Issues: Whether the assessee's satellite transmission receipts were liable to tax in India as royalty under the Income-tax Act, 1961 and the India-USA Double Taxation Avoidance Agreement, and whether the assessee was entitled to the benefit of the treaty so as to escape Indian taxation.

Analysis: The Tribunal noted that the assessee was a tax resident of the USA and that the controversy had already been settled by binding jurisdictional High Court decisions in the assessee's own case and in similar satellite-telecommunication matters. Relying on those decisions, it held that the receipts could not be brought to tax in India on the footing adopted by the Assessing Officer and the Dispute Resolution Panel. The Tribunal accepted that the earlier adverse view could not survive in the face of the settled legal position.

Conclusion: The assessee's income was held not liable to tax in India, and the addition was deleted.

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