P.M. JAGTAP, A.M. Order These are ten appeals, six filed by assessee and four filed by Revenue. Out of them, four appeals by assessee and all four appeals by Revenue are cross-appeals for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 whereas remaining two appeals of assessee are for asst. yrs. 1997-98 and 1998-99. Since issues involved in these ten appeals are common and interrelated, same are being disposed of by this single consolidated order. 2. relevant facts of case giving rise to these appeals are as follows. assessee is non-resident company incorporated in USA (hereinafter referred to as 'Sheraton'). It is engaged in business of providing various services related to hotels and provide such services to many hotels in United States as well as other countries around world including India. In India, it has been providing services to M/s. ITC Hotels Ltd., M/s. ITC Ltd. (Hotel Division), etc. on terms and conditions stipulated in agreements entered into with said Indian companies from time to time. first of such agreements was entered into with ITC Ltd. on 27th Jan., 1979 for providing services to three of hotels owned by ITC Ltd., namely, Welcomgroup, Maurya Sheraton, New Delhi, Welcomgroup Mughal Sheraton, Agra and Welcomgroup Chola Sheraton, Madras. said agreement was executed after getting necessary approval from Government of India providing, inter alia, for payment of fees for publicity, advertisement and sale (including reservation) services by ITC Ltd. to Sheraton at rate of 3 per cent of room sales. This agreement dt. 27th Jan., 1979 was entered into for period of ten years and after getting necessary approval from Government of India, same was extended for further period of ten years by executing fresh agreement on 30th Dec., 1988. similar agreement was entered into on 9th May, 1985 with ITC Hotels Ltd. in respect of Hotel Windsor Manor, Bangalore. Meanwhile, there was reorganization of business of ITC Ltd. whereby its hotel division came to be taken over by ITC Hotels Ltd. and accordingly, rights and obligations of ITC Ltd. under agreement with Sheraton were transferred to ITC Hotels Ltd. Sheraton also entered into similar agreements with another Indian company Aidyar Gate Hotels Ltd. in respect to their Hotel Park Sheraton at Madras. Prior to coming into force of Double Taxation Avoidance Agreement (DTAA) between India and USA w.e.f. 1st April, 1991, fees paid by Indian companies to Sheraton for services rendered by them relating to hotel business was held to be business income for determining tax deductible from remittances under s. 195(2) and 10 per cent of such income was held to be taxable in India on estimated basis. As result of DTAA between India and USA coming into force w.e.f. 1st April, 1991, assessee sought review of this position contending that there being no PE in India, its entire income received from Indian companies was not taxable in India. This stand of assessee was accepted by Department and accordingly, no objection certificate was issued initially on 28th Oct., 1991 permitting remittance of fees without deduction of any tax at source. assessee thus continued to receive remittances from India towards fees for services rendered by it without deduction of tax at source. On 25th Nov., 1999, notice under s. 163, however, was issued by AO proposing to treat M/s. ITC Hotels Ltd. as agents of assessee in India. Thereafter, notice under s. 142(1) for asst. yr. 1996-97 was also issued to assessee by AO on 26th Nov., 1999. This notice was further followed by other notices issued on 6th Jan., 2000 and 28th Jan., 2000 and along with one of said notices issued on 28th Jan., 2000, detailed questionnaire was issued by AO to assessee. All these notices, however, remained uncomplied with by assessee which left AO with no option but to complete assessment to best of his judgment on basis of record available with him including especially agreement between assessee company and M/s. ITC Hotels Ltd. He, accordingly, analyzed terms and conditions of said agreement and on such analysis, arrived at following conclusions : (i) Sheraton has agreed to make available technical and consultancy services to hotel. Sheraton has modern international hotels and techniques and it has marketing specialists who make those techniques available to customers. It has also reservation network. All these technical know-how together with consultancy services is to be made available to customers. computerized reservation systems are highly technical systems and they can be accessed from India. It provides complete connectivity to hotels in India. Indian hotels have right to access this reservation system. (ii) customers as well as assessee have agreed that Sheraton will make available following : (a) global Sheraton reservation network; (b) highly developed technology for hotel sales; (c) regular updating of such technologies and standards; (d) under special of foreign tourist and travellers needs and meeting these through specialisms particularly in context of food and beverages and other hotel services. This proves beyond doubt that assessee is making technology and its consultancy available to its customers. (iii) Further in art. III it has been agreed in no ambiguous terms that Sheraton will make available its expertise and know-how to its customers. assessee has further agreed to provide training to employees of its customers. (iv) Its trademarks have not been sold but have been given by assessee to its customers for use and as soon as contract is terminated, customer will have no right over it. services are linked to trademark also. assessee will not render any services unless customer uses trademark. Further payment is not related to number of bookings provided by assessee or to quantum of business brought in by assessee. It is based on total turnover of hotel. (v) assessee has made available technical know-how, documentation, manual etc. for which it is charging fee, that too not in lump sum but on basis of business done by customer. RBI vide its letter dt. 16th May, 1989 at point 2(c) has mentioned : "The approval may also be treated as bank's permission to M/s. Sheraton International Inc. USA under s. 28(1)(b) Foreign Exchange Regulation Act, 1973 for rendering technical, etc. services to company under collaboration agreement." From above it is clear that payment is covered under fees for included services as provided under art. 12(4)(b) of IT Act [sic-DTAA]. 3. On basis of aforesaid observations recorded in his assessment order, AO concluded that assessee company had business connections in India and income on account of fees for services rendered having been deemed to accrue or arise to it in India, case of assessee was covered under s. 9. Without prejudice to this conclusion and as alternative, he also held that said income of assessee was taxable in India as per provisions of art. 12 of DTAA between India and USA. Since there was no compliance from side of assessee company to notices issued by him during course of assessment proceedings furnishing required details such as exact amount of receipts from Indian hotels during year under consideration, he estimated such receipts at Rs. 30 crores and held that said receipts covered under fees for included services were chargeable to tax in India at rate of 15 per cent. 4 . Against aforesaid assessment order of AO, assessee company preferred appeal before learned CIT(A) and detailed written submission along with paper book was filed by it before him on 6th Oct., 2000. Oral arguments were also advanced before learned CIT(A) who forwarded submissions made on behalf of assessee company to AO for his comments. remand reports received from AO giving his comments were confronted by learned CIT(A) to assessee and written rejoinder as well as supplementary submissions made on behalf of assessee company were also taken on record by him. Before learned CIT(A), it was submitted on behalf of assessee company at outset that estimation of its income made by AO for asst. yr. 1997-98 at Rs. 30 crores was without any basis and it was purely guess work of AO without reference to any material or evidence on record. As regards nature of its receipts from Indian companies, it was submitted that said amounts were received by it for hotel related services rendered to Indian companies in connection with business promotion, marketing and reservation. It was also submitted that worldwide activities of advertising and promotional programmes for hotels in chain were rendered by assessee company for hotels located all over world and said services along with reservation facilities were extended to hotels in India. It was submitted that no technical knowledge or skill thus was made available by assessee company to ITC as covered under art. 12 of DTAA between India and USA. AO, on other hand, submitted in his remand reports that payments were made by Indian companies to assessee company for purposes of provision of highly developed technology for sale, publicity, reservation as well as for updating technology and use of brand name etc. and since it was case wherein assessee company had made available technical knowledge, experience, skill and know-how to Indian companies, same was covered under said art. 12. He also reiterated stand taken by him in assessment order based on analysis of relevant clauses of agreement entered into between assessee company and its Indian counterparts. After considering these submissions as well as material available on record, learned CIT(A) decided issue relating to applicability of art. 12 to case of assessee as follows : "Under agreement, ITC has been allowed to use trademarks, trade name and 'S' sign of appellant. In fact name of word 'Sheraton' and its stylized 'S' service mark and any other identification characteristic that may be developed subsequently have been allowed to be used to appellant. However, this user has been allowed at no cost. It is not understandable that such valuable trade name and trade mark etc. have been allowed to be used for no cost while charges are raised for such minor services as advertisement in booklets of appellant. Accordingly, it is held that this is colourable part of agreement under which payments in respect of trademark, etc. have been attempted to be shown as payments in respect of other services. Therefore, this para is not taken at its face value and payments will have to be attributed to user of these intangible assets. payment received to allow to use these intangible assets clearly amount to payment of royalties under para 3(a) of art. 12. agreement also provides for reservation services, assistance to ITC in terms of expertise and know-how and its standards established worldwide. These services clearly fall under para 3(a) as information concerning industrial or commercial experience. appellant also undertook publicity, marketing and promotion activities outside India for ITC. These activities cannot be said to be ancillary or subsidiary to enjoyment of any right, property or information described as 'royalties' in para 3. Therefore, payments in respect of these activities outside India will constitute commercial income and in absence of PE in India, these payments cannot be brought to tax. However, payments in respect of reservation services, services regarding maintenance of high international standard and use of trademark constitute payments of royalties. Of all these activities, use of trademark and service mark, etc. are of paramount importance because these assets and their user makes it know to public at large that hotel confirms to standards of Sheraton International Standards and, therefore, due weightage has to be given to this user. On whole three kinds of services constitute royalties while one service leads to arising of commercial income, therefore, it will be in order to allocate 75 per cent of payments by ITC as royalties, which are taxable under art. 12 of DTAA. balance payment of 25 per cent is commercial income, not liable to tax in India." 5 . Accordingly, he held that 75 per cent of amount received by assessee company from Indian companies was in nature of royalty taxable in India under art. 12 of DTAA. Since estimate of such receipts of assessee made by AO for asst. yr. 1997-98 at Rs. 30 crores was found to be arbitrary and without any basis by learned CIT(A) and actual amount so received was claimed by assessee company to be Rs. 7,83,36,687, he directed AO to bring to tax 75 per cent of said amount after verification thereof. 