DCIT (IT ) 3(2)(1), MUMBAI V. MARRIOT INTERNATIONAL INC, MUMBAI

CO 3/MUM/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 4088 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 30-05-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2012-2013
• Appeal Filed On: 12-01-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PARAS SAVALA
• Keywords: Set aside
• Section: 195; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA No. 2363/Mum./2017 (Assessment Year : 2012–13) ITA No. 2364/Mum./2017 (Assessment Year : 2011–12) Marriot International Inc. C/o BMR & Associates LLP BMR House, 36B, Dr. R.K. Shirodkar Marg Parel, Mumbai 400 012 PAN – AAECM8040K ................ Appellant v/s Dy. Commissioner of Income Tax (I.T.) Circle–3(2)(1), Mumbai ................ Respondent Cross Objection no.3/Mum./2021 Arising out of ITA No. 2363/Mum./2017 (Assessment Year : 2012–13) Cross Objection no.4/Mum./2021 Arising out of ITA No. 2364/Mum./2017 (Assessment Year : 2011–12) Dy. Commissioner of Income Tax (I.T.) Circle–3(2)(1), Mumbai ............. Cross Objector (Original Respondent) v/s Marriot International Inc. C/o BMR & Associates LLP, BMR House 36B, Dr. R.K. Shirodkar Marg, Parel Mumbai 400 012 PAN – AAECM8040K ................ Respondent (Original Appellant) Assessee by : Shri Paras Savala Revenue by : Shri Milind Chavan, Sr. D.R. Date of Hearing – 30.05.2022 Date of Order – 31/05/2022 Marriot International Inc. ITA. No. 2363 & 2364/Mum./2017 C.O. No.3 & 4/Mum./20172021 Page | 2 O R D E R PER SANDEEP SINGH KARHAIL, J.M. The present appeals have been filed by the assessee challenging the separate impugned orders dated 30/11/2016, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals)-57, Mumbai [“learned CIT(A)”], for the assessment year 2011-12 and 2012–13. 2. Since, identical issues are involved, therefore, both the appeals are taken up together and disposed off by this common order for the sake of convenience. 3. When these appeals came up for hearing, learned Representative appearing for the parties fairly agreed that in similar facts in assessee’s own case for earlier assessment years, Co-ordinate Bench of the Tribunal has remanded similar issues to the file of Assessing Officer. 4. We find that the Co–ordinate Bench of the Tribunal in Marriott International Inc. v/s The Dy CIT, in ITAs No.3232/Mum./2015 to 3235 /Mum./2015, vide order dated 06.05.2022, for assessment years 2006– 07 to 2009–10, observed as under: “013. We have carefully considered the rival contention and perused the orders of the lower authorities. The only issue involved in this appeal is that income of royalty arising out of the above trademark of „ brand Marriott‟ is taxable in the hands of the assessee or not. Now, Marriot International Inc. ITA. No. 2363 & 2364/Mum./2017 C.O. No.3 & 4/Mum./20172021 Page | 3 assessee has given a registration certificate dated 21 st august, 2006 and covers above assessment years. No doubt, as held by the Hon'ble Delhi High Court in the case of CUB Pty Limited vs. [2016] 71 taxmann.com 315 (Delhi) that since the brand owner not located in India, the situs of the brand would also be outside India and naturally, the income arising there from would be chargeable to tax in the hands of the owner of the brand. In fact, Marriott International Inc. (assessee) in these appeals is not the owners of the brand as per certificate of ownership produce before us. Therefore, it is chargeable to tax in the hands of the person who owns the brand. Nevertheless, it is not the contention of the assessee that no tax should have been deducted under section 195 of the Act on the payments made by, Juhu Beach Resorts Limited, V.M. Salgaonkar and Brothers Pvt. Ltd. and Chalet Hotels Limited and we are also conscious of the fact that sum is received by the assessee and provision of section 163 of the act also needs to be examined. However, there is a substantive provision for that. 014. In view of these facts, we set aside all these four appeals back to the file of the learned Assessing Officer with a direction to consider the certificate of registration on trademark dated 21 August 2006, which was applied for on 24 November 2003. The learned Assessing Officer may re-consider that in whose hands the above income is chargeable to tax as royalty income. The learned Assessing Officer may also consider that who received the above sum on behalf of the non- resident tax payers and whether the provision of section 163 of the Act can be invoked or not considering assessee as an „agent‟ of Nonresident. The learned Assessing Officer may also consider that if the tax is required to be deducted under section 195 of the Act, then whether the tax has been deducted by the payer or not and whether they can be held to be agent of the non-resident. However, the learned Assessing Officer before proceeding against any other assessee or this assessee may issue requisite notice. In view of the above facts, we set aside all the grounds of appeal back to the file of the learned Assessing Officer for deciding the taxability of royalty.” 5. As similar issues are arising in present appeals, we see no reason to deviate from the view so taken by the Co–ordinate Bench in assessee’s own case for earlier assessment years. Accordingly, all the grounds raised by the assessee in both the appeals are set aside to the file of the Assessing Officer with similar directions, as passed in aforesaid decision. Marriot International Inc. ITA. No. 2363 & 2364/Mum./2017 C.O. No.3 & 4/Mum./20172021 Page | 4 Needless to mention that both the sides shall be at liberty to take all available pleas during the remand proceedings. 6. During the course of hearing, learned Authorised Representative wish to not press the additional ground raised in both the appeals and sought liberty to raise the same at the appropriate level. Accordingly, additional ground raised in both the appeals is kept open, which may be contested as and when the situation arises. 7. In the result, appeals by the assessee are allowed for statistical purpose. 8. As we have remanded all the grounds raised by the assessee to the file of Assessing Officer, the cross-objection filed by the Revenue in both the assessment years becomes academic in nature, in the present case, and are accordingly dismissed. 9. In the result, cross-objections by the Revenue are dismissed. Order pronounced in the open court on 31/05/2022 Sd/- PRAMOD KUMAR VICE PRESIDENT Sd/- SANDEEP SINGH KARHAIL JUDICIAL MEMBER MUMBAI, DATED: 31/05/2022 Marriot International Inc. ITA. No. 2363 & 2364/Mum./2017 C.O. No.3 & 4/Mum./20172021 Page | 5 Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The CIT(A); (4) The CIT, Mumbai City concerned; (5) The DR, ITAT, Mumbai; (6) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Assistant Registrar ITAT, Mumbai