Centralized Services Fee Ruled Non-Taxable; Appeals Closed Pending Supreme Court Judgment Outcome.

The HC concluded that no substantial question of law warranted consideration, affirming the ITAT's decision that the centralized services fee earned by the respondent/assessee was not taxable, based on the precedent set by Director of Income Tax v. Sheraton International Inc. The appeals were closed, with a stipulation that if the appellant/revenue succeeds in the SC against the Sheraton International Inc. judgment, the parties must comply with the SC's final decision.

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Issues involved:
The judgment concerns appeals related to Assessment Year 2014-15 and 2015-16 challenging the order of the Income Tax Appellate Tribunal regarding the taxability of centralized services fee earned by the respondent/assessee.

Issue 1: Taxability of centralized services fee
The Tribunal held that the centralized services fee earned by the respondent/assessee, covering various aspects like sales and marketing, loyalty programs, reservation service, technological service, operational service, and training programs/human resources, is not taxable. This decision was based on the precedent set by the case of Director of Income Tax v. Sheraton International Inc.

Decision:
The High Court found that no substantial question of law arises for consideration, given the Tribunal's reliance on the Sheraton International Inc. judgment in similar cases for other Assessment Years. Consequently, the appeals were closed. However, it was clarified that if the appellant/revenue succeeds in an appeal against the Sheraton International Inc. judgment at the Supreme Court level, the parties will abide by the final decision rendered by the Supreme Court.

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