Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (6) TMI 605 - AT - Income TaxTaxability in India - consideration for conducting Training programs and providing access to CRS, Property Management Systems and Other Systems were towards reimbursement of expenses incurred by the assessee - Held that:- As the assessee had failed to substantiate on the basis of any clinching evidence that the consideration received for the services rendered by it to the Indian Hotels were in the nature of reimbursement of expenses incurred by the assessee and there was no mark up or profit made by rendering the said services, therefore, its claim that the same not being in the nature of income was not liable to be taxed in India cannot be accepted. We thus reject the aforesaid claim of the assessee. The Ground of appeal No. 1 is dismissed. Consideration received for conducting training programs - held by the CIT(A) as FTS in its hands - whether training programs conducted by the assesses did “make available” technical knowledge? - India- Netherland DTAA - Held that:- The consideration received by the assessee for the managerial/leadership training provided to the employees of the Indian Hotels cannot be held as FTS under Article 12(5)(a) of the India- Netherland tax treaty. As neither the training services rendered by the assessee to the Indian Hotels could be held to be technical services, nor the same could have been characterised as “ancillary and subsidiary” services as per Article 12(5)(a), hence the consideration received by the assessee for rendering the training services could not be held as FTS in its hands. We thus, not being persuaded to subscribe to the view taken by the CIT(A) that the consideration received for providing training services to the Indian Hotels was chargeable as FTS in the hands of the assessee, set aside his order. The Ground of appeal No. 2 is allowed in terms Whether amounts received by the assessee for providing access to the international CRS, Property Management Systems and Other Systems was ancillary and subsidiary to the enjoyment of the right “Marriott” and hence, taxable as FTS under the India-Netherland tax treaty, as well as under the Act? - Held that:- As the access to CRS, Property Management System and Other Systems provided to the Indian Hotels by the assessee were common facilities provided to the members of the Marriott chain of hotels across the world by the assessee, and were not tailor made services to suit their specific requirements, thus the said facility could not be construed as ‘technical services’. As neither be held to be technical services, nor the same in terms of our aforesaid observations could have been characterised as “ancillary and subsidiary” services under Article 12(5)(a), hence the consideration received by the assessee for rendering the said services/facility could not be held as FTS in its hands. We thus, set aside the order of the CIT(A) holding that the consideration received by the assessee for providing of access to CRS, Property Management Services and Other Systems was chargeable as FTS in the hands of the assessee. The Ground of appeal No. 3 is allowed Interest under Sec. 234B - Held that:- Now when a duty is cast upon the payer to deduct and pay tax at source, then on the payers failure to do so interest under Sec. 234B could not be imposed on the payee assessee. We find that the said issue is squarely covered by the judgment of the Hon’ble High Court of Bombay in the case of DIT (Intl. Taxation) Vs. NGC Network Asia LLC (2009 (1) TMI 174 - BOMBAY HIGH COURT). ‘Tax rate’ provided in the India-Netherland tax treaty by a further amount of surcharge, education cess and secondary and higher education cess - Held that:- We find that the issue that the of rate of tax provided in the tax treaty cannot be enhanced by including surcharge and education cess separately, is covered by an order of a coordinate bench of the Tribunal in the case of Capgemini SA vs. DCIT (Intl. Taxation)-2(10(1), Mumbai (2016 (7) TMI 712 - ITAT MUMBAI).Direct the A.O not to enhance the rate of tax provided in the tax treaty by including surcharge and education cess separately.
|