ORDER

S. Ravindra Bhat, J. The present appeals, by the Revenue, under Section 260A of the Income Tax Act 1961 ("the Act") are preferred against orders of the Income Tax Appellate Tribunal ("ITAT"), which upset Assessment Orders that ruled that the income derived by the assessees through data transmission services was taxable as royalty under Section 9(1)(vi) of the Act as well as Article 12 of the relevant Double Tax Avoidance Agreements ("DTAA"). The ITAT however, in the light of the judgment in Asia Satellite Communications Co. Ltd. V. Director of Income Tax, [2011] 332 ITR 340 (Del), interpreting Section 9(1)(vi) in the context of such services, reversed the said orders. During the pendency of these appeals, the Finance Act of 2012 amended Section 9(1)(vi) and inserted Explanations 4, 5, and 6.

2. The substantial question framed by this Court is two-fold;

(1) whether the receipts of the assessees 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.

3. In the interest of both brevity and clarity, below is a table of details with respect to the assessment orders and the orders of the ITAT:

Brief Facts: Pre-Finance Act 2012

4. The assessee in ITA 500/12 and 244/14, M/s Shin Satellite Public Co. Ltd. (hereafter "Shin"), is a company incorporated in Thailand, engaged in the business of providing digital broadcasting services as well as consultancy services to its customers who consist of both residents of India and non-residents. Shin provides these services through its satellite Thaicom 3, whose footprint covers a large geographical area, including India. In AY 2007-08 and 2009-10, the assessee filed NIL returns. The AO reviewed the return under Section 143(3) read with Section 144C of the Act and held that the income was taxable under Explanation 2(iii) and (iva) of Section 9(1)(vi) of the Act as well as Article 12 of the Indo-Thai DTAA.

5. Likewise, the assessee in ITA 473/2014 and 474/2012 is a company incorporated in Netherlands, namely M/s New Skies Satellite B.V. (hereafter "New Skies") that engages in providing digital broadcasting services. On filing a return of NIL taxable income for the relevant years, the AO again under Section 143(3) r/w 144C applied Section 9(1)(vi) of the Act to tax the income of the assessee as royalty.

6. The assessees in the present cases both derive income from the "lease of transponders" of their respective satellites. This lease is for the object of relaying signals of their customers; both resident and non-resident TV channels that wish to broadcast their programs for a particular audience situated in a particular part of the world. In the present cases, the assessees were chosen for the simple reason that the footprint of their satellites, i.e. the area over which the satellite can transmit its signal, includes India. The process by which the TV programmes reach the viewers in India can be simply described. The TV channels produce or acquire the tapes of the programs, which they then uplink to the satellite. The satellite then receives the content, amplifies it, changes its frequency by undertaking certain processes, and then downlinks it, scattering the signal over the area of its footprint. The cable operators who ultimately relay it to the viewers in their homes then receive the downlinked signal.

7. These satellites are geostationary satellites placed in an orbit 22240 miles above the surface of the Earth. The repeater section of