Appeal Details
Counselvise Citation
[2020] 110 COUNSELVISE.COM (IT) 4398 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
1 year(s) 10 month(s) 16 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-10-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
Mumbai
Assessment Year
2015-2016
Appeal Filed On
07-12-2018
Judgement Text
ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 1 IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.7025/MUM/2018 (ASSESSMENT YEARS: 2015 - 16 ) INMARSAT GLOBAL LIMITED C/O SRBC & ASSOCIATES LLP, 14 TH FLOOR, THE RUBY, 20 SENAPATI BAPAT MARG, DADAR (W), MUMBAI 400 028 VS. DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) CIRCLE 2(2)(1), 17 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI 400 021 PAN AAACI6098K (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI P.J. PARDIWALA & MS. AARATI SATHE, A.RS RESPONDENT BY: SHRI AVANEESH TIWARI , D.R DATE OF HEARING: 26.08 .2020 DATE OF PRONOUNCEMENT: 23 .10.2020 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE A.O UNDER SEC.143(3) R.W.S 144C(13) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 25.09.2018 FOR A.Y. 2015 - 16. THE IMPUGNED ORDER HAS BEEN ASSAILED BEFORE US ON THE FOLLOWING GROUNDS OF APPEAL: BASED ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, INMARSAT GLOBAL LIMITED (HEREINAFTER REFERRED TO AS THE 'APPELLANT) RESPECTFULLY CRAVES LEAVE TO P REFER AN APPEAL UNDER SECTION 253 OF THE INCOME - TAX ACT, 1961 ('ACT') AGAINST THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME - TAX (INTERNATIONAL TAXATION) - 2(2)(1) ('AO') DATED 25 SEPTEMBER 2018 IN PURSUANCE OF THE DIRECTIONS ISSUED BY DISPUTE RESOL UTION PANEL - I ('DRP'), MUMBAI, DATED 04 SEPTEMBER 2018 ON THE FOLLOWING GROUNDS WHICH ARE INDEPENDENT AND WITHOUT PREJUDICE TO EACH OTHER: ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED DRP AND THE LEARNED A O HAS GROUND NUMBER 1 ERRED IN DETERMINING THE TOT AL INCOME OF THE APPELLANT AT RS. 5,89,84,812 INSTEAD OF 'NIL' INCOME AS DECLARED BY THE APPELLANT IN THE RETURN OF INCOME; GROUND NUMBER 2 ERRED IN HOLDING THE AMOUNTS RECEIVED BY THE APPELLANT FROM TATA COMMUNICATIONS LIMITED ('TCL') [EARLIER KNOWN AS VIDESH SANCHAR NIGAM LIMITED] TO BE 'ROYALTY' AS DEFINED UNDER SECTION 9(1)(VI) OF THE ACT AS WELL AS UNDER ARTICLE 13(3)(A) OF THE DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND UNITED KINGDOM ('INDIA - UK TAX TREATY'); GROUND NUMBER 3 ERRED IN NOT FOLLOWING THE DECISION OF THE JURISDICTIONAL MUMBAI TRIBUNAL IN THE APPELLANT'S OWN CASE FOR PREVIOUS ASSESSMENT YEARS 2000 - 01 TO AY 2005 - 06 (ITA NO. 5102/M/2004, 423/M /2005, 7555/ M/2005, 3426/M/2007, 2583/M/2007 AND 3213/M/2008) CONSIDERING THE FACTS IN THE INSTANT PREVIOUS YEAR ARE SIMILAR TO THE FACTS OF THE PREVIOUS YEARS AND TAXI NG THE RECEIPTS FROM TCL AS 'ROYALTY' UNDER SECTION 9(1)(VI) OF THE ACT AS WELL AS ARTICLE 13(3)(A) OF THE INDIA - UK TAX TREATY; GROUND NUMBER 4 THE LEARNED AO HAS ERRED IN NOT FOLLOWING THE ADVANCE RULING (AS AFFIRMED BY HON'BLE SUPREME COURT) OBTAINED B Y INDIAN SPACE RESEARCH ORGANISATION ('ISRO') (A CUSTOMER OF INMARSAT), AND TAXING THE RECEIPTS FROM TCL AS 'ROYALTY' PURSUANT TO THE RETROSPECTIVE AMENDMENT INSERTED VIDE EXPLANATION 5 / 6 TO SECTION 9(1)(VI) OF THE ACT BY FINANCE ACT 2012 AS WELL AS ARTICLE 13(3)(A) OF THE INDIA - UK TAX TREATY; GROUND NUMBER 5 THE LEARNED AO HAS NOT JUSTIFIED IN HOLDING THAT THE DEFINITION OF 'ROYALTY' BY INSERTION OF EXPLANATION 5/6 TO SECTION 9(1)(VI) OF THE ACT VIDE FINANCE ACT, 2012 SHOULD ALSO BE APPLIED TO THE DEFINITION OF 'ROYALTY' AS DEFINED IN ARTICLE 13 READ WITH ARTICLE 3(3) OF THE INDIA - UK TAX TREATY ; GROUND NUMBER 6 THE HON'BLE DRIP HAS ERRED IN CONCLUDING THAT THE LIAISON OFFICE (LO) CONSTITUTES A PERMANENT ESTABLISHMENT IN INDIA, WITHOUT APPRECIATING THE FACT THERE ARE NO ACTIVITIES THAT ARE CARRIED OUT BY THE LO IN INDIA; GROUND NUMBER 7 THE HON'BLE DRIP HAS ERRED IN CONCLUDING THAT THE LAND EARTH STATION ('LES') CONSTITUTES A PERMANENT ESTABLIS HMENT OF THE APPELLANT IN INDIA, WITHOUT APPRECIATING THE FACT THAT THE SAID LES WAS OWNED AND OPERATED BY TCL AND NOT APPELLANT, THEREBY NOT APPRECIATING THE FACTS APPROPRIATELY; GROUND NUMBER 8 THE LEARNED AO HAS ERRED IN CONSIDERING THE PROFITABILITY ON AN AD - HOC BASIS AT 30 PERCENT OF THE GROSS RECEIPTS FROM TCL BY APPLYING RULE 10 OF THE INCOME - TAX RULES, 1962 ('RULES'), WITHOUT APPRECIATING THE FACT THAT: THE A O DID NOT CARRY OUT ANY ACTIVITIES IN INDIA AND DID NOT HAVE ANY EMPLOYEE DURING THE RELEV ANT ASSESSMENT YEAR; AND THE LES IN INDIA WAS NOT OWNED OR CONTROLLED BY THE APPELLANT. GROUND NUMBER 9 THE LEARNED AO HAS ERRED IN LEVYING SURCHARGE, SECONDARY EDUCATION CESS AND HIGHER SECONDARY EDUCATION CESS OVER AND ABOVE THE TAX COMPUTED AT THE RATE PRESCRIBED UNDER THE INDIA - UK TAX TREATY ON THE RECEIPTS OF THE APPELLANT WHILE CALCULATING INCOME TAX L IABILITY FOR THE YEAR UNDER CONSIDERATION; GROUND NUMBER 10 THE LEARNED AO HAS ERRED IN GRANTING THE TDS CREDIT OF RS . 58,45,615 AS AGAINST THE TDS CREDIT CLAIMED BY THE APPELLANT OF RS. 58,98,497; GROUND NUMBER 11 THE LEARNED AO HAS ERRED IN LEVYING INTEREST AMOUNTING TO RS.1,47,546 UNDER SECTION 234B OF THE ACT: ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 3 GROUND NUMBER 12 THE LEARNED AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271 (1)(C) OF THE ACT. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, OMIT OR SUBSTITUTE ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR AT THE TIME OF THE APPEAL, TO ENABLE THE HON'BLE ITAT TO DECIDE THE APPEAL IN ACCORDANCE WITH LAW. 2. BRIEFLY STATED, THE ASSESSEE WHICH IS A COMPANY INCORPORATED AND REGISTERED UNDER THE LAWS OF UNITED KINGDOM ( FOR SHORT U.K ) IS ENGAGED IN THE BUSINESS OF PROVIDING TELECOMMUNICATION SERVICES AND LEASING OF SPACE SEGMENT CAPACITY OF NAVIGATIONAL TRANSPON DER . THE ASSESSEE IS A TAX RESIDENT OF U.K. FOR THE PURPOSE OF TH E INDIA - U.K. T AX T REATY. R ETURN OF INCOME DECLARING A TOTAL INCOME OF RS.NIL FOR A.Y. 201 4 - 15 WAS FILED BY THE ASSESSEE ON 30.09.2015. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE WA S ENGAGED IN THE BUSINESS OF PROVIDING TELECOMMUNICATION SERVICES AND LEASING OF SPACE SEGMENT CAPACITY OF NAVIGATIONAL TRANSPONDER, WHICH ESSENTIALLY INVOLVES MAKING AVAILABLE A CHANNEL (FREQUENCY) IN AIR THROUGH WHICH THE COMMUNICATION SIGNALS ARE TRANSMITTED. ON A PERUSAL OF THE RECORDS , IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE HAD ENTERED INTO AN AGREEM ENT WITH TATA COMMUNICATION S LTD. ( FOR SHORT TCL ) [EARLIER KNOWN AS VID H ESH SANCHAR NIGAM LIMITED ( FOR SHORT VSNL )] DATED 01.04.1999 (UPDATED IN 2004) FOR PROVIDING SATELLITE TELECOMMUNICATION SERVICES. OBSERVING, THAT THE RECEIPTS FROM TATA COMMUNICAT ION LTD. (EARLIER KNOWN AS VSNL) WERE IN THE ASSESSMENTS FRAMED IN THE CASE OF THE ASSESSEE FOR THE PRECEDING YEARS TAX ED AS ROYALTY INCOME IN ITS HANDS, THE A.O CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE AMOUNTS RECEIVED FROM TCL MAY NOT BE SIMILAR LY TAXED DURING THE YEAR UNDER CONSIDERATION. IN REPLY, IT WAS INTER ALIA SUBMITTED BY THE ASSESSEE THAT THE ISSUE OF ITS TAXABILITY IN INDIA HAD ALREADY BEEN DECIDED BY THE TRIBUNAL IN ITS FAVOUR IN ITS APPEALS FOR A.Y 2000 - 01 TO A.Y 2005 - 06 [ ITA NO. 5102 /MUM/2004,423/MUM/2005,7555/MUM/2005,3426/MUM/2007,2583/MUM/ 2007 AND 3213/MUM/2008 ] . IT WAS SUBMITTED BY THE ASSESSEE THAT THE ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 4 TRIBUNAL IN THE AFORESAID PRECEDING YEARS HAD HELD THAT THE CONSIDERATION RECEIVED BY THE ASSESSEE FROM TCL WAS NOT IN THE NATURE OF ROYALTY EITHER UND ER THE PROVISIONS OF THE ACT OR THE INDIA - U.K TA X T REATY. HOWEVER, THE REPLY FILED BY THE ASSESSEE DID NOT FIND FAVOUR WITH THE A.O. REBUTTING THE CLAIM OF THE ASSESSEE , IT WA S OBSERVED BY THE A.O THAT THE LEGAL LANDS CAPE WITH RESPECT TO TAXABILITY OF TRANSPONDER SERVICES HAD UNDERGONE A SEA CHANGE OVER THE YEARS. IN THE BACKDRO P OF HIS AFORESAID OBSERVATION, THE A.O WAS OF THE VIEW THAT THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE PERTAINED TO THE PRE - AMEND MENT ERA. OBSERVING, THAT THE SERVICES RENDERED BY THE ASSESSEE WERE CLEARLY TAXABLE AS ROYALTY UNDER SEC. 9 (1) (VI) OF THE ACT AND THE INDIA - U.K. T A X T REATY, THE A.O WAS OF THE VIEW THAT THE AMOUNT OF RS.5,89,84,812 / - RECEIVED BY THE ASSESSEE FROM TCL WAS CLEARLY TAXABLE AS ROYALTY BOTH UNDER THE ACT AS WELL AS THE INDIA - U.K. T AX T REATY. ALTERNATIVELY, IT WAS OBSERVED BY THE A.O THAT AS THE ASSESSEE HAD NOT FURNISHED ANY DETAILS OF EXPENDITURE, THEREFORE, THE NET INCOM E/PROFIT FROM RENDERING OF THE AFORESAID SERVICES COULD NOT BE DETERMINE D. ACCORDINGLY, THE A.O INVOKED RULE 10 OF THE INCOME TAX RULES, 1962 AND ESTIMATED THE BUSINESS PROFIT OF THE ASSESSEE AT 30% OF ITS GROSS RECEIPTS OF RS.5,89,84,812/ - , WHICH WORKED O UT TO AN AMOUNT OF RS.1,76,95,444/ - . IT WAS OBSERVED BY THE A.O THAT IF THE ASSESSEES INCOME WAS SUBSEQUENTLY HELD AS NOT BEING IN THE NATURE OF ROYALTY, THEN ITS BUSINESS INCOME WOULD BE WORKED OUT IN TERMS OF HIS AFORESAID OBSERVATIONS. ACCORDINGLY, IN THE BACKDROP OF HIS DELIBERATIONS THE A.O PROPOSED TO ASSESS THE TOTAL RECEIPTS OF RS.5,89,84,812/ - AS ROYALTY IN THE HANDS OF THE ASSESSEE, WHICH WAS SUBJECTED TO TAX BY HIM @ 10% UNDER THE INDIA - U.K. TAX T REATY, VIDE HIS DRAFT ASSESSMENT ORDER PASSED UND ER SEC.143(3) R.W.S 144C(1), DATED 21.12.2017. 4. OBJECTING TO THE AFORESAID DRAFT ASSESSMENT ORDER THE ASSESSEE FILED OBJECTIONS WITH THE DISPUTE RESOLUTION PANEL - 1 (WZ), MUMBAI. THE ASSESSEE OBJECTED TO THE PROPOSED TREATMENT OF THE AMOUNTS RECEIVED BY THE ASSESSEE FROM TCL AS ROYALTY UNDER SEC.9(1)(VI) OF THE ACT AN D ARTICLE 13 OF THE INDIA - U.K. TAX T REATY. IT WAS SUBMITTED BY THE ASSESSEE THAT THE TRIBUNAL WHILE DISPOSING OFF IT S ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 5 APPEALS FOR A.Y. 2000 - 01 TO A.Y. 2005 - 06, VIDE ITS CONSOLIDATED ORDER DATED 14.07.2017, HAD CONCLUDED, THAT THE CONSIDERATION RECEIVED BY THE ASSESSEE FROM TCL WAS NOT TO BE HELD AS ROYALTY. APART FROM THAT, IT WAS SUBMITTED BY THE ASSESSEE THAT THE A.O WHILE CHARACTERISING THE AMOUNTS RECEIVED BY THE ASSESSEE FROM TCL HAD FAILED TO FOLLOW THE ADVANCE RULING IN THE CASE OF ISRO SATELLITE CENTRE [ISACT] VS. DIT (INTL. TAXATION) (2008) 307 ITR 59 (AAR), WHEREIN THE HONBLE AUTHORITY FOR ADVANCE RULING (FOR SHORT AAR) HAD HELD THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM ISRO IN LIEU OF PROVIDING TRANSPONDER SERVICES WAS NOT TAXABLE EITHER UNDER THE ACT OR THE INDIA - U.K. TAX T REATY. IT WAS SUBMITTED BY THE ASSESSEE THAT THE AFORESAID ORDER OF THE AAR HAD T HEREAFTER BEEN AFFIRMED BY THE HONBLE SUPREME COURT AND THE SLP FILED BY THE REVENUE WAS DISMISSED VIDE AN ORDER DATED 31.08.2008 OF THE HONBLE APEX COURT . ALSO, THE ASSESSEE HAD RELIED ON THE JUDGMENT OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF ASIA SATELLITE TELECOMMUNICATION COMPANY LTD. ( 2011) 332 ITR 340 (DEL). IN THE SAID CASE THE HONBLE HIGH COURT AFTER EXTENSIVELY RELYING ON THE ADVANCE RULING IN THE CASE OF ISRO SATELLITE CENTRE [ISACT] VS. DIT (2008) 307 ITR 59 (AAR) , HAD CONCLUD ED , THAT THE AMOUNTS RECEIVED FOR PROVIDING USE OF TRANSPONDER FACILITY ON SATELLITE TO TELEVISION COMPANIES OUTSIDE INDIA WAS NOT IN THE NATURE OF ROYALTY. FURTHER, THE ASSESSEE OBJECTED TO THE VIEW TAKEN BY THE A.O THAT THE S PACE SEGMENT MONITORING SYSTEM (SSMS) AND THE LI AISON OFFICE (LO) CONSTITUTED A PE OF THE ASSESSEE IN INDIA. THE AFORESAID OBJECTION S WERE RAISED BY THE ASSESSEE IN THE BACKDROP OF THE FOLLOWING FACTS : (A) SSMS WAS NOT PRESENT IN INDIA DURING THE YEAR UNDER CONSIDERATION. (B) IT WAS SENT BACK TO THE UK IN THE YEAR 2006. (C) SSMS WAS NOT USED TO PROVIDE TELECOMMUNICATIONS SERVICES TO TCL. (D) THERE IS NOT INCOME GENERATING ACTIVITIES CARRIED ON BY LO IN INDIA. (E) DURING THE YEAR, LO HAD ONLY ONE EMPLOYEE. (F) AAR IN THE CASE OF ISRO SUPRA HELD THAT ASSESSEE DOES NOT HAVE PE IN INDIA. LASTLY, THE ASSESSEE OBJECTED TO WORKING OUT OF ITS PROFITABILITY ON AN ADHOC BASIS @ 30% OF ITS GROSS RECEIPTS FROM TCL BY APPLYING OF RULE 10 OF THE INCOME TAX RULES, 1962 BY THE A.O . 