TaxTMI 
TaxTMI 
TaxTMI 
2012 (2) TMI 555
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....e projected in these grounds of appeal is that the ld. CIT(A) erred in holding that the transactions in respect of which the impugned payments were made to six non-resident entities were purely on account of services and not in the nature of royalty. 3. At the outset, the ld. D.R. Shri K.E.B. Rengarjan, appearing on behalf of the Revenue, very fairly conceded that the issue stands decided in favour of the assessee by the decision of the Hon'ble Delhi High Court in the case of Asia Satellite Telecommunication Co. Ltd Vs. Director of Income-tax [2011] 332 ITR 304 [Del]. However, he submitted that the decision of the Delhi Special Bench of the Tribunal in the case of New Sky Satellite N.V. Vs. Asstt. Director [Income-tax] [2009] 319 ITR [AT] ....
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....9,751/- and Rs. 3,33,39,659/- for A.Ys. 2002-03 and 2003-04 respectively. The Assessing Officer also charged interest u/s. 201(1A) amounting to Rs. 1,99,6S,927/- and Rs. 1,52,71,474/- for A.Ys. 2002-03 and 2003-04 respectively. The Assessing Officer has, therefore, taken the following arguments for raising the impugned demands. (1) The service provided by the Telecommunication service Provider in the case is different from that provided by the non-resident companies in the present case. (2) Telephone is fundamentally different from a bandwidth service. (3) The bandwidth service is not a specified service. (4) Equipment of the nonresident company through which connectivity is provided is used by the assessee the requisite bandwid....
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.... 6.3 On the above facts and in the circumstances of the case, only one question arises for decision whether the remittances made by the appellant company to the foreign parties would fall within the purview of sec. 195(1) which requires deduction of tax at source. Bandwidth is bought and sold to consumers and it acts as a conduit only. In the appellant's case there are no equipments installed in its premises and the contract entered with the foreign parties is only for the services. Mere use of equipment in providing bandwidth services would not amount to transfer of right to use. As a matter of fact there are no goods involved in the transaction and the payments are made only for the use of services. The word" royalty" and its meani....
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.... as royalty and it was held that no TDS was required to be made. The Hon'ble ITAT, Bangalore Bench in the case of ITO Vs. Madhura Coats Pvt. Ltd., in ITA No. 1711 and 1712jBang/2005 for AYs. 2005-06 and 2006-07 vide order dated 28-09-2006, relying on the decision of the Apex court in the case of Bharat Sanchar Nigam Ltd., (Supra)' wherein, it was held that providing telecom services do not fall under the category of 'goods', the Hon'ble ITAT held that payments made for connectivity for transmission of data would not fall into the category 'royalty' or 'fees for technical 6:4. In view of these facts and In the circumstances of the case and the position of law set out above, it is held that the@ transactions....