6. Meanwhile, notices under s. 142(1) were issued by AO on 6th Jan., 2000 and 28th Jan., 2000 requiring assessee to file its return of income for asst. yr. 1998-99. Since said notices remained uncomplied with by assessee, fresh notice under s. 142(2) along with detailed questionnaire was issued by AO on 5th Jan., 2001 requiring assessee to file its return of income for asst. yr. 1998-99. assessee finally filed its return of income for asst. yr. 1998-99 on 30th Jan., 2001. As per details furnished along with said return, following receipts were shown to have been received by assessee from Indian clients/hotels : On account of International marketing, Rs. 1. publicity and sales(including reservations) 7,78,26,449 On account of Sheraton Club $ 2. International 2,37,284 On account of Frequent Flyer $ 3. Programme 18,779 7 . It was submitted on behalf of assessee before AO that aforesaid amounts had been received by it mainly for following services and facilities provided to Indian clients/hotels in connection with publicity and marketing : ' Sheraton brand advertising'This advertisement is made by assessee on various media such as TV, newspapers, magazines, posters, etc. ' Presentation at trade shows'The assessee sets up display and information booths at all major shows/exhibitions of hotel trade in world such as ITB- Berlin, WTM-London, Arabian Travel Mart-Dubai, BIT-Milan, etc. where all Sheraton affiliated hotels of world or of particular region have their stalls. ' Participation in Sheraton Road shows to travel agents'The assessee organizes meetings in important cities of world where persons engaged in travel trade and key account customers are invited and presentations are made to them about all Sheraton affiliated hotels. ' Worldwide directory and regional directories'The assessee prints at its own cost directory of all its client hotels and also directories of its client hotels located in particular region (India is listed in Asia Pacific region). worldwide directory and directory of particular region is placed in all hotel rooms so that guest staying in any hotel gets information about Sheraton affiliate hotels in particular region as well as anywhere in world. Such directories are also placed in general sales offices and central reservation offices. ' Divisional Brochures'The assessee publishes brochures called 'a la carte' and 'at glance' containing information about its client hotels which are sent to travel agents, wholesalers, incentive planners, convention planners, etc. ' In room magazine'The assessee publishes, inter alia, in-room magazine called 'Sojourn' which contains information about all its client hotels in region and also carries features about country, state or city where such hotels are located in order to enhance awareness and create interest in minds of guests of its client hotels about places and hotels. This magazine is placed in hotel rooms. ' directories, divisional brochures, magazines, etc. are printed at assessee's cost and client hotels only pay for cost of freight and import duties, if any, for receiving same. ' Participation in sister hotel promotions'The assessee's client hotels are entitled to participation in such promotional programmes where certain hotels are selected as 'hotels of month' and tent, cards, posters and other merchandising material are kept on display at all client hotels of region for month. This is done especially for new hotels to create awareness among potential customers. ' Networking all sales offices, contact names, addresses, etc. access to key corporate clients worldwide. ' Promoting hotels to airline partners. ' Participation in American Express membership programmes. ' Access to customer data of Sheraton Worldwide. ' Access to marketing tools such as global preferred rates, Sheraton executive traveller rates, etc. for corporate clients worldwide. 8 . Keeping in view nature of aforesaid services and facilities provided by it to Indian clients/hotels as per agreements, it was contended on behalf of assessee that it was case of providing services in connection with publicity and marketing of Indian hotels abroad in normal course of its business and not case whereby any technology had been made available to its client as envisaged in para 4(b) of art. 12 of DTAA between India and USA. It was thus contended that aforesaid amount received by assessee during previous year relevant to asst. yr. 1998-99 entirely was in nature of its business profits and assessee company having no PE in India, such receipts were not chargeable to tax in India in view of art. 7 of DTAA between India and USA. 9 . aforesaid submissions made on behalf of assessee company were not found acceptable by AO. According to him, nature of amounts received by assessee was required to be ascertained on basis of examination of terms and conditions of agreements made by assessee with Indian hotels and clients and after having made such examination, he held that assessee was clearly making available not only its trademarks, trade names and designs etc. for use of its Indian clients, but was also making available its expertise, technical know-how and skills to Indian hotels/clients for developing its business of running international chain of hotels on worldwide basis. After having so held, AO classified various services rendered by assessee to Indian hotels/clients in four different categories as under : "(a) For use of trademarks, trade name and stylized "S" of assessee. To state that as per agreement no cost has been charged is not correct as has already been discussed above. It is not correct to state that such valuable trade name and trademark has been allowed to be used free whereas minor services as advertisements and booklets have been charged. Thus, payments received which are attributable to user of intangible assets shall be taxable as 'royalty'. (b) Further, assessee is receiving payments for reservation services, assistance to Indian hotels and other clients in terms of expertise and know-how and its standards established worldwide. assessee is making available its expertise, technical know-how, skills and managerial practices for development of its international business to ITC, Indian hotels and other clients. These services are taxable as 'fees for included services' under art. 12(4)(b) of DTAA. (c) assessee is receiving payments, i.e. charging ITC, etc. for use of its highly sophisticated centralized reservation system. These are also taxable as 'fees for included services'. (d) assessee is receiving payments for rendering of certain services such as advertisements, worldwide directory, in room magazine, brochures, networking, promotion of hotels worldwide, promoting hotels to airline partners etc. These incomes of assessee are business income and in absence of 'PE' in India are not taxable." 10. Out of aforesaid four categories, income received from three categories classified as (a), (b) and (c) was held to be taxable by AO in India as "royalty" under art. 12(3)(a) and/or as "fees for included services" as per art. 12(4)(b) of DTAA between India and USA whereas income classified in category (d) was held to be business profit of assessee by AO not chargeable to tax. Accordingly, he brought 75 per cent of total amount of Rs. 7,78,26,449 received by assessee for aforesaid services to tax in India @ 15 per cent as per art. 12 of DTAA between India and USA. amount received on account of Sheraton Club International and Frequent Flyer Programme was held to be not taxable in India by him. assessment so completed by AO for asst. yr. 1998-99 under s. 143(3) vide his order dt. 23rd March, 2001 was challenged by assessee in appeal filed before learned CIT(A) and various submissions as made during appellate proceedings for asst. yr. 1997-98 were reiterated on it's behalf before him for asst. yr. 1998-99. learned CIT(A), however, did not accept same and for similar reasons as given in his appellate order dt. 22nd March, 2001 passed in assessee's own case for asst. yr. 1997-98 on similar issues and involving similar facts, he upheld order of AO for asst. yr. 1998-99 bringing to tax 75 per cent of Rs. 7,78,26,449 in India @ 15 per cent as per art. 12 of DTAA between India and USA holding same to be 'royalty' and 'fees for included services'. 11. Based on his assessment orders passed in assessee's case for asst. yrs. 1997-98 and 1998-99 as sustained by learned CIT(A) vide his appellate orders dt. 22nd March, 2001 and 13th Nov., 2001 holding that income of assessee for services rendered to Indian hotels/clients was taxable @ 15 per cent in India being royalty and fees for included services as per art. 12 of DTAA, AO initiated reassessments proceedings in assessee's case for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 by issue of notices under s. 148 after recording following reasons which are identical for all these four years : "Sheraton International Inc. is company incorporated under laws of USA. It carries on business of providing hotel related services worldwide. It entered into agreements with M/s. ITC Hotels Ltd. and other 'Welcome Group' companies in India for providing various services like training, managerial assistance, etc. It also provides its logo 'S' and name 'Sheraton' to hotels it has entered into contract with. For these services assessee was in receipt of income amounting to crores. same is clearly taxable as fee for included services in terms of art. 12 of DTAA between India and USA as well as s. 9(1) of IT Act, 1961. Orders under s. 143(3) passed for asst. yrs. 1997-98 and 1998-99 were passed on above lines and same were confirmed by CIT(A)-XXIX. In view of above, I have reasons to believe that income of assessee accruing or arising in India has escaped assessment within meaning of s. 147 of IT Act. Therefore proceedings under s. 147 of IT Act is hereby initiated. Issue notice under s. 148 of IT Act." 12. During course of reassessment proceedings, AO found that assessee has received following amounts from Indian hotels/clients for services rendered during previous years relevant to asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 : A.Y. 1995- A.Y. 1996- A.Y. 1999- A.Y. 2000- Particulars 96 97 2000 01 Rs. Rs. Rs. Rs. Sheraton 3,01,66,720 5,19,92,318 6,47,14,664 6,55,26,256 Fees Sheraton Club International 1,06,17,408 96,48,432 56,89,157 32,34,095 Contribution Contribution from Frequent ' ' 6,10,300 14,18,758 Flyer Programme 13. In connection with receipt of aforesaid amounts by assessee, AO referred to classification of services rendered by assessee to Indian hotels/clients as made by him in assessment order for asst. yr. 1998-99 in four categories and relying on conclusions drawn therein as upheld by learned CIT(A) in his appellate order for that year, he held that income attributable to first three categories of such services taken at 75 per cent was taxable in India as per art. 12 of relevant DTAA. As regards fourth category of services, income attributable to which was held to be not taxable in India being business profits of assessee in assessment order for asst. yr. 1998-99 as well as in appellate orders of learned CIT(A) for asst. yrs. 1997-98 and 1998-99, AO however held that these services/facilities provided by assessee to Indian hotels/clients were also essentially and intrinsically linked with advertisement and promotion activities undertaken by assessee for Indian hotels operating under brand Sheraton. According to him, in all such activities, prominent motive was to maximize reach of Sheraton brand and to enhance brand equity of hotels enjoying brand name of Sheraton. He also noted that said activities of advertising were not by using general means of advertising, but assessee was using its highly sophisticated and time tested methods developed by it using its own in-house facilities in specialized field of services related to hospitality industry. He, therefore, deviated from view earlier taken by his predecessor in assessment order for asst. yr. 1998-99 as well as by learned CIT(A) in his appellate orders for asst. yrs. 1997-98 and 1998-99 and held that entire amount received by assessee from Indian hotels/clients including fees for services rendered, contribution towards Sheraton International Club and contribution under Frequent Flyer Programme is taxable in India as 'royalty' and/or 'fees for included services'. Accordingly, he brought entire amount received by assessee from Indian hotels/clients under different heads during all four previous years relevant to asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 to tax in India @ 15 per cent as per art. 12 of DTAA between India and USA vide assessments completed under s. 148 r/w s. 143(3). 