INCOME TAX ACT, 1961

Section 195

Tax deduction at source - Under section 195 - Fee paid to non-resident for use of transponder and uplinking facility -

Assessee claimed deduction of payment made to M/s. Intelsat Corporation USA on account of transponder charges for the satellite facility provided AO held that fee for use of transponder and uplinking facility on the satellite was covered under the definition of the royalty and, accordingly, AO denied deduction for want of TDS under section 195.Held: Payment of transponder charges to US based entity and up linking charges could not be treated as a consideration for 'use' or 'right to use' any copyright of literary, artistic, or scientific work, including cinematograph films or work on film, tape or other means of reproduction for use in connection with radio or television broadcasting or in any manner relates to any patent or trademark, design, secret formula or process. It was only for use of facility and not for use or right to use any industrial, commercial, or scientific equipment. Thus, said payment did not fall within the ambit of terms 'royalty' used in para 3 of Artical 12 of Indo-US DTAA and accordingly no tax was liable to be deducted under section 195.

Applied:Taj TV Ltd. in ITA No. 9079/Mum./2010 dated 23-12-2016 and New Skies Satellite BV (2016) 382 ITR 114 (Del) : 2016 TaxPub(DT) 1115 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

SUBSCRIBE FOR FULL CONTENT