INCOME TAX ACT, 1961

Section 9(1)(vii)

Income deemed to accrue or arise in India - Under section 9(1)(vii) - Payments received from Indian Customers on account of Centralized Services -

Appellant Revenue stated that ITAT had erred in holding that entire payments received by assessee from its Indian Customers on account of Centralized Services viz. sales and marketing, loyalty programs, reservation service, technological service, operational services and training programs/human resources did not constitute 'Fee for Technical Services' as defined under section 9(1)(vii) or 'Fee for included services' as defined under Article 12(4)(a) of the Indo-US DTAA. He stated that ITAT had allowed appeals of assessees following judgment of this Court in Director of Income Tax v. Sheraton International Inc (2009) 178 Taxman 84 (Del) : 2009 TaxPub(DT) 1391 (Del-HC). He, however, stated that said decision of this Court had not been accepted by Revenue and an appeal had been preferred against same, which was pending adjudication before the Supreme Court. Hence these appeals. Held: Revenue had not brought anything on record to distinguish facts of present case with facts involved in Sheraton International Inc. (supra). Though judgment of this Court has been challenged and is pending adjudication before the Supreme Court, yet there is no stay of said judgment till date. Consequently, in view of judgments passed by the Supreme Court in Kunhayammed and Others v. State of Kerala and Another, (2000) 6 SCC 359 : 2000 TaxPub(DT) 1461 (SC) and Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, CSI Cinod Secretariat, Madras (1992) 3 SCC 1 : 1992 TaxPub(CL) 0159 (SC), present appeals were dismissed being covered by judgment passed by predecessor Division Bench in Director of Income Tax v. Sheraton International Inc (2009) 178 Taxman 84 (Del) : 2009 TaxPub(DT) 1391 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2015-16

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