5. THE DRP AFTER NECESSARY DELIBERATIONS DID NOT FIND FAVOUR WITH THE CONTENTIONS ADVANCED BY THE ASSESSEE AND REJECTED THE SAME. INSOFAR THE CLAIM OF THE ASSESSEE THAT THE AMOUNTS RECEIVED FROM TCL COULD NOT BE TREATED AS ROY ALTY WAS CONCERNED, THE DRP SIMPLY RELIED UPON THE VIEW THAT WAS TAKEN BY THE PREDECESSOR PANEL IN ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 6 CONTEXT OF THE ISSUE UNDER CONSIDERATION IN THE PRECEDING YEARS I.E A.Y. 2010 - 11, A.Y. 2011 - 12, A.Y. 2013 - 14 AND A.Y. 2014 - 15 AND THEREIN HELD THAT THE AFORESAID AMOUNTS RECEIVED BY THE ASSESSEE FROM TCL WERE TAXABLE IN INDIA BEING RECEIPTS IN THE NATURE OF ROYALTY BOTH IN TERMS OF THE INCOME - TAX ACT AS WELL AS THE INDIA - U.K. TAX T REATY. ACCORDINGLY, THE DRP OBSERVING THAT ITS PREDECESSOR PANEL HAD IN THE EARLIER YEARS UPHELD THE AO S VIEW AND HAD CONCLUDED THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM TCL WERE TO BE TREATED AS ROYALTY, THUS , FOR THE SAID REASON REJECTED THE AFORESAID CLAIM OF THE ASSESSEE. AS REGARDS THE CLAIM OF THE ASSESSEE THAT IT DID NOT HAVE A PE IN INDIA, THE SAME TOO D ID NOT FIND FAVOUR WITH THE DRP. O BSERVING, THAT ITS PREDECESSOR PANEL IN A.Y. 2014 - 15 HAD UPHELD THE VIEW TAKEN BY THE A.O THAT THE ASSESSEE HAD A PE IN INDIA, IT WAS CONCLUDED BY THE DRP THAT THE ACTIVITIES CARRIED ON THE LAND THROUGH LAND EARTH STATIONS (LES) CONSTITUTED A PE OF THE ASSESSEE IN INDIA. ACCORDINGLY, THE ASSESSEES CLAIM THAT IT HAD NO PE IN INDIA WAS REJECTED BY THE DRP VIDE ITS OBSERVATIONS RECORDED AT PARA 9.3 ONWARDS OF ITS ORDER. AS REGARDS THE CLAIM OF THE ASSESSEE THAT THE A.O HAD ERRED IN CONSIDERING ITS PROFITABILITY ON AN ADHOC BASIS AT 30% OF ITS GROSS RECEIPTS FROM TCL BY APPLYING RULE 10 OF THE INCOME TAX RULES, 1962, THE SAME TOO WAS REJECTED BY THE DRP, OBSE RVING AS UNDER: THE CONTENTIONS RAISED BY THE ASSESSEE HAVE BEEN CONSIDERED. WE FIND THESE TO BE NOT ACCEPTABLE FOR FOLLOWING REASONS: I) NOTHING HAS BEEN BROUGHT OUT BY THE ASSESSEE TO SHOW THAT IT HAS MAINTAINED INDIA SPECIFIC ACCOUNTS. II) THE SERVICES BEING PROVIDED BY THE U . K SERVICE PROVIDER, THAT TOO THROUGH THE SATELLITES, FOR USE OF CLIENTS IN INDIA, FURTHER, THE END USERS BEING NUM EROUS IN DIVIDUALS/CORPORATIONS/BODIES RESIDENT AS WELL NON - RESIDENT, ALL THESE FACTORS AND SPECIALLY WHEN INDIA SPECIF IC ACCOUNTS ARE NOT MAINTAINED, MAKE THE INCOME ASCERTAINMENT VERY DIFFICULT. III) CONSIDERING ABOVE FACTS AND OF THE FACT THAT DESPITE BEING A SKED BY THE AO FOR THE PROFITABILITY/INDIA SPECIFIC ACCOUNTS, THE ASSESSEE HAS FAILED TO PRODUCE ANYTHING IN ITS SUPP ORT. IN THESE CIRCUMSTANCES, THE AO HAS NO OPTION BUT TO ESTIMATE THE INCOME BY APPLYING RULE 10 OF THE INCOME TAX RULES. HENCE, THE AO'S ACTION OF ADOPTING RULE 10 CANNOT BE ERRONEOUS AND IN FACT HE ADOPTED THE ONLY OPTION AVAILABLE TO HIM. IV) IT HAS NEVER B EEN CHALLENGED THAT PE HAS A TURNOVER IN INDIA. REGARDING INCOME ATTRIBUTION TO PE, IT IS NOTED THAT REVENUE GETS GENERATED IN INDIA, THE SERVICE RECIPIENTS ARE IN INDIA, THE NECESSARY APPROVALS HAVE COME FROM INDIA; THE END USERS ARE IN INDIA. THE SERVICE PROVIDER, THOUGH IN UK, IS PROVIDING SERVICE THROUGH THE SATELLITE BASED TRANSPONDER AND GROUND STATIONS BASED IN INDIA. ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 7 V) NO INDIA SPECIFIC ACCOUNTS, DETAILS , EXPENSE, RATIO ARGUMENTS/CLAIMS/PROPOSITIONS HAVE BEEN PROVIDED BY THE ASSESSEE. VI) CONSIDERING ALL THE ABOVE FACTORS, RATE OF 30% FOR INCOME ADOPTION CANNOT BE FAULTED WITH. THE ASSESSEES OBJECTION IS THEREFORE, REJECTED. ON THE BASIS OF ITS AFORESAID DELIBERATIONS THE DRP REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE. 6. THE A. O AFTER RECEIVING THE ORDER PASSED BY THE DRP UNDER SEC.144C(5) OF THE ACT, DATED 04.09.2018 THEREIN FRAMED THE ASSESSMENT VIDE HIS ORDER PASSED UNDER SEC. 143(3) R.W.S 144C(13) OF THE ACT, DATED 25.09.2018 , AND TREATING THE G ROSS RECEIPTS OF THE ASSESSEE FROM TCL AS ROYALTY, SUBJECTED THE SAME TO TAX @ 10% UNDER THE INDIA - U.K. TAX T REATY. ALTERNATIVELY, IT WAS OBSERVED BY THE AO, THAT AS IN THE PRECEDING YEARS, AS NO DETAILS OF EXPENDITURE WAS EITHER AVAILABLE ON RECORD NOR PROVIDED BY THE ASSESSEE, THUS, THE BUSINESS INCOME/PROFIT OF THE ASSESSEE WAS TO BE WORKED OUT ON AN ESTIMATE BASIS AT 30% OF ITS GROSS RECEIPTS OF RS.5,89,84,812/ - , WHICH AMOUNTED TO RS.1,76,95,444/ - BY INVOKING RULE 10 OF THE IN COME TAX RULES, 1962. I T WAS OBSERVED BY THE A.O THAT HI S LATTER PART OF THE ORDER I.E ASSESSING OF THE BUSINESS INCOME/PROFITS OF THE ASSESSEE WOULD BE TRIGGERED IF THE ASSESSEES INC OME WAS HELD AS BUSINESS INCOME AND NOT ROYALTY. 7. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER PASSED BY THE A.O UNDER SEC. 14 3(3) R.W.S 144C(13) , DATED 25.09.2018, HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE ASSESSEE HAS ASSAILED THE ASSESSMENT FRAMED BY THE A.O INTER ALIA ON THREE ISSUE S VIZ. (I) THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM TCL WERE NOT TO BE HELD AS ROY ALTY UNDER SEC. 9(1)(VI) OF THE ACT AND ARTICLE 13(3)(A) OF THE INDIA - U.K. TAX TREATY; (II) THAT THE AO/DRP HAD ERRED IN CONCLUDING THAT THE LIAISON OFFICE (LO) AND THE LAND EARTH STATION (LES) CONSTITUTED A PE OF THE ASSESSEE IN INDIA; AND (III) THAT THE A.O HAD ERRED IN ALTERNATIVELY CONSIDERING THE PROFITABILITY OF THE ASSESSEE ON AN AD HOC BASIS AT 30% OF ITS GROSS RECEIPTS FROM TCL BY APPLYING RULE 10 OF THE INCOME TAX RULES, 1962. 8. WE SHALL FIRST DEAL WITH THE CLAIM OF THE ASSESSEE THAT THE AMOUNTS RECEIVED FROM PROVIDING SATELLITE TELECOMMUNICATION SERVICES TO TCL (EARLIER KNOWN AS VIDHESH SANCHAR NIGAM LIMITED) (VSNL) WERE NOT TO BE TREATED AS ROYALTY UNDER SEC.9(1)(VI) OF THE ACT AND ARTICLE 13 OF THE INDIA - U.K. TAX TREATY. AS OBSERVED BY US ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 8 HEREI NABOVE, IT WAS THE CLAIM OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES THAT THE ISSUE THAT THE AMOUNTS RECEIVED BY IT FROM TCL WERE NOT TO BE HELD AS ROYALTY WAS SQUARELY COVERED BY THE ORDER PASSED BY THE TRIBUNAL IN ITS OWN CASE FOR A.Y. 2000 - 01 TO A.Y. 2005 - 06, VIDE ITS CONSOLIDATED ORDER DATED 14.07.2017. IN THE COURSE OF THE HEARING OF THE APPEAL THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE TOOK US THROUGH THE CONSOLIDATED ORDER PASSED BY THE TRIBUNAL WHILE DISPOSING OFF THE ASS ESSEES APPEAL S FOR A.Y. 2000 - 01 TO A.Y. 2005 - 06, DATED 14.07.2017. IT WAS FURTHER SUBMITTED BY THE LD. A.R , THAT THE ISSUE PERTAINING TO TREATING OF THE AMOUNT S RECEIVED BY THE ASSESSEE FROM TCL FOR PROVIDING SATELLITE TELECO MMUNICATION SERVICES, AS ROYAL TY , BY THE A.O/DRP, HAD AGAIN CAME UP BEFORE THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR A.Y. 2007 - 08 TO A.Y. 2012 - 13, WHEREIN AFTER EXHAUSTIVE DELIBERATIONS AND RELYING ON ITS EARLIER ORDER, THE TRIBUNA L HAD CONCLUDED THAT THE SAME WAS NOT TO BE TREATED AS ROYALTY. 9. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. HOWEVER, THE LD. D.R COULD NOT CONTROVERT THE CLAIM OF THE ASSESSEES COUNSEL THAT THE ISSUE WAS SQUARELY CO VERED BY THE ORDERS PASSED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE PRECEDING YEARS. 10. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE AFORESAID ISSUE, AND FIND, THAT THE TRIBUNAL WHILE DISPOSING OFF THE ASSESSEES APPEALS FOR A.Y. 2007 - 08 TO A .Y. 2012 - 13, VIDE ITS CONSOLIDATED ORDER DATED 12.12.2018 , HAD HELD, THAT THE AMOUNT RECEIVED BY THE ASSESSEE COMPANY FROM PROVIDING SATELLITE TELECOMMUNICATION SERVICES TO TCL WAS NOT TO BE TREATED AS ROYALTY . THE TRIBUNAL WHILE DEALING WITH T HE AFORESAID ISSUE HAD FOLLOWED ITS EARLIER VIEW THAT WAS TAKEN WHILE DISPOSING OFF THE ASSESSEES APPEALS FOR A.Y. 2000 - 01 TO A.Y. 2005 - 06, AND V IDE ITS ORDER DATED 14.07.2017 HAD OBSERVED AS UNDER : 5 . IN ORDER TO APPRECIATE THE CONTROVER SY, THE FOLLOWING DISCUSSION IS RELEVANT. THE APPELLANT IS A COMPANY INCORP ORATED IN UNITED KINGDOM AND IS ALSO A TAX RESIDENT OF UNITED KINGDOM. THE APPELLANT IS ENGAGED IN THE BUSINESS OF PROVIDING TELECOMMUNICATION SERVICES A ND FOR ASSESSMENT YEAR 2007 - 08, IT FILED ITS R ETURN OF INCOME DECLARING NIL INCOME, INTER - ALIA , CONTENDING THAT ITS INCOME WAS NOT TAXABLE IN INDIA. SO FAR AS THE INCOME EARNED BY THE ASSESSEE IN THIS YEAR IS CONCERNED, THE SAME STANDS ON SIMILAR FOOTING AS IN THE PAST YEARS, NAMELY, FROM RENDERING OF TELECOMMUNICATION SERVICES TO VIDESH SANCHAR NIGAM LTD. (I N SHORT VSNL), WHOSE NAME HAS SUBSEQUENTLY BEEN CHANGED TO TATA COMMUNICA TION LTD. (IN SHORT TCL). THE RECEIPTS FROM RENDERING OF TELECOMMUNICATION SERVICES TO TCL WERE CLAIMED TO BE NOT TAXABL E IN INDIA; HOWEVER, THE ASSESSING OFFICER HAS TAXED THE SAME AS ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 9 ROYALTY UNDER THE ACT AS WELL AS IN TERMS OF THE INDIA - UK DOUBLE TAXATION AVOIDANCE AGREEMENT (IN SHORT INDIA - UK DTAA). THE STAND OF THE ASSESS EE HAS BEEN THAT ITS RECEIPTS FROM TCL ARE IN T HE NATURE OF BUSINESS PROFITS COVERED BY ARTICLE 7 OF THE INDIA - UK DTAA A ND, IN THE ABSENCE OF ANY PE IN INDIA, THE SAME ARE NOT TAXABLE IN INDIA. IT WAS A COMMON GROUND BETWEEN THE PARTIES THAT THE MANNER IN WHICH THE SER VICES HAVE BEEN RENDERED BY THE ASSESSEE IN THE INSTANT YEAR IS SIMILAR TO T HE MANNER IN WHICH THE SERVICES HAVE BEEN RENDERED IN THE PAST YEARS. BROADLY SPEAKING, THE FOLLOWING FACT - SITUATION ASSERTED BY THE ASSESSEE BEFORE THE ASSESSING OF FICER BRINGS OUT THE MECHANICS OF THE MANNER I N WHICH THE ASSESSEE IS PROVIDING TELECOMMUNICATION SERVICES FROM OUTSIDE INDIA AND DERIVING ITS EARNING FROM TCL, THE SAME IS REPRODUCED BELOW : - 2.1 BACKGROUND INMARSAT IS ENGAGED IN THE BUSINESS OF PROVIDING TELECOMMUNICATION SERVICES FROM OUTSIDE INDIA. THE AFORESAID NATURE OF SERVICES ESSENTIALLY INVOLVES MAKING AVAILABLE A CHANNEL (FREQUENCY) IN AIR THROUGH WHICH THE COMMUNICATION SIGNALS ARE TRANSMITTED. THIS FREQUE NCY IS MADE AVAILABLE BY A NETWORK WHICH INCLUDES THE FOLLOWING RESOURCES : SATELLITE NETWORK CO - ORDINATING STATION (NCS) NETWORK OPERATION CENTRE (NOC) SATELLITE CONTROL CENTRE OTHER INFRASTRUCTURE INMARSAT PROVIDES A TELECOMMUNICATION LINK BETWEEN THE USER OF MOBILE TELEPHONE SYSTEM KNOWN AS MOBILE EARTH STATION (MES) AND LAND EARTH STATION (LES). MES IS AN EQUIPMENT LOCATED ON A SHIP, AIRCRAFT OR VEHICLE OR CARRIED IN HAND HELD CASE. THE USERS OF THE E QUIPMENT ARE THIRD PARTIES WHO ARE NOT CONNECTED WITH INMARSAT. THE LES IS A FIXED SITE (WITH LARGE SATELLITE DISHES AND RELATED EQUIPMENT), WHI CH IS OPERATED BY A THIRD PARTY I . E A LAND EARTH SERVICE OPERATOR (LESO). INMARSAT IS ENGAGED IN RENDERING VARIOUS TELECOMMUNICATION SERVIC ES INCLUDING THE FOLLOWING : VOICE TRANSMISSION SERVICES FAX TRANSMISSION SERVICE DATA TRANSMISSION SERVICE E - MAIL TRANSMISSION PRIVATE/CORPORATE NETWORKS, VALUE ADDED NETWORKS TRANSMISSION INTERNET ACCESS - BROWSING E - MAIL VIDEO CONFERENCIN G - STORE AND FORWARD VIDEO, REAL TIME, ETC. IN THIS CONNECTION, WE ENCLOSE HEREWITH IN ANNEXURE 7, A DIAGRAMMATIC REPRESENTATION WHICH DESCRIBES THE ABOVE MENTIONED ACTIVITIES. THE LESO IN INDIA IS VSNL. INMARSAT HAS ENTERED I NTO A LESO AGREEMENT WITH VSN L FOR PROVIDING SATELLITE TELE COMMUNICATION SERVICES. WE HAVE ENCLOSED HEREWITH IN ANNEXURE 8 A COPY OF THE LESO AGREEMENT DATED 12 APRIL 1999, ENTERED INTO BY INMA RSAT WITH VSNL FOR PROVISION OF TELECOMMUNICATION SERVICES. THE LES IS LINKED ON THE GROUND TO THE LOCAL PUBLIC TELECOMMUNICATION NETWORK. THIS SYSTEM ENABLES COMMUNICAT ION TO TAKE PLACE BETWEEN USERS OF THE MES EQUIPMENT AND EITHER OTHER USER S OF SIMILAR EQUIPMENT OR USERS OF THE PUBLIC TELEPHONE NETWORK. IN EACH CA SE, THE COMMUNICATION PASSES VIA AN INMARSAT SATELLITE AND IS CO - ORDINATED AND CONNECTED BY THE LESO. ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 10 6 . THE ASSESSING OFFICER, HOWEVER, TOOK TH E STAND, FOLLOWING THE STAND OF THE ASSESSING AUTHORITIES OF THE PAST Y EARS THAT THE IMPUGNED RECEIPTS EARNED BY THE ASSESSEE FROM TCL ARE IN THE NA TURE OF ROYALTY. WE FIND THAT THE DRP HAS ALSO AFFIRMED THE DECISION OF THE ASSESSING OFFICER. 7 . ON THIS ASPECT OF THE ROYALTY ISSUE CONTROVERSY, IT HAS BEEN POINTED OUT BEFORE US THAT THE TRIBUNAL VIDE ITS ORDER IN ITA NO S. 5102/MUM/2004 & OT HERS DATED 14.07.2017 IN THE CONTEXT OF ASSESSME NT YEARS 2000 - 01 TO 2005 - 06 HAS EVALUATED THE RIVAL STANDS AND HAVE DISAGREE D WITH THE STAND OF THE REVENUE THAT THE NATURE OF RECEIPT WAS ROYALTY. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE A SSESSEE HAS TAKEN US THROUGH THE DETAILE D DECISION MADE BY THE TRIBUNAL IN ITS ORDER DATED 14. 07.2017 (SUPRA), WHOSE RELEVANT PORTION WE ARE TEMPTED TO REPRODUCE AS UNDER : - 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. WE FIND THAT THE MATERIAL FACTS OF THE PRESENT CASE ARE LARGELY IDENTICAL TO THE FACTS AS CONSIDERED BY AAR IN THE RULING IN THE CASE OF ISRO SATELLITE CENTRE(2008) 307 ITR 59 (AAR). WE NOTE THAT THE REASONING AND CONCLUSION ON FACTS SIMI LAR TO THE F ACTS IN THE PRESENT PROCEEDINGS WITH ISRO WHICH HAS BEEN FOLLO WED AFTER A DETAILED DISCUSSION AND IN FACT EXTRACTED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF ASIA SATELLITE TELECOMMUNICATIONS CO. LTD. (2 011) 332 ITR 340(DEL.). WE NOTE THAT NO ARGUMENT S HAVE BEEN ADVANCED BY THE REVENUE TO REBUT THE ASSESSEES ARGUMENTS THAT FACTS AS CONSIDER ED IN ISRO SATELLITE CENTRE ARE IDENTICAL IN THE PRESENT PROCEEDINGS ALSO. WE HAVE TAKEN INTO CONSIDERATION THAT THE LEARNED CIT - DR HAS PLACED RELIANCE ON THE DECIS IONS OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF VERIZ ON COMMUNICATIONS SINGAPORE PTE LTD. VS. INCOME TAX OFFICER (IT) (2014) 361 ITR 575 (MAD), THE DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. CGI INFORMATION SYSTEMS AND MANAGEMENT CONSULTANTS (P) LTD. AND THE DECISION OF TH E HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SIEMENS AKTIONGESWELLSCHAFT (2009) 310 ITR 320 (BOM). RELIANCE HAS BEEN PLACED ON THE ORDER OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF VIACOM 18 M EDIA P. LTD. VS. ADIT (INTERNATIONAL TAXATION) - 2(2), MUMBAI(2014) 44 TAXMANN.COM 1 (MUM - TRIB) IN SUPPORT OF THE ARGUMENT THA T THIS IS THE VIEW TAKEN BY THE MUMBAI BENCH OF THE TRIBUNAL. NOTWITHSTAND ING THE FACT THAT AT THAT POINT OF TIME THE COORDINATE BEN CH DID NOT HAVE THE BENEFIT OF THE ORDERS O F THE HON'BLE DELHI HIGH COURT IN ASIA SATELLITE COMMUNICATION CO. LTD. WE ALSO NOTE THAT CONSISTENTLY THE MUMBAI BENCH OF THE TRIBUNAL HAS TAKEN INTO THE CONSIDERATION THE DISTINCTION IN FACTS, LA W AND THE ISSUE WHICH WAS POSED BEFORE DIFFERENT FORUMS FOR CONSIDER ATION AND FIND THAT IT HAS BEEN CONSISTENTLY HELD RELYING UPON THE DECISIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASES OF NEW SKIES SATELLITE(2016) 382 ITR 1, DIT VS. NOKIA NETWORKS OY (2013) 358 ITR 2 59 AND ASIA SATELLITE COMMUNICATIONS CO. LTD. (SUPRA) IN THE DECISIONS OF ALCATEL - LUCENT USA IN C. DATED 25.04.2007 IN ITA NOS. 7299 & 7300/ MUM/2010 FOR A.Y. 2005 - 06 AND 2007 - 08, DDIT VS. SHELL INFORMATION TECHNOLOGY INTERNATIONAL BV DATED 15.03.2017 IN IT A NO. 5051/MUM/ 2009 & OTHERS FOR A.Y. 2006 - 07 TO 2008 - 09 AND ADIT VS. TAJ TV LTD. DATED 05.07.2016 IN ITA NO. 4 678/MUM2007 FOR A.Y. 2003 - 04 TO 2005 - 06. WE HAVE ALSO NOTED THAT RELIANCE PLACED BY THE LEARNED CIT - DR ON THE DECISION OF THE HON'BLE JURIS DICTI ONAL HIGH COURT IN SIEMENS AKTIONGESWELLSCHAFT (SUPRA) SUPPORTS ITS CASE IS MISPLACED. SPECIFIC MENTION MAY BE MADE TO PARA 20 OF THE S AID DECISION. REFERENCE THEREIN HAS BEEN MADE TO A DECISION OF THE CA NADIAN COURT IN THE CASE OF HER MAJESTY THE QUEEN VS . MELFORD DEVELOPMENT INC. 82 DTC 6281 AND THE CATEGORIC OBSERVATION ON UNILATERAL AMEND MENT BY A NATION WHICH IS PARTY TO THE AGREEMENT LEAVES THE ISSUE IN NO DOUBT ABOUT THE VIEW FAVOURED. ACCORDINGLY WE QUOTE HERE THE DECISION OF THE HON'BLE DELHI HIGH COURT IN DIT VS. NEW SKIES SATELLITE BV CITED SUPRA TO SUPPORT THE CONCLUSION WHY THE CONSISTENT ORDERS OF THE ITAT ON THE ISSUE ARE BEING FOLLOWED: - 48. IN COMMISSIONER OF INCOME TAX V. SEIMENS AKTI ONGESSELLSCHAFT, [2009] 310 ITR 320 (BOM), THE BOMBAY HIGH COURT CITING R V. MELFORD DEVELOPMENTS INC. HELD THAT ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 11 THE RATIO OF THE JUDGMENT, IN OU R OPINION, WOULD MEAN THAT BY A UNILATERAL AMENDMENT IT IS NOT POSSIBL E FOR ONE NATION WHICH IS PARTY TO AN AGREEMENT TO TAX INCOME WHICH OTHERWISE W AS NOT SUBJECT TO TAX. SUCH INCOME WOULD NOT BE SUBJ ECT TO TAX UNDER THE EXPRESSION LAWS IN FORCE. *** ** ** WHILE CONSIDERING THE DOU BLE TAX AVOIDANCE AGREEMENT THE EXPRESSION LAWS IN FORCE WOULD NOT ONLY INCLUDE A TAX ALREADY COVERED BY THE TREATY BUT WOULD ALSO IN CLUDE ANY OTHER TAX AS TAXES OF A SUBSTANTIALLY SIMILAR CHARACTE R SUBSEQUENT TO THE DATE OF THE AGREEMENT AS SET OUT IN ARTICLE I(2). CONSIDERING THE EXPRESS LANGUAGE OF ARTICLE I(2) IT IS NOT POSSIBLE TO ACCEPT THE BROAD PROPOSITION URGED ON BEHALF OF THE ASSESSEE THAT THE LAW WOULD BE THE LAW AS APPLICABLE OR AS DEFINE WHEN THE DOUBLE TAX AVOIDANCE AGREEMENT WAS ENTERED INTO. 49. IT IS ESSENTIAL TO NOTE THE CON TEXT IN WHICH THIS JUDGMENT WAS DELIVERED. THERE, THE COURT WAS CONFRONTED WI T H A SITUATION WHERE THE WORD ROYALTY WAS NOT DEFINED IN THE GERMAN DTAA. FOLLOWING FROM OUR PREVIOUS DISCUSSION ON THE BIFURCAT ION OF TERMS WITHIN THE TREATY, IN SITUATIONS WHERE WORDS REMAIN UNDEFINED, ASSISTANCE IS TO BE DRAWN FROM THE DEFINITION AND IM PORT OF THE WORDS AS THEY EXIST IN THE DOMESTIC LAWS IN FORCE. IT WAS IN TH IS CONTEXT THAT THE BOMBAY HIGH COURT HELD THAT THEY WERE UNABLE TO ACCEPT THE ASSESSES CONTENTION THAT THE LAW APPLICABLE WOULD BE THE LA W AS IT EXISTED AT THE TIME THE DOUBLE T AX AVOIDANCE AGREEMENT WAS ENTERED INTO. THIS IS THE CONTEXT IN WHICH THE AM BULATORY APPROACH TO TAX TREATY INTERPRETATION WAS NOT REJECTED. THE SITUATION BEFORE THIS COURT HOWEVER IS MATERIALLY DIFFERENT AS THERE IS IN FACT A DEFINITION OF THE WORD ROYAL TY UNDER ARTICLE 12 OF BOTH DTAA, THUS DISPENSING WITH THE NEED FOR RECOURSE TO ARTICLE 3. 50. THERE ARE THEREFORE TWO SETS OF CIRCUMSTANCES. FIRST, WHERE THERE EXISTS NO DEFINITION OF A WORD I N ISSUE WITHIN THE DTAA ITSELF, REGARD IS TO BE HAD TO THE LAW S IN FORCE I N THE JURISDICTION OF THE STATE CALLED UPON TO INTERPRET THE WORD. THE BOMBAY HIGH COURT SEEMS TO ACCEPT THE AMBULATORY APPROACH IN SUCH A SITUATION, THUS ALLOWING FOR SUCCESSIVE AMENDMENTS INTO THE REALM OF LAWS IN FORCE. WE EXPRESS NO OPINI ON IN THIS REGARD SINCE IT IS NOT I N ISSUE BEFORE THIS COURT. THIS COURTS FINDING IS IN THE CONTEXT OF TH E SECOND SITUATION, WHERE THERE DOES EXIST A DEFINITION OF A TERM WI THIN THE DTAA. WHEN THAT IS THE CASE, THERE IS NO NEED TO REFER TO THE LAWS IN FOR C E IN THE CONTRACTING STATES, ESPECIALLY TO DEDUCE THE MEANING OF THE DEFINITION UNDER THE DTAA AND THE ULTIMATE TAXABILITY OF THE INCOME UNDER THE AGREEMENT. THAT IS NOT TO SAY THAT THE C OURT MAY BE INCONSISTENT IN ITS INTERPRETATION OF SIMILAR DEFINITION S. W HAT THAT DOES IMPLY HOWEVER, IS THAT JUST BECAUSE THERE IS A DOMESTI C DEFINITION SIMILAR TO THE ONE UNDER THE DTAA, AMENDMENTS TO THE DOMESTIC LAW, IN AN ATTEMPT TO CONTOUR, RESTRICT OR EXPAND THE DEFIN ITION UNDER ITS STATUTE, CANNOT EXTEND TO THE DEFI NITION UNDER THE DTA A. IN OTHER WORDS, THE DOMESTIC LAW REMAINS STATIC FOR THE PURPOSES O F THE DTAA. THE COURT IN SANOFI (S UPRA), HAD ALSO HELD SIMILARLY: WE ARE IN AGREEMENT WITH THE PETI TIONERS AND IN THE LIGHT OF OUR PRECEDING ANALYSES, DISCERN NO TEXT UAL, GRAMMATICAL OR SYNTACTIC AMBIGUITY IN ARTICLE 14(5), WARRANTING A N INTERPRETIVE RECOURSE. IN THE CIRCUMSTANCES, INVOKING PROVISIONS O F ARTICLE 3(2) BY AN ARTIFICIAL INSEMINATION OF AMBIGUITY (TO ACCOMMODATE AN EXPANDED MEANING TO THE DTAA PROVISIO N), WOULD BE CONTRARY TO GOOD FAITH INTERPRETATION. A FURTHER PROBLEMATI C OF CONTRIVING AN AMBIGUITY TO UNWARRANTEDLY INVITE APPLICATION O F DOMESTIC LAW OF A CONTRACTING STATE WOULD BE THAT WHILE INDIA WOULD INTERPRET AN UNDEFINED DTAA PROVISION ACCORDING TO THE PROVISIONS OF THE ACT, FRANCE COULD DO SO BY REFERENCE TO ITS TAX CODE. AS A CONSE QUENCE, THE PURPOSE OF ENTERING INTO A TREATY WITH A VIEW TO AVOIDING DOUBLE - TAXATION OF CROSS - BORDER TRANSACTIONS WOULD BE FRUSTRATED. 51. PERTINENTLY, THIS COURT I N DI RECTOR OF INCOME TAX V NOKIA NETWORKS, 2013 (358) ITR 259 SPECIFIC ALLY DEALT WITH THE QUESTION OF THE EFFECT OF AMENDMENTS TO DOMES TIC LAW AND THE MANNER OF THEIR OPERATION ON PARALLEL TREATIES. THE COUR T DELIVERED ITS JUDGMENT IN THE CONTEXT OF THE VE RY AMENDMENTS THAT ARE IN QUESTION TODAY; THE EXPLANATIONS TO SECTION 9(1)(VI) VIS A VIS THE INTERPRETATION OF A DOUBLE TAX AVOIDANCE AGREEMENT. THIS CO URT REJECTED THAT ANY AMENDMENT COULD CHANGE THE SITUATION AND RENDER T HE SERVICE OR ACTIVITY TAXABLE, I N THE FOLLOWING OBSERVATIONS: ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 12 HE, THUS SUBMITTED THAT THE QUEST ION OF COPYRIGHTED ARTICLE OR ACTUAL COPYRIGHT DOES NOT ARISE IN THE CONTEXT OF SOFTWARE BOTH IN THE DTAA AND IN THE INCOME TAX ACT SINCE TH E RIGHT TO USE SIMPLICITER OF A SOFTWARE PROGRAM ITSELF IS A PART O F THE COPYRIGHT IN THE SOFTWARE IRRESPECTIVE OF WHETHER OR NOT A FURTHER RIGHT TO MAKE COPIES IS GRANTED. THE DECISION OF THE DELHI B ENCH OF THE ITAT HAS DEALT WITH THIS ASPECT IN ITS JUDGMENT IN GRACEM AC CO. VS. ADIT 134 TTJ (DELHI) 257 POINTING OUT THAT EVEN SOFTWARE BOUGHT OFF THE SHELF, DOES NOT CONSTITUTE A COPYRIGHTED ARTICLE AS SOUGHT TO BE MADE OUT BY THE SPECIAL BENCH OF THE ITAT IN THE P RESENT CASE. HOWEVER, THE ABOVE ARGUMENT MISSES THE VITAL POINT NAME LY THE ASSESSEE HAS OPTE D TO BE GOVERNED BY THE TREATY AND THE LANGUAGE OF THE SAID TREATY DIFFERS FROM THE AMENDED SECTION 9 OF THE ACT. IT IS CATEGORICALLY HELD IN CIT VS. SIEMENS AKTIONGESELLSCH AFT, 310 ITR 320 (BOM) THAT THE AMENDMENTS CANNOT BE READ INTO THE TREATY. ON THE W ORDI NG OF THE TREATY, WE HAVE ALREADY HELD IN ERIC SSON (SUPRA) THAT A COPYRIGHTED ARTICLE DOES NOT FALL WITHIN THE PU RVIEW OF ROYALTY. THEREFORE, WE DECIDE QUESTION OF LAW NO.1 & 2 IN FAV OUR OF THE ASSESSEE AND AGAINST THE REVENUE. 