Bandwidth service receipts are not royalty where no equipment or process rights are transferred under the treaty.

Receipts from international private leased circuit and MPLS bandwidth services were held not to constitute royalty under section 9(1)(vi) of the Income-tax Act or Article 12(3) of the India Singapore Tax Treaty, because the payments were for bandwidth services and not for use of equipment, use of process, or any other royalty element. The Tribunal followed its consistent view in the assessee's own earlier years, as subsequently upheld, and applied that binding line of reasoning to identical facts for the relevant year. The royalty addition was therefore deleted.

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Issues: Whether receipts from bandwidth services were taxable as royalty under section 9(1)(vi) of the Income-tax Act, 1961 and Article 12(3) of the India Singapore Tax Treaty.

Analysis: The assessee's receipts arose from provision of international private leased circuit and MPLS bandwidth services. The issue had already been decided in the assessee's own case for earlier assessment years, and the consistent view of the Tribunal had been upheld in subsequent years. Following that binding and recurring line of decisions, the receipts from bandwidth charges were held not to constitute consideration for use of equipment, use of process, or any other royalty element within the statutory provision or the treaty article.

Conclusion: The receipts from bandwidth services are not taxable as royalty under section 9(1)(vi) of the Income-tax Act, 1961 or under Article 12(3) of the India Singapore Tax Treaty, and the addition was liable to be deleted.

Ratio Decidendi: Bandwidth service receipts do not amount to royalty merely because the service uses telecommunication infrastructure for transmission of data; where earlier binding decisions in the assessee's own case have already negated royalty characterization, the same view must be followed for identical subsequent years.

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