9911796707
TMI Blog2016 (4) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... .09.2009 declaring a total income of Rs. 1,64,18,893/-. In doing so, it declared in the profit and loss account on the credit side, income of Rs. 1,78,75,045/- and, on the debit side sum of Rs. 44,68,763/. The assessee had claimed royalty and commission of Rs. 56,97,904/-. Out of total expenditure of Rs. 56,97,904/-, revenue sharing with A.B. Hotels amounted to Rs. 44,68,763/- and finder fee paid, amounted to Rs. 12,29,140/-. The assessee had entered into a Memorandum of Understanding with A.B. Hotels Ltd., on 27.03.2000, according to which out of the fee received 20% will be allocated towards expenditure to be borne by RHW and balance 80% will be shared equally between A.B. Hotels Ltd. and the assessee. 2.2.The assessee had also filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt venture company" of M/s Radisson Hotel International Inc. and Unitech Group, and has been engaged in the business of promoting a brand and basic support services to a brand, since incorporation. 4.3. Ld. AR further submitted that, in order to provide such services, the assessee has necessary expertise for organizing and developing a systematic array for specialized training and specific procedures for the structure and operation of franchise operations in the field of speciality restaurants. 4.4. Ld. AR submitted that, in pursuant to the above objective, the assessee in the assessment year 2000-01, i.e. on 27.03.2000 entered into a Memorandum of Understanding with A.B. Hotels Limited (see page 3-4 of the Paper Book) who was the owner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a manual relating to the cuisine, systems and procedures for the operation of a franchise agreement with potential customers and does not imply that any services had been rendered by Radisson Hotel, Delhi. 4.10. The Ld. AR submitted that Radisson Hotel, Delhi is operated and run by M/s A.B. Hotels Ltd., and as such the assumption that M/s A.B. Hotels Ltd. is in existence on behalf of Radisson Hotel, Delhi and is paid the share of fee being the royalty to utilize the name of Radisson Hotel Delhi is factually incorrect. 4.11. From the substance of the transaction, it is seen, that share of M/s A.B. Hotels Ltd. were never the income of the assessee. Ld.AR placed is reliance on the decision of Hon'ble Supreme Court in the case of CIT VS B.M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but it was the assessee who was to market the Brand and franchise the Brand 'The Great Kabab Factory' owned by Radisson Hotels. The Brand 'The Great Kabab Factory' always remained with M/s A.B. Hotels Pvt. Ltd., and franchises who were introduced by the assessee were using the Brand 'The Great Kabab Factoyr' i.e. they were operating under the brand 'The Great Kabab Factory' for its own. 6.2. The remittance by the assessee to AB hotels Ltd., was only a diversion of , on which AB hotels Ltd., had an overriding title. Such income to the extent of share of AB Hotels, never accrued to the assessee in its own rights. The assessee acted merely as a facilitator to get this income and pass it on to AB Hotels Ltd. The payer has deducted TDS on full ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s persons who wanted to use this brand as an authorised franchise and the fee was to be shared between the assessee and M/s. AB Hotels in the manner specified above. The sharing of the revenue clearly demonstrates that no services were to be rendered by M/s.AB Hotels to the assessee. In fact it was assessee who had undertaken to promote the brand and assessee received various payments from the persons who got into franchise agreement with assessee and all such payments to the assessee were made after deducting TDS by such franchises. 6.5. Thus, the year under consideration under the aforesaid MOU, assessee earned a total sum of Rs. 1,78,75,045/- and in accordance with the aforesaid letter dated 23.20.2007, an amount of Rs. 44,68,763/- paid ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
