The Delhi High Court has held that High Court can’t decide on the taxability of payments received from Indian Customers on Centralized Services which was already pending appeal before the supreme court.
The appellant revenue challenged the common order dated 29th April 2022 passed by the Income Tax Appellate Tribunal (‘ITAT’) against Westin Hotel Management and Sheraton Overseas Management, the respondents.
The Appellant stated that the ITAT has 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’ as defined under Section 9(l)(vii) of the Income Tax Act, 1961 or ‘Fee for included services as defined under Articles 12(4) (a) of the Indo- US DTAA.
Further contended that the ITAT has allowed the appeals of the Assessees following the judgement of this Court in Director of Income Tax v. Sheraton International Inc which has not been accepted by the Revenue and an appeal has been preferred against the same, which is pending adjudication before the Supreme Court.
The Court comprising Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that the Revenue has not brought anything on record to distinguish the facts of the present case from the facts involved in Sheraton International Inc.
It was observed that the already decided matter which was challenged before the supreme court and was pending can’t be decided by the same court.
While dismissing the petition, the Court held that “though the judgment of this Court has been challenged and is pending adjudication before the Supreme Court, yet there is no stay of the said judgment till date.”
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