2023 (9) TMI 1683 - HC - Income Tax

Income deemed to accrue or arise in India - reimbursement of expenses qua marketing fees frequent flyer programme guest programme and reservation fees received by the respondent/assessee cannot be treated as fee for technical services in terms of Article 12(4) of the Indo-Singapore DTAA and under Section 9(1)(vii) - HELD THAT - This issue stands covered by the following judgments Sheraton International Inc. 2009 (1) TMI 27 - DELHI HIGH COURT Sheraton International Inc. 2023 (5) TMI 1435 - DELHI HIGH COURT and Starwood Hotels Resorts Worldwide Inc. 2022 (11) TMI 1492 - DELHI HIGH COURT Therefore according to us no substantial questions law arises for consideration.

Summary

The Delhi High Court, in ITA Nos. 532/2023 and 535/2023 concerning AYs 2019-20 and 2018-19, upheld the Income Tax Appellate Tribunal's order dated 28.02.2023. The Tribunal ruled that reimbursements for marketing fees, frequent flyer and guest programs, and reservation fees received by the assessee do not constitute "fee for technical services" under Article 12(4) of the Indo-Singapore DTAA and Section 9(1)(vii) of the Income Tax Act, 1961. This position aligns with precedents including DIT vs. Sheraton International Inc. (2009) and CIT vs. Sheraton International Inc. (2023). The Court held that "no substantial questions of law arise for consideration" and accordingly dismissed the appeals. It noted that the parties shall abide by the Supreme Court's final decision on the Special Leave Petition filed against the Sheraton judgment.