TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1060
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....nd 26/04/2022 passed u/s 143(3) r.w. Section 144C(13) of the Income Tax Act, 1961 ('Act' for short). 2. Brief facts of the case are that, the Assessee is a company incorporated and a tax resident of USA. The Assessee is part of the Inter-Continental Hotel Group ('IHG') and was the legal and beneficial owner of the registered trademark of certain IHG brands including 'Holiday Inn', 'Holiday Inn Express' and 'Crowne Plaza'. Assessee had entered into license/ franchisee agreements with various third-party hotels in India for allowing them the use of the trademarks for their business of operating the hotels. During both the years i.e. AY 2017- 18 and AY 2018-19 Marketing and Reservation Contribution (w....
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....ssuing the final assessment order for both the years, held that MRC and other reimbursements related receipts are taxable as FTS/ FIS under the Act and India-USA DTAA. 5. Aggrieved by the Final Assessment Orders dated 14/02/2021 and 26/04/2022 for Assessment Year 2017-18 and 2018-19 respectively, the Assessee preferred Appeal before this Tribunal. The Co-ordinate Bench of the Tribunal vide order dated 17th November, 2023, quashed the Final Assessment Orders in both the years on the ground that DRP direction did not bear document Identification No. (DIN). The Revenue preferred Appeals before the Hon'ble High Court of Delhi by challenging the orders of the Tribunal dated 17th November, 2023, wherein the Assessee requested the Hon'b....
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....e order of the Co-ordinate Bench of the Tribunal, sought for allowing Ground No. 1 of both the Appeals. 8. Per contra, the Ld. Departmental Representative though relied on the orders of the Lower Authorities, however, has not brought any contrary proposition put forth by the Assessee. 9. We have heard both the parties and perused the material available on record. The Co-ordinate Bench of the Tribunal in Assessee's own case for Assessment Year 2020-21 in ITA No. 2355/Del/20213 vide order dated 09/05/2024 held as under:- "16. It was submitted that the issue of taxability of Marketing and reservation related receipts has been subjected to scrutiny in the past years and the same has been consistently held in favour of the Assesse....
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....f the assessee on this ground is allowed." 10. By respectfully following the ratio laid down, we allow Ground No. 1 of the Appeals of the Assessee filed for Assessment Year 2017- 18 and 2018-19 respectively. 11. The Ground No. 2in Assessment Year 2018-19 (ITANo. 1459/Del/2022) is regarding addition proposed in relation to receipts in the nature of reimbursement amounting to Rs. 8,10,38,864/- received from India Hotels. The Ld. Counsel for the Assessee submitted that the issue involved in the above ground No. 2 for Assessment Year 2018-19 is covered in Assessee's own case for Assessment Year 2020-21 wherein it has been held by the Tribunal that the amount of travel agent commission program received by the Assessee is not in the nature ....
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....e interpreting the meaning of FTS as per Explanation 2 of section 9(1)(vii) of the Income tax Ac t, 1961 held as under: "....... .A look at the above Explanation shows that it contains a definition of FTS and says that FTS means any consideration for the rendering of any managerial, technical or consultancy services including the provision of services of technical or other personnel, but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries The content of the Explanation unmistakably is that the payment must be made as quid pro quo for such services rendered as have been enumerated ....
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.... Appeal No 2028/Ahd./13 and CO No 13/Ahd./14] * DCIT vs. Welspun Corporation L td. [2017] 77 taxmann.com* 165 (Ahmadabad ITAT) * Armayesh Global vs. ACIT 45 SOT 69 (ITAT Mumbai) * DCIT, Chennai vs. Mainetti (India) (P.) Ltd. [2011] 12taxmann.com (ITAT Chennai) * CLSA Ltd. vs. ITO, (International Taxation) [2013] 31taxmann.com 5 (ITAT Mumbai) * PahilajraiJaikishin (66 taxmann. com 30) (ITAT Mumbai) 27. In view of the principles emerging from the above judicial precedents, it can be concluded that the amount charged by the Assessee as TACP for booking hotel rooms for third-party Indian Hotels cannot be said to be in the nature of managerial, technical or consultancy in nature for treating ....