TMI Blog2024 (2) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... herwise. A change in executive position cannot bring about a unilateral legislative amendment into a treaty concluded between two sovereign states. It is fallacious to assume that any change made to domestic law to rectify a situation of mistaken interpretation can spontaneously further their case in an international treaty. Therefore, mere amendment to Section 9(1)(vi) cannot result in a change. Consequently, since we have held that the Finance Act, 2012 will not affect Article 12 of the DTAAs, it would follow that the first determinative interpretation given to the word royalty in Asia Satellite [ 2011 (1) TMI 47 - DELHI HIGH COURT] when the definitions were in fact pari materia (in the absence of any contouring explanations), will continue to hold the field for the purpose of assessment years preceding the Finance Act, 2012 and in all cases which involve a Double Tax Avoidance Agreement, unless the said DTAAs are amended jointly by both parties to incorporate income from data transmission services as partaking of the nature of royalty, or amend the definition in a manner so that such income automatically becomes royalty. The Revenue has not pointed any change into facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n India and Netherlands ('the DTAA'), the receipts earned by the Appellant are not taxable in India. 2. That on the facts and circumstances of the case and in law, the Ld. AO erred in holding that the payments received by the Appellant as consideration for data transmission services are in the nature of 'Royalty' as defined under section 9(1)(vi) of the Income Tax Act, 1961 ('the Act') and Article 12(4) of the DTAA. 2.1. That without prejudice to the above, on facts and circumstances of the case and in law, the Panel and the Ld.AO erred in reading into the expanded meaning of Royalty contained in section 9(1)(vi) of the Act as retrospectively amended by Finance Act, 2012, for the purpose of interpreting the definition of Royalty as provided under Article 12(4) of the India-Netherland DTAA, when it is a settled position in law that amendment in the Act cannot have any effect in interpretation of DTAA as also held by the Hon'ble High Court of Delhi in the Appellant's own case in [2016] 382 ITR 114 (Delhi) for AY 2006-07 and AY 2008-09. 2.2. Without prejudice to ground 2 above, the Ld. AO and the Panel erred in not taking cognizance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the nature of Royalty u/s 9(1)(vi) of the Income Tax Act, 1961 ( the Act ) and Article 12(4) of the India-Netherland Double Taxation Avoidance Agreement ( DTAA ). Alternatively, he held that the revenue earned by the assessee is Fee for Technical Services u/s 9(1)(vii) of the Act r.w. Article 12(5) of the India- Netherlands DTAA. Thus, the AO assessed income of the assessee at INR 312,82,92,163/-. 4. Aggrieved against this, the assessee preferred appeal before this Tribunal. 5. Apropos to Grounds Nos. 1 to 3, Ld. Counsel for the assessee submitted that the issue is squarely covered in favour of the assessee by the judgement of Hon ble Delhi High Court rendered in the case of Director of Income Tax vs New Skies Satellite BV Others in ITA No.473/2012 Others order dated 08.02.2016. 6. Ld. CIT DR opposed these submissions and supported the orders of the authorities below. 7. We have heard Ld. Authorized Representatives of the parties and perused the material available on record and gone through the orders of the authorities below. Undisputedly, Ld.DRP has followed its direction in earlier years in passing the impugned directions. For the sake of clarity, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nality. Hence, the directions given on the matter by DRP in the preceding years continue to apply in this AY as well. The objections filed by the assessee are accordingly rejected. 7.1. We find that in earlier years, Hon ble Delhi High Court in the case of assessee had framed the substantial questions as under:- (1) whether the receipts of the asses sees earned from providing data transmission services, fall within the term royalty under the Income Tax Act, 1961, and (2) if the answer to the first is in the affirmative, whether the assessees would be eligible for the benefit under the relevant Double Tax Avoidance Agreements. 7.2. And the Jurisdictional Delhi High Court answered the questions in favour of the assessee by observing as under:- 59. On a final note, India's change in position to the OECD Commentary cannot be a fact that influences the interpretation of the words defining royalty as they stand today. The only manner in which such change in position can be relevant is if such change is incorporated into the agreement itself and not otherwise. A change in executive position cannot bring about a unilateral legislative amendment into a treaty co ..... 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