Case Law Details
Marriott International Inc Vs DCIT (ITAT Mumbai)
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, assessee has given a registration certificate dated 21st 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.
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.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
These are four appeals filed by Marriott International Corporation [ Assessee/ Appellant] for Assessment Years 2006-07 to 2009-10 involving common issue, parties raised similar arguments , Therefore, we state facts for AY 2006-07, and based on our finding for that year, we dispose of all these appeals by this common order .
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