Court held that the entire payments received by the non-resident, from its Indian customers on account of centralized services of sales and marketing, loyalty programs and reservation, technological and operational services and training programs or human resources did not constitute “fees for technical services” under section 9(1)(vii) of the Income-tax Act, 1961 or “fees for included services” as defined under article 12(4)(a) of the Double Taxation Avoidance Agreement between India and the United States of America. The court also clarified that the order passed in the present appeals should abide by the final decision of the Supreme Court in Civil Appeal No.3094 of 2010, DIT v. Sheraton International Inc (2010) 323 ITR 47 SC) (St). (AY.2015-16)
CIT(IT) v. Westin Hotel Management LP (2022) 449 ITR 489/ (2023) 290 Taxman 262 (Delhi)(HC) CIT(IT) v. Sheraton Overseas Management Corporation (2022) 449 ITR 489 (Delhi)(HC).Editorial : Notice issued in SLP against High Court order , CIT(IT) v. Westin Hotel Management LP ( 2023) 294 Taxman 430 ( SC)
S. 9(1)(vii) : Income deemed to accrue or arise in India-Fees for technical services-Payments received from Indian customers for centralised services–Not taxable as fees for technical services or fees for included services-DTAA-India-USA. [Art. 12(4)(a)]