52. THUS, AN INTERPRETIVE EXERC ISE BY THE PARLIAMENT CANNOT BE TAKEN SO FAR AS TO CONTROL THE MEANING OF A WORD EXPRESSLY DEFINED IN A TREATY. PARLIAMENT, SUPREME AS IT MA Y BE, IS NOT EQUIPPED, WITH THE POWER TO AMEND A TREATY. IT IS CERTAINLY TRUE THAT LAW LAID DOWN B Y THE PARLIAMENT IN OUR DOMESTIC CONTEXT, EVEN IF IT WERE IN VIOLATIO N OF TREATY PRINCIPLES, IS TO BE GIVEN EFFECT TO; BUT WHERE THE STATE UNILATERALLY SEEKS TO AMEND A TREA TY THROUGH ITS LEGISLATURE, THE SITUATION BECOMES ONE QUITE DIFF ERENT FROM WHEN IT BREACHES THE TREATY. IN THE LATTER CASE, WHILE INTERNATIONALLY CONDEM NABLE, THE STATES POWER TO BREACH VERY MUCH EXISTS; COURTS IN INDIA HAVE NO JURISDICTION IN THE MATTER, BECA USE IN THE ABSENCE OF ENACTMENT THROUGH APPROPRIATE LEGISLATION IN ACCORDANCE WITH ARTICLE 253 OF THE CONSTITUTION, COURTS DO NOT POSSES S ANY POWER TO PRONOUNCE ON THE POWER OF THE STATE TO ENACT A LAW CONT RARY TO ITS TREATY OBLIGATIONS. THE DOMESTIC COURTS, IN OTHER WORD S, ARE NOT EMPOWERED TO LEGALLY STRIKE DOWN SUCH ACTION, AS TH EY CANNOT DIC TATE THE EXECUTIVE ACTION OF THE STATE IN THE CONTEXT OF AN INTERNAT IONAL TREATY, UNLESS OF COURSE, THE CONSTITUTION ENABLES THEM TO. TH AT BEING SAID, THE AMENDMENT TO A TREATY IS NOT ON THE SAME FOOTIN G. THE PARLIAMENT IS SIMPLY NOT EQUIPPED WITH THE POWER TO, THROUGH DOMESTIC LAW, CHANGE THE TERMS OF A TREATY. A TREATY TO BEGIN WITH, IS NO T DRAFTED BY THE PARLIAMENT; IT IS AN ACT OF THE EXECUTIVE. LOGICALLY THEREFORE, THE EXECU TIVE CANNOT EMPLOY AN AMENDMENT WITHIN THE DOMESTIC LAWS OF THE STATE TO IMPLY AN AMENDMENT WITHIN THE TREATY. MOREOVER, A TREATY OF THIS N ATURE IS A CAREFULLY NEGOTIATED ECONOMIC BARGAIN BETWEEN TWO STATES. NO ONE PARTY TO THE TREATY CAN ASCRIBE TO ITSELF THE POWER TO UNILA TERALLY CHANGE THE TERMS OF THE TREATY AND AN NUL THIS ECONOMIC BARGA IN. IT MAY DECIDE TO NOT FOLLOW THE TREATY, IT MAY CHOSE TO RENEGE FR OM ITS OBLIGATIONS UNDER IT AND EXIT IT, BUT IT CANNOT AMEND THE TREATY, ESPECIALLY BY EMPLOYING DOMESTIC LAW. THE PRINCIPLE IS RECIPROCA L. EVERY TREATY ENTERED INTO BE THE INDIAN STATE, UNLESS SELF - EXECUTOR Y, BECOMES OPERATIVE WITHIN THE STATE ONCE PARLIAMENT PASSES A LAW TO SUCH EFFECT, WHICH GOVERNS THE RELATIONSHIP BETWEEN THE TREATY TERMS AND THE OTHER LAWS OF THE STATE. IT THEN BECOME S PART OF THE GENERAL CONSPECTUS OF DOMES TIC LAW. NOW, IF AN AMENDMENT WERE TO B E EFFECTED TO THE TERMS OF SUCH TREATY, UNLESS THE EXISTING OPERATIONA LIZING DOMESTIC LAW STATES THAT SUCH AMENDMENTS ARE TO B ECOME AUTOMATICALLY APPLICABLE, PARLIAMENT WILL HA VE TO BY EITHER A SEPARATE LAW, OR THROUG H AN AMENDMENT TO THE ORIGINAL LAW , MAKE THE AMENDMENT EFFECTIVE. SIMILARLY, AMENDMENTS TO DOMESTIC LAW CANNOT BE READ INTO TREATY PROVISIONS WITHOUT AMENDING THE TREATY ITSELF. 53. FINALLY, STATES ARE EXPECTED TO FU LFILL THEIR OBLIGATIONS UNDER A TREATY IN GOOD FAITH. THIS INCLUDES T HE OBLIGATION TO NOT DEFEAT THE PURPOSE AND OBJECT OF THE TREATY. THESE OBLIGATIONS ARE ROOTED IN CUSTOMARY INTERNATIONAL LAW, CODIFIED BY THE VCLT, ESPECIALLY ARTICLE 26 (BINDING NATUR E OF TREATIES AND THE OBLIGATION TO PERFO RM THEM IN GOOD FAITH); ARTICLE 27 (INTERNAL LAW AND OBSERVANCE OF TREATIES, I.E PROVISIONS OF INTERNAL OR MUNICIPAL LA W OF A NATION CANNOT BE USED TO JUSTIFY OMISSION TO PERFORM A TREATY); GENERAL RULE OF INTERPRET ATION UNDER ARTICLE 31 (1) (I.E THAT IT SHALL B E INTERPRETED IN GOOD FAITH, IN ACCORDANCE WITH ORDINARY MEANING TO BE GIVEN TO THE TERMS OF A TREATY) AND ARTICLE 31 (4) (A SPECIAL M EANING SHALL BE GIVEN TO A TERM IF IT IS ESTABLISHED THAT THE PARTIES SO IN TENDED). THE EXPRESSION PROCESS AND TREATY INTERPRETATION IN THIS CASE. ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 13 10.1 THE NEXT DECISION ALSO CITED BY THE CI T - DR IS THE CASE OF FORMULA ONE WORLD CHAMPIONSHIP LTD. VS. CIT ( INTERNATIONAL TAXATION) FOR THE PROPOSITION THAT THE DECISION OF THE HO N'BLE DELHI HIGH COURT IN THE CASE OF ASIA SATELLITE COMMUNICATION CO. LTD. AND NE W SKIES SATELLITE IS OVERRULED. ON A READING OF THE SAID DECISION WE NOTE THAT THE RELIANCE IS MISPLACED. THE ISSUE FOR CONSIDERATION BEFORE T HE HON'BLE APEX COURT WAS ON AN ENTIRELY DIFFERENT SET OF FACTS AND CIRCUMSTANCES AND AN ENTIRELY DIFFERENT ISSUE WAS BEING CONSIDERED. THE SAID DECISIONS WERE NEITHER CITED BEFORE THE COURT NOR REFERRED TO BY IT NOR CO NSIDERED IN THE SAID JUDGEMENT. ACCORDINGLY ON A READING OF THE DECIS IONS RE NDERED ON PECULIAR FACTS OF THE PRESENT CASE WHICH WE HAVE BROUGHT OUT IN DETAIL IN THE EA RLIER PART OF THIS ORDER WE FIND OURSELVES IN AGREEMEN T WITH THE DETAILED FINDING AND CONCLUSION DRAWN BY THE COORDINATE BENCHES AND RESPECTFULLY FOLLOWING THE SAME CONCLUDE THAT THE APPEALS OF THE AS SESSEE ARE TO BE ALLOWED. FOR READY REFERENCE WE EXTRACT FROM ONE OF TH E DECISIONS CITED BEFORE US. WE REPRODUCE THE RELEVANT EXTRACT FROM THE DECISION IN THE CASE OF ALCATEL LUCENT USA INC. BEING THE MOST LATEST IN POINT OF TIME HEREUNDER: - 5. WE HAVE HEARD THE RIVAL SUBMI SSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE BASIC ISSUE TO BE DECIDED IS AS TO WHETHER THE PAYMENTS RECEIVED BY THE ASSESSE E FROM RELIANCE CAN BE TAXED AS ROYALTY IN VIEW OF THE AMENDMENT TO SECTION 9(1)OF THE ACT. IT IS SAID THAT A DTAA IS A RESULT OF NEGOTIATIONS BETWEEN TWO COUNTRIES AS TO THE EXTENT TO WHICH SPECIAL CONCESSI ONAL TAX PROVISIONS CAN BE MADE NOTWITHSTANDING THAT THERE MIGHT BE A L OSS OF REVENUE. A PLAIN READING O F SECTION 90(2) OF THE ACT MAKES IT CLEAR THAT THE PROVISIONS OF THE DTAA WOULD PREVAIL OVER THE ACT UNLES S THE ACT IS MORE BENEFICIAL TO THE ASSESSEE. THEREFORE, EXCEPT TO THE E XTENT A PROVISION OF THE ACT IS MORE BENEFICIAL TO IT, THE DTAA WILL OVERRID E THE ACT. THIS IS IRRESPECTIVE OF WHETHER THE ACT CONTAINS A PROVISION THAT CORRESPONDS TO THE TREATY PROVISION. IN OUR OPINION, INTERNATIO NAL - TAXATION ISSUES HAVE TO BE DECIDED KEEPING IN MIND THE ABOVE BROAD PRINCIPLES. 5.1. IT IS FOUND THAT ALL THE I SSUES RA ISED BY THE DR, BEFORE US, HAVE BEEN DEALT WITH BY THE TRIBUNAL IN THE CASE OF ANTWERP DIAMOND (SUPRA). WE ARE R EPRODUCING THE ARGUMENTS OF THE REPRESENTATIVES OF BOTH THE SIDES AND THE RELEVANT PORTION OF THAT ORDER AND IT READS AS UNDER: 2. AT THE OUTSET, THE LD. COUNSEL, MR. K. K. VED SU BMITTED THAT SIMILAR ISSUE HAS BEEN DECIDED B Y THE TRIBUNAL IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE RIGHT FROM THE ASSESSMENT YEARS 2004 - 05, 2005 - 06 AND 2008 - 0 9. THE SECOND ISSUE RELATING TO DISALLOWANC E OF INTEREST PAID TO THE HEAD OFFICE ALSO HA S BEEN DECIDED IN FAVOUR OF THE A SSESSEE BY THE SPECIAL BENCH IN SUMITOMO MITSUI BANKING CORPN. , WHEREIN, THE ASSESSEE WAS ONE OF THE PARTY. 3. ON THE OTHER HAND, LD. DR ST RONGLY RELIED UPON THE ORDER OF THE AS SESSING OFFICER AND SUBMITTED THAT, SO FAR AS DATA PROCESSING COST IS CONCERNE D, THE SAME IS IN THE NATURE OF ROYALTY AND IN SUPPORT HE H AS STRONGLY RELIED UPON THE TWO KARNATAKA HIGH COURT DECISIONS IN THE CASE OF: - I ) CIT VS. WIPRO LTD., REPORTED IN 355 ITR 284; II) CIT VS. CGI INFORMATION SYSTEM S & MANAGEMENT CONSULTANTS (P) LTD., 226 TAXMAN 319 THE ISSUE WHETHER THE AMENDMENT BROUGHT BY FINANCE ACT 2012 IN SECTION 9(1)(VI) BY WAY OF EXPLANATIONS INSERTED IN THE INCO ME - TAX ACT WITH RETROSPECTIVE EFFECT CAN BE READ INTO DTAA OR NOT HAS TO BE SEEN IN THE LIGHT OF THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V SIEMENS AKTIONGE SELLSCHAFT, REPORTED IN 310 ITR 320 (BOM HC) ACCORDINGLY, HE SUBMITTED THAT OTHE R DECISIONS RENDERED BY THE DELHI HIGH CO URT AND THE TRIBUNAL MAY NOT BE APPLICABLE. WHILE APPRECI ATING THE SIEMENS AG (SUPRA) HE SUBMITTED THAT, IT MAY KIND BE BORN E IN MIND THAT: I) THE QUESTION OF LAW BEFORE THE HONBLE HIGH COURT WAS NOT THAT WHETHER A MENDMENTS IN THE INCOME - TAX A CT CAN BE READ INTO THE DTAA OR NOT; II) IN THE SAID CASE, OL D DTAA (1960) BETWEEN INDIA AND GERMANY WAS UNDER CONSIDERAT ION; III) THE SAID DECISION WAS RENDERED IN 20008 WHEN THE ONLY CL ARIFICATORY PROVISION BY WAY OF EXPLANAT ION IN SECTION 9 W AS THE EXPLANATION BELOW S.9(2) INSERTED BY THE FINANCE ACT, 200 7 DOING WITH THE REQUIREMENT OF PE FOR ROYALTY; IV) THAT AMENDMENTS/EXPLANATIONS IN THE INCOMETAX ACT ARE BEING SOUGHT TO BE READ INTO DTAA BY VIRTUE OF ARTICLE 3(12) OF THE MODERN TREATIE S; V)SECTION 9(1)(VI) UP TO AND INCLUDING EXPLANATION 2 ARE SUBSTAN TIVE PROVISIONS AS INSERTED BY FINANCE ACT 1976 AND THEREAFT ER, EXPLANATION 3 TO 6 ARE ONLY CLARIFICATORY PROVISIONS INSERTED SUBSEQUENTLY; AND VI) IT IS NOT DISPUTED BY THE R EVENUE THAT THE P ROVISIONS OF DTAA IF BENEFICIAL TO THE ASSESSEE SHALL BE PREFE RRED OVER THE PROVISIONS OF THE INCOME - TAX ACT. HE FURTHER SUB MITTED THAT, THE HONBLE BOMBAY HIGH COURT DECISION IN THE CAS E OF SIEMENS AKTIONGESELLSCHAFT (SUPRA) WOULD REVEAL THAT, I) NOWH ERE IN THE SAID ORDER, THE HIGH COURT HAS HELD THAT AMENDME NTS/EXPLANATIONS CANNOT BE READ INTO DTAA AS IT WAS NOT QUESTION BE FORE THE HONBLE HIGH COURT; II) THE NATURES OF SERVICES RENDERED IN THE SAID CASE WERE FOUND TO BE NOT ROYALTY UNDER THE DTAA T HOUGH FOUND TO BE ROYALTY UNDER THE ACT. THOSE SERVICES WERE FOUND TO FALL UNDER THE ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 14 EXPRESSION COMMERCIAL OR INDUSTRIAL PROFITS AS PER THE THEN DTAA (OLD) AND THEREFORE COULD NOT BE TAXED IN INDIA IN ABSENCE OF PE. THE PROVISIONS OF DTAA BEING THE BENEFICIAL TO THE ASSESSEE WERE PREFERRED OVER THE PROVISIONS OF THE INCOME - TAX ACT; III) IN PARAS 13, 22 AND 28 OF ITS ORDER, THE HONBLE HIGH COURT HAS APPROVED THE INSERTION OF EXPLANATION BEL OW SECTION 9(2) INSERTED BY THE FINANCE ACT 2007, THEREBY IMPLYING THAT THE EXPLANATIONS INSERTED BY FA 2007 COULD BE READ INTO MODERN D TAAS; IV) MUMBAI TR IBUNAL IN THE CASE OF VIACOM 18 MEDIA (P.) LTD. [2014] 162 TTJ 336 (MUM) HAS EXPLAINED THE IMPORT OF BOMBAY HIGH COURT DECISION IN RI GHT PERSPECTIVE IN PAR AS 16 AND 17 OF ITS ORDER WHILE REJECTING THE ASSESSEES ARGUMENT THAT THE HC HAS HELD THAT AMENDMENTS IN THE ACT CANNOT BE READ INTO DTAAS; AND V) THE BOMBAY HIGH COURT HAS APPROVE D AMBULATORY APPROACH (PARA 22) TO INTERPRETATION OF T REATIES AGA INST STATIC APPROACH ADOPTED BY THE DELHI HIGH COURT. SO FAR AS THE INTEREST PAID BY THE BRA NCH OFFICE TO THE HEAD OFFICE INCO ME OF HEADQUARTER, HE SUBMITTED THAT, EXPENDITURE INCLUDING INTE REST ATTRIBUTABLE OF EARNING OF INCOME WHICH DOES NOT F ORM PAR T OF THE TOTAL INCOME HAS TO BE DISALLOWED UNDER SECTION14A IF IT HAS TO BE HELD THAT IN VIEW OF THE SPECIAL BENCH DECISION IN THE CAS E OF THE ASSESSEE, THE INTEREST PAID BY THE BRANCH OFFIC E TO THE HEAD OFFICE IS NOT THE COMMISSION OF THE HEAD OFFI CE. IN SUPPORT, HE RELIED UPON THE DECISION OF OMAN INTERNATIONAL BANK AG ON THE ADMISSIBILITY OF THE BELIEF, HE RELIED UPON THE DE CISION OF HONBLE SUPREME COURT IN THE CASE OF NTPC VS. CIT, REPORTED IN 229 ITR 383. 