TMI Blog2009 (9) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ajay Arora, Ms. Kavita Jha, Mr. Sriram Krishna and Ms. Akansha Aggarwal, Advocates, for the respondent. JUDGMENT The judgment of the court was delivered by VALMIKI J. MEHTA, J. - The present appeals under Section 260 A of the Income Tax Act, 1961, are filed against the common order passed by the Income Tax Appellate Tribunal for the Assessment Years 1998-1999, 1999-2000, 2000-2001 and 2001-2002. The appellant/revenue has proposed the following question of law: (a) Whether in the facts and circumstances of the case, the Ld. ITAT erred in holding that the assessee was not liable to deduct tax u/s 194I of the Act in respect of the payments made to the Franchisee under the head "Infrastructural Claims"? 2. The facts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... run under the brand name of the respondent and the respondent was providing its valuable technical knowhow and other intellectual rights to franchisees it was necessary on the part of the respondent to put in place certain restrictions on the running of the education centre in order its name, brand, value, intellectual property rights as also the interest of students were protected. 3. Under the model fees collected from the students was deposited in the account of the respondent and then the fees collected was shared with the Franchisees in accordance with the terms of the Franchisees/License agreement. To ensure that the Franchisees delivered the services in accordance with the methods and process provided by the respondent it was es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r plant or equipment; (b) fifteen per cent of the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fitting where the payee is an individual or a Hindu undivided family; and (c) twenty per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings where the payee is a person other than an individual or a Hindu undivided family:]]...... . Explanation. - For the purpose of this section,- (i) "rent" means any payment , by whatever name called, under any lease, sub-lease tenancy or any other agreement or arrangement for the use of (either separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sor and lessee as has been sought to be contended by the Revenue. A reference to the clauses of the agreement which has been placed on record shows that a limited license is granted by the assessee company to Sh. Ashok Arora and Sh. Ashish Bhatia(i.e the licencee) for use by the licensee of the trademark and trade name of the assessee company for the education centre. The assessee company granted the license for the purpose of the Agreement within the specified territory the use of it's confidential technical knowhow contained in its manuals and any improvements and developments to such know how. The licensee was given the right to operate the education centre in relation to marketing of NIIT courses specified in the agreement. Various othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of his premises from where the partnership business is carried on, then, payment made to such partner by the firm can be stretched to be included in the definition of rent under Section 194 I, and which surely cannot be the intention of the legislature. 8. We find that the Tribunal has given the following valid finding and which we uphold : "The appellant is entered into the agreement with the Franchisees for running the education centre at various Metro Cities. The fees was shared between the assessee and the Franchisee as per the clauses of the agreement. The details of provisions regarding conduct of the business were stipulated in the franchisee. The dominant intention of the parties of the agreement was to conduct the busines ..... X X X X Extracts X X X X X X X X Extracts X X X X
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