Receipt under Master Franchise Agreement is not royalty or FTS or FIS

Country Inn & Suites By Redisson Vs ACIT (ITAT Delhi)

ITAT Delhi held that amount received under the Master Franchise Agreement cannot be treated either as royalty or Fee for Technical Services (FTS) or FIS and hence addition deleted.

Facts-

The issue arising in the appeal relates to taxability of payment received by the assessee under Master Franchise Agreement as Royalty/Fee for Technical Services (FTS), both under the Domestic Law as well as India-USA Double Taxation Avoidance Agreement – (DTAA).

Conclusion-

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