4. AFTER CONSIDERING THE AFORESAI D SUB MISSIONS AND ON PERUSAL OF THE IMPUGNED ORDERS, WE FIND THAT SO FAR AS THE ISSUE RAISED VIDE GROUND NO.1 TO 3 IS CONCERNED IT IS A RECURRING ISSUE IN THE CASE OF THE ASSESSEE RIGHT FROM THE EARLIE R YEARS. THE LD.CIT (A) TOO HAS FOLLOWED THE CIT( A)S ORDERS FOR THE ASSESSMENT YEARS 2003 - 04 TO 2004 - 05, 2005 - 06 AND 2008 - 09. THE TRIBUNAL IN THE ASSESSMENT YEAR 2004 - 05 IN ITA N O.7347/MUM/2007 ON THE ISSUE OF DISALLOWANCE OF DATA PROCESSING COST HAS DEALT AND DECIDED THIS ISSUE IN THE FOLLOWING MANNER: - 15. NOW, COMING TO THE MAIN ISSUE I.E., WHETHER THE REIMBURSEMENT OF DATA PROCESSING COST OF RS.34,03,734, AMOUNTS TO ROYALTY OR NOT, WE FIND FROM THE RECORD THAT THE ASSESSEE IS ENGAGED IN THE BANKING BUSINESS AND OPERATES IN INDIA THROUGH BRANCH IN M UMBAI. IT HAS ACQUIRED BANKING APPLICATION SOFTWARE NAMED AS FLEXCUBE FROM AN INDIAN SOFTWARE COMPANY WHICH IS EXCLUSIVELY USED FOR THE BANKING PURPOSE BY THE ASSESSEE ALL OVER THE WORLD. WHEN THE MUMBAI BRANCH WAS SET UP, THE BRANCH WAS ALLOWED TO USE T HE SAID SOFTWARE BY MAKING IT ASSESSABLE THROUGH SERVERS LOCATED AT BELGIUM. THE BRANCH SENDS ITS DATA TO THE BELGIUM SERVER FROM WHERE THE DATA GETS PROCESSED AS PER THE REQUIREMENT OF THE BANKING OPERATIONS. AS PER THE TERMS OF AGREEMENT BETWEEN THE BRAN CH AND THE HEAD OFFICE FOR THE USAGE OF SOFTWAR E BY THE BRANCH, WHICH HAS BEEN INCORPORATED ABOVE, IT IS EVIDEN T THAT THE HEAD OFFICE ONLY HAS THE NON EXCLUSIVE NON TRANSFERRAB LE RIGHTS TO USE THE COMPUTER SOFTWARE BROUGHT FO R PERSONAL USE AND CLAUSE 16 OF THE SAID AGREEMENT SPECIFICALL Y PROVIDES THAT THE HEAD OFFICE DOES NOT HAVE ANY RIGHT TO ASSIGN, SUB LICENSE O R OTHERWISE TRANSFER THE LICENSE OF THIS AGREEMENT. THUS, THE PAY MENT BY THE BRANCH FOR USE OF COMPUT ER SOFTWARE IS NOT THE RIGHT IN THE COPY RIG HT BUT ONLY F OR DOING THE WORK FROM THE SAID SOFTWARE WHICH SUBSIST IN THE COPY RIGHT OF THE SOFTWARE. THE BRANCH IS USING THE COMPUTER SOFTWARE AND THE I.T. RESOURCES INSTALLED AT BELGIUM FOR W HICH THE PAYMENT IS MADE BY THE HEAD OFFICE TOWARDS THE USE OF SUCH SOFTWARE LICENSE. SINCE THE BRANCH IS USING THE S AME SOFTWARE FOR THE PURPOSE OF BUSINESS OPERATIONS, THE HEAD OFFICE ALLOCATES THE SAID EXPENDITURE ON A PRORAT A BASIS FOR THE USE OF THE SAID RESOURCES WHICH IS BEING REIMBURSED BY THE BRANCH TO THE H EAD OFFICE. IT IS NOT IN DISPU TE THAT THE ASSESSEE HAS SOUGHT THE BENEFIT OF TREATY BE TWEEN INDIA AND BELGIUM AND HAD SPECIFICALLY RELIED UPON THE DEFI NITION OF ROYALTY AS GIVEN IN THE ARTICLE 12. CLAUSE (A) OF PARA 3 OF ARTICLE 12, WHICH DEFINES THE TERM ROYALTY IN THE FOLLOWING MANNER: 3(A) THE TERM ROYALTIES AS USED IN THIS ARTICLE MEANS PAYMENTS OF ANY KIND RECEIVED AS A CONSI DERATION FOR THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF L ITERARY, ARTISTIC OR SCIENTIFIC WORK INCLUD ING CINEMATOGRAP H FILMS, ANY PATENT, TRADEMARK, DESIGN OR MODEL, PLAN, SE CRET FORMULA OR PROCESS, OR FOR INFORMATION CONCERNING INDUS TRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE. 16. THE ABOVE DEFINITION OF ROYALTY THUS PROVIDES THAT, WHEN THE PAYMENT OF A NY KIND IS RECEIVED AS A CONSIDERATION FOR USE OF OR THE RIGHT TO USE OF ANY OF THE COPY RIGHT OF ANY ITEM OR FOR VARIOUS TERMS USED IN THE SAID ARTICLE, THEN ONLY IT CAN BE HELD TO BE FOR THE PURPOSE OF ROYALTY. THE SAID DEFINITION OF ROYALTY IS E XHAUSTIVE AND NOT INCLUSIVE AND, THEREFORE, IT HAS TO BE GIVEN THE MEANING AS CONTAINED IN THE ARTICLE ITSELF AND NO OTHER MEANING SHOULD BE LOOKED UPON. IF THE ASSESSEE IS CLAIMING THE APPLICATION OF THE DTAA, THEN THE DEFINITION AND SCOPE OF ROYALTY GI VEN IN THE DOMESTIC LAW, IN THE PRESENT CASE, SECTION 9(1)(VI) SHOULD NOT BE READ INTO OR LOOKED UPON. THE CHARACTER OF PAYMENT TOWARDS ROYALTY DEPENDS UPON THE INDEPENDENT USE OR THE RIGHT TO USE OF THE COMPUTER SOFTWARE, WHICH IS A KIND OF COPY RIGHT . IN THE PRESENT CASE, THE PAYMENT MADE BY THE BRANCH IS NOT FOR USE OF OR RIGHT TO USE OF SOFTWARE WHICH IS BEING EXCLUSIVELY DONE BY THE HEAD OFFICE ONLY, INSTALLED IN BELGIUM. THE BRANCH DOES NOT HAVE ANY INDEPENDENT RIGHT TO USE OR CONTROL OVER SUC H MAIN FRAME OF THE COMPUTER SOFTWARE INSTALLED IN BELGIUM, BUT IT SIMPLY SENDS THE DATA TO THE HEAD OFFICE FOR GETTING IT PROCESSED. INSOFAR AS THE BRANCH IS CONCERNED, IT IS ONLY REIMBURSING THE COST OF PROCESSING OF SUCH DATA TO THE HEAD OFFICE, WHICH H AS BEEN ALLOCATED ON PRORATA BASIS. SUCH REIMBURSEMENT OF PAYMENT DOES NOT FALL WITHIN THE AMBIT OF DEFINITION OF ROYALTY WITHIN THE ARTICLE 12(3)(A). TO FALL WITHIN ITS AMBIT, THE BRANCH SHOULD HAVE EXCLUSIVE AND INDEPENDENT USE OR RIGHT TO USE THE SOFT WARE AND FOR SUCH USAGE, PAYMENT HAS TO BE MADE IN CONSIDERATION THEREOF. IT IS NOT THE CASE OF THE REVENUE THAT THE HEAD OFFICE HAS PROVIDED ANY COPY RIGHT OF SOFTWARE OR ANY COPYRIGHTED ARTICLE DEVELOPED BY THE HEAD OFFICE FOR THE EXCLUSIVE USE OF THE AS SESSEE FOR, WHICH THE ASSESSEE IS MAKING THE PAYMENT ALONG WITH THE MARK UP EXCLUSIVELY FOR THE PURPOSE OF ROYALTY. IF THE PAYMENT FOR LICENSE FOR THE SOFTWARE WHICH IS INSTALLED IN ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 15 THE HEAD OFFICE IS BEING MADE BY THE HEAD OFFICE, THEN ANY ALLOCATION OF C OST AND REIMBURSEMENT THEREOF BY THE BRANCH TO THE HEAD OFFICE CANNOT BE TERMED AS INDEPENDENT PAYMENT FOR THE PURPOSE OF RO YALTY. TO FALL WITHIN THE AMBIT OF ROYALTY UNDER ARTICLE, THE PAYMENT SHOULD BE EXCLUSIVELY QUA THE USE OR THE RIGHT TO USE THE SO FTWARE EXCLUSIVELY BY THE BRANCH. THE CHARACTER OF THE PAYMENT UNDER THE ROYALTY TRANSACTIONS DEPENDS UPON THE RIGHTS THAT THE TRANSFEREE ACQUIRES IN RELATION TO THE USE AND EXPLOITATION OF THE SOFTWARE PROGRAMME. HERE, THERE IS NO SUCH RIGHT WHICH HAS BEE N ACQUIRED BY THE BRANCH IN RELATION TO THE USAGE OF SOFTWARE, BECAUSE THE HEAD OFFICE ALONE HAS THE EXCLUSIVE RIGHT OF THE LICENSE TO USE THE SOFTWARE. THUS, THE REIMBURSEMENT OF THE DATA PROCESSING COST TO THE HEAD OFFICE DOES NOT FALL WITHIN THE AMBIT O F DEFINITION OF ROYALTY UNDER ARTICLE 12(3)(A). 17. THE LEARNED COMMISS IONER (APPEALS) AND THE LEARNED SENIOR COUNSEL HAVE STRONGLY RELIED UPON THE DECISION OF THE CO ORDINATE BENCH OF THE TR IBUNAL IN KOTAK MAHINDRA PRIMUS LTD. (SUPRA). ON A PERUSAL OF THE SAID DECISION, IT IS SEEN THAT THE CONCLUSION DRAWN BY THE TRIB UNAL, IS DIRECTLY APPLICABLE TO THE FACTS OF THE ASSESSEES C ASE ALSO, WHICH IS EVIDENT FROM THE FOLLOWING OBSERVATIO NS AND CONCLUSIONS DRAWN BY THE TRIBUNAL: 11. THE CONSIDERATION OF P A YMENT IS ONLY THIS DATA PROCESS WORK. NO PART OF THIS PAYMENT C AN BE SAID TO BE FOR THE USE OF SPECIALIZED SOFTWARE ON WHICH D ATA IS PROCESSED OR FOR THE USE OF MAINFRAME COMPUTER BECAUSE THE INDIAN COMPANY DOES NOT HAVE ANY INDEPENDENT RI GHT TO USE THE C OMPUTER OR EVEN PHYSICAL ACCESS TO THE MAINF RAME COMPUTER, SO AS TO USE THE MAINFRAME COMPUTER OR THE SPE CIALIZED SOFTWARE. ALL THAT THE RIGHT IS FOR PROCESSING OF DATA, AND THE USE OF MAINFR AME COMPUTER IS PERMITTED ON LY FOR THAT PURPOSE. THE INDIAN COMPANY CAN FEED THE RAW DATA IN THE MAINFRAME COMPUTER IN AUSTRALIA, WITH THE HELP OF THE TELECOMMUNICATION LINK, AND THE OUTPUT DATA, AFTER DUE PR OCESSING IS TRANSMITTED BACK TO THE INDIAN COMPANY. THERE IS N O PRIVILEGE OR RIGHT GRANTED TO THE INDIAN COM PANY BY THE AUSTRALIAN COMPANY. THE CONTROL OF THE INDIAN COMPANY IS ONL Y ON THE INPUT TRANSMISSION AND THE RIGHT IS TO GET THE OUTPUT PROCESSED DATA BACK. THE ACTUAL PROCESSING OF DATA IS THE EXCL USIVE CONTROL OF THE AUSTRALIAN COMPANY AND IT IS FOR THIS W ORK THAT THE AUSTRALIAN COMPANY GETS PAID. IN OUR CONSIDERED VIEW, THEREFORE, IN ESSENCE THE IMPUGNED PAYMENT IS MADE TO THE AUSTRALIAN COMPANY INCONSIDERATION OF ITS PROCESSING OF DATA BELONGING TO THE INDIAN COMPANY. AS FAR AS T HE SCOPE OF ARTICLE 12(3) (A) IS CONCERNED, WE FIND THAT IT CO VERS ONLY A PAYMENT FOR THE USE OF, OR THE RIGHT TO USE OF, A NY COPYRIGHT, PATENT, DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, TRADEMARK, OR OTHER LIKE PROPERTY OR RIGHT. THE CASE OF THE REVENUE IS THAT THE PAYMENT IS MADE FOR THE USE O F SPECIALIZED SOFTWARE WITH THE HELP OF WHICH DATA IS PROCESS ED. WE ARE NOT PERSUADED. AS WE HAVE CONCLUDED EARLIER IN THIS OR DER, ON THE FACTS OF THIS CASE, THE PAYMENT MADE BY THE IN DIAN COMPANY IS NOT FOR THE USE OF, OR RIGHT TO US E OF, SOFTWARE, THE PAYMENT IS FOR DATA PROCESSING. BE THAT AS IT MAY, EVEN IF STAND OF THE REVENUE IS TO BE UPHELD AND IT IS TO B E CONCLUDED THAT THE PAYMENT IS MADE FOR SOFTWARE PER SE, THAT DOE S NOT LEAD TO TAXABILITY OF RECEIPT IN THE HANDS OF THE A UST RALIAN COMPANY EITHER. IT IS ALSO BY NOW SETTLED THAT TH E PAYMENT FOR SOFTWARE IS FOR A COPYRIGHTED ARTICLE AND NOT CO PYRIGHT PER SE, AND, THEREFORE, IS NOT COVERED BY THE SCOPE OF PAYMENT FOR COP YRIGHT. THE AUTHORITY FOR THIS PROPOSITIO N IS CONTAINED IN S PECIAL BENCH DECISION IN THE CASE OF MOTOROL A INC. V. DY. CIT (2005) 95 ITD 269 (DEL)(SB), SAMSUNG ELECTRONICS COMPANY LTD. V. ITO (2005) 94 ITD 91 (BANG), AN D LUCENT TECHNOLOGIES HINDUSTAN LTD. V. ITO (2005) 92 ITD 366 (BANG). IT IS NOT EVEN THE REVENUES CASE THAT THE PAYMENT I N QUESTION IS NOT (SIC) FOR THE USE OF, OR RIGHT TO USE OF, PATENT , DESIGN OR MODEL, PLAN, SECRET FORMULA OR PROCESS, OR T RADE MARK. IN ANY EVENT, HAVING PERUSED THESE CLASSIFICATIONS AND HAVING CONSIDERED THE FACTS BEFORE US, WE ARE OF THE C ONSIDERED VIEW THAT THE PAYMENT DOES NOT FIT INTO ANY OF THESE C LASSIFICATIONS. IT IS, HOWEVER, CONTENDED THAT THE IMPUGNED PAYMENT IS COVERED BY THE RESIDUARY CLAUSE, I.E., OTHER LIKE PROPERTY OR RIGHT. IT IS CONTENDED THAT BY MA KING PAYMENT OF US $ 60,000 PER ANNUM, THE INDIAN COMPA NY GETS A VALUABLE PROPERTY AND RIGHT AS THE PAYMENT CANN OT BE SAID TO HAVE BEEN MADE IN VACUUM AND WITHOUT ANY CON SIDERATION. THIS PLEA ALSO DOES NOT IMPRESS US. IT IS NOT EVERY PROPERTY OR RIGHT WHIC H CAN BE COVERED BY THESE EXPRESSIONS APPEARING IN THE END OF ARTICLE 12(3)(A), BECAUSE, FOLLOWING TH E PRINCIPLES OF EJUSDEM GENERIS MEANING OF THE GENERAL WOR DS FOLLOWING THE SPECIFIC WORDS HAVE TO TAKE COLOUR FROM T HE SPECIFIC WORDS PRECEDING IT. WHEN TH AT PROPERTY OR RIGHT, EVEN IF IT SO EXISTS, IS NOT OF THE NATURE OF ANY OF THE SPECIFI C CATEGORIES SET OUT IN ARTICLE 12(3)(A), IT CANNOT BE COVERED BY THE GENERAL WORDS FOLLOWING THOSE CATEGORIES EITHER. FOR AL L THESE REASONS, WE ARE OF THE CONSIDERED VIE W THAT PROVISIO NS OF ARTICLE 12(3)(A)CANNOT BE INVOKED ON THE FACTS OF THE C ASE BEFORE US. THAT TAKES US TO THE QUESTION WHETHER THE PRO VISIONS OF ARTICLE 12(3)(B), AS RELIED UPON BY THE REVENUE AUTHORITIES, CAN BE INVOKED ON THE FACTS OF THE PRESENT CASE. ARTIC LE 12(3)(B) CAN APPLY ONLY WHEN THE PAYMENT IN QUESTION CAN BE HELD TO BE PAYMENT FOR THE USE OF, OR THE RIGHT TO USE , ANY INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT. THIS CONDITION CAN ONLY BE SATIS FIED WHEN IT IS ESTABLISHED TH AT THE IMPUGNED PAYMENT IS MADE FOR THE USE OF, OR RIGHT TO USE OF, MAINFRAME COMPUTER. THE INDIAN COMPANY DOES NOT HAV E ANY CONTROL OVER, OR PHYSICAL ACCESS TO, THE MAINFRA ME COMPUTER IN AUSTRALIA. THERE CANNOT, THEREFORE, BE ANY QUE STION OF PAYMENT FOR USE OF THE MAINF RAME COMPUTER. IT IS INDEED TRUE THAT THE USE OF MAINFRAME COMPUTER IS INTE GRAL TO THE DATA PROCESSING BUT WHAT IS IMPORTANT TO BE AR IN MIND IS THE FACT THAT THE PAYMENT IS NOT FOR THE USE OF MAINFRAME COMPUTER PER SE, THAT THE INDIAN COMPANY DOE S NOT HAVE ANY CONTROL OVER THE MAINFRAME COMPUTER OR P HYSICAL ACCESS TO THE MAINFRAME COMPUTER, AND THAT THE PAYMENT IS FOR ACT OF SPECIALIZED DATA PROCESSING BY THE AUSTR ALIAN COMPANY. USE OF MAINFRAME COMPUTER IN THE COURSE OF P ROCESSING OF DATA IS ONE OF THE IMPORTANT ASPECTS OF THE WHO LE ACTIVITY BUT THAT IS NOT THE PURPOSE OF, AND CONSIDER ATION FOR, THE IMPUGNED PAYMENT BEING MADE TO AUSTRALIAN C OMPANY. THE PAYMENT, AS WE HAVE OBSERVED EARLIER, IS FOR THE ACTIVITY OF SPECIALIZED DATA PROCESSING. IT IS NEITHE R PRACTICA BLE, NOR PERMISSIBLE, TO ASSIGN MONETARY VALUE TO EACH OF THE SEGMENT OF THIS ECONOMIC ACTIVITY AND CONSIDER TH AT AMOUNT IN ISOLATION, FOR THE PURPOSE OF DECIDING CHARA CTER OF THAT AMOUNT. THEREFORE, NEITHER THE IMPUGNED PAYMEN T CAN BE SAID TO BE TOWARDS USE OF, OR RIGHT TO USE OF, TH E MAINFRAME COMPUTER, NOR IS IT ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 16 PERMISSIBLE TO ALLOCATE AP ART OF THE IMPUGNED PAYMENT, AS ATTRIBUTABLE TO USE OF , OR RIGHT TO USE OF, MAINFRAME COMPUTER. ACCORDINGLY, THE PROV ISIONS OF ARTICLE 12(3)(B) CANNOT HAVE ANY APPLICATION IN THE MATTER. 