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2024 (2) TMI 582 - ITAT MUMBAITaxable Income in India or not - Royalty receipt - PE in India or not? - amount received towards Marketing Contribution, Priority Club receipts, Reservation Contribution, and Holidex Fee - Reimbursement of expenses - assessee is a company incorporated and a tax resident of the USA - HELD THAT:- We find that the taxability of similar receipts came up for consideration before the coordinate bench of the Tribunal in assessee’s own case as held that money was received by the assessee, on account of Marketing and Reservation fees, with a corresponding obligation to use it for the agreed purposes and it was not an unfettered receipt in the hands of the assessee and therefore it was a kind of a trust money received in fiduciary capacity. It was further held that the receipt cannot be termed as a consideration for the use of any intellectual property asset of the company, even though the receipt may have been incidental to the same. Accordingly, the coordinate bench came to the conclusion that the receipt is not taxable as a Royalty or Fees for Technical Services and therefore is not taxable in the hands of the assessee in the absence of any PE in India. Marketing Contribution and Reservation Fees received by the assessee are not Royalty and therefore, the impugned addition is deleted. Decided in favour of assessee.
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