TMI Blog2019 (10) TMI 1447X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Dr. B. R. R. Kumar, J. The present appeal has been filed by the revenue against the order of the Id. CIT(A)-43, New Delhi dated 26.07.2016. 2. The ground raised by the revenue is as under: (i) Whether on the facts and in the circumstances of the case, the [d. CIT (A) has erred in holding that the Centralized services fee received by the appellant for rendering various services such as Sales and Marketing, Loyalty Programs, Reservation Service, Technological Service, Operational Services and Training Program etc. to customers in India, were not taxable as Fees for Technical Services (FTS) in terms of Section 9 of the Income Tax Act, 1961 as well as Article 12 of the India-US Double Taxation Avoidance Agreement (D TAA). 3. Before the Id. CIT (A), the assessee has raised the following relevant grounds which bestows the brief of contentious issue between the assessee and the revenue: That the [d. AO has erred on facts and in law in holding that the payments received by the Appellant for rendering various marketing and advertisement services to customers in India, were taxable as Fees for Technical Services ( F T S ), in terms of Article 12 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not accepted the judgment of the Hon'ble Delhi High Court and filed SLP before the Hon'ble Supreme Court. We hold that as on today, the issue has been covered by the judgment of Hon'ble Jurisdictional High Court, hence, no addition on this ground is called for. 7. For the sake of brevity and ready reference the relevant portion of the judgment of the Hon'ble High Court is reproduced as under: (i) the main purpose of the agreement entered into between the assessee and its clients-hotels was to promote business keeping in mind their mutual interests, through worldwide publicity, marketing and advertisement. All other services rendered by the assessee as encapsulated in various articles of the agreement were incidental and/or ancillary to its main object. The permission to use the trademark, brand name, as well as, the stylized 'S' given by the assessee to its clients- hotels was examined by the Tribunal. It returned a finding that there was nothing on record for it to come to conclusion that the real transaction was other than what was stated in the agreement, that is, the use of the trademark etc. was not free of cost but was camouflaged in the compo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of article 7 of the Indo-American DTAA. We, therefore, allow the relevant grounds raised in the assessee's appeals on this issue and dismiss the additional grounds raised by the revenue in its appeals. (v) it found that article 12(4)(b) had no applicability and for this purpose it relied upon the Memorandum of Understanding dated 15-5-1989 and the examples set out therein. After perusing the examples given therein, it came to the conclusion that it had no applicability to the hotel industry. It held that article 12(4)(b) applied to those services which related to areas where technology was made available, whereas what the assessee in the present case was extending was services to the hotel industry in relation to advertisement, publicity and sales promotion, which were, not in the nature of technical or consultancy service involving 'making of any technology available'. The finding to this effect is given in paragraph 83 of the impugned judgment. The relevant extract is given here in below:- It is also further clarified in the Memorandum of Understanding that technical and consultancy services as envisaged under paragraph 4(b) of article 12 could make tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the meaning of paragraph 4(b) of article 12. Since the facts of the present case are almost similar to the facts of this case given in Example 7 of the Memorandum of Understanding, it leaves no doubt that the payment in question received by the assessee-company from the Indian hotels/clients or any part thereof could not be treated as 'fees for included services' within the meaning of paragraph 4(b) of article 12. 12.2 As regards the agreement being a colourable device the Tribunal noted that nothing was brought on record by the revenue Authorities to show that the intention of the said arrangement or even the action of the parties, as reflected in the agreement, was at variance with the terms of the agreement. It noted that since both the assessee and its clients were operating at arm's length, no collusion could be attributed to the parties to the agreement since, no evidence whatsoever to support or substantiate the said allegation was placed before them. It also noted the fact that not only all statutory requirements have been fulfilled and compliances had been obtained by the assessee from time to time, but that even the Income-tax Authorities had gi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e revenue to enable them to hold that the agreement was a colourable device, in particular, that the payments received were for use of trade mark, brand name and stylized mark 'S'. We agree with reasoning adopted by the Tribunal. Moreover, these are findings of fact which could be gone into only if a question was proposed impugning the findings of the Tribunal as perverse. We find that no such question has been proposed in the appeal. The observations of the Supreme Court in the case of K. Ravindranathan Nair v. CIT [2001] 247 ITR 178/114 Taxman 53 being relevant are extracted below: - The High Court overlooked the cardinal principle that it is the Tribunal which is the final fact-finding authority. A decision on fact of the Tribunal can be gone into by the High Court only if a question has been referred to it which says that the finding of the Tribunal on facts is perverse, in the sense that it is such as could not reasonably have been arrived at on the material placed before the Tribunal. In this case, there was no such question before the High Court. Unless and until a finding of fact reached by the Tribunal is canvassed before the High Court in the manner s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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