14. Meanwhile, appeals filed by assessee against appellate orders of learned CIT(A) dt. 23rd March, 2001 and 13th Nov., 2001 for asst. yrs. 1997-98 and 1998-99 came to be disposed of by Tribunal Delhi 'D' Bench vide its common order dt. 23rd Oct., 2002 in Sheraton International Inc. vs. Dy. CIT (2004) 86 TTJ (Del) 126 : (2003) 85 ITD 110 (Del). In said order, Tribunal disposed of this issue relating to taxability of amount received by assessee from Indian hotels @ 3 per cent of room charges on account of services rendered for publicity, marketing and reservations in India vide para No. 24 as under : "24. Both parties have been heard at length. After going through orders of authorities below and considering arguments of parties, we are of view that issue has not been dealt with in right perspective inasmuch as AO as well as CIT(A) had proceeded on assumption as if covenants of DTAA authorizes levy of tax on income of non- resident. parties before us also have not addressed any argument as to whether income of non-resident assessee is chargeable to tax under provisions of IT Act, 1961 or not. They simply have proceeded on same footings on which lower authorities decided issue. We are unable to uphold such approach adopted by lower authorities for simple reason that taxability of income of non-resident has to be first determined in light of charging provisions of IT Act. scheme of Act is that taxability of income of non-resident has to be determined with reference to charging provisions of ss. 4, 5 and 9. However, s. 5 is subject to other provisions of Act. Sec. 90 authorizes Central Government to enter into agreement with Government of any other country for : (a) granting of relief in respect of income on which have been paid both income-tax under this Act and income-tax in that country; or (b) For avoidance of double taxation of income under this Act and under corresponding law in force in that country; or (c) For exchange of information for prevention of evasion or avoidance of income-tax chargeable under this Act or under corresponding law in force in that country or investigation of cases of such evasion or avoidance; or (d) For recovery of income-tax under this Act and corresponding law in force in that country. combined reading of these provisions clearly reveals that provisions of s. 90 are to be invoked for granting relief to assessee if income of non-resident assessee is chargeable to tax under ss. 4, 5 and 9. If income of non-resident itself is not chargeable to tax under IT Act, then question of invoking provisions of s. 90 would not arise at all. None of parties below decided issue as to whether income of non-resident was taxable as royalty under charging provisions of IT Act. Therefore, we set aside orders of CIT(A) for both years and restore matter to file of AO for fresh adjudication in accordance with law. At this stage, we may also refer to decision rendered by Authority for Advance Ruling in case of Cyril Eugene Pereira, In re (1999) 154 CTR (AAR) 281 wherein it has been held that provisions of DTAA cannot be availed of if non-resident is taxable only in one country. other view has also been expressed by said authority in cases Mohsinally Alimohammed Rafik, In re (1995) 126 CTR (AAR) 311 : (1995) 213 ITR 317 (AAR) and Dr. Rajnikant R. Bhatt, In re (1996) 135 CTR (AAR) 472 [sic-The AO will take into consideration these decisions while deciding] issue. assessee shall also be given reasonable opportunity of being heard and to lead evidence in support of its case. In result, both appeals are allowed for statistical purposes." 15. Tribunal thus set aside orders of learned CIT(A) for asst. yrs. 1997-98 and 1998-99 impugned in appeals filed before it and restored matter to file of AO for fresh adjudication after taking into consideration first taxability of amounts in question under charging provisions contained in ss. 4, 5 and 9 of IT Act, 1961. 16. In pursuance of aforesaid directions given by Tribunal, AO issued fresh notices to assessee initiating assessment proceedings for asst. yrs. 1997-98 and 1998-99. During said proceedings, assessee was called upon by AO to state its case with regard to taxability or otherwise of receipts to be treated as 'royalty' and/or 'fees for technical services' as defined in s. 9. In reply, detailed submissions were made by assessee reiterating its contentions as raised during course of original assessment proceedings for asst. yr. 1998-99 and reassessment proceedings for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 before AO as well as during course of appellate proceedings for asst. yrs. 1997-98 and 1998-99 before learned CIT(A). said submissions made on behalf of assessee were examined by AO in light of agreements between assessee and Indian hotels/clients, DTAA between India and USA as well as relevant provisions of s. 9. observations/findings recorded by AO on such examination in assessment orders, which are identical in both years, i.e. asst. yrs. 1997-98 and 1998-99, are summarized hereunder : 1. assessee was making available its expertise, technical know-how and skills to maintain hotels for developing its business of running International Chain of Hotels on worldwide basis. very fact that assessee was receiving payments linked to sales further confirmed that said payments were received for making available technical services and use of brand name Sheraton. 2. payments received by assessee from Indian hotels and clients were indirectly for use of Sheraton trade name, trade marks and in particular name 'Sheraton' and its stylized 'S' and any other identifying characteristics that may be developed by Sheraton. Indian hotels were therefore, in effect, paying to assessee for use of word 'Sheraton' in its name. 3. assessee thus was actually receiving payment for rendering technical services and for use of brand name Sheraton and this amount so received was therefore taxable as royalty and fees for technical services as per s. 9. 4. services in connection with publicity, marketing and promotional activities rendered by assessee to Indian hotels/clients as well as services rendered in connection with reservation by making use of its technical expertise in field of service industry to promote and develop clientele abroad were in nature of technical services and payment received for such services was in nature of 'fees for technical services'. other activities such as advertisements in worldwide directory, in-room magazine, brochure, etc. as mentioned in last category were intrinsically and inextricably linked to main services of providing marketing and promotion and in these activities also, assessee had utilized highly specialized methods of advertising which was available at its disposal on account of its expertise acquired in field. 17. On basis of his aforesaid findings/observations, AO held that payments received by assessee from Indian hotels/clients in respect of maintenance of high International standards and use of trademark clearly constituted royalty under IT Act. He also held that activities performed by assessee as part of advertising and brand promotion were to enhance and market hotels in India that come under brand Sheraton and thus, entire receipts of assessee were taxable as 'royalty' and/or 'fees for included services' as case may be. He held that entire income of assessee from receipts for services rendered to Indian hotels/clients was taxable with reference to charging provisions of ss. 4, 5 and 9 and assessee having no PE in India, same was taxable in India as 'royalty' and/or 'fees for included services' as per art. 12(3) and/or art. 12(4)(b) of DTAA between India and USA at specified rate of tax. Accordingly, he brought to tax in India @ 15 per cent entire amounts of Rs. 7,83,36,887 and Rs. 7,78,26,449 received by assessee during previous year relevant to asst. yrs. 1997-98 and 1998-99 respectively from Indian hotels/clients vide his assessment orders passed under s. 143(3) r/w s. 254 on 28th Nov., 2003. For this conclusion, he relied on decision of Mumbai Bench of Tribunal in case of CEAT International vs. IAC (1985) 23 TTJ (Bom) 8 : (1985) 12 ITD 381 (Bom) which was later on upheld by Hon'ble Bombay High Court in CEAT International S.A. vs. CIT (1999) 156 CTR (Bom) 165 : (1999) 237 ITR 859 (Bom). 1 8 . Aggrieved by aforesaid orders passed by AO for asst. yrs. 1997-98 and 1998-99 in set aside proceedings under s. 143(3) r/w s. 254 on 28th Nov., 2003, appeals were preferred by assessee before learned CIT(A). Meanwhile, appeals were also filed by assessee before learned CIT(A) against orders passed by AO for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 under s. 148/143(3). Since main issue involved in all these six appeals filed by assessee involving asst. yrs. 1995- 96 to 2000-01 relating to taxability of amount received by assessee for services rendered to Indian hotels/clients in India was identical, learned CIT(A) considered and disposed of all these six appeals on 31st Oct., 2005 by six separate orders. During course of hearing of these appeals before learned CIT(A), various facilities and services provided by it to Indian hotels/clients were enumerated on behalf of assessee as follows : " t Sheraton brand advertising'This advertisement is made by appellant on various media such as TV, newspapers, magazines, posters, etc. ' Presentation at Trade shows'The appellant sets up display and information booths at all major shows/exhibitions of hotel trade in world such as ITB-Berlin, WTM-London, Arbian Travel Mart-Dubai, BIT-Milan, etc. where all Sheraton affiliated hotels of world or of particular region have their stalls. ' Participation in Sheraton Road shows to travel agents'The appellant organizes meetings in important cities of world where persons engaged in travel trade and key account customers are invited and presentations are made to them about all Sheraton affiliated hotels. ' Worldwide directory and regional directories'The appellant prints at its own cost directory of all its client hotels and also directories of its client hotels located in particular region (India is listed in Asia Pacific region). worldwide directory and directory of particular region is placed in all hotel rooms so that guest staying in any hotel gets information about Sheraton affiliate hotels in particular region as well as anywhere in world. Such directories are also placed in general sales offices and central reservation offices. ' Divisional brochures'The appellant publishes brochures called 'a la carte' and 'at glance' containing information about its client hotels which are sent to travel agents, wholesalers, incentive planners, convention planners, etc. ' In room magazine'The appellant publishes, inter alia, in-room magazine called 'Sojourn' which contains information about all its client hotels in region and also carries features about country, state or city where such hotels are located in order to enhance awareness and create interest in minds of guests of its client hotels about places and hotels. This magazine is placed in hotel rooms. ' ' directories, divisional brochures, magazines, etc. are printed at appellant's cost and client hotels only pay for cost of freight and import duties, if any, for receiving same. ' Participation in sister hotel promotions'The appellant's clients hotels are entitled to participation in such promotional programmes where certain hotels are selected as 'hotels of month' and tent, cards, posters and other mechandising material are kept on display at all client hotels of region for month. This is done especially for new hotels to create awareness among potential customers. ' Networking all sales offices, contact names, addresses, etc. to provide access to key corporate clients worldwide. ' Promoting hotels to airline partners. ' Participation in American Express membership programmes. ' Access to key customer data of Sheraton worldwide. ' Access to marketing tools such as Global Preferred Rates, Sheraton Executive Traveller rates, etc. for corporate clients worldwide." 19. It was submitted on behalf of assessee before learned CIT(A) that all aforesaid services/facilities provided by it were related to publicity, marketing and reservation only and payment at rate of 3 per cent on total room charges was received in lieu thereof. It was contended that payments so received by assessee thus were entirely related to publicity and marketing services rendered outside India on global basis including provision for reservation facility and same could not be regarded as royalty or fees for included services. It was submitted that as specifically provided in relevant agreements, trademark of assessee company was provided to Indian hotels/clients free of cost and said agreements having been repeatedly scrutinized and approved by Government of India, AO was not correct in creating fiction by attributing part of fees received by assessee to grant of right to use trademark. In support of this contention, reliance was placed on behalf of assessee on decision of Hon'ble Supreme Court in case of Union of India vs. Azadi Bachao Andolan & Anr. (2003) 184 CTR (SC) 450 : (2003) 263 ITR 706 (SC). It was also contended that income earned by assessee from Indian hotels/clients for services rendered was in nature of its business income which was not covered under art. 12(3) of DTAA between India and USA as 'royalty' or even under art. 12(4)(b) as 'fees for included services'. decision of Mumbai Bench of Tribunal in case of Raymond Ltd. vs. Dy. CIT (2003) 80 TTJ (Mumbai) 120 : (2003) 86 ITD 791 (Mumbai) was relied upon by assessee in support of this contention. It was pointed out on behalf of assessee before learned CIT(A) that payment so received by it from Indian clients/hotels had been consistently accepted as its 'business income' right from year 1979 while issuing certificates under s. 195(2) by Department and there being no material change in facts and circumstances of case during years under consideration, AO had no justifiable reason to take different stand in these years. 