TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 1263
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....nue has raised the following grounds of appeal: 1. "Whether on the facts and under the circumstances of the case and in law, the Ld. DRP is right in holding that Jubilant Food Works Limited does not constitute a Permanent Establishment of the assessee in India. 2. "Whether on the facts and under the circumstances of the case and in law, the Ld. DRP is right in holding that the income of the assessee should be treated as royalty income only and not income u/s 44DA of the Income-tax Act, 1961. 3. The Appellant prays that the order of the ld. DRP on the above grounds be set aside and that of the Assessing Officer be restored. 2. Brief facts of the case are that the assessee is a Company is tax resident of United States of America (US....
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....ute a permanent establishment or dependent agency or an agency PE of assessee. Consequent upon the action of Assessing Officer in treating the royalty income as Profit & Gain from business under section 44DA was also set-aside. Pursuant to the direction of DRP, the Assessing Officer passed the assessment order dated 22.01.2016 under section 143(3) r.w.s. 144C(13). Therefore, aggrieved by the direction of DRP, the revenue has filed the present appeal before us. 3. We have heard the ld. Departmental Representative (DR) for the Revenue and ld. Authorized Representative (AR) of the assessee and perused the material available on record. The ld. DR for the Revenue supported the order of Draft Assessment passed by Assessing Officer. The ld. DR fu....
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....y services to Jubilant. In consideration that Jubilant paid store opening fees for those services. The franchise fee is received by assessee from Jubilant for ongoing use of Dominos Trademark and also for the right to use the new technology, new product development and system improvement. As per MFA dated 23.09.2009, the assessee is entitled to charge 3% of the sales of store of Jubilant and further 3% on sale of their sub-franchise store. (copy of MFA is placed on record at page no.16 to 108 of PB) & (copy of sub-franchise agreement dated 23.02.2010 is at page no. 109 to 142 of PB). The ld. AR of the assessee further submits that M/s Jubilant does not act on behalf of assessee (clause-1.4 of the agreement provides irrevocable right to Jubi....
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....ubmission, the ld. AR of the assessee has filed a list of various case law, however, while making submissions relied only upon the decision of Bhopal Sugar Industries Vs Sales Tax Officer (1977 CTR 284) and Western Union Financial Services Inc (104 ITD 40) (Del). 5. We have considered the rival submission of the parties and have gone through the orders of authorities below. We have also gone through the copy of MFA dated 23.09.2009 (PB 16 to 108), copy of sub-franchise agreement between the Jubilant Food Works Pvt. Ltd. with Travel Food Services Pvt. Ltd. dated 23.02.2010 for Mumbai location (PB 109 to 142) and Jubilant Food Works Pvt. Ltd. and Travel Food Services Pvt. Ltd. for Delhi Location effective from 01.05.2010 (PB 143 to 172). We ....
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....ondition with some franchise and that all contract and sub-franchise are concluded and signed only by assessee. The correct fact that the sub-franchise agreement is executed between Jubilant and sub-franchise and not between the assessee and sub-franchise. We have verified these facts from the copy of MFA and sub-franchise agreement (SFA) (Page No. 16 to 108 and 109 to 142 and 143 to 172 of PB) and find that the assertion of assessee is correct. The SFA is signed on behalf of Jubilant and Travel Food Services Pvt. Ltd. for Mumbai and Delhi Location. As per the clause of MFA, the assessee is entitled to 3% of sale proceed and further entitled for store opening fees as well as sub-franchise fees. We have also noted that the profit and loss fr....