9911796707
TMI Blog2024 (7) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... dditions for AY 2020-21. On similar facts, the co-ordinate Bench in assessee s own case [ 2024 (1) TMI 490 - ITAT DELHI] for AY 2015-16 held that the amount in dispute cannot be qualified as royalty and directed the AO to delete the addition. Therefore, addition is hereby deleted. Ground No.1 of the appeal is allowed. Computing of gross tax liability at incorrect rates (inclusive of surcharge and education cess) without taking into consideration, the applicable tax rates as per India Singapore DTAA in the computation sheet accompanying the final assessment order u/s 143(3) - AO is directed to verify the above grievance of the assessee and apply the correct tax rate in accordance with law. Ground no.3 is allowed for statistical purposes. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Marketing Fee are taxable in India without appreciating that such fees are received by the Appellant towards expenses incurred for marketing and reservation related activities, which are quite routine activities in the context of hotel industry. 1.4. On the facts and in circumstances of the case and in law, the Ld. AO and the Ld. DRP have erred in not following the favourable decisions in similar facts relied on by the Appellant wherein it has been held that centralized services rendered like sales and marketing, loyalty programs, reservation service, technological services etc. are not in the nature of Royalty/FTS under the Act as well as under the DTAA. 2. That on the facts and in the circumstances of the case and in law, the Ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of Rs. 33,11,70,181/- as royalty income both under the provisions of the Act as well as under Indian- Singapore Double Taxation Avoidance Agreement (DTAA). 3.1. The assessee filed its return of income declaring income of Rs. 33,95,25,010. In the said return of income, assessee offered the amounts received towards franchise, license fee etc. as royalty income. Further, certain fees received towards training imparting training in relation to central reservation, integral property management system, information technology related services etc. were offered to tax as FTS. However, the fee received towards reservation services, marketing services and loyalty programme receipts were not offered to tax in India pleading that they are neith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned DRP. However, learned DRP endorsed the view expressed by the Assessing Officer. Accordingly, the draft assessment order was finalized. 5. Thus, it is seen that during the year, the AO made the following additions in the assessment order. Sl. No. Nature of receipts Payer entity Amount (INR) AY 2020-21 1 Loyalty Programme receipts AAPC India 13,14,42,789 2 Reservation Fee AAPC India 18,58,64,968 3 Marketing Fee Accor Advantage India 1,38,62,424 Total 33,11,70,181 5.1. In making the above addition, the AO followed the findings given in the case of the assessee for AY 2015-16 in the final assessment order dated 24.01.2023 passed u/s 147 r.w.s. 143(3) of the Act. The DRP also followed its directions dated 22.12.2022 for AY 2015-16 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additions amounting to Rs. 33,11,70,181/- for AY 2020-21. On similar facts, the co-ordinate Bench in assessee s own case in ITA No.581/Del/2023, vide order dated 29.12.2023 for AY 2015-16 held that the amount in dispute cannot be qualified as royalty and directed the AO to delete the addition. Therefore, respectfully following the above decision of the Co-ordinate Bench, the addition of Rs. 33,11,70,181/- is hereby deleted. Ground No.1 of the appeal is allowed. 9. Ground no.2 of the appeal is against the levy of interest u/s 234A and 234B of the Act. In view of our decision in ground no.1, the Assessing Officer is directed to recalculate the interest u/s 234A 234B in accordance with law. 10. Ground no.3 of the appeal is against the initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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