2022 (11) TMI 32

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....rned Dispute Resolution Panel (DRP). 2. The issue arising in the appeal relates to taxability of payment received by the assessee under Master Franchise Agreement as Royalty/Fee for Technical Services (FTS), both under the Domestic Law as well as India-USA Double Taxation Avoidance Agreement - (DTAA). 3. Briefly, the facts are, the assessee is a resident corporate entity incorporated under the laws of USA and is a resident of that country. The assessee is owner of a hotel system which provides hotel services through its business, system under various names viz. "Country Inn by Radisson", 'Country Suites by Radisson' and Country Inn & Suites by Radisson'. 4. For the assessment year under dispute, assessee filed its return of income on 30.....

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....he Tribunal in assessee's own case in assessment year 2016-17. 8. In this context, our attention was drawn to the relevant observations of the Tribunal in order dated 29.04.2022 passed in ITA No.9689/Del/2019. 9. Having considered rival submissions, we find, identical issue came up for consideration before the Tribunal in assessee's own case in assessment year 2016-17, in the order referred to above. While deciding the issue, the Tribunal has held as under: "32. We have heard Shri Pradip Dinodia, learned counsel for the assessee and Shri Sanjay Kumar, learned Departmental Representative. Though, the only differentiating factor in these appeals is, the assessees have entered into a single agreement for license to use brand name and provi....

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....be said that centralized services, which includes marketing, promotion, reservation and other allied services flow out of grant of license to make them ancillary and subsidiary to grant of license. Even, the quantum of service fee received if compared to the royalty income, would not make it ancillary and subsidiary so as to make it FIS under article 12(4(a) of the treaty. In our view, service fee received by the assessees would clearly fit in to the illustration given in example 2 of MoU to India-USA DTAA. 33. Therefore, after in depth analysis of the relevant facts arising in these appeals, the agreement between the assessees and the Indian hotels and other materials on record, we are of the view that our reasoning given in case of Sta....