20. aforesaid submissions made on behalf of assessee, however, were not found acceptable by learned CIT(A). He held that orders passed under s. 195(2) in connection with deductibility of tax at source were not final and conclusive and same, therefore, did not pre-empt Department from passing appropriate orders of assessment in accordance with law. For this conclusion, he relied on decision of Hon'ble Bombay High Court in case of CIT vs. Tata Engineering & Locomotive Co. Ltd. (2001) 165 CTR (Bom) 67 : (2000) 245 ITR 823 (Bom). He also relied on another decision of Hon'ble Bombay High Court in case of CIT vs. Elbee Services (P) Ltd. (2001) 168 CTR (Bom) 44 : (2001) 115 Taxman 618 (Bom) wherein it was held that finding given under s. 195(2) will not preclude Department from taking contrary view in assessment proceedings. He then proceeded to examine main issue involved in assessee's case relating to taxability of payments received by it from Indian hotels/clients of services rendered in India in light of orders passed by AO, submissions made on behalf of assessee from time to time, agreements between assessee and Indian hotels/clients, relevant articles of DTAA between India and USA as well as relevant provisions of IT Act, 1961. On such examination and after analyzing various terms and conditions of agreements between assessee and Indian hotels/clients, he noted that assessee was imparting information concerning technical and/or commercial knowledge and experience to Indian hotels for developing their business of running hotels as per international standards. He further held that assessee was also providing to Indian hotels all manuals and other written material of confidential in nature as per agreement which were useful commercial information based on experience of assessee. He held that payments received by assessee for such services thus were entirely in nature of 'royalty' as defined in s. 9(1)(vi) read with Expln. 2 thereto. He further noted that services and facilities provided by assessee to Indian hotels/clients by way of making available its commercial experience and management practices, providing assistance from its sales offices throughout world to promote flow of foreign tourists to India, advertising through listing of Indian hotels in Corporate Sheraton Directory, providing assistance through Sheraton's corporate facilities for worldwide public relations, etc. were definitely meant to improve its brand name and relying on decision of Mumbai Bench of Tribunal in case of CEAT International vs. IAC (supra), he held that payments received for such services were in nature of royalty under art. 12(3)(a) of DTAA between India and USA. He also held that even though Indian hotels/clients were allowed to use trademark and trade name stylized as "S" of assessee free of any cost as provided in relevant agreements, such use of brand name/trademark ensured automatic clients and tourist procurement to Indian clients/hotels on worldwide basis. He also observed that fees received by assessee was not fixed amount, but same was directly related to their turnover. He held that payments so received, therefore, were clearly in nature of 'royalty' and assessee could not claim it to be different by simply drafting agreements in manner to state that fees being received by it was only for services rendered and not for allowing use of its brand name in India. According to him, allowing use of trade mark, etc. by assessee to Indian hotels/clients was important element of services provided by it to Indian hotels/clients and, therefore, payments received for such services were clearly in nature of 'royalty' as defined in s. 9(1)(vi) read with Expln. 2(iii) thereto as well as per art. 12(3)(a) of DTAA between India and USA. 2 1 . As regards agreements between assessee and Indian hotels/clients having been already approved by various Departments of Government of India, learned CIT(A) held that each Department while giving approval to particular agreement examines that agreement from its own angle and within mandate provided to that authority under particular Acts or Rules and, therefore, such approval does not preclude other Departments from examining nature of payment under relevant statute. He, therefore, finally held that entire payments received by assessee from Indian hotels/clients for services rendered in terms of various agreements entered into with them were in nature of 'royalty' under s. 9(1)(vi) of IT Act, 1961 and also under art. 12(3)(a) of DTAA between India and USA. He, therefore, upheld action of AO in bringing said receipts as chargeable to tax in India at rate of 15 per cent during all six years under consideration. As regards contributions received by assessee from Indian hotels/clients in respect of Sheraton Club International (SCI) and Frequent Flyer Programme (FFP) held to be taxable by AO in India in assessments completed under s. 148/143(3) for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01, he noted that these contributions were not received by assessee in pursuance of agreements entered into with Indian hotels/clients. He also noted that these contributions received from hotels for providing services to members were being given back to guests in form of various rewards. He also found on perusal of relevant documents such as SPG Programme Guide and specimen invoices for SCO contributions/award redemption payments that said contributions were received for facilitating operational/promotional programme in order to promote business of hotels worldwide. He, therefore, held that these contributions were not in nature of fees for technical services or royalty but constituted commercial income of assessee which could not be brought to tax in India in hands of assessee company since it was not having any PE in India. He, therefore, deleted additions made by AO on account of these contributions in asst. yrs. 1995-96, 1996-97, 1999- 2000 and 2000-01. 22. Aggrieved by aforesaid orders of learned CIT(A), assessee has preferred present appeals for all relevant six years i.e. asst. yrs. 1995-96 to 2000-01 whereas Department is in appeal for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 challenging relief allowed by learned CIT(A) to assessee. 23. main issue relating to taxability of amounts received by assessee company from Indian hotels/clients for services rendered in pursuance of agreements entered into with them in India is raised by assessee company in following grounds which are common in all its six appeals (except that numbers thereof are different in appeals for asst. yrs. 1997-98 and 1998-99) : "2(a) That in facts and circumstances of case learned CIT(A) erred in holding that payments received by appellant from ITC Ltd., ITC Hotels Ltd. & Adyar Gate Hotels Ltd. fall within definition of 'royalty' as per Expln. 2 to s. 9(1)(vi) of IT Act, 1961. 2(b) That learned CIT(A) erred in brushing aside explanations of appellant that payment received from aforesaid companies relate entirely to publicity and marketing services rendered entirely outside India on global basis and provision of reservation facility and accordingly, same cannot be regarded as 'royalty' under IT Act. 2(c) That without prejudice to above, even otherwise learned CIT(A) fell in error in not appreciating that since there existed Double Taxation Avoidance Agreement between Government of India and Government of USA (hereinafter referred to as DTAA), provisions of DTAA will prevail over general provisions contained in IT Act as per provision of s. 90(2) of IT Act and as per CBDT Circular Nos. 333 and 728. 3(a) That learned CIT(A) acted capriciously in overlooking repeated contention of appellant that as per express clauses of agreements with Indian companies, trademark was provided free of any cost or charges. 3(b) That learned CIT(A) failed to appreciate that specific clauses of agreement providing for use of trademark free of any cost were approved by Government of India on several occasions and found to be true and acceptable and accordingly, same cannot be brushed aside merely on whims and fancies of Revenue authorities. 3(c) That learned CIT(A) erred in concluding that case laws relied upon by appellant were not relevant to facts of case without appreciating ratio of judgments rendered. 3(d) That learned CIT(A) erred on facts and in law in assuming that appellant had received payment as consideration for use of trademark within meaning of cl. 3(a) of art. 12 of DTAA without being able to substantiate same. 4. That AO and learned CIT(A) failed to prove chargeability of impugned income under charging provisions of IT Act, 1961. 5. That even otherwise, learned CIT(A) erred in not appreciating that receipts of appellant from ITC Ltd., ITC Hotels Ltd. & Adyar Gate Hotels Ltd. were in nature of business profits which were covered under art. 7 of DTAA between India and USA and that since appellant had no PE in India, same was not chargeable to tax in India in view of said article. 6(a) That without prejudice to above, Revenue authorities failed to appreciate that even if it was assumed that impugned income was covered under art. 12 of DTAA, as per cl. (1) of said article, alleged royalties and fees for including services were liable to be taxed in other contracting State i.e. USA. 6(b) That Revenue authorities failed to prove taxability of impugned income under cl. (2) of art. 12 of DTAA. 7(a) That AO erred in partly following orders of AO and learned CIT(A) for asst. yr. 1998-99 without appreciating that said orders were not sustained in further appeal by Hon'ble Tribunal. 7(b) That learned CIT(A) erred in upholding said action of AO. 7(c) That AO erred in differing from orders of Revenue authorities for asst. yrs. 1997-98 and 1998-99 wherein 25 per cent of fees for marketing, publicity and reservation services were held to be "Business profits" of appellant and hence not chargeable to tax in India in absence of PE, thereby not appreciating that said orders of learned CIT(A) to aforesaid extent had reached finality inasmuch as same were not challenged in appeal by Department before Hon'ble Tribunal. 7(d) That although aforesaid ground of appeal was raised before learned CIT(A), learned CIT(A) erred in overlooking said ground altogether in his appellate order for impugned year. 8. That accordingly, order of learned CIT(A) holding that payments to extent of Rs. 5,19,92,318 received by appellant company from hotels in India for services rendered in terms of various agreement entered into with them were in nature of royalty under s. 9(1)(vi) of IT Act and also under art. 12(3)(a) of DTAA, is arbitrary, unwarranted and bad in law and as such, same should be quashed." 24. learned counsel for assessee, at outset, submitted before us that assessee being non-resident company, only income received in India or deemed to be received in India, income accruing or arising in India and income deemed to accrue or arise in India is liable to tax in India as per charging provisions of s. 5(2) contained in Chapter-II. He submitted that income on account of receipts in question received by assessee company from Indian hotels/clients was neither received by it in India nor could same be deemed to have been received in India in terms of s. 7. He also submitted that services for which said income had been received, were rendered by assessee entirely outside India and this being so, income from said receipts could not be said to have accrued or arisen to assessee company in India. According to him, assessee also did not have any business connection in India and, therefore, said income could not be attributed to any operation carried on by assessee in India so as to bring same to tax in India even by deeming provisions contained in s. 9(1)(i). In support of this contention, he relied on Circular No. 23 issued by CBDT on 23rd July, 1969. He pointed out that all services rendered by assessee company in connection with marketing and publicity to Indian hotels/clients were through systems/facilities located outside India. He contended that income of assessee earned from services rendered to Indian hotels/clients thus was not chargeable to tax in India and therefore, question of invoking provisions of s. 9 could not arise in its case at all. He also contended that assessee admittedly having no PE in India, said income being its business income, in any case, was not chargeable to tax in India by virtue of art. 7 of DTAA between India and USA. 2 5 . As regards allegation of Revenue authorities that substantial part of payments received by assessee under relevant agreements was attributable to allowing use of trademark, trade name and stylized 'S' to Indian hotels/clients and that it was important element of overall services provided by it to Indian clients, learned counsel for assessee submitted