18. INSOFAR AS THE RELIANCE PLACED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE DECISIONS OF THE MADRAS HIGH COURT AND ALSO THE SCOPE OF ROYALTY AS GIVEN IN EXPLANATION 4 AND 5 TO SECTION 9(1)(VI) BROUGHT IN STATUTE BY THE FINANCE ACT, 2012 ARE CONC ERNED, WE FIND THAT THE SAME IS NOT TENABLE FOR THE REASON T HAT ONCE THE ASSESSEE HAS OPTED FOR THE BENEFIT OF THE DTAA, T HEN THERE IS NO REQUIREMENT FOR RESORTING TO THE DEFINITION AND THE SCOPE OF ROYALTY AS GIVEN IN SECTI ON 9(1)(VI).THE SAI D AMENDMENT CANNOT BE READ INTO THE TREATY AND WILL NOT INFLUENCE THE DEFINITION OF ROYALTY, AS GIVEN IN ARTICLE 12(3). THIS PRO POSITION IS SQUARELY COVERED BY THE DECISION OF THE BOMBAY HIGH C OURT IN SIEMENS AKTIONGESELLSCHAFT (SUPRA) , THE DECISION OF DELHI HIGH COURT IN NOKIA NETWORK (SUPRA) AND DIT V/S ERICSON AB, [2012] 343 ITR 470. EVEN THE DECISIONS OF M ADRAS HIGH COURT AS RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS NOT APPLI CABLE WHICH IS EVIDENT FROM THE ISSUE INVO LVED AS IS EVIDENT FROM THE SUBSTANTIAL QUESTION OF L AW WHICH WERE FORMULATED BY THE HIGH COURT FOR ADJUDICATION. HE NCE, THE SAID DECISIONS ARE NOT APPLICABLE. 19. THUS, IN VIEW OF THE AFORESAID REASONS, WE HOLD T HAT THE IMPUGNED PAYMENT MADE BY THE BRANC H TO THE H.O. TOWARDS REIMBURSEMENT OF COST OF DA TA PROCESSING CANNOT BE HELD TO BE COVERED WITHIN THE SCOP E OF EXPRESSION ROYALTY UNDER ARTICLE12(3)(A) OF THE INDIA BELGIUM DTAA. ACCORDINGLY, THE CONCLUSION DRAWN BY THE LE ARNED COMMISSIONER (APPEALS) IS AFFIRMED. 20. SINCE WE HAVE ALREADY HELD THAT THE DATA PROCESSING COST PAID BY THE ASSESSEE DOES NOT AMOUNT TO ROYALTY, CONSEQUENTLY, THERE IS NO REQUIREMENT FOR DEDUCTING TAX AT SOURCE ON SUCH PAYMENT. THEREFORE, THE PROVIS IONS OF SECTION 40(A)(I) WILL NOT APPLY. ACCORDINGLY, THE ISSUE ARISING OUT OF GROUND NO.1 AND 2 IS D ISMISSED. THIS DECISION OF THE TRIBUNAL HAVE BEEN FOLLOWED IN THE SUBSEQUENT YEARS BY THE TRIBUNAL, I.E., IN AY2006 - 07 AND 2007 - 08. IN THE AFOR ESAID DECIS ION OF THE TRIBUNAL, THE D ECISION OF BOMBAY HIGH COURT IN THE CASE OF SIEMENS AKTIONGESE LLSCHAFT (SUPRA) AND DELHI HIGH COURT DECISION IN THE CAS E OF NOKIA NETWORK, REPORTED IN [2012] 253 CTR (DE) 417 AND DIT V SONY ERICSON AB, REPORTED IN [2012] 343 ITR 4 70 HAVE BEEN TAKEN NOTE OF. THUS, THIS ISSUE HAS BEEN DECIDED IN FAVO UR OF THE ASSESSEE AFTER DETAIL ANALYSIS AND DISCUSSION. MOREO VER, WE FIND THAT IN THE LATEST DECISION OF HONBLE DELHI HI GH COURT IN THE CASE OF DIT VS. NEWS SKY SATELLITE BV PASS ED IN I TA 473/2012, ORDER DATED 8.02.2016 HAVE EXPLAINED THE RATIO AND PRINCIPLE OF HONBLE BOMBAY HIGH COURT IN THE CAS E OF SIEMENS AKTIONGESELLSCHAFT (SUPRA). THE RELEVANT OBSERV ATION OF THE HONBLE DELHI HIGH COURT IN THE SAID CASE READS AS UNDER: - 48 IN CO MMIS SIONER OF INCOME TAX V. SEIMENS AKTIONGESSELLSCHAFT, [2009] 310 ITR 320 (BOM), THE BOMBAY HIGH COURT CITING R V. MELFORD DEVELOPMENTS INC. HELD THAT THE RATIO OF THE JUDGMENT, IN OUR OPINION, WOULD MEAN THAT BY A UNILATERAL AMENDMENT IT IS N OT POSSIBLE FOR ONE NATION WHICH IS PART Y TO AN AGREEMENT TO TAX INCOME WHICH OTHERWISE WAS NOT SUBJECT TO TAX. SUCH INCOME WOULD NOT BE SUBJECT TO TA X UNDER THE EXPRESSION LAWS IN FORCE. WHILE CONSI DERING THE DOUBLE TAX AVOIDANCE AGREEMENT THE EXPRESSIO N LAWS IN FORCE WOULD NOT ONLY INCLUDE A TAX ALREADY COVER ED BY THE TREATY BUT WOULD ALSO INCLUDE ANY OTHER TAX AS T AXES OF A SUBSTANTIALLY SIMILAR CHARACTER SUBSEQUENT TO T HE DATE OF THE AGREEMENT AS SET OUT IN ARTICLE 1(2). CONSIDERING THE EXPRESS LANG UAGE OF ARTICLE 1(2) IT IS N OT POSSIBLE TO ACCEPT THE BROAD PROPOSITION URGED ON BEHA LF OF THE ASSESSEE THAT THE LAW WOULD BE THE LAW AS A PPLICABLE OR AS DEFINE WHEN THE DOUBLE TAX AVOIDANCE AGREEMENT WAS ENTERED INTO. 49. IT IS ESSENTIAL TO NOTE THE CON TEXT IN WHICH THIS JUDGMENT WAS DELIVERED. THERE, THE COURT WAS CONFRONTED WITH A SITUATION WHERE THE WORD ROYALTY WAS NOT DEFINED IN THE GERMAN DTAA. FOLLOWI NG FROM OUR PREVIOUS DISCUSSION ON THE BIFURCATION OF TERMS W ITHIN THE TREATY, IN SITUATIONS WHERE WORDS REMAIN UNDEF INED, ASSISTANCE IS TO BE DRAWN FROM THE DEFINITION AND IMPOR T OF THE WORDS AS THEY EXIST IN THE DOMESTIC LAWS IN FORCE. IT WAS IN THIS CONTEXT THAT THE BOMBAY HIGH COURT HELD THAT THEY WERE UNABLE TO ACCEPT THE ASSESSES CONTENTION TH AT THE LAW APPLICABLE WOULD BE THE LAW AS IT EXISTED AT TH E TIME THE DOUBLE TAX AVOIDANCE AGREEMENT WAS ENTERED INT O. THIS IS THE CONTEXT IN WHICH THE AMBULATORY APPROACH T O TAX TREATY INTERPRETATION WAS NOT REJECTED. THE SITUATION BEFORE THIS COURT HOWEVE R IS MATERIALLY DIFFERENT AS THERE IS IN FACT A DEFINITION OF THE WORD ROYALTY UNDE R ARTICLE 12 OF BOTH DTAA, THUS DISPENSING WITH THE NEED FOR RECOURSE TO ARTICLE 3. 50. THERE ARE THEREFORE TW O SETS OF CIRCUMSTANCES. FIRST, WHERE THERE EXISTS NO DEFINITI ON OF A WORD IN ISSUE WITHIN THE DTAA ITSELF, REGARD IS TO BE HAD TO THE LAWS IN FORCE IN THE JURISDICTION OF THE STA TE CALLED UPON TO INTERPRET THE WORD. THE BOMBAY HIGH COURT SEEMS TO ACCEPT THE AMBULATORY APPROACH IN SUCH A SITUATION, THUS ALLOWING FOR SUCCESSIVE AMENDMENTS INT O THE REALM OF LAWS IN FORCE. WE EXPRESS NO OPINION IN THIS REGARD SINCE IT IS NOT IN ISSUE BEFORE THIS COURT. THIS COURT S FINDING IS IN THE CONTEXT OF THE SECOND SITUATION, WHERE T HERE DOES EXIST A DEFINITION OF A TERM WITHIN T HE DTAA. WHE N THAT IS THE CASE, THERE IS NO NEED TO REFER TO THE LAWS IN F ORCE IN THE CONTRACTING STATES, ESPECIALLY TO DEDUCE THE MEANING OF THE DEFINITION UNDER THE DTAA AND THE ULTIMATE TAXABILITY OF THE INCOME UNDER THE AGREEMENT. THAT IS NOT TO SAY TH AT THE COURT MAY BE INCONSISTENT IN ITS INTERPR ETATION OF SIMILAR DEFINITIONS. WHAT THAT DOES IMPLY HOWE VER, IS THAT JUST BECAUSE THERE IS A DOMESTIC DEFINITION SIM ILAR TO THE ONE UNDER THE DTAA, AMENDMENTS TO THE DOMESTIC LAW, IN AN ATTEMPT TO CONTOUR, RE STRICT OR EXPAND TH E DEFINITION UNDER ITS STATUTE, CANNOT EXTEND TO THE DEFI NITION UNDER THE DTAA. IN OTHER WORDS, THE DOMESTIC LAW REM AINS STATIC FOR THE PURPOSES OF THE DTAA. 5. THUS, ON THE FACTS OF TH E PRESENT CASE, WE ARE BOUND TO FOLLOW THE JUDICIA L PRECEDENCE IN ASSESSEES OWN CASE FOR THE EARLIER YEARS AND IN VIEW OF THE F INDING GIVEN THEREIN, WE UPHELD THE ORDER OF THE CIT (A) AND DI SMISS THE GROUNDS RAISED BY THE REVENUE. ACCORDINGLY, GROUNDS NO.1, 2 & 3 ARE DISMISSED. 5.2. AS FAR AS FILING OF WRIT PETITION TO BE FILED BEFORE THE HONBLE HIGH COURT IS CONC ERNED IF WOULD BE SUFFICIENT TO MENTION THAT NOTHING WAS BROUG HT ON RECORD TO PROVE THAT WRIT HAD BEEN FILED AND HEARD. HAD TH E FINAL HEARING TAKEN PLACE, IT WOULD HAVE BEEN A DIFFERENT SITUATI ON. SO, IN ANTICIPATION OF FILING OF A WRIT - PETITION, WE ARE NOT ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 17 INCLINED TO DEFER THE DECISION ESPECIALLY WHEN SAME IS COVERED BY THE ORDERS FOR THE EARLIER YEARS. CONSIDERING THE ABOVE AND RESPE CTFULLY FOLLOWING THE ORDERS OF THE TRIBUNAL IN THE CASES O F ANTWERP DIAMOND BANK NV ENGINEERING CENTRE ( SUPRA) AND ANTWERP DIAMOND BANK NV(SUPRA), WE DECIDE THE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE. 10.2 IN VIEW OF THE ABOVE REASONING ON FACTS AND LAW WE FIND THAT THE JUDICIAL PRECEDENT AS CITED BEFORE US AND AS DISCUSSED AND CONSIDERED AT LENGTH BY THE HON'BLE DELHI HIGH COURT IN FACTS AS UPHELD IN THE RULING OF AAR IN THE CASE OF ISRO (SUPRA) IS ALSO FOUND SUPPORTED BY THE HON'BLE JURISDICTIONAL HIGH COURT SUPPORTS THE VIEW TAKEN AND THE DECISIO N OF THE HON'BLE MADRAS HIGH COURT STANDS CONSIDERED AND THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IT IS NOTED HAVING BEEN RENDERED ON 9TH JUNE, 2014 DID NOT HAVE THE BENEFIT OF THE VIEW TAKEN BY THE HON'BLE DELHI HIGH COURT IN THE ORDER OF THE COOR DINATE BENCH IN VIACOM 18 THE BENEFIT OF THE SAID DECISIONS WAS NOT AVAILABLE AND IN THE SAID DECISIONS RELIED UPON BY THE REVENUE, THE SIMILARITY OF THE PECULIAR FACTS WITH THE FACTS OF AARS RULING IN ISRO AS CONSIDERED BY THE HON'BLE DELHI HIGH COURT WA S NOT CONSIDERED. THUS THE LONE ITAT DECISION CITED BY THE LEARNED CIT - DR OF THE MUMBAI TRIBUNAL IT HAS BEEN NOTICED DID NOT HAVE THE BENEFIT OF THE DECISIONS OF THE HON'BLE DELHI HIGH COURT AND IN FACT RELIES ON THE ORDER OF THE SPECIAL BENCH OF THE ITAT AND THE POSITION OF LAW AS WAS THEN AVAILABLE. ACCORDINGLY, IN VIEW OF THE PREPONDERANCE OF THE CONSISTENT VIEWS OF COORDINATE BENCHES THE APPEALS OF THE ASSESSEE ARE ALLOWED. 8 . SINCE THE FACTS AND CIRCUMSTANCES IN THIS YEAR REMAIN THE SAME AS IN THE P AST YEARS, WHICH HAS BEEN CONSIDERED BY THE TRIBUNAL, WE FIND NO REASON TO DISTRACT FROM THE EARLIER DECISION OF THE TRIBUNAL DATED 14.07.2017 (SUPRA). PERTINENTLY, IT IS ALSO NOT THE CASE OF THE REVENUE THAT THERE IS ANY CHANGE IN THE NATURE OF THE INCOME BEING EARNED BY THE ASSESSEE FROM TCL THAN THAT CONSIDERED BY THE TRIBUNAL IN ITS ORDER DATED 14.07.2017 (SUPRA). THEREFORE, FOLLOWING THE PRECEDENT IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2000 - 01 TO 2005 - 06, THE STAND OF THE ASSESSEE HAS TO BE APPROV ED. 9. SO, HOWEVER, BEFORE PARTIN G, WE MAY MAKE A MENTION OF THE DISCUSSION SOUGHT TO BE MADE BY THE DRP IN THE IMPUGNED ORDER REGARDING THE INAPPLICABILITY OF THE RATIO OF THE DECISION OF THE AAR IN THE CASE OF ISRO SATELLITE CENTRE REPORTED IN 307 ITR 5 9 (AAR). IN THIS CONTEXT, WE FIND THAT THIS ASPECT OF THE CONTROVERSY HAS BEEN EXPRESSLY CONSIDERED BY OUR COORDINATE BENCH WHILE RENDERING ITS DECISION DATED 14.07.2017 (SUPRA). THEREFORE, WE FIND NO REASON TO UPHOLD THE STAND OF THE REVENUE IN THIS YEAR FOLLOWING THE PRECEDENT IN THE ASSESSEES OWN CASE. THEREFORE, SO FAR AS GROUND OF APPEAL NOS. 2 & 3 ARE CONCERNED, THE SAME ARE ALLOWED, AS ABOVE. 11 . AS THE FACTS AND THE ISSUE INVOLVED IN THE CASE BEFORE US REMAINS THE SAME AS WAS THERE BEFORE THE TRIBUNAL IN THE PRECEDING YEARS, THEREFORE, WE RESPECTFULLY FOLLOW THE VIEW THEREIN TAKEN , AND CONCLUDE , THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM TCL FOR PROVIDING SATELLI TE TELECOMMUNICATION SERVICES I S NOT TO BE HELD AS ROYALTY IN ITS HANDS. THE GR OUNDS OF APPEAL NO S . 