Case Number: ITA 712/DEL/2021
Appellant: Hyatt International Southwest Asia Ltd., United Arab Emirates
Respondent: ACIT (International Taxation)- 2(1)(1), New Delhi
Assessment Year: 2017-18
Case Filed On: 2021-06-15
Order Type: Final Tribunal Order
Date of Order: 2022-12-20
Pronounced On: 2022-12-20
Before: Shri N.K. Billaiya, Accountant Member and Shri Yogesh Kumar US, Judicial Member
This appeal was filed by Hyatt International Southwest Asia Ltd. against the order of the CIT(A)-23, New Delhi, dated 12.04.2021, for the assessment year 2017-18. The primary issues in this case involved the alleged existence of a Permanent Establishment (PE) in India, the attribution of profits to the alleged PE, and the alternative taxation of India source income as royalty.
Hyatt International Southwest Asia Ltd. filed this case challenging the conclusions reached by the Assessing Officer (AO) and the Dispute Resolution Panel (DRP) regarding the existence of a PE in India and the attribution of profits to this PE. The appellant also disputed the alternative taxation of their income as royalty.
The appellant raised the following grounds of appeal:
The appellant argued that:
The Senior Departmental Representative (DR) supported the conclusions of the AO and DRP, arguing that the PE existed and the attribution of profits was justified. The DR also supported the classification of consultancy services as royalty.
The tribunal reviewed the case records and the submissions of both parties. The tribunal noted that the issue of the existence of a PE had been previously decided against the appellant in earlier assessment years by the same tribunal. However, the tribunal found that the issues of profit attribution and classification of consultancy services as royalty required further examination.
The tribunal considered the following judicial precedents:
The tribunal dismissed the ground relating to the existence of a PE, as it had already been decided against the appellant in earlier years. However, the tribunal restored the issues of profit attribution and classification of consultancy services as royalty back to the AO for fresh adjudication in line with the directions given in earlier years. The tribunal instructed the AO to provide a reasonable and adequate opportunity for the appellant to present their case.
This summary provides an overview of the key points and conclusions from the ITAT order in the case of Hyatt International Southwest Asia Ltd vs. ACIT for the assessment year 2017-18.
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