that this allegation of learned CIT(A) was entirely unfounded and baseless in sense that other services rendered under agreements by assessee had been totally side-tracked by him. He submitted that practice of assessee company followed consistently is to enter into agreements with reputed hotels only which have very strong brand of their own and which are capable of meeting high international standards set by it. He submitted that use of trademark of assessee by client hotels thus was just to facilitate rendering of primary services, viz., marketing, publicity and reservation services and use of trade name or trademark was just to ensure optimum marketing and sales results for hotels marketed and publicized under brand name 'Sheraton'. He submitted that such use of brand name 'Sheraton' was also going to facilitate cluster advertising by allowing all hotels using brand name 'Sheraton' to be advertised together resulting in reduction of cost. He submitted that use of trademark/trade name of assessee by I n d i n hotels thus was for purpose of maximizing client or tourist procurement on worldwide basis in order to increase revenue of assessee which was directly related to sale results of client hotels. He contended that use of trademark/trade name thus was going to help assessee in maximizing its business profit and since it was in business interest of assessee, such use was allowed free of any cost to client hotels. He pointed out that client hotels of assessee in India like ITC themselves have very strong and reputed brand and agreement entered into by assessee with them provided for joint use of brand name of local chain of hotels along with its own brand name 'Sheraton'. He also pointed out that as per agreement entered into by assessee with ITC, it was undertaken by latter to recommend and promote all Sheraton hotels and motels worldwide and to make every reasonable effort to encourage use of same by all its customers and guests. He contended that use of brand name thus was mainly for purpose of promoting mutual business which was in interest of assessee of earning more profits. 26. learned counsel for assessee further submitted that as per agreements entered into by assessee company with Indian clients/hotels, it was entitled to receive fees for publicity, marketing and reservation services only and other services, if required by client, were either to be separately negotiated or provided on reimbursement of actual cost as expressly stipulated in agreements. He pointed out that no such auxiliary services, however, were in fact rendered by assessee to Indian clients/hotels in any of six years under consideration which clearly shows that all services/facilities provided by assessee to Indian hotels/clients were in nature of publicity, marketing and reservation services only. He submitted that none of Indian hotels/clients with whom such agreements had been entered into by assessee company was related to it and since they were clearly operating at arms' length, there was no basis to go behind express clauses of agreements and allege that part of consideration was attributable to use of trademark especially when said agreements had been approved by different Government authorities repeatedly after necessary scrutiny. In support of this contention, he relied on decision of Hon'ble Delhi High Court in case of D.S. Bist & Sons vs. CIT (1984) 149 ITR 276 (Del). He also relied on decision of Hon'ble Madras High Court in case of CIT vs. Lucas TVS Ltd. (1998) 144 CTR (Mad) 449 : (1997) 226 ITR 281 (Mad) to contend that said agreements having been approved by various Government authorities from time to time, terms thereof could not be regarded as unreasonable or excessive and same, in any case, cannot be considered as sham or collusive merely on basis of surmises and conjectures. For this contention, he also derived support from decision of Hon'ble Delhi High Court in case of CIT vs. Sriram Pistons & Rings Ltd. (1989) 80 CTR (Del) 159 : (1990) 181 ITR 230 (Del) and that of Pune Bench of Tribunal in case of Kinetic Honda Motor Ltd. vs. Jt. CIT (2001) 72 TTJ (Pune) 72 : (2001) 77 ITD 393 (Pune). He contended that consideration paid to assessee company by Indian hotels/clients thus was not paid for use of any patent, model, design, secret formula or process or trademark and same, therefore, could not be regarded as 'royalty' within meaning of cl. (iii) of Expln. 2 to s. 9(1)(vi). He contended that said consideration as specified in agreements thus was only attributable to marketing, promotion and reservation services which essentially constituted 'business income' of assessee which cannot fall under Expln. 2 to s. 9(1)(vi) or even under art. 12(3) of DTAA. 27. As regards allegation of Revenue authorities that assessee was imparting information concerning technical and/or commercial knowledge or experience to Indian hotels for developing their business of running hotels, learned counsel for assessee submitted that international standards set by Sheraton are well-known worldwide and they are not in nature of any secret information which is imparted by Sheraton specifically to Indian hotels covered under agreement in lieu of consideration. He submitted that maintenance of high international standards, on other hand, is obligation cast upon client hotels under agreement with assessee for which there is no question of receiving any payments by assessee. He submitted that entire payment in pursuance of agreement was actually received by assessee from Indian hotels/clients for services related only to publicity, marketing and sales (including reservation) as per art. VII of said agreement and there was no payment made for provision of any advisory services by assessee through specialists from Sheraton Asia Regional Office for which charges were to be received separately as provided in agreement. He contended that amount in question thus was received by assessee from Indian hotels/clients only for rendering of services related to publicity, marketing and sales promotion and this position, clearly apparent from agreement especially art. VII thereof, cannot be disputed by Department merely on basis of suspicion and guesswork without referring to any evidence or material at all. Relying on decision of Hon'ble Supreme Court in case of CIT vs. Daulatram Rawatmull 1972 CTR (SC) 411 : (1973) 87 ITR 349 (SC), he contended that onus of proving that apparent was not real is on party who claimed it to be so and Department has failed to discharge this onus. He also relied on decision of Hon'ble Supreme Court in case of Union of India vs. Azadi Bachao Andolan (supra) wherein it was held that act which is otherwise valid in law cannot be treated as non est merely on basis of some underlying motive supposedly resulting in some economic detriment or prejudice to national interest. He contended that agreements entered into by assessee company with Indian hotels/clients thus have to be taken at their face value since Department has failed to prove same to be sham or collusive by bringing on record some cogent or conclusive evidence. He contended that payments in question received by assessee from Indian hotels/clients thus are not in nature of 'royalty' under Expln. 2 to s. 9(1)(vi) and learned CIT(A) was not justified in invoking same. He pointed out that learned CIT(A) in his impugned order has not treated said payments as 'fees for technical services' under Expln. 2 to s. 9(1)(vii) and Department having not challenged said orders of learned CIT(A) on this issue, same has attained finality. 28. learned counsel for assessee also submitted that since entire payment in question received by assessee from Indian hotels/clients was related entirely to publicity and marketing services rendered outside India on global basis, same constituted business profits of assessee which could not be brought to tax in India as per art. 7 of DTAA since assessee did not have any PE in India during all six years under consideration. 2 9 . As regards allegation of learned CIT(A) that aforesaid payments are in nature of 'royalty' under art. 12(3)(a) of DTAA, learned counsel for assessee invited our attention to said article to show that same does not take within its ambit rendering of services as same are dealt with in para 4 of art. 12. He pointed out that para 3(a) only deals with use or right to use any rights, property, information, design, plan, etc. and not with physical rendering of services. He contended that payments received by assessee for marketing, publicity and sales related services such as reservation, therefore, cannot fall under para 3(a) or even para 3(b) of art. 12 of DTAA. He contended that such services are not in nature of property or rights that can be exploited but contemplate only level of practices/targets of perfection to be achieved in order to maximize marketing and sales results under agreements. 30. As regards decision of Mumbai Bench of Tribunal in case of CEAT International (supra) relied upon by Revenue authorities, learned counsel for assessee submitted that said case is clearly distinguishable on facts. In this regard, he took us through relevant portion of order passed by Tribunal in said case as well as judgment of Hon'ble Bombay High Court upholding decision of Tribunal and pointed out that assessee in said case was admittedly receiving consideration for allowing use of trademark by Indian company under cl. (d) of relevant agreement. He contended that said consideration thus was held to be in nature of 'royalty' in terms of Expln. (ii) to s. 9(1)(vi) whereas there being no such consideration received by assessee in present case since use of trademark was allowed free of cost to Indian hotels/clients as per agreement, Expln. (ii) to s. 9(1)(vi) has no application. He also pointed out that in case of CEAT International (supra), use of channels of distribution in overseas market and after sales services was allowed as per relevant agreement whereas no such services were rendered by assessee in present case. He further pointed out that unlike in case of CEAT International (supra), assessee has not imparted any information concerning technical, industrial, commercial or scientific knowledge or experience or skill to Indian hotels. 31. As regards applicability of art. 12(4) of DTAA dealing with "fees for included services", learned counsel for assessee submitted that said article has been impliedly held to be not applicable by learned CIT(A) for all years under consideration and there being no appeal filed by Department against orders of learned CIT(A) on this issue, fact that impugned payments are not in nature of "fees for included services" has attained finality. Without prejudice to this contention, he argued that said article, in any case, has no application to amount in question received by assessee. In this regard, he invited our attention to relevant portion of said article as contained in DTAA as well as memorandum of understanding explaining further scope and ambit of said article reported in (1991) 91 CTR (St) 6 : (1991) 187 ITR (St) 102. He submitted that cl. (a) of art. 12(4) includes technical and consultancy services that are ancillary and subsidiary to application and enjoyment of right, property or information for which royalty is received under license or sale as described in art. 12(3)(a) as well as those ancillary and subsidiary to application or enjoyment of industrial, commercial or scientific equipment for which royalty is received under lease as described in art. 12(3)(b). He submitted that since payment received by assessee was not covered either under art. 12(3)(a) or 12(3)(b), art. 12(4)(a) cannot have any application in its case. As regards application of art. 12(4)(b), he invited our attention to MoU dt. 15th May, 1989 (supra) wherein it was clarified that para 4(b) of art. 12 refers to technical or consultancy services that make available to person acquiring service, technical knowledge, expertise, skill, know-how or process or consists of development and transfer of technical plan or technical design to such person. It was further clarified that fact that provisions of service may require technical input by person providing service does not per se mean that technical knowledge, skill, etc. are made available to person purchasing service within meaning of para 4(b). Similarly, use of product which embodies technology shall not per se be considered to make technology available. Relying on this portion/clarification of MoU as well as illustrative list of type of technical services covered under art. 12(4)(b) as given in MoU, learned counsel for assessee contended that in order to fall under art. 12(4)(b) of Indo-US DTAA, payment should be received for rendering any technical or consultancy services and consultancy services, if rendered, should be of technical nature inasmuch as same should make available to person acquiring service, some technology enabling him to apply same. He contended that applying this criterion, none of services