THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3 vs. WESTIN HOTEL MANAGEMENT LP

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ITA - 80 / 2023HC Delhi14 February 20232 pages
For Petitioner: RUCHIR BHATIA
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the centralized fees earned by the assessee are not taxable under the India-US Tax Treaty. This decision was based on a prior judgment of a coordinate bench in a similar case.

What were the facts?

The assessee received centralized fees for various services including sales, marketing, and technology. The Income Tax Appellate Tribunal held that these fees were not taxable as 'Fee for included services' under the India-US Tax Treaty.

What were the issues?

Whether centralized fees received by the assessee are taxable as 'Fee for included services' under the India-US Tax Treaty.

Which sections of the Income-tax Act were involved?

Article 12(4)(a), Article 12(4)(b)

AI-generated summary — verify with the full judgment below

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$~24 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 80/2023 THE COMMISSIONER OF INCOME TAX - INTERNATIONAL TAXATION -3

......Appellant Through: Mr Ruchir Bhatia, Sr. Standing Counsel.

versus

WESTIN HOTEL MANAGEMENT LP

......Respondent Through: Mr Divyanshu Agrawal with Ms Pooja Mittal, Advocates.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MS JUSTICE TARA VITASTA GANJU

O R D E R %

14.02.2023 [Physical Hearing/Hybrid Hearing (as per request)] 1. This appeal concerns Assessment Year (AY) 2016-2017. 2. The challenge in the appeal is laid to the order dated 21.07.2022 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”]. The Tribunal via the impugned order has ruled in favour of the respondent/assessee. 2.1 The Tribunal, in short, has held that centralized fee earned by the respondent/assessee is not taxable. The centralized fee concerns various aspects, such as sales and marketing, loyalty programs, reservation service, technological service, operational services and training programs/human resources.

ITA 80/2023

page 1 of 2 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 13:11:24

2.2 According to the Tribunal, such fees cannot be treated as „Fee for included services‟ either under Article 12(4)(a) or 12(4)(b) of the India-US Tax Treaty. 3. The issue stands covered by the judgment of the coordinate bench in Director of Income Tax v. Sheraton International Inc (2009) 178 taxman 84 (Del). 4. Furthermore, in the respondent/assessee‟s case for other AYs, the coordinate bench has followed the same approach i.e., accepted the ratio of the judgment in Sheraton International Inc. 5. In view of the above, according to us, no substantial question of law arises for our consideration. 5.1 Accordingly, the appeal is closed. 6. In view of the fact that the appellant/revenue has preferred an appeal qua the judgment rendered by the division bench of this court in Sheraton International Inc, it is made clear that if the appellant/revenue were to succeed in the said matter, parties will abide by the final decision rendered by the Supreme Court.

RAJIV SHAKDHER, J

TARA VITASTA GANJU, J

FEBRUARY 14, 2023 / tr

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ITA 80/2023

page 2 of 2 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/03/2026 at 13:11:24

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