Centralized services payments not treated as technical or included services; prior Delhi HC precedent controlled the outcome.

Payments for centralized services were held not to constitute fee for technical services under Section 9(1)(vii) of the Income-tax Act or fee for included services under Article 12(4)(a) of the Indo-US DTAA, because the issue was already covered by the Court's earlier decision in Sheraton International Inc. The Revenue failed to distinguish the facts, and the pending Supreme Court challenge did not affect the binding force of that decision in the absence of any stay. The appeals were dismissed as covered by the prior ruling in favour of the assessee.

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Issues: Whether the payments received by the assessee for centralized services constituted fee for technical services under Section 9(1)(vii) of the Income-tax Act, 1961 or fee for included services under Article 12(4)(a) of the Indo-US DTAA.

Analysis: The issue was already decided by the Court in Sheraton International Inc. in favour of the assessee. The Revenue did not place any material to distinguish the present facts from that decision. The earlier judgment had been challenged, but there was no stay of its operation. In these circumstances, the pending challenge before the Supreme Court did not displace the binding effect of the existing decision.

Conclusion: The payments were not held to constitute fee for technical services or fee for included services, and the appeals were dismissed as covered by the earlier judgment in favour of the assessee.

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