TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 245
X X X X Extracts X X X X
X X X X Extracts X X X X
....circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition to income amounting to Rs, 39,28,87,342 made by Ld. Assessing Officer (hereinafter referred to as 'Ld. AO'), towards Centralized Services fees received by the Appellant primarily in the nature of Sales & Marketing charges, Reservation charges, Loyalty programs and fees for other centralized services rendered outside India. 3. That on the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in treating the fees of Rs. 39,28,87,342 received for rendering various Centralized Services taxable as Fees for Technical Services (hereinafter referred as 'FTS') under Section 9(1)(vii) of the Act or Fee for Included Services ('FIS') under of India- USA Double Taxation Avoidance Agreement ("DTAA"). 4. That on the facts and the circumstances of the case and in law, the Ld. CIT (A) has erred in not abiding by the Principle of Stare Decisis by not following the decisions of Jurisdictional Hon'ble Delhi Tribunal and Hon'ble Delhi High Court in cases Of group entities of the Appellant rendering similar services, namely Sheraton International Inc. vs DDIT ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd to submit Such statements, documents and papers as may be considered necessary either at or before the appeal hearing. 3. At the very outset, the counsel for the assessee stated that the substantive issues raised in the grounds of appeal has been considered and decided by this Tribunal in favour of the assessee and against the revenue. 4. The DR fairly conceded to this. 5. We have carefully perused the orders of the authorities below and have duly considered the decision of this Tribunal in ITA No.2013/Del/2019 order dated 29.04.2022. 6. Briefly stated that the facts of the case are that the appellant assessee is a firm incorporated under the laws of United States of America and resident thereof. It is engaged in the business of providing hotel related services in several countries around the world. The assessee is group entity of Starwood. 7. In India the assessee has entered into agreements with various Indian hotels for provision of hotel related services interalia worldwide publicity, marketing and advertising services through its system of sales, advertising, promotion, public relations and reservations. 8. During the course of scrutiny assessment proceedings and tak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eraton International since the said case had only considered the taxability under the payments in question received by the assessee company from the Indian hotels/ clients as "fees for included services" within the meaning of paragraph 4(a) of Article 12 . 12. This quarrel was considered by this Tribunal in assessee's own case in ITA No. 2013/Del/2019 for A.Y.2015-16 vide order dated 29.04.2022. The relevant findings of the coordinate Bench read as under :- 24. Thus, on a reading of the aforesaid observations of the Coordinate Bench, it becomes very much clear that not only the Tribunal has examined the applicability of Article 12(4)(a) of the Treaty qua the payment received but has categorically held that it cannot be treated as FIS under Article 12(4)(a) of the Treaty. Undisputedly, the aforesaid observations of the Coordinate Bench have been upheld by the Hon'ble Jurisdictional High Court in case of DIT Vs. Sheraton International Inc (supra). In view of the aforesaid, the observations of learned Commissioner (Appeals) that the applicability of Article 12(4)(a) was never examined has to be rejected at the threshold. In fact, we are constrained to observe, learned Commissi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eir consideration, as these are findings of fact by the Tribunal. Therefore, respectfully following the orders of the higher judicial authorities, the bringing to tax of the business receipts of the appellant in India, is deleted Thus, the appellant succeeds in grounds 1 to 4. 8. The issue in controversy has also been set at rest by the Hon'ble Delhi High Court in case cited as Director of Income-tax vs, Sheraton International Inc. - (2009) 313 ITR 267 (Del) as under: "Double taxation relief-Agreement between India and USA- Payment for advertising, publicity and sales promotion services-Tribunal found as a final fact finding authority that main services rendered by assessee, a company incorporated and tax resident in USA, to Indian company, was advertisement, publicity and sates promotion keeping, in mind their mutual interests and in that context, the use of trademark, trade name etc, and other enumerated services referred to in the agreement With the assessee were incidental to main service- Tribunal thus rightly concluded that the payments received were neither in the nature of royalty under s.9(I)(iv), Expln. 2 not in the nature of fee for technical services ....