2022 (3) TMI 1645 - HC - Income Tax

Satellite transmission services do not constitute royalty under India-Netherlands tax treaty, appeal dismissed pending Supreme Court decision

The Delhi HC Division Bench dismissed an appeal regarding whether satellite transmission services constitute 'royalty' under the India-Netherlands DTAA. ... Royalty receipts - Satellite transmission services are within the term ‘royalty’ under the India Netherlands DTAA - HELD THAT:- Issue is covered by the Division Bench ruling in New Skies Satellite B.V. [2018 (4) TMI 2016 - DELHI HIGH COURT] No question of law arises. The writ petition is accordingly dismissed. It appears that an appeal has been entertained by the Supreme Court against the order of the New Skies. The parties to the present litigation i.e. the Revenue and the Assessee [New Skies Satellite B.V.], shall be bound by the decision on the question of law, to be decided finally in that regard. The Delhi High Court, through a Division Bench comprising Hon'ble Justices Manmohan and Dinesh Kumar Sharma, addressed whether satellite transmission services constitute 'royalty' under the India-Netherlands Double Taxation Avoidance Agreement (DTAA). The Court relied on its prior ruling in *The Commissioner of Income Tax - International Taxation -2 vs. New Skies Satellite B.V.*, ITA 416/2018 (11.04.2018), which settled this issue. Consequently, the Court held that 'no question of law arises' and dismissed the appeal. It further noted that a Supreme Court appeal against the *New Skies* decision is pending, and both parties are bound by the Supreme Court's final determination on this legal question.