TMI Blog2022 (7) TMI 628X X X X Extracts X X X X X X X X Extracts X X X X ..... at in the case of International Hotel Licensing Company [ 2006 (11) TMI 141 - AUTHORITY FOR ADVANCE RULINGS] held that amounts received by the International Hotel Licensing Company SARI. (referred to as the applicant) from the Indian Hotel owner in connection with the marketing and business promotion activities said to be conducted outside India would be taxable in India. In the present case assessee is an assignee of the IMPPA entered into by IHLC with Indian hotels and under the said agreement, assessee rendered similar services as were considered by learned AAR in the aforesaid ruling. Further, no change in facts was alleged in the present case as were considered by the learned AAR in the aforesaid ruling. In view of the above, we find no infirmity in the impugned order passed by the learned CIT(A) following the learned AAR s ruling in International Hotel Licensing Company Co. (supra). As a result, grounds No. 1 to 5 raised in assessee s appeal are dismissed. Levy of interest under section 234A - HELD THAT:- Assessing Officer is directed to carry out necessary verification whether the return of income was filed by the assessee within time and levy interest under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of IHLC, without giving cognizance to the fact that (i) a writ petition has been filed before the Honorable High Court and the same has been admitted, and (ii) the Income-tax Appellate Tribunal has admitted the ground of principle of mutuality raised by IHLC (for AY 2006-07 and AY 2008-09) and remanded the matter back to the Assessing Officer for examining its applicability; The CITIA) erred in holding that the ground of appeal of the Appellant in relation to the initiation of penalty proceedings under section 271) of the Act is premature in nature. 3. The main issue arising in present appeal is pertaining to taxation of payments received by the assessee from Indian hotels pursuant to International Marketing Program and Participation Agreement ( IMPPA ) as fees for technical services. 4. The brief facts of the case pertaining to this issue, as emanating from record, are: The assessee is a company incorporated in Luxembourg and the tax resident of Luxembourg. For the year under consideration, assessee filed its return of income on 30/03/2012 declaring total income at Rs. Nil. During the year, assessee had received contribution from various Indian hotels for sales and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l services. The appellant was authorized for giving favour of the Mam group in a different manner as detailed in IMPPA agreement. Such Tamil services was so intended for providing better business and better clientele to the hands of the remitter, who have been provided the business avenues through such contribution. Therefore, I am of the considered view that the AO has rightly taken note of decision of the advance ruling decision in the case of in Appeal No AAR/674/2005 in the case of M/s. International Hotel Licensing Company SARL. Accordingly, the action of the A.O. of taxing the appellant s income under the head fee for technical services u/s 197 of the Act is completely justified and correct. Accordingly, the action of the A.O. is confirmed. 7. In addition to this, I would also like to mention here that the appellant's claim of principle of mutuality is completely without having any basis or substance. In my considered view, the Indian Hotels here using the Marriott brand were nowhere equal to the appellant in the exercise of its activities. Such kind of assertion that the payments were made merely to the extent of expenditure is completely without having any substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assigned to the assessee pursuant to Assignment and Assumption Agreement dated 21/07/2008 entered into between IHLC and the assessee. 10. We find that in the case of International Hotel Licensing Company, [2007] 158 Taxmann 321 (AAR), learned AAR, while rendering the opinion on the issue whether the amount received from resident Hotel owner in connection with marketing and business promotion activities is taxable as fees for technical services, in respect of similar agreement, observed as under: 22. In the instant case from the provisions of the IMPPA, referred to above, as well as the classification of expenditure of the fund, as noted by the independent auditors under the heads (a), (b), (c), (d), (f) indicated above, it is evident and it requires no elaboration to conclude that services provided by the applicant both within and outside India in the form of advertising, marketing promotion, sales programme and special services and other programmes for which payments are made by the owner, would amount to rendering managerial and consultancy services and therefore the requirements of the said definition of FTS are satisfied. In the light of the above discussion we conclude ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, are legal issues which can be decided on the basis of material available on record, we are of the view that same can be admitted for consideration and adjudication in view of the ratio laid down by Hon ble Supreme Court in NTPC Ltd vs CIT: 229 ITR 383. 16. As regards, addition ground No. 8, the Assessing Officer is directed to comply with the directions of the learned CIT(A) and grant TDS credit in accordance with the provisions of law. As a result, additional ground No. 8 is allowed for statistical purpose. 17. Further, as regards levy of interest under section 234A of the Act, the Assessing Officer is directed to carry out necessary verification whether the return of income was filed by the assessee within time and levy interest under section 234A of the Act, in case of delay, in accordance with law. Further, as regards levy of interest under section 234B of the Act, it was submitted that taxes were fully withheld at source and therefore levy of interest under section 234B of the Act does not arise. In any case, no interest under section 234B of the Act is leviable, for the year under consideration the present case, in view of decision of Hon ble Supreme Court in DIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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