Satellite Transmission Service receipts held not to be royalty for Indian tax purposes on identical facts.

Receipts from Satellite Transmission Services were examined for taxability in India as royalty under Explanation II to section 9(1)(vi) of the Income-tax Act and Article 12(3) of the India-USA DTAA. The Tribunal followed its earlier decisions in the assessee's own case, which had been affirmed by the jurisdictional High Court, and found no distinguishing facts for the year under appeal. On that binding and consistent footing, the receipts were held not to constitute royalty, the royalty addition was deleted, and the assessment was set aside to that extent in favour of the assessee.

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Issues: Whether receipts from Satellite Transmission Services are taxable in India as royalty under Explanation II to section 9(1)(vi) of the Income-tax Act, 1961 and Article 12(3) of the India-USA Double Taxation Avoidance Agreement.

Analysis: The issue had repeatedly arisen in the assessee's own case for earlier assessment years and had been consistently decided in favour of the assessee by the Tribunal, with the view affirmed by the Jurisdictional High Court. Following that binding and consistent line of decisions, the receipts from Satellite Transmission Services were held not to constitute royalty. As the factual position was unchanged, the same treatment was adopted for the year under appeal.

Conclusion: The receipts from Satellite Transmission Services are not taxable in India as royalty and the addition was deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded and the assessment was set aside to the extent of the royalty addition.

Ratio Decidendi: Receipts for Satellite Transmission Services do not constitute royalty where the same issue has already been conclusively decided in the assessee's favour on identical facts and no distinguishing feature is shown.

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