2 TO 5 ARE ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 18 12 . WE SHALL NOW DEAL WITH THE ISSUE AS TO WHETHER OR NOT THE ASSESSEE HAD A PE IN INDIA DURI NG THE YEAR UNDER CONSIDERATION . AS OBSERVED BY US HEREINABOVE, THE A.O/DRP HAD CON CLUDED THAT THE LAND EARTH STATION (LES) CONSTITUTED A PE OF THE ASSESSEE IN INDIA. IT HAS BEEN THE CLAIM OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES THAT AS THE LES WAS OWNED AND OPERATED BY TCL AND NOT BY THE ASSESSEE, THEREFORE, ON THE SAID COUNT IT CO ULD NOT HAVE BEEN HELD TO HAVE CONSTITUTED A PE OF THE ASSESSEE IN INDIA. ALSO, AS IS DISCERNIBLE FROM THE ORDERS OF THE LOWER AUTHORITIES, THE A.O/DRP HAD OBSERVED THAT THE LIAISON OFFICE (LO) CONSTITUTE D A PE OF THE ASSESSEE IN INDIA. AS OBSERVED BY US H EREINABOVE, IT WAS THE CLAIM OF THE ASSESSEE THAT AS THE LO HAD NOT CARRIED OUT ANY ACTIVITI ES IN INDIA, IT COULD THEREFORE NOT BE TREATED AS THE ASSESSEES PE IN INDIA. THE LD. A.R SUBMITTED THAT THE FACTUAL POSITION QUA THE ISSUE AS TO WHETHER THE ASSESSEE HAD A PE IN INDIA ON BOTH OF THE AFORESAID COUNTS HAD BEEN LOOKED INTO BY THE TRIBUNAL WHILE DISPOSING OFF THE APPEALS O F THE ASSESSEE FOR THE PRECEDING YEAR S I.E A.Y. 2007 - 08 TO A.Y. 2012 - 13, VIDE ITS ORDER DATED 12.12.2018. THE LD. A.R TAKING US THROUGH THE AFORESAID ORDER OF THE TRIBUNAL IN CONTEXT OF THE ISSUE UNDER CONSIDERATION SUBMITTED, THAT AS THE FACTUAL MATRIX DU RING THE YEAR UNDER CONSIDERATION REMAINED THE SAME AS WAS THERE BEFORE THE TRIBUNAL IN THE AFOREMENTIONED PRECEDING YEARS, HENCE , THE VIEW THEREIN TAKEN BY THE TRIBUNAL THAT THE ASSESSEE DID NOT HAVE A PE IN INDIA WOULD EQUALLY APPLY FOR ADJUDICATING THE SAID ISSUE FOR THE YEAR UNDER CONSIDERATION. 13 . PER CONTRA, THE LD. D.R RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. HOWEVER, THE LD. D.R COULD NOT CONTROVERT THE CLAIM OF THE ASSESSEES COUNSEL THAT THE ISSUE HEREIN INVOLVED WAS S QUARELY COVERED BY THE ORDERS PASSED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE PRECEDING YEARS. 14 . WE FIND THAT THE LOWER AUTHORITIES HAD CONCLUDED THAT THE ASSESSEE HAD A PE IN INDIA ON TWO GROUNDS , VIZ. (I) THAT THE LIAISON OFFICE (LO) OF THE ASSESSEE CONSTITUTED IT S PE IN INDIA; AND (II) THAT THE LAND EARTH STATIONS (LES) CONSTITUTED A PE OF THE ASSESSEE IN INDIA. WE FIND THAT THE FACTUAL POSITION PERTAINING TO THE AFORESAID TWO ASPECTS ON THE BASIS OF WHICH A VIEW HAD BEEN TAKEN BY THE LOWER AUTHORITIES THAT THE AS SESSEE HAD A PE IN INDIA REMAINS THE SAME AS WAS THERE IN THE PRECEDING YEARS, AND HAD BEEN LOOKED INTO BY THE TRIBUNAL AT LENGTH WHILE DISPOSING OFF THE APPEALS OF THE ASSESSEE FOR THE SAID RESPECTIVE YEARS. IN FACT, A PERUSAL OF THE ORDER OF THE DRP REVE ALS THAT THE VIEW TAKEN BY THE A.O THAT THE ASSESSEE HAD A PE ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 19 IN INDIA WAS ENDORSED BY THE DRP, FOR THE REASON, THAT ITS PREDECESSOR PANEL HAD WHILE DISPOSING OFF THE ASSESSEES OBJECTIONS FOR A.Y. 2014 - 15 UPHELD THE AO S ORDER. IN THE BACKDROP OF THE AFOR ESAID FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE BASIS AND THE FACTS THEREIN INVOLVED FOR CONCLUDING THAT THE ASSESSEE HAD A PE IN INDIA DURING THE YEAR UNDER CONSIDERATI ON HAD NOT WITNESSED ANY CHANGE AS IN COMPARISON TO THE FACTS WHICH WERE THERE IN I TS CASE FOR THE PRECEDING YEARS. ON A PERUSAL OF THE ORDER OF THE TRIBUNAL FOR A.Y. 2007 - 08 TO A.Y. 2012 - 13, WE FIND, THAT AFTER EXHAUSTIVE DELIBERATIONS THE TRIBUNAL HAD CONCLUDED THAT THE ASSESSEE DID NOT HAD A PE IN INDIA, OBSERVING AS UNDER: 10 . SO FAR AS GROUND OF APPEAL NO. 4 IS CON CERNED, THE SAME DEALS WITH THE GRIEVANCE OF THE ASSESSEE AGAINST THE INCOME - TAX AUTHORITIES HOLDING THAT IT HAS A PE IN INDIA. IN THIS CONTEXT, THE RELEVA NT FACTS ARE THAT THE ASSESSING OFFICER NOTED THAT ASSESSEE OWNED SPACE SEGMENT MONITORING SYSTEM (SSMS), WHICH WAS EQUIPMENT INSTALLED/LO CATED AT ARVI, MAHARASHTRA. THE ASSESSING OFFICER FURTHER NOTES THAT THE LAND EARTH STATION (LES) OF VSNL/TCL IS ALSO LOCATED AT THIS PLACE AND THAT THE SSMS EQUIPMENT PLAYS A CRITICA L ROLE IN PROVIDING TELECOMMUNICATION SERVICES TO THE LAND EARTH SERVICE OPERATOR (LESO), WHICH IS VSNL. THE ASSESSING OFFICE R NOTED THAT THE SAID EQUIPMENT IS INSTALLED AND MAINTAINED BY THE ASSESSEE AND THAT ASSESSEE ALSO HAS A LIAISON OFFICE IN INDIA. T HE ASSESSING OFFICER N OTES THAT THE ACTIVITIES OF THE LIAISON OFFICE CANNOT BE SAID TO BE JUST A MERE LIAISONING WORK IN INDIA . THE ASSESSING OFFICER FURTHER NOTES THAT THE EMPLOY EES/STAFF OF THE LIAISON OFFICE PROVIDE VARIOUS SERVICES TO THE ASSESSEE - CO MPANY IN CONNECTION WITH THE CONTRACT WITH VSNL. THEREFORE, THE ASSES SING OFFICER CONCLUDED THAT THE LOCATION OF SSMS EQUIPMENT IN INDIA AND THE PR ESENCE OF THE LIAISON OFFICE IN INDIA CONSTITUTED A PE OF THE ASSESSEE IN IN DIA AND, THEREFORE, THE PAYMENT R ECEIVED BY THE ASSESSEE FROM VSNL WAS ATTRI BUTABLE TO THE ASSESSEES PE IN INDIA. THUS, NOTWITHSTANDING HIS STAND THAT THE RECEIPTS FROM VSNL WERE IN THE NATURE OF ROYALTY, THE ASSESSING OFFICER HELD THAT EVEN GOING BY ARTI CLE 7 OF THE INDIA - UK DTAA (BY WH ICH SUCH R ECEIPTS ARE TREATED AS BUSINESS PROFITS), BECAUSE OF THE PRESENCE OF A P E IN INDIA, INCOME ARISING FROM RECEIPTS FROM VSNL WAS ATTRIBUTABLE TO A BUSINESS CONNECTION IN INDIA. THEREFORE, HE APPLIED RULE 10 OF THE INCOME TAX RULES, 1962 AND ESTIM ATED THE PROFIT OF THE PE AT 30% OF THE GROSS RECEIPTS. THE AFORESAID ADDITION PROPOSED BY THE ASSESSING OFFICER WAS OBJECTED TO BY THE ASSESSEE BEFORE THE DRP BY RAISING VARIOUS OBJECTIONS. THE DRP, HOWEVER, AFFIRMED THE ULTIMATE CONCLUSION OF THE ASSESSI NG OFFICER TO THE EFFECT THAT ASSESSEE HAS A PE IN INDIA. IN COMING TO SUCH A DECISION, THE DRP HAS CONFINED ITS OBSERVATION TO THE PRESENCE OF THE LIAISON OFFICE OF THE ASSESSEE IN INDIA AND NOT GIVEN ANY FINDING ON THE ASPECT OF LOCATION OF SSMS EQUIPMEN T. AS PER THE DRP, THE ACTIVITIES OF THE LIAISON OFFICE COULD NOT BE CONSIDERED TO BE PREPARATORY AND ANCILLARY, AS THE BASIC JOB OF THE OFFICE TO ACT AS A FIXED PLACE WITH RESPECT TO THE FINAL AGREEMENTS BEING ENTERED INTO BY THE CLIENTS LIKE ISRO, VSNL WITH THE ASSESSEE. FOR THE SAID REASON, THE DRP AFFIRMED THE STAND OF THE ASSESSING OFFICER THAT THERE EXISTED A PE OF THE ASSESSEE IN INDIA. 11 . AGAINST THE AFORESAID, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE VEHEMENTLY POINTED OUT THAT SINCE BEGINNI NG AND UPTO THE ASSESSMENT YEAR 2006 - 07, THERE HAS BEEN NO FINDING BY THE INC OME - TAX AUTHORITIES THAT EITHER THE LIAISON OFFICE OR THE SSMS EQUIPMENT CON STITUTED A PE IN INDIA ALTHOUGH THE ARRANGEMENT WITH VSNL/TCL ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 20 WAS THE S AME AS IN THE INSTANT YEARS. ON THE POINT OF LAW, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE RELIED ON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIT VS MITSUI & CO. LTD., [2017] 84 TAXMANN.COM 3 (DELHI) TO POINT OUT THAT THE ONUS WAS ON THE REVENUE TO SHOW THAT ANY ACT IVITY IN THE NA TURE OF BUSINESS OR TRADING WAS CARRIED OUT IN THE LIAISON OFFICE. IT WAS POINTED OUT THAT THE LIAISON OFFICE OF THE ASSESSEE HAS BEEN IN EXISTENCE SINCE IT WAS INITIALLY APPROVED BY THE RBI VIDE ITS PERMISSION DATED 20.10.1999, A COPY OF WH ICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 39 TO 42. IT HAS BEEN FURTHER POINTED OUT THAT THE APPROVAL GRANTED BY THE RBI HAS BEEN RENEWED FROM TIME TO TIME AND SO FAR AS THE CAPTIONED PERIOD IS CONCERNED, THE APPROVAL OF THE RBI VIDE ORDER DATED 10.10 .2008 SUBSISTS. IT IS POINTED OUT THAT THE VERY FACT THAT THE RBI CONTINUES TO ACCORD APPROVAL FOR THE LIAISON OFFICE SHOWS THAT THERE IS NO ACTIVITY OF TRADING, COMMERCIAL OR INDUSTRIAL NATURE WHICH IS CARRIED OUT SO AS TO TREAT SUCH LIAISON OFFICE AS A P E. 12 . SO FAR AS THE REFERENCE MADE B Y THE LOWER AUTHORITIES TO SSMS EQUIPMENT IS CONCERNED, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN THE PAST YEARS ALSO SUCH EQUIPMENT WAS EXISTING, BUT NO ADVERSE VIEW HAS BEEN TAKEN AND, IN ANY CA SE, SO FAR AS THE INSTANT PERIOD IS CONCERNED, THE ASSESSEE HAS FOREGON E THE USE OF SUCH EQUIPMENT FOR PROVIDING SERVICES. IN THIS CONTEXT, OUR ATTE NTION HAS BEEN DRAWN TO PAGE 64 OF THE PAPER BOOK WHEREIN A COMMUNICATION DAT ED 28.04.2005 IS PLACED WHICH IS ADDRESSED TO VSNL WHEREBY IT IS INFORMED THAT THE FACILITY OF SSMS EQUIPMENT WOULD NOT BE USED FOR PROVIDING SERVICES W.E.F. 17.06.2005. IT HAS BEEN POINTED OUT THAT SUCH CHANGE W AS ON ACCOUNT OF AN OPERATIONAL REQUIREMENT AS ASSESSEE HAS LAUNCHED ITS 4TH GENERATION SATELLITE WHICH WAS THEREAFTER USED TO PROVIDE THE SERVICES WHICH WERE EARLIER BEING PROVIDED BY THE USE OF SSMS EQUIPMENT. 13 . IT WAS, THEREFORE, CONTENDED THAT IT IS WHOLLY ERRONEOUS ON THE PART OF THE LOWER AUTHORITIES TO HOLD THAT THE LI AI SON OFFICE AND SSMS EQUIPMENT CONSTITUTED A PE OF THE ASSESSEE IN INDIA. 14 . ON THE OTHER HAND, THE LD. DR APPEARING FOR THE REVENUE DEFENDED THE STAND OF THE LOWER AUTHORITIES BY PLA CING RELIANCE ON THE RESPECTIVE ORDERS. FURTHER, INSOFAR AS THE ASSESSM ENT YEARS 2010 - 11 TO 2012 - 13 IS CONCERNED, THE LD. DR RAISED A FURTHER POINT BASED ON THE OBSERVATION OF THE DRP. IN THE AFORESAID THREE YEARS, THE ASSESSIN G OFFICER HELD THE EXISTENCE OF A PE IN INDIA ON THE BASIS OF THE EXISTENCE OF THE LIAISON OFFICE AN D LOCATION OF SSMS EQUIPMENT. ON THE OTHER HAND, THE DRP IN ASSESSMENT YEARS 2007 - 08 TO 2009 - 10 CONCLUDED THE EXISTENCE OF A PE ON THE BASIS OF EXISTENCE OF LIAISON OFFICE WHEREAS FOR ASSESSMENT YEARS 2010 - 11 TO 2012 - 13, THE DR P HAS BASED ITS DECISION ON T HE EXISTENCE OF LIAISON O FFICE AS WELL AS THE USE OF LES BY THE ASSESSEE FOR PROVIDING SERVICES. IN THIS MANNER, THE LD. DR HAS DEFENDED THE STAND OF THE LOWER AUTHORITIES. 15 . WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS . FACTUALLY SPEAKING, IT IS SEEN THAT THE ASSESSEE HAS A LI AISON OFFICE IN INDIA WHICH HAS BEEN INITIALLY PERMITTED BY THE RBI UNDER THE RELEVANT PROVISIONS OF FOREIGN EXCHANGE REGULATION ACT, 1973. IN FACT, INITI ALLY THE PERMISSION TO SET - UP A LIAISON OFFICE WAS GRANTED ON 20.10.199 9 FOR A PERIOD OF THREE YEARS, SUBJECT TO CERTAIN TERMS AND CONDITIONS. ONE OF THE SPECIFIC CONDITION WAS THAT THE LIAISON OFFICE SHALL ONLY UNDERTAKE LIAIS ON ACTIVITIES, I.E. TO ACT AS A COMMUNICATION CHANNEL BETWEEN THE HEAD O FFICE AND THE PARTIES IN IND IA. THE CONDITION IMPOSED BY THE RBI SPECIFICALL Y PROHIBITED THE LIAISON OFFICE FROM UNDERTAKING ANY OTHER ACTIVITY OF TR ADING, COMMERCIAL OR INDUSTRIAL NATURE. THE LIAISON OFFICE WAS ALSO, INTER - ALIA , PROHIBITED FROM ENTERING I NTO ANY BUSINESS CONTRACT IN ITS OWN NAME. IT FURT HER PRESCRIBED THAT THE LIAISON OFFICE WILL NOT CHARGE ANY COMMI SSION ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 21 OR FEE FOR ITS LIASIONING ACTIVITY/SERVICES RENDERED BY IT. THE STA NDARD TERMS AND CONDITIONS ALSO STATED THAT THE ENTIRE EXPENSE OF THE LIAISON OFFICE WERE TO BE M ET EXCLUSIVELY OUT OF THE FUNDS RECEIVED FROM ABR OAD AND THAT THE LIAISON OFFICE COULD NOT BORROW OR LEND ANY MONEY FROM OR TO ANY PERSON IN INDIA WITHOUT PRIOR APPROVAL, ETC. THE AFORESAID PERMISSION HAS BEEN FURTHER RENEWED AN D THERE IS NO DISPUTE THAT F OR THE PERIOD UNDER C ONSIDERATION ALSO THE REQUISITE APPROVAL OF THE RBI EXISTS FOR THE LIAISON OFFICE OF THE ASSESSEE. WE ARE ONLY HIGHLIGHTING THE AFORESAID FEATURES OF THE P ERMISSION GRANTED BY THE RBI TO POINT OUT THAT THE LIAISON OFFICE IS PROHIBITED FROM CARRYING OUT ANY BUSINESS OR TRADING ACTIVITY. AT THE TIME OF HEARING, IT WAS ALSO STATED BY THE LEARNED REPRESENTATIVE FOR THE ASSESSEE AT BAR THAT TI LL NOW THERE IS NO INFRINGEMENT OR ANY OTHER ADVERSE VIEW TAKEN BY THE RBI QUA THE ACTIVITIES WHICH ARE BEING CARRIED OUT BY THE LIAISON OFFICE IN INDIA. THIS SINGULAR ASPECT IS QUITE PERTINENT TO ESTABLISH THAT IF THE ASSESSING OFFI CER IS TO HOLD TO THE CONTRARY, I.E. TO SAY THAT THE LIAISON OFFICE WAS UNDERTAKING ACTIVITIES IN THE NATURE OF BUSINESS O R COMMERCE, THEN, THE ONUS WAS ON HIM TO ESTABLISH SO. ANOTHER NOTABLE FEATURE IS THAT THE LIAISON OFF ICE OF THE ASSESSEE HAS BEEN IN EXISTENCE SINCE 1999 AND, EVEN IN THE PAST ASSESSMENT YEARS WHEN THE ASSESSING OFFICER DISAGREED WITH