The Division Bench of the Delhi High Court in the case of The CIT - International Taxation -3 vs Radisson Hotel Interaction Incorporated consisting of Justices Manmohan and Justice Manmeet Pritam Singh Arora reiterated that the receipts of the Assessee from various activities of hotel management constitute ‘Fee for Technical Services’ u/s 9(l)(vii) of the Income Tax Act, 1961 or ‘Fee for included services’ as defined under Article 12(4)(a) of the India-US Double Taxation Avoidance Agreement (DTAA).
Facts
This Income Tax Appeal was filed challenging the order passed by the Income Tax Appellate Tribunal (‘ITAT’) for Assessment Year 2016-17.
Contentions Made
Appellant: Relying on Director of Income Tax v. Sheraton International Inc., it was contended that ITAT erred in holding that the entire payments received by the Assessee from its Indian Customers on account of Centralized Services viz. sales and marketing, loyalty programs, reservation service, technological service, operational services and training programs/human resources do not constitute ‘Fee for Technical Services’ u/s 9(l)(vii) of the Income Tax Act, 1961 (the ‘Act’) or 'Fee for included services’ under Articles 12(4) (a) of the India-US DTAA.
Observations of the Court
Relying on the judgments passed by the Supreme Court in Kunhayammed & Ors. v. State of Kerala & Anr., and Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association CSI Cinod Secretariat, Madras, the Bench opined this appeal was covered by the judgment passed in Sheraton International Inc. (supra).
Judgment
Since no substantial question of law arose for consideration in this appeal, the same was dismissed. However, it clarified that the judgment of this Court in Sheraton International Inc. (supra) has been challenged and is pending adjudication before the Supreme Court, although there is no stay of the said judgment till date. So, the orders passed in this appeal shall abide by the final decision of the Supreme Court in the aforesaid Civil Appeal.
Case: The CIT - International Taxation -3 vs Radisson Hotel Interaction Incorporated
Citation: ITA 441/2022
Bench: Justice Manmohan, Justice Manmeet Pritam Singh Arora
Decided on: 10th November 2022
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