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TMI Blog2023 (7) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... Lords in series of cases, the Tribunal observed In the totality of circumstances neither the indicia of a partnership or a joint venture is discernable from the terms and conditions of the agreements between the parties, particularly since there is neither a contribution of assets nor a sharing of profits and / or losses provided in the agreements between the parties. These normative ingredients of a partnership or a joint venture are absent. Applying the principle laid down in the said judgment of the Tribunal, it is found that there is no arrangement of sharing of profits and losses between the parties nor there is contribution of assets by the appellant in implementing the project; entire burden of raising the infrastructure, maintenance, etc., rests with the Institute only. Also, there is no participation in preparing the syllabus but exclusively under the control of the appellant. The Trade name or logo of the appellant has been used and displayed for advertisement of the course, and it cannot be liberally used by the Institute - In the present case, the Institute is given right to use their logo etc., and advertise the said project to attract students to join the traini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owledge in the field of hotel management. It is his contention that a careful reading of the said agreement, it is evident that the same is an arrangement whereby the appellant and The Institute of Hotel Management Studies have agreed jointly to offer training in hotel management, dividing various responsibilities between two of them. It is his contention that the arrangements are akin to joint venture and cannot be considered to be franchisee agreement. He has forcibly argued that there is no grant of representational right by the appellant to The Institute of Hotel Management Studies and mere use of word Franchisee in the said agreement is not determinative of the nature of the agreement. He further submitted that the appellant is not a hotel or hotel management institute and they do not have any specialised skill, knowledge or expertise in the hotel management or hotel management training. The hotel management/hotel management training is not associated with the appellant and their logo is not identified with such service. Thus, the basic requirement of the service in question being one identified with the appellant is not satisfied. Thus, there cannot be grant of any represen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating authority that the agreement is a franchisee agreement since it granted representational right with the institute. 4.1 Further, referring to the definition and scope of the franchisee service , the learned Authorised Representative has submitted that after amendment brought into the said agreement with effect from 16.06.2005 it enlarged its scope thereby the main thrust was laid down on providing representational right by the franchisor to the franchisee. The terms and conditions of the agreement dated 20.05.2006 and the activities undertaken by the appellant clearly fall within the scope of the amended definition of Franchisee Service . Supporting the findings of the adjudicating authority, that the appellant had clearly allowed the franchisee to use Kitco name, logo, emblem, and name board of the institute implies that the appellant granted representational right to the institute; the appellant was receiving 20% of the course fee and 50% of the examination fees, while the institute incurs all expenses involved in addition to providing infrastructure facilities and the appellant is immune to any losses arising out of the project. Revenue claimed that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be analysed is the agreement dated 20.05.2006. The clause (1) indicates that the Institute will conduct the said course and the syllabus and training of the students will be prescribed by KITCO, who will conduct the final examination and provide certification to successful candidates. Clause (2) of the said Agreement stipulates the division of the work between the appellant and the Institute. The sub-clause (a) stipulates that the Institute will organise public campaign about the course through advertisements. Sub-clause (b) prescribes that the Institute will provide the premises for the said project at its own cost and responsibility: the infrastructure and facilities as detailed in the guidelines to franchisee issued to the Institute and would carry out modifications and alterations as directed by the appellant from time to time. The Institute will bear full responsibility including all expenses recurring or otherwise for maintenance and upkeep. No alterations or changes will be made to infrastructure without appellant s written consent. Sub-clause (c) and (d) prescribes strict adherence to the terms of the contract and guidelines of the project and also any additional instruc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (not the assessee) vide clause 9 of the agreement. The participation of the assessee in the agreement of the schools, through its representation on the BoM is calibrated only for effectuation of the assesses perceived expertise and experience, in establishing and running quality English Medium Schools. For this service provided, the assessee receives remuneration as clearly indicated in clause 3 of the agreement. All financial inputs, obligations and liabilities, including liabilities arising out of any litigation in respect of the enterprise is to the account of the other party and to the exclusion of the assessee. In the totality of circumstances neither the indicia of a partnership or a joint venture is discernable from the terms and conditions of the agreements between the parties, particularly since there is neither a contribution of assets nor a sharing of profits and / or losses provided in the agreements between the parties. These normative ingredients of a partnership or a joint venture are absent. 12. Applying the principle laid down in the said judgment of the Tribunal, we find that there is no arrangement of sharing of profits and losses between the parties nor the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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