THE ASSESSE E ON THE NATURE OF THE RECEIPTS FROM VSNL/TCL, THERE WAS NO ADVERSE CONCL USION WITH REGARD TO THE NATURE OF ACTIVITIES BEING CARRIED OUT BY THE LIAISON OFFICE. THE HON'BLE DELHI HIGH COURT IN THE CASE OF MITSUI & CO. LTD. (SUPRA) NOTED THAT IN A CASE WHERE ASSESSEE WAS FOUND ADHERING TO THE CO NDITIONS IMPOSED BY THE RBI FOR RUNNING OF A LIAISON OFFICE, IT INCREASES TH E BURDEN OF THE REVENUE TO SHOW THAT NOTWITHSTANDING THE SUBSISTING RBI PERMIS SION, THE LIAISON OFFICE CAN BE CONSTRUED AS A PE IN INDIA. IN OUR VIEW, THE FAC TUAL MATRIX IN THE INSTANT CASE CLEARLY ATTRACTS THE LEGAL POSITION ENUNCIATED BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF MITSUI & CO. LTD. (SUPRA) AND, T HEREFORE, WE PROCEED FURTHER TO EXAMINE AS TO WHETHER THE REVENUE HAS DISCH ARGED ITS BURDEN ON THIS ASPECT IN THE PRESENT CASE. IN THIS CONTEXT, WE HAVE PERUSED THE DISCUSSION MADE BY THE ASSESSING OFFICER, WHEREIN HE HAS CONCLUDE D THE EXISTENCE OF A PE IN PARA 11.1 OF HIS ORDER BASED ON THE EXISTENCE OF LIAISON OFFICE AND THE LOCATION OF SSMS E QUIPMENT OWNED BY THE ASSESSEE. WE FIND THAT APART FROM MAKING BALD ASSERTIONS THAT THE ACTIVITY OF THE LIAISON OFFICE CANNOT BE MERE LIASIONING , NO OTHER SPECIFIC POINT HAS BEEN MADE OUT BY THE ASSESSING OFFICER. THE ASSESSING OFFICER ALSO NOTES THAT TH E LIAISON OFFICE IS PERFORMING FUNCTIONS WHICH ARE MUCH MORE THAN LIASIONING NATURE , SO HOWEVER, WE DO NOT FIND EVEN AN IOTA OF EVIDENCE REFERRED TO B Y THE ASSESSING OFFICER IN THIS REGARD. IN FACT, IN THE COURSE OF HEARING, A QUESTION WAS PUT ACROSS TO THE PARTIES AS TO WHETHER DURING THE ASSESSM ENT PROCEEDINGS THIS ASPECT WAS SPECIFICALLY SHOW CAUSED TO THE ASSESSEE OR NOT? THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT AFTER RECEIPT OF THE DRAFT ASSESSMENT ORDER, ASSESSEE HAD RAISED OBJECTI ONS BEFORE THE DRP IN THE FOLLOWING MANNER : - 4.1 THE ASSESSEE HAS A SSMS LOCATE D IN INDIA AT VSNLS LAND EARTH STATION (LES) AT ARVI. THE PURPOSE OF THE SSMS IS TO PROVIDE A DEGREE OF SURVEILLANCE CAPABILITY TO THE INMARSAT N ETWORK OPERATIONS CENTRE IN THE UK WHEREBY THE ASSESSEE CAN MONITOR THE TRANSMITTED POWER LEVELS OF INDIVIDUAL CHANNELS (BOTH SIGNALLING AND VOICE CARRIERS) TO AND FROM SATELLITES IN THE INDIAN OCEAN REGIO N AND THE FREQUENCY DEVIATIONS. SSMS IS NOT A CRITI CAL COMPONENT TO THE SE RVICES RENDERED BY THE ASSESSEE AND EVEN WITHOUT SSMS, THESE SERVICES CAN BE CONTINUED TO BE RENDERED. THE COST OF THIS EQUIPMENT IS APPROXIMATE LY USD 150,000. THIS INVESTMENT IS INSIGNIFICANT WHEN COMPARED WITH THE TOTAL COST OF TH E ASSESSEES ASSETS WORLDWIDE (INCLUDING SATELLITES) WHICH IS USD 2,230,839,000 AS PER THE AUDITED ACCOUNTS FOR THE YEAR 1998. THUS, SSMS IS NOT CONTRIBUTING TO THE REVENUES AND HENCE, NO PART OF THE AMOUNT S RECEIVABLE IS ATTRIBUTABLE TO SSMS. 4.2 THE ASS ESSEE HAS A LO IN INDIA, WHICH HAS BEEN SET - UP WITH THE APPROVAL OF THE RESERVE BANK OF INDIA (RBI). A LL THE ACTIVITIES OF THE LO ARE IN ACCORDANCE WITH THE ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 22 RBIS APPROVAL . THE LO UNDERTAKES LIAISON AND COORDINATION ACTIVITIES ON BEHALF OF THE ASSESSEE. THERE ARE NO INCOME GENERATING ACTIVITIES CARRIED OUT BY THE LO IN INDIA. THE LO WAS ENGAGED IN COORDINATING A PILOT PROJECT T O ASSIST VSNL AND DEPARTMENT OF TELECOMMUNICATIONS TO PROVIDE SATELLITE BA SED VILLAGE PUBLIC TELEPHONE IN RURAL AREAS. PRESENTLY, THE LO INTERACTS WI TH THE INDIAN GOVERNMENT TO GET INFORMATION AND COORDINATES WITH THE REGUL ATORY AUTHORITIES IN CONNECTION WITH THE USE OF INMARSATS SERVICES IN INDIA. THE LOS ACTIVITIES DO NOT PLAY ANY ROLE IN THE RENDERING OF TELECOMMUNICATION SERVIC ES TO VSNL. 4.3 BASED ON THE ABOVE, INMARSAT SUBMIT S THAT THE PRESENCE OF THE SSMS AND THE LO IN INDIA DOES NOT CONSTITUTE A PE OF INMARSAT IN INDIA. 16 . THE AFORESAID FACT - SITUATION ASSERT ED BY THE ASSESSEE HAS NOT BEEN COUNTERED BY THE DRP IN ANY MANNER. IN FACT, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAS POINTED OUT THAT WITH REGARD TO THE DISCONTINUATION OF THE USE OF SSMS EQUIPMENT, COMMUNICATION TO VSNL DATED 28.04.2005 (COPY PLACED AT PAGE 64 OF THE PAPER BOOK) WAS ALSO FURNISHED, WHICH C LEARLY ESTABLISHES THAT THE SAME WAS NOT USED IN RENDERING SERVICES DURING THE PERIOD UNDER CONSIDERATION. 17 . THUS, WE FIND THAT THE ASSERTIONS OF THE ASSESSEE QUA T HE ACTIVITY OF THE ASSESSEE AND LIAISON OFFICE AS WELL AS THE SIGNIFICANCE OF THE USE OF SSMS EQUIPMENT LOCATED IN INDIA QUA THE SERVICES PROVIDED TO VSNL CLEARLY ESTABLISHES THAT THE SAME COULD NOT BE CONSTRUED TO CONSTITUTE A PE IN INDIA. THE DRP, IN OUR VIEW, HAS ALSO NOT REFERRED TO ANY SPECIFIC INSTANCES IN THE FUNCTIONING OF THE LIAISON OFFICE TO POINT OUT THAT IT WAS RENDERING SERVICES WHICH COULD BE CONSTRUED AS BEING A PE IN INDIA. CONSIDERING THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE MATERIAL LED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES, IN THE PRESENT CASE, IT IS SAFE TO DEDUCE THAT THE REVENUE HAS FAILED TO DISCHARGE ITS BURDEN OF PROVING THAT THE ACTIVITIES OF THE LIAISON OFFICE WERE SUCH AS TO CONSTRUE IT TO BE A PE IN INDIA. 18 . ON THE ASPECT OF USE OF SSMS EQUIPMENT ALSO, WE FIND THAT THERE IS NO REASON TO HOLD THAT IT COULD BE CONSTRUED AS A PE IN INDIA. SO FAR AS THE REFERENCE TO THE LES MADE BY THE DRP IN ASSESSMENT YEARS 2010 - 11 TO 2012 - 13 IS CONCERNED, THE SAME, IN OUR VIEW, IS QUITE MISPLACED. THE DRP ITSELF NOTES THAT THE LES IS OWNED BY THE LESO, I.E. VSNL. IT IS ALSO A FEATURE OF ASSESSEES AGREEMENT FOR PROVIDING SERVICES THAT IT IS THE LESO, I.E. VSNL, WHO HAS THE FULL RIGHT AND RESPONSIBILITY WITH REGARD TO THE LES. IN ANY CASE, IT IS UNDENIABLE THAT THE LES IS NOT OWNED BY THE ASSESSEE, AN ASPECT WHICH T HE DRP ITSELF HAS NOTED IN ITS ORDER. THEREFORE, CONSIDERING THE MATTER IN ITS ENTIRETY, WE FIND IT ERRONEOUS ON THE PART OF THE ASSESSING OFFICER TO HOLD THAT THERE EXISTS A PE OF THE ASSESSEE IN INDIA. THUS, ASSESSEE SUCCEEDS ON THIS ASPECT ALSO. 19 . IN SOFAR AS GROUND OF APPEAL NO. 5 IS CONCERNED, THE SAME RELATES TO INCOME COMPUTED BY THE ASSESSING OFFICER, WHICH CAN BE ATTRIBUTABLE TO THE PE OF THE ASSESSEE IN INDIA. SINCE WE HAVE UPHELD THE PRIMARY STAND OF THE ASSESSEE THAT THERE DOES NOT EXIT ANY PE OF THE ASSESSEE IN INDIA, THE DISPUTE IN GROUND OF APPEAL NO . 5 IS RENDERED ACADEMIC AND IS DISMISSED AS INFRUCTUOUS. 15 . AS THE FACTS IN THE BACKDROP OF WHICH THE A.O/DRP HAD IN THE AFORESAID PRECEDING YEARS CONCLUDED THAT THE LO AND LES WERE TO BE TREATED AS THE PE ON THE ASSESSEE IN INDIA, REMAINS THE SAME , AS ARE INVOLVED IN THE APPEAL OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, WE THEREFORE RESPECTFULLY FOLLOW THE A FORESAID ORDER OF THE TRIBUNAL. ACCORDINGLY, IN THE BACKDROP OF OUR A FORESAID OBSERVATIONS, WE HEREIN ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 23 CONCLUDE THAT THE ASSESSEE DID NOT HAVE ANY PE IN INDIA DURING THE YEAR UNDER CONSIDERATION. THE GROUNDS OF APPEAL NOS. 6 & 7 ARE ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. 16 . WE SHALL NOW DEAL WITH THE CONTENTION OF THE ASSESSEE THAT THE AO HAD ERRED IN CONSIDERING ITS PROFITABI LITY ON AN ADHOC BASIS AT 30% OF ITS GROSS RECEIPTS FROM TCL BY APPLYING RULE 10 OF THE INCOME TAX RULES, 1962. WE FIND THAT THE AFORESAID ISSUE PERTAINS TO THE COMPUTING OF THE INCOME OF THE ASSESSEE ATTRIBUTABLE TO ITS PE IN INDIA. SINCE WE HAVE UPHELD THE PRIMARY STAND OF THE ASSESSEE THAT THERE DOES NOT EXIST ANY PE OF THE ASS ESSEE IN INDIA, THUS, THE DISPUTE IN G ROUND OF APPEAL NO. 8 HAVING BEEN RENDERED AS MERELY ACADEMIC IS DISMISSED AS INFRUCTUOS. 17 . THE ASSESSEE HAS ASSAILED THE ASSESSMENT ORDER ON THE GROUND THAT THE A.O HAD ERRED IN LEVYING SURCHARGE, SECONDARY EDUCATION CESS AND HIGHER SECONDARY EDUCATION CESS OVER AND ABOVE THE TAX COMPUTED AT THE RATE P RESCRIBED UNDE R THE INDIA - U.K. TAX T REATY ON THE RECEIPTS OF THE ASSESSEE WHILE CALCULATING ITS INCOME TAX LIABILITY FOR THE YEAR UNDER CONSIDERATION. WE FIND THAT THE AFORESAID ISSUE IS SQUARELY COVERED BY THE ORDER OF THE ITAT, KOLKATA IN THE CASE OF DDIT VS. THE BOC GROUP LTD. [ITA NO. 571/KOL/2013, DATED 30.11.2015] . I N ITS AFORESAID ORDER, IT WAS OBSERVED BY THE TRIBUNAL THAT ARTICLE 2 OF THE INDIA - U.K. TAX TREATY PROVIDES THAT INCOME TAX INCLUDES ANY SURCHARGE THEREON , AND THAT THE CONVENTION SHALL ALSO APPLY TO ANY IDENTICAL OR SUBSTANTIALLY SIMILAR TAXES WHICH ARE IMPOSED BY EITHER CONTRACTING STATE AFTER THE DATE OF SIGNING OF THE CONVENTION IN ADDITION TO OR IN PLACE OF THE TAXES OF THE CONTRACTING STATE REFER RED TO IN PARAGRAPH 1 OF THE ARTICLE. THE TRIBUNAL HAD CON CLUDED THAT WHEN THE TAX RATE IS DETERMINED UNDER THE TAX TREATY, THEN THE TAX RATE PRESCRIBED THEREON SHALL HAVE TO BE FOLLOWED STRICTLY WITHOUT ANY ADDITIONAL TAXES THEREON IN THE FORM OF SURCHARGE OR EDUCA TION CESS. THE TRIBUNAL WHILE CONCLUDING AS HEREINABOVE HAD RELIED ON A SIMILAR VIEW TAKEN BY THE COORDIN ATE BENCHES VIZ. (I) DIC ASIA PACIFIC PTE. LTD. VS. ADIT, (INTL. TAXATION ) (2012) 52 SOT 447 (KOL); (II) SUNIL V. MOTIANI VS. ITO (INTL. TAXATION ) (2013) 33 TAXMAN.COM 252; (III) PARKE DAVIS & CO. LLC VS. ACIT (2014) 41 TAXMAN.COM 193 (MUM); AND (IV) ITO (INTL. TAXATION) VS. M/S M. FAR HOTELS LTD. [ITA NOS. 430 - 435/COCH/2011, DATED 05.04.2013] (COCHIN). ACCORDINGLY, FOLLOWING THE VIEW TAKEN BY THE COORDINATE BENCHES OF THE TRIBUNAL IN THE AFOR ESAID CASES, WE HEREIN CONCLUDE THAT THE TAX COMPUTED AT THE RATE PRESCRIBED UNDER THE INDIA - U.K. TAX TREATY IS NOT BE SUBJECTE D TO ANY ADDITIONAL TAXES IN THE FORM ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 24 OF SURCHARGE OR EDUCATION CESS. WE THUS SET A SIDE THE VIEW T A KEN BY THE LOWER AUTHORITIES AND DIRECT THE A.O TO RECOMPUTE THE TAX LIABILITY OF THE ASSESSEE IN TERMS OF OUR AFORESAID OBSERVATIONS. THE GROUND OF APPEAL NO. 9 IS ALLOWED. 1 8 . THE ASSESSEE HAS ASSAILED THE ORDER OF THE A.O, ON THE GR OUND , T HAT HE HAS ERRED IN GRANTING TDS CREDIT OF RS.58,45,615/ - AS AGAINST THE ASSESSEES CLAIM OF CREDIT OF RS.58,98,497/ - . AS THE ADJUDICATION OF THE SAID ISSUE WOULD REQUIRE VERIFICATION OF THE RECORDS, WE THEREFORE, RESTORE THE MATTER TO THE FILE OF THE A.O TO VERIFY THE FACTUAL POSITION. IN CASE THERE IS A SHORT CREDIT OF TDS ALLOWED TO THE ASSESSEE, THEN THE CREDIT FOR THE BALANCE AMOUNT SHALL BE ALLOWED BY THE A.O, AS PER LAW. THE GROUND OF APPEAL NO. 10 IS ALLOWED FOR STATISTICAL PURPOSE. 1 9 . THE ASSESSEE HAS ASSAILED THE LEVY OF INTEREST UNDER SEC. 234B OF RS.1,47,546/ - . AS THE ASSESSEE HAS NOT RAISED ANY SUBMISSION AS REGARDS THE AFORESAID ISSUE, THE SAME IS THEREFORE DISMISSED AS NOT PRESSED. THE GROUND OF APPEAL NO. 11 IS DISMISSED. 2 0 . THE AS SESSEE HAS ASSAILED THE INITIATION OF PENALTY PROCEEDINGS UNDER SEC.271(1)(C) OF THE ACT. AS THE AFORESAID GROUND RAISED BY THE ASSESSEE IS PREMATURE, THE SAME IS THEREFORE DISMISSED. THE GROUND OF APPEAL NO. 12 IS DISMISSED. 2 1 . THE APPEAL OF THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS . ORDER PRONOUNCED UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, BY PLACING THE DETAILS ON THE NOTICE BOARD. SD/ - SD/ - PRAMOD KUMAR RAVISH SOOD ( VICE PRESIDENT ) ( JUDICIAL MEMBER) MUMBAI, DATE: 23 .10.2020 R. KUMAR ITA NO. 7025/MUM/2018 A.Y. 2015 - 16 INMARSAT GLOBAL LIMITED VS. DCIT (I.T) CIRCLE 2(2)(1) 25 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI
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