2012 (1) TMI 311

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....ding that the payments received by the assessee company are not in the nature of royalty under Article 12 of the Double Taxation Avoidance Agreement between India and USA. 2. The appellant craves to add, amend, modify or alter any grounds of appeal at the time or before the hearing of the appeal." 2. The assessee, earlier known as PanAmSat, is a company incorporated under the laws of USA having its registered office at 3400 International Drive NW, Washington DC, USA and is a tax resident of USA. During the year the assessee has derived income from providing telecommunication services to various customers in India as well as outside India. The assessee was the owner and operator of global network of telecommunication satellites l....

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....s computed at  Rs. 37,26,52,401/- from where 5% has been attributed and revenue is computed at  Rs. 1,86,32,620/- on which tax has been computed at  Rs. 18,63,262/-. 3. The tax liability of the assessee has been shown in the table by the Assessing Officer which is reproduced:- Particulars Total Revenue Attributed Revenue Tax Indian customers 349,816,199 349,816,199 34,981,619 Global Customers (Attribution @ 90%) 76,624,662 68,962,195 6,896,219 Global Customers (Attribution @ 50%) 145,744,570 72,872,285 7,287,228 Global Customers (Attribution @ 5%) 372,652,401 18,632,620 1,863,262 Total income   510,283,300 51,028,330 4. The assessment so made w....

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..... We have considered the facts of the case and submissions made before us. We have already mentioned that there is a distinguishable feature namely that the assessee has received payments from persons residents in India. However, the receipts have been taxed u/s 9(1)(vii), Explanation 2, Clause (vi) thereunder. The decision in the case of Asia Satellite Telecommunications Company Limited is to the contrary and in favour of the assessee. It is also a matter of fact on record that the assessee is a tax resident of USA and, therefore, the provisions contained in the DTAA are applicable. However, we are of the view that we need not go into the provisions of the DTAA because of the provision contained in Section 90(2) of the Act. This provision ....