TMI Blog2022 (12) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is preferred against the order of the CIT(A)-43, New Delhi dated 28.08.2019 pertaining to A.Y.2016-17 2. The grievance of the assessee read as under :- GROUNDS OF APPEAL Appeal against the order under section 250(6) of the Income Tax Act, 1961 ('the Act') dated August 28, 2019 for Assessment Year 2016-17 passed by the Commissioner Of Income Tax (Appeals) - 43, New Delhi (hereinafter referred as 'Ld. CIT(A)'), received by Appellant on September 21, 2019. The Appellant prefers the present appeal on the below mentioned grounds which are mutually exclusive and without prejudice to one another: 1. The order of the Ld. CIT(A) is contrary to the facts, law and principle of Stare decisis and is, therefore, bad in law. 2. That on the facts and the circumstances of the case and in law, the Ld. CIT(A) has erred in upholding the addition to income amounting to Rs, 39,28,87,342 made by Ld. Assessing Officer (hereinafter referred to as 'Ld. AO'), towards Centralized Services fees received by the Appellant primarily in the nature of Sales Marketing charges, Reservation charges, Loyalty programs and fees for other centralized services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant to present its case regarding non-applicability of such article/ reason. 8. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in upholding interest amounting to Rs. 11,530,912 be levied under Section 234B Of the Act, 9. Additional Ground: That on the facts and circumstances of the case and in law, the Ld. AO has erred in levying interest amounting to Rs 7206,820. levied under Section 234A of the Act, despite the Appellant filing the Income Tax return within the due date Of filing the Income Tax return. All of the above Grounds of Appeal are independent of and without prejudice to each Other. The Appellant craves leave to add to or alter, by deletion, substitution or otherwise, any or all of the foregoing grounds of appeal at or before the hearing, and to submit Such statements, documents and papers as may be considered necessary either at or before the appeal hearing. 3. At the very outset, the counsel for the assessee stated that the substantive issues raised in the grounds of appeal has been considered and decided by this Tribunal in favour of the assessee and against the revenue. 4. The DR fairly conceded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Ground no 3 of the earlier appeal. 11. Thereafter the CIT(A) followed the findings given in A.Y. 2015-16 as under :- The same view is followed in. the present year as the facts are nature to the earlier AY 2015-16. Therefore being consistent with the above finding on ground no 2 and 3, summarizing, it is seen that the considerations of Rs.34,22,65,341 received are taxable as fee for included services under paragraph 4(a) of the Article 12 of the India US Treaty as these are ancillary and subsidiary to the enjoyment of rights for which consideration has been received as royalty under paragraph 3 of Article 12. The said considerations are also chargeable to tax under section 9 of the Income Tax Act as explained above, The case of the assessee is not covered and distinguishable from the case of the Jurisdictional High Court in Sheraton International since the said case had only considered the taxability under the payments in question received by the assessee company from the Indian hotels/ clients as fees for included services within the meaning of paragraph 4(a) of Article 12 . 12. This quarrel was considered by this Tribunal in assessee s own case in ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant's income from hotel related services provided to hotels in India, as royalty fees for technical services, stands squarely covered by f the judgment of the ITAT, Delhi in the case of Sheraton International Inc. at ITA Nos. 50 to 55/Del/2006 dated 04.10.2006, It is also observed that the appeals of the Revenue have been dismissed by the Delhi High Court vide order dated 30.01.2009, there in the Hon'ble High Court held that the Tribunal had rightly concluded that the payments received were in the nature of business income, and not in nature of royal or fees for technical services. It was accepted by the Ld. Assessing Officer that the appellant did not have a permanent establishment in India, and hence the business income could not be brought to tax under Article 7 of the India- USA DTAA, Moreover, no question of taw had arisen for their consideration, as these are findings of fact by the Tribunal. Therefore, respectfully following the orders of the higher judicial authorities, the bringing to tax of the business receipts of the appellant in India, is deleted Thus, the appellant succeeds in grounds 1 to 4. 8. The issue in controversy has also been set at re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2013- 14, wherein, the Tribunal decided the issue in favour of the assessee in ITA No. 5144/ Del/ 2016, dated 18.11.2019 and the Hon ble Jurisdictional High Court has upheld the decision of the Tribunal. 27. Thus, keeping in view our detailed reasoning, hereinabove, and the ratio laid down in the binding judicial precedents rendered in assessee's own case as well as in case of group company, viz, Sheraton International Inc., cited before us, we have no hesitation in holding that the fee received by the assessee under the Centralized Services Agreement cannot be treated as FIS either under Article 12(4)(a) or 12(4)(b) of the India-US Tax Treaty. As a natural corollary, it can only be treated as business income of the assessee. Hence, in absence of a PE in India, it will not be taxable. 28. For the sake of completeness, we must observe, in course of hearing, learned Departmental Representative has relied upon some judicial precedents to drive home the point that the payment received towards centralized services fee is in the nature of FIS under Article 12(4)(a) of the Treaty In this context, we must observe, after carefully examining the decisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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