This case note canvasses the recent decision of the Full Federal Court of Australia in Satyam Computer Services Limited v. Commissioner of Taxation, where the court applied the Australia-India income tax treaty to create a tax liability on royalties paid to a non-resident, which was not provided for in Australia’s domestic law. The author argues that tax treaties serve as a limitation on taxing liabilities: they allocate taxing rights rather than generate new tax liabilities. The author criticizes the court’s decision for failing to apply the doctrine that an income treaty acts as a shield and not a sword.