rendered by assessee under impugned agreements could be said to be technical in nature to fall under art. 12(4)(b). He also contended that even marketing advice, corporate divisional and area programmes and promotions, advisory services of senior hotel specialists, training facilities, etc. could not be regarded as technical or consultancy services as envisaged in art. 12(4)(b). In support of this contention, he relied on decision of Mumbai Bench of Tribunal in case of Dy. CIT vs. Boston Consulting Group Pte. Ltd. (2005) 93 TTJ (Mumbai) 293 : (2005) 94 ITD 31 (Mumbai) wherein it was held that services rendered by assessee company which was engaged in business of rendering strategy consulting services such as business strategy, marketing and sales strategy, portfolio strategy to its clients in India and abroad, were outside scope of art. 12(4)(b) of India-US Tax Treaty observing that such non- technical services could not be covered under said article. It was also held that payments for services not containing any technology are required to be treated as outside scope of "fees for technical services". He also cited decisions of Mumbai Bench of Tribunal in case of McKinsey & Co., Inc. (Phillippines) & Ors. vs. Asstt. Director of IT (2006) 99 TTJ (Mumbai) 857, National Organic Chemical Industries Ltd. vs. Dy. CIT (2005) 96 TTJ (Mumbai) 765, Raymond Ltd. vs. Dy. CIT (2003) 80 TTJ (Mumbai) 120 : (2003) 86 ITD 791 (Mumbai) and unreported decision of Mumbai Bench of Tribunal in ITA No. 300/Mum/2002 in support of this contention. He emphasized that in course of rendering services in respect of marketing, publicity and reservations, no technical knowledge or skill was made available to clients by assessee company and if at all rendering of such services required providing of some technical input by assessee, it does not per se mean that technical knowledge, skill, etc. was made available to person purchasing said services to attract art. 12(4)(b) of Indo-US DTAA. He also invited our attention to example No. 7 given in MoU to illustrate scope of art. 12(4)(b) wherein it was categorically stated in analysis based on said example that fact that technical services were required by performer of services in order to perform commercial information service does not make service technical service within meaning of para 4(b) of art. 12. He contended that payments in question received by assessee for services rendered to Indian hotels/clients during year under consideration, therefore, did not constitute either 'royalty' under art. 12(3) or 'fees for included services' under art. 12(4) of Indo-US DTAA. 32. Without prejudice to his aforesaid arguments and as alternative, learned counsel for assessee contended that even if it is assumed for sake of arguments that impugned payments are covered under art. 12 of DTAA, same can be taxed only in USA and not in India as per provisions contained in para Nos. 1 and 2 of art. 12. In this regard, he pointed out that relevant provisions giving discretion to tax said payments also in India as contained in para 2 of art. 12 of DTAA are vague and provides defective machinery for taxing same also in India. In this regard, he relied on decision of Delhi Bench of Tribunal in case of Modiluft Ltd. vs. Dy. CIT in ITA Nos. 3949 and 3950/Del/1998 wherein it was held that keeping in view lacuna in provisions of DTAA as well as defective machinery provided therein and in absence of any guidelines issued by CBDT or any other competent authority, AO cannot be given discretion to impose tax in India and benefit of such shortcomings/lacuna is required to be extended to assessee. 33. learned special counsel for Revenue Shri Y.K. Kapur, on other hand, submitted that it is necessary to refer to relevant clauses of agreement between assessee and Indian hotels/clients to ascertain exact nature of payments received by it for services rendered to said parties. In this regard, he took us through relevant clauses of said agreements in order to explain stand of Revenue about nature of amount in question received by assessee being 'royalty' and/or 'fees for included services' chargeable to tax in India. Referring to cls. (4) and (5) of preamble of said agreement, he submitted that background of assessee as well as experience attained by it in field of hotel business described therein clearly shows "fund of knowledge" possessed by it. He submitted that cl. (3) of preamble of said agreement talks of imparting technical knowledge so as to bring computers of ITC in synchronization with those of Sheraton through which reservation can be done which can take place only on Sheraton imparting technical information with regard to software used and also would fall within means of communication skill through satellite as noted by AO in his assessment orders for asst. yrs. 1997-98 and 1998-99. He submitted that even cl. (4) further shows experience and knowledge of assessee pertaining to hospitality industry and information concerning commercial and scientific experience possessed by it. According to him, cls. (5) and (6) of said agreement talk of bringing out hotels in India to international standards and to sell them through publicity, etc. with help of knowledge, information and experience possessed by assessee. He contended that these contents of agreement clearly and unambiguously reflect fund of knowledge possessed by assessee in field of hospitality industry and commercial experience it has acquired not only in setting up of hotels but also to market and publicize same through such method and techniques which have been acquired by it through long special in industry helped by professional people. He submitted that when assessee passes this information possessed by it pertaining to industrial, commercial and scientific experience for consideration, payment of such consideration in lump sum or on periodical basis falls within domain of s. 9 of IT Act, 1961 as well as art. 12 of DTAA between India and USA which deals with payments on account of 'fees for included services' and/or 'royalty'. He submitted that services rendered in connection with publicity, marketing and promotion, on other hand, are nothing but ancillary and subsidiary services as defined in art. 12(4) of DTAA. 34. Shri Kapur also submitted that entire reservation system between client hotels and Sheraton including ITC is connected through satellite and this undisputed position clearly shows that assessee and his clients communicate with each other through satellite which again brings services rendered by it within ambit of art. 12(4). According to him, even making of reservation system available facilities assessee to send communication through said system in India to Indian hotels which again attracts art. 12(4) of DTAA. He submitted that as per agreement, it was also agreed by assessee to part with its knowledge to help Indian clients to bring their hotels at par with international standards and information in this connection was agreed to be supplied on-going process by bringing said hotels under Sheraton network. He pointed out that it was also agreed by assessee to make available to Indian clients/hotels services of senior hotel specialists from Sheraton Asia Regional Offices and these stipulations contained in art. 4 further show that payment received by assessee for services rendered in terms of said agreement was covered not only under art. 12(3)(a) but also under art. 12(4)(a). He also submitted that as per said article, regular feedback was agreed to be supplied by assessee pertaining to services and supplemented guidelines and even ITC agreed to ensure compliance of existing as well as revised regulations guidelines and standards made available by assessee from time to time. He contended that it was thus clear case of information concerning industrial, commercial or scientific experience being made available by assessee to Indian clients/hotels and consideration paid for same, therefore, clearly falls within ambit of 'royalty' and 'fees for included services'. He also contended that even assistance and training of staff to be provided by assessee in accordance with international standards set up by it would also constitute imparting of information regarding industrial, commercial or scientific experience and amount paid for such services would be nothing but 'royalty'. 35. Shri Kapur submitted that for all aforesaid services agreed to be rendered by assessee to Indian clients/hotels, single composite payment was agreed to be paid and such composite payment being agreed to be made towards use of trademark, supply of information concerning industrial, commercial and scientific experience, reservation of rooms, etc., stipulation made in agreement to effect that trade name and trademark were allowed to be used free of cost is nothing but colourable device adopted by assessee to avoid payment of tax in India. He submitted that art. XIII dealing with termination of agreement and art. XIV dealing with confidentiality clause clearly show that trademark, symbol, material and information supplied as per agreement remained to be property of assessee and Indian hotels/clients were allowed to use same only for period during which agreements were in force and that too, subject to confidentiality clause whereby same was not to be disclosed to any third party. He contended that these terms of agreement leave no room to doubt that assessee has granted use and right to use trademark, information concerning industrial, commercial as well as scientific experience to Indian hotels/clients and payments received for same were squarely covered by art. 12(3)(a). He contended that information furnished by assessee as reflected in art. III of agreements thus clearly falls under art. 12(4)(b) of DTAA whereas advertising and other services rendered by assessee being nothing but ancillary and subsidiary to obligation of enjoyment of right, property and information etc. are squarely covered under art. 12(4)(a). He submitted that this stand of Revenue also gets support from illustrations given in MoU to explain scope of 'fees for included services' as mentioned in art. 12. 36. As regards chargeability of payment in question received by assessee from Indian hotels/clients, Shri Kapur contended that same is covered under s. 9 of IT Act, 1961 as established by learned CIT(A) in his impugned orders relying on definition of 'royalty' and 'fees for included services' given therein. He submitted that stand of assessee about said payment not being in nature of 'royalty' based on premise that use of trademark as specifically provided in agreement was without consideration is devoid of any merits in view of s. 25 of Contract Act which provides that agreement without consideration is void. He contended that if test of s. 25 is applied, then assessee cannot be permitted to say that there was no consideration for usage of trademark relying on agreement. He contended that consideration agreed under agreement in any case was for all services to be provided by assessee under said agreements and same being composite consideration for such services, part of it was clearly attributable to use of trademark which clearly was in nature of 'royalty'. He also invited our attention to letter dt. 9th April, 1990 issued by RBI granting permission to remit amount to assessee placed at page No. 75 of paper book 2 and pointed out that said payment was clearly termed therein as 'royalty'. 