The Delhi High Court granted relief to Radisson Hotel Interaction Incorporated and reiterated that Receipts of assessee from various activities of hotel management constitute ‘Fee for Technical Services.
The present appeal has been preferred challenging the orders of the Income Tax Appellate Tribunal (ITAT). The appellant in the present appeal is the Commissioner of Income Tax- International Taxation and the respondent is Raddison Hotel Interaction Incorporated.
The Counsel for the assessee submitted that the ITAT has allowed the appeals of the Assessees following the judgement of this Court in Director of Income Tax v. Sheraton International and stated that the said decision of this Court 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 Counsel for the appellant submitted 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 or 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.
The Court noted that though the judgment of this Court in Sheraton International Inc.has been challenged and is pending adjudication before the Supreme Court, yet there is no stay of the said judgment till date.
A Bench consisting of Justice Manmohan and Justice Manmeet Pritam Singh Arora observed that “Accordingly, no substantial question of law arises for consideration in the present appeal and the same is dismissed. However, it is clarified that the orders passed in the present appeal shall abide by the final decision of the Supreme Court in the aforesaid Civil Appeal.”
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