TaxTMI 
TaxTMI 
2011 (3) TMI 1034
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.... in the satellites are taxable in India. 3. In the course of hearing of these appeals, the learned counsel for the assessee at the outset has submitted that the facts of the present case are quite identical and similar to that of Asia Satellite Telecommunications Co. Ltd. as so clearly and emphatically observed and stated by the revenue authorities below in their respective orders. He, therefore, submitted that the issue involved in these appeals be decided in the light of the decision rendered by the Hon'ble Delhi High Court in the case of Asia Satellite Telecommunications Co. Ltd. v. DIT [2011] 197 Taxman 263/9 taxmann.com 168, whereby the decision of the Delhi Bench of the Tribunal in the case of Asia Satellite Telecommunications Co. Ltd. v. Dy. CIT [2003] 85 ITD 478 has been reversed. He further pointed out that the Assessing Officer as well as the CIT(A) has decided this issue against the assessee mainly relying upon the decision of Delhi Bench of the Tribunal in the case of Asia Satellite Telecommunications Co. Ltd. (supra). He further submitted that since the decision of Delhi Bench of the Tribunal in the case of Asia Satellite Telecommunications Co. Ltd. (supra) has been....
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....pellant and the facts of the case carefully. I find that submissions given by the Appellant are not based on the correct legal interpretation. The above issue has been decided by the jurisdictional ITAT in the case of Asia Satellite Telecommunications Company Ltd. v. DCIT." 5. The above decision of the Hon'ble Delhi ITAT in the case of Asia Sat has been reversed by the Hon'ble Delhi High Court by its judgment dated 31st January, 2011, in ITA Nos. 131 and 134 of 2003. The Hon'ble Delhi High Court has held that the amounts received by Asia Sat are not taxable in India at all. 6. As admittedly, the relevant facts of the Appellant's case are identical to those of Asia Sat, it follows, therefore, that the above service charges received by the Appellant are not taxable in India, in view of the above decision of the Hon'ble Delhi High Court. 7. The complete similarly between the assessee's facts and those of Asia Sat is further shown by a comparison between the following extract from paragraph 35 on page 28 of the Hon'ble Delhi High Court's judgment and paragraph 4.4 at page 6 of the Assessing Officer's order for assessment....
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....eriod when the sunlight is blocked, gyros to stabilize the satellite to keep the footprint properly aligned on the ground. The repeater section consists of an antenna system (comprising of two reflectors one for receiving and other for transmitting) and microwave used to receive, modify in frequency, amplify, modify in polarization and retransmit the signals involved. The path of each channel from receiving antenna to the transmitting antenna is called a transponder. The signals uplinked by the telecasting companies are received though the receiving antenna. This antenna located on the satellite transforms the wireless (electromagnetic) signals into an electrical form, which is suitable for amplification in the Low Noise Receiver (LNR). Due to the long distance of the satellite i.e., 36000 Kms from the earth the signals received by the transponder are at a very low power level. The signals are than modified within the LNR in frequency to correspond to the relay range and then amplified again before the individual filters. A microwave type boosts the power of the signal within each transponder to a high power level before applying it to the transmitting antenna. The transmitting ant....
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....process in the transponders of assessee's satellite and the payment being made by them is precisely for the use of the said process only. Reliance is placed on the ruling of the Authority for Advance Ruling in the case of Y reported in 238 ITR 296. In the said case the American Company was operating a worldwide credit card system and the related travel business and was receiving payments for the same. The American Company was maintaining a main frame computer, which was connected to the database in Hongkong. The database was in turn connected to a location in India, which was owned and controlled by an Indian company. The Indian company received information on computer about the use of credit cards and traveller cheques from all over India and in turn was making payments to the American Company for the use of its services. It was held that the payment is in the nature of royalty under clause (iii) of Explanation 2 to section 9(1)(vi). The entire discussion leaves no doubt about the fact that the payments received by the assessee is squarely covered under the term 'royalty' as defined in the Explanation 2 of section 9(1)(vi) of the I.T. Act, 1961. The only point that now needs to....
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....ssment year 1997-98 and it is also claimed that during the relevant previous assessment year, i.e., 1996-97, the assessee had no customers, who are residents of India. During the previous year, relevant to the assessment year under appeal, the appellant was the lessee of a satellite called Asia Sat I which was launched in April 1990 and was the owner of a satellite called Asia Sat 2 which was launched in November 1995. These satellites were launched by the appellant and were placed in a geostationary orbit in orbital slots, which initially were allotted by the International Telecommunication Union to UK, and subsequently handed over the China. These satellites neither use Indian orbital slots nor are they positioned over Indian airspace. The footprints of Asia Sat 1 and Asia Sat 2 extend over four continents, viz., Asia, Australia, Eastern Europe and Northern Africa. The footprint is that area of the earth's surface over which a signal relayed from the appellant's satellite can be received. Asia Sat 1 comprises of a South Beam and a North Beam and Asia Sat 2 comprises of the C Band and the Ku Band. The territory of India falls within the footprint of the South Beam of Asia Sat 1 an....
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....therefore, income of the assessee was chargeable in India. The appellant was accordingly called upon to file its return. The assessee responded by the questioning the authority of the Assessing Officer and explaining as to why its income was not chargeable to tax in India. It also sought some time to file its return of income. Ultimately, the return was filed on 30-12-1999, reiterating that no income earned by the appellant was chargeable to tax in India. 9. The Assessing Officer, however, went ahead with the assessment proceedings. The assessment order dated 29-3-2000 was passed assessing the income of the assessee at Rs. 160,28,03,316. According to the Assessing Officer, the appellant had a business connection in India and, therefore, was chargeable to tax in India. He rejected the appellant's contention that its revenues ought to be apportioned having regard to the number of countries covered by the footprint. According to him, the revenues would have to be apportioned on the basis of countries targeted by the T.V. Channels who were the appellant's customers. On this basis, he estimated that ninety per cent of the appellant's revenue was attributable to India. After arriving ....