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| The Tax Publishers2021 TaxPub(DT) 4181 (Del-Trib) INCOME TAX ACT, 1961
Section 90
It was pertinent to note that AO simplicitor made addition in respect of FTS under Article 12 of Indo-US DTAA but no limb of Article 12 was given by AO and there was no specification which came out from assessment order. Accordingly, addition made by AO was not sustainable.
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Double taxation relief - Agreement between India and USA - Fees for technical services under article 12(4) - Receipts from various activities of hotel management--Failure of AO to mention specific limit of article 12(4)
Assessee-company based at USA carried on the business of providing various centralized services to the hotels in several countries across the world. It received consideration from Indian entities towards various activities of hotel management ranging inter alia from ticketing, reservation, marketing, advertising, operation, administration, catering, network support services, Starwod Portal Services, imparting of skill sets through trainings, etc. AO held that consideration received by assessee was taxable as 'fees for Technical Services' (FTS) within the meaning and scope of section 9 as well as article 12 of Indo-US DTAA. Held: It was pertinent to note that AO simplicitor made addition in respect of FTS under Article 12 of Indo-US DTAA but no limb of Article 12 was given by AO and there was no specification which came out from assessment order. Accordingly, addition made by AO was not sustainable.
Followed:Westin Hotel Management for assessment year 2013-14 by the Tribunal in [ITA No. 5146/Del/2016 Order, dated 7-1-2020] and Dy. CIT v. Sheraton International Inc. (2009) 313 ITR 267 (Del) : 2009 TaxPub(DT) 1391 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
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