37. Shri Kapur then took us through various articles of relevant agreements and submitted that perusal of terms contained therein clearly shows that same are composite documents with each clause being interlinked and interwoven with other clauses. He submitted that none of said clauses, therefore, can be read in isolation and stand of assessee based on one clause providing for no payment for use of trademark cannot be accepted especially when one single composite payment was agreed to be made as consideration in terms of said agreement. Relying on decision o f Hon'ble Supreme Court in case of CIT vs. Panipat Woollen & General Mills Co. Ltd. 1976 CTR (SC) 317 : AIR 1976 SC 640, he contended that in order to construe agreement, Court has to look to substance or essence of it rather than its form and party cannot escape consequence of law merely by describing agreement in particular form though, in essence and i n substance, it may be different transaction. real intention has to be gathered from terms and conditions agreed upon by parties executing particular contract. He also relied on decision of Hon'ble Supreme Court in case of State of Orissa vs. Titaghur Paper Mills Co. Ltd. AIR 1985 SC 1293 wherein it was held that document cannot be interpreted by picking up only few clauses and ignoring relevant ones as well as true nomenclature and description given to contract is not demonstrative of real nature of document or transaction thereunder which have to be determined from all terms and clauses of document and all rights and results flowing therefrom and not from picking and choosing out ultimate effect or result. He also cited decision of Hon'ble Delhi High Court in case of Nanak Builders & Investors (P) Ltd. vs. Vinod Kumar Alag AIR 1991 Del 315 wherein it was held that mere heading or title of document cannot deprive document of its real nature and it is substance which has to be seen and not form. He also relied on decision of Hon'ble Bombay High Court in case of Govindram Mihamal vs. Chetumal Villardas AIR 1970 Bom 251, Hon'ble Supreme Court in case of Angurbala Mullick vs. Debabrata Mullick AIR 1951 SC 293, Hon'ble Calcutta High Court in case of Abdul Kader Laskar vs. State of West Bengal AIR 1967 Cal 39, Hon'ble Bombay High Court in case of Aziende Colori Naziondali Affini vs. CIT 1977 CTR (Bom) 299 : (1977) 110 ITR 145 (Bom) as well as host of other judgments wherein similar proposition was propounded laying down that document/agreement has to be considered as whole to ascertain real nature thereof as well as to gather real intention of parties and different clauses thereof cannot be considered in isolation. He contended that if entire agreements entered into by assessee company with Indian clients/hotels are read as whole, real nature as well as intention of parties arising from substance thereof leaves no room to doubt that it was single/composite payment agreement and payments received by assessee in pursuance thereof were liable to tax in India not only under s. 9 of domestic law but also under arts. 12(3) and 12(4) of Indo- US DTAA. He contended that said payments received by assessee were not its business profits as claimed by it but were clearly in nature of 'royalty' and 'fees for included services' chargeable to tax in India. In support of this contention, he also placed reliance on following judgments : (i) CEAT International vs. IAC (supra); (ii) CEAT International S.A. vs. CIT (supra); (iii) Aziende Colori Naziondali Affini vs. CIT (surpa); (iv) CIT vs. Stanton & Stavely (Overseas) Ltd. (1984) 146 ITR 405 (Cal); (v) CIT vs. Ahmedabad Manufacturing & Calico Printing Co. (1983) 139 ITR 806 (Guj); (vi) N.V. Philips Gloeilampenfabrieken Eindhoven vs. CIT (1987) 65 CTR (Cal) 103 : (1988) 172 ITR 521 (Cal); (vii) CIT vs. Davy Ashmore India Ltd. (1991) 190 ITR 626 (Cal); (viii) Elkem Technology vs. Dy. CIT (2001) 169 CTR (AP) 49 : (2001) 250 ITR 164 (AP); (ix) Union Carbide Corporation vs. IAC (1994) 50 TTJ (Cal) 535 : (1994) 50 ITD 437 (Cal); (x) Nisshinbo Industries Inc. vs. Asstt. CIT (2003) 78 TTJ (Chennai) 554 : (2002) 83 ITD 748 (Chennai); (xi) Raymond Ltd. vs. Dy. CIT (supra); (xii) Chanderkant Manilal Shah vs. CIT 1991 JT (4) SC 171. 38. In rejoinder, learned counsel for assessee submitted that direction given by Tribunal while setting aside issue relating to chargeability of 75 per cent of amount received by assessee company from Indian hotels/clients during asst. yrs. 1997-98 and 1998-99 to tax in India, was very specific i.e. to ascertain taxability of said amount under domestic law keeping in view charging provisions contained in ss. 4, 5 and 9. He submitted that despite this specific direction given by Tribunal, no specific findings have been recorded by AO on this aspect in fresh assessments completed during set aside proceedings. He submitted that assessee is in business of hotel related services and its main business activity is to render such services. infrastructure available with it such as reservation offices worldwide, computerized systems, etc. are only incidental to facilitate this business. He submitted that Indian companies such as ITC were already in business of running hotels of international standard with all infrastructure facilities and network available with them including computerized reservation system which got interfaced with computerized reservation system of assessee company. Referring to relevant portion of agreements entered into by assessee company with Indian hotels/clients, he pointed out that main purpose of entering into said agreements was to do business together and all services listed in said agreements were merely incidental to this main purpose. He contended that to ascertain exact nature of arrangement between two sides, main object of such arrangement as evident from agreements is to be seen and not modus operandi and apparatus used to attain said objective. He submitted that whole purpose of Indian hotels/clients to avail services from assessee company was to boost its hotel business and nature of services to be rendered by assessee company needs to be appreciated in this background. He submitted that use of its trademark, trade name etc. by Indian hotels/clients is being insisted upon by assessee company for achieving main objective in its own interest to promote hotel business and not for anything else and since whole purpose of such insistence as well as providing incidental and ancillary services was to maximize its business profits, payments received by it from Indian hotels/clients was entirely its business income. He submitted that Indian hotels/clients including especially ITC neither insisted nor paid for use of trademark, trade name etc. as well as other facilities separately and it was assessee company who provided these facilities with purpose, inter alia, of maximizing its business profit. He submitted that prime object of providing all these facilities thus was to augment larger revenue from market and use of trademark, trade name, etc. as well as rendering of other services was merely incidental to achieve said prime objective. He also submitted that similar types of services as well as facilities are being provided by assessee company to various hotels worldwide and it, therefore, cannot be said that some specialized or secret technical or commercial information is provided by assessee company to Indian hotels/clients exclusively. He submitted that even if it is assumed for sake of arguments that some technology was also provided by assessee company to Indian hotels/clients, same was provided as integral part of business arrangement and in these circumstances, technology cannot be said to have been made available by assessee company to Indian hotels/clients. He also pointed out that there is no evidence on record to show that computer network of assessee company and computer network of Indian hotels/clients were connected via satellite. He submitted that said computer network including reservation system in any case is part of assessee's business apparatus and use of this apparatus by assessee company for its own business purpose is nothing but its 'business income' and not 'royalty' or 'fees for included services'. He emphasized that keeping in view nature of arrangement between assessee company and Indian hotels/clients as well as main purpose of their association as evident from relevant agreements, bifurcation of services rendered cannot be done for attributing or apportioning payment on basis of such bifurcation. 3 9 . We have considered rival submissions in light of material available on record and various case laws cited at Bar. issue which requires our consideration relates to taxability in India of amount in question received by assessee for services rendered to Indian hotels/clients as per agreements entered into with them and this issue first of all needs to be considered and examined from point of view of charging provisions contained in ss. 4, 5 and 9. Only when it is found that income is chargeable to tax in India as per these provisions, one can refer to DTAA between India and concerned country (i.e. USA in present case) to look for any benefits available to assessee vis-a-vis IT Act since as per specific provisions contained in s. 90(2), provisions of DTAA override provisions of IT Act insofar as they are more beneficial to assessee. In our view, this precisely is reason why direction was given by Tribunal earlier in assessee's case while restoring matter to AO for asst. yrs. 1997-98 and 1998-99 to consider same first from point of view of charging provisions contained in ss. 4, 5 and 9. 40. Sec. 4 of IT Act, 1961 is charging provision for all heads of income as regards income-tax and it confers power upon Central Government to "charge" income-tax. charge arises when person earns income, computation of which is to be made according to provisions of IT Act, 1961 and total income envisaged by s. 2(45) is arrived at. scope of such total income of any previous year of particular person is defined in s. 5 and as is evident from provisions contained in s. 5 such scope is primarily determined by residential status of person whether he is resident, non-resident or resident but not ordinarily resident. other important aspect is basis of charge i.e. whether computation should be on basis of receipt, accrual, deemed receipt, deemed accrual or arisal basis. Sec. 9 contains specifically cases of income deemed to accrue or arise in India and Revenue has invoked/applied provisions as contained in cl. (vi) of sub-s. (1) of said section in present case to bring to tax payment in question received by assessee in India. said provisions along with provisions of s. 9(1)(vii) as well as relevant Expln. 2 are reproduced hereunder : "9. (1) following incomes shall be deemed to accrue of arise in India : ....... (vi) income by way of royalty payable by' (a) Government; or (b) person who is resident, except where royalty is payable in respect of any right, property or information used or services utilized for purposes of business or profession carried on by such person outside India or for purposes of making or earning any income from any source outside India; or (c) person who is non-resident, where royalty is payable in respect of any right, property or information used or services utilized for purposes of business or profession carried on by such person in India or for purposes of making or earning any income from any source in India : Provided.............. Provided further......... Explanation 1 ....... Explanation 2 : For purposes of this clause, "royalty" means consideration (including any lump sum consideration but excluding any consideration which would be income of recipient chargeable under head "Capital gains") for' (i) transfer of all or any rights (including granting of licence) in respect of patent, invention, model, design, secret formula or process or trademark or similar property; (ii) imparting of any information concerning working of, or use of, patent, invention, model, design, secret formula or process or trademark or similar property; (iii) use of any patent, invention, model, design, secret formula or process or trademark or similar property; (iv) imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill; (iva) use or right to use any industrial, commercial or scientific equipment but not including amounts referred to in s. 44BB; (v) transfer of all or any rights (including granting of licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for sale, distribution or exhibition of cinematographic films; or (vi) rendering of any services in connection with activities referred to in sub-cls. (i) to (iv), (iva) and (v). Explanation 3 : For purposes of this clause, "computer software" means any computer programme recorded on any disc, tape, perforated media or other information storage device and includes any such programme or any customized electronic data; (vii) income by way of fees for technical services payable by' (a) Government; or (b) person who is resident, except where fees are payable in respect of services utilized in business or profession carried on by such person outside India or for purposes of making or earning any income from any source outside India; or (c) person who is non-resident, where fees are payable in respect of services utilized in business or profession carried on by such person in India or for purposes of making or earning any income from any source in India; Provided........ Explanation 1........ Explanation 2. : For purposes of this clause, "fees for technical services" means any consideration (including any lump sum consideration) for rendering of any managerial, technical or consultancy services (including provision of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by recipient or consideration which would be income of recipient chargeable under head 'Salaries'." 41. As is evident from sub-cl. (b) of cl. (vi) of s. 9(1), any income by way of royalty payable by person who is resident is deemed to accrue or arise in India except where royalty is payable in respect of any right, property or information used or services utilized for purposes of business or profession carried on by such person outside India or for purposes of making or earning any income from any source outside India. Similarly, as per sub-cl. (b) of cl. (vii) of s. 9(1), income by way of fees for technical services payable by person who is resident is deemed to accrue or arise in India except where fees are payable in respect of services utilized for purposes of business or profession carried on by such person outside India or for purposes of making or earning any income from any source outside India. In present case, amount in question was paid or payable by Indian hotels/clients, who are residents to assessee company, who is non-resident for services rendered and such services/facilities provided by assessee were utilized by said Indian clients/hotels for purposes of their business carried on in India and amount in question paid for rendering of said services thus could be said to have accrued or arisen in India by invoking deeming provisions of s. 9 only if same was payable by Indian hotels/clients to assessee by way of 'royalty' as defined in Expln. 2 below cl. (vi) of s. 9(1) or by way of 'fees for technical services' as defined in Expln. 2 below cl. (vii) of s. 9(1). first and foremost question which thus arises for our consideration in present case is whether amount in question paid by Indian hotels/clients to assessee for service rendered in pursuance of agreements entered into with them was on account of royalty as defined in Expln. 2 below cl. (vi) of s. 9(1) or on account of fees for technical services as defined in Expln. 2 below cl. (vii) of s. 9(1) so as to bring same to tax in India as per charging provisions of s. 4, r/w s. 5 and s. 9. 4 2 . In order to ascertain exact nature of services rendered by assessee company to Indian hotels/clients, it is necessary to analyse and appreciate agreements entered into by it with said parties and there cannot be quarrel with proposition that said agreements are required to be read as whole in order to construe same. As held by Hon'ble Supreme Court in case of Chatturbhuj Vithaldas vs. Moreshwar Parashram AIR 1954 SC 236, when contract consists of number of terms and conditions, each condition does not form separate contract but is item in one contract of which it is part. consideration for each condition in contract like this is consideration for contract taken as whole. In case of Panipat Woollen & General Mills Co. Ltd. (supra), Hon'ble Supreme Court has held that Court in order to construe agreement has to look to substance or essence of it rather than its form. party cannot escape consequences of law merely by describing agreement in particular form though in essence and in substance, it may be different transaction. In case of Titaghur Paper Mills Co. Ltd. (supra), Hon'ble Supreme Court has held that just as document cannot be interpreted by picking out only few clauses ignoring other relevant ones, in same way nature and meaning of document as to whether it amounts to grant of benefit arising out of land, cannot be determined by its end result or one of results or consequences which flow from it. Explaining further, their Lordships of apex Court observed that nomenclature and description given to contract is not determinative of real nature of document or transaction thereunder which have to be determined from all terms and clauses of documents and all rights and results flowing therefrom and not by picking and choosing out ultimate effect or result. In case of Nanak Builders & Investors (P) Ltd. vs. Vinod Kumar Alag (supra), Hon'ble Delhi High Court has held that mere heading or title of document cannot deprive document of its real nature and it is substance which has to be seen and not form. 43. Keeping in view this settled position as emanating from aforesaid judicial pronouncements in respect of interpretation of any agreement, we can now endeavour to analyse relevant terms of agreements entered into by assessee in present case with its Indian clients/hotels in order to find out exact nature of services rendered by it from point of view of applicability of s. 9(1)(vi) or 9(1)(vii). Admittedly, terms and conditions of all agreements entered into by assessee with different Indian clients/hotels, by and large, are similar and major payments having been received by assessee from ITC Ltd., we can appropriately refer to agreement entered into by assessee with said Indian client covering years under consideration for this analysis. copy of said agreement executed on 30th Dec., 1988 is placed at page Nos. 31 to 52 of assessee's paper book II and perusal of same shows that background of ITC, being party to said agreement, was given in para Nos. 2 and 3 of preamble as follows : "2. ITC has been engaged in number of manufacturing and commercial activities in India for many years and has developed well-known extensive and highly efficient organization in country manned by personnel with prolonged experience and knowledge of Indian business and market conditions, Indian economic policies priorities and procedures. 3. Pursuant to one of its principal objects and maximizing foreign exchange earnings ITC is also engaged through its Hotels Division (known by name of Welcomgroup) in operation and/or construction of hotels consistent with international standards in different parts of India; and towards this end has already established hotels in Madras, Agra and Delhi and has also leased or is otherwise operating hotels in association with third parties in Bombay, Bangalore, Madras, Aurangabad and at various other Indian locations. Furthermore, ITC maintains network for making and confirmation of hotel reservations ("Welcomnet") within India which it is engaged in modernizing so as to achieve interface between Welcomgroup-Sheraton hotels reservation facilities and Sheraton Reservation system hereafter referred to." 44. Similarly, background of assessee was narrated in para Nos. 4 and 5 in preamble of said agreement as follows : "4. Sheraton and its associates own, operate and franchise international chain of over 500 hotels in United States and around world including Europe, Africa, Middle East, South America, South East Asia and Australia; have pioneered modern international hotel sales techniques that have become well recognized by industry; publicise and market hotels through sales and marketing specialists at their hotels; maintain corporate sales offices in numerous countries and worldwide organization manned by professional sales persons highly specialized in advertising, selling and promoting hotels as well as utilize international computerized system ('Reservation') operated by corporation associated with Sheraton for making and confirming of hotel reservations at Sheraton hotels worldwide. 5. Sheraton has engaged inter alia in development leasing management operation publicity and marketing of hotels in many countries all in interest of facilitating international travel and trade and has established well- known high international standards policies and procedures for operation of such hotels has evolved highly experienced organization for provision of expert technological know-how in planning designing construction decorating managing and equipping of hotels and motor inns throughout world as well as for training and development of key personnel to equip them for operation of such hotels to international standards established by Sheraton and has furthermore acquired name, experience and personnel that enable Sheraton to obtain international business for hotels from all market segments such as individual travellers, groups from travel and tour industry and groups for conventions, congresses and seminars and sale meetings, etc." 45. Before us, learned special counsel for Department Shri Y.K. Kapur has highlighted this background of assessee to contend that it clearly shows its expertise in field of hotel business especially management and publicity thereof. He has also laid great emphasis on highly specialized system such as international computerized system available with assessee for reservation which was to be made available to Indian hotels/clients by providing necessary interface. In our opinion, this background of assessee given in preamble of agreement, however, cannot be appreciated in right perspective by reading same in isolation and it is necessary to read same with background of Indian client/hotel given in para Nos. 2 and 3 as reproduced above as well as intention and purpose for which these two parties had joined hands as described in para No. 6 in preamble of said agreement as follows : "6. ITC and Sheraton intend to continue to associate together (1) in international marketing of hotels of high international standards in India with objects inter alia of : (i) development of tourism on wide front covering broad economic spectrum of foreign tourists and provision of hotel services for individual travellers including important customers from international commercial organizations, professional associations, airlines and travel trade; (ii) maximizing foreign exchange earnings; (iii) training and development of key hotel management personnel and technical specialists to handle growing interest in India; (iv) introducing and ensuring international standards for hotels in India to attract foreign tourists and to reflect with advantage India's image abroad. (2) to generally for mutual benefit of parties promote/advertise worldwide Sheraton chain of hotels. And parties have agreed that these objectives would be achieved by combining ITC expertise and infrastructure in Indian context with Sheraton expertise resources and infrastructure covering inter alia : (a) international marketing through Sheraton's global travel connections; (b) global Sheraton reservation network; (c) highly developed technology for hotel sales, publicity operations and international standards developed by Sheraton worldwide; (d) regular updating of such technology and standards; (e) understanding of foreign tourists' and travellers' needs and meeting these through specialists particularly in context of food and beverages and other hotel service; (f) experience in and facilities for training key hotel management personnel." 4 6 . As is evident from reading of aforesaid cl. No. 6 of agreement, main intention of both sides to continue their association was to develop tourism on wide front by providing, inter alia, best hotel facilities of international standards to tourists worldwide. said objective was to be achieved by promoting and advertising worldwide Sheraton chain of hotels for mutual benefit. As stated in agreement, ITC was already having well-developed, well-known, extensive and highly efficient organization in India manned by experienced and knowledgeable personnel and through its hotel division known by its own brand name 'Welcom Group', it was already engaged in setting up and management of hotels consistent with international standards in different parts of India. It was also maintaining network for booking and confirmation of hotel reservations known as 'Welcomnet' within India. If background of assessee company given in para Nos. 4 and 5 of agreement is read with this background of ITC given in para Nos. 2 and 3 as well as main intention given in para No. 6 of promoting and advertising worldwide Sheraton chain of hotels for mutual benefit, one can easily understand that both these parties had come together with their specialized information, experience and knowledge in field of hotel business for mutual benefits and in way to justify or explain their association, their introduction was given highlighting relevant experience and knowledge possessed by them. This experience and knowledge described in agreement thus was in context of explaining/justifying association of two parties for attaining of of explaining/justifying association of two parties for attaining of main objective to promote and advertise hotel business, of not only Indian clients but also that of assessee for mutual benefit. 47. aforesaid position gets further fortified from various obligations stipulated in various articles of said agreement as discussed now. Article II to art. VI, being relevant in this context, are reproduced below : "Article II Publicity marketing and promotion Sheraton shall undertake worldwide publicity marketing and advertising of t h e hotels covered by this Agreement through its worldwide system of sales advertising promotion public relations and reservations. Such activities outside India will include following : (a) Assistance from sales offices throughout worldwide Sheraton system to promote flow of foreign tourists to India. These sales offices service individual travellers important customers such as international companies and professional associations airlines and transportation companies and travel industry. Specialists are also available to cover particular travel needs of organizations such as United Nations, international organizations insurance companies, government agencies, embassies and incentive tour market and tour operators; (b) Marketing advice from Sheraton Divisional Headquarters and from corporate headquarters in Boston to assist each hotel's management in planning market strategy to enable it to maximize revenues in local competitive environment; (c) Upon request (and subject to payment of any actual out-of-pocket costs incurred by it) Sheraton's Divisional Office will provide sