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2022 (3) TMI 140 - AT - Income TaxIncome accrued or deemend to accrue in India - Fees for technical services' under Article 12(5)(a) of the India-Netherlands tax treaty - amounts received by the Appellant under the Training and Computer Systems Agreement ('TCSA') on account of conducting core managerial training programs for managerial employees of the Indian hotels - assessee is a company incorporated in Netherlands and is a tax resident of Netherlands. The assessee is part of Marriott group engaged in conducting training programmes and providing access to various computers systems such as centralized reservation systems, property management systems and other systems to Marriott chain of hotels located worldwide - HELD THAT:- As decided in own case [2018 (6) TMI 605 - ITAT MUMBAI] CIT(A) loosing sight of the fact that as the assessee had neither granted any right of enjoyment of the brand "Marriott" to the Indian Hotels and thus was not in receipt of any royalty as provided in Article 12(4) of the India-Netherland tax treaty, thus the consideration received by it from the Indian Hotels for providing access to CRS, Property Management System and Other Systems, could not have been brought within the sweep of "ancillary and subsidiary" services under Article 12(5)(a). We thus, in terms of our aforesaid observations are of the considered view that as providing of access to CRS, Property Management Services and Other services could 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 It is not in dispute that the facts prevailing in A.Yrs. 2009-10 [2018 (6) TMI 605 - ITAT MUMBAI], 2011-12 and 2012-13 [2019 (8) TMI 1797 - ITAT MUMBAI] are identical with the facts prevailing in A.Y. 2010-11 [2018 (6) TMI 605 - ITAT MUMBAI] as they form part of the same agreement and same nature of activities carried out by the assessee. Hence, we hold that the decision rendered by this Tribunal for A.Yrs. 2009-10 [2018 (6) TMI 605 - ITAT MUMBAI], 2011-12 and 2012-13 as detailed shall apply mutatis mutandis to A.Y.2010-11 also. Accordingly, the ground Nos. 1-3 raised by the assessee are allowed. Seeking direction to the ld. AO for granting correct TDS credit to the assessee - HELD THAT:- The facts relevant for this adjudication of this additional ground are already on record before the lower authorities and hence, this additional ground raised by the assessee is hereby admitted and the ld. AO is hereby directed to grant correct TDS credit in accordance with law. Accordingly, the ground No.10 raised by the assessee is allowed for statistical purposes. Seeking deduction for primary, secondary and higher education cess when tax is charged as per the Indo-Netherlands treaty - HELD THAT:- The facts relevant for this adjudication of this additional ground are already on record before the lower authorities and hence, this additional ground raised by the assessee is hereby admitted. We find that ultimately tax liability is determined by the ld. AO only as per the Indo-Netherlands Treaty @10%. Hence, there cannot be any levy of education cess on such tax when tax is determined under treaty provisions. This issue is no longer res integra in view of the decision of this Tribunal in assessee’s own case for A.Y.2009-10 [2018 (6) TMI 605 - ITAT MUMBAI] wherein this Tribunal by placing reliance on the Co-ordinate Bench decision of the Mumbai Tribunal in the case of Capgemini SA vs. Dy. CIT (International Taxation) [2016 (7) TMI 712 - ITAT MUMBAI] had held that rate of tax provided in the tax treaty cannot be enhanced by including surcharge and education cess separately. Accordingly, the ground No.11 raised by the assessee vide additional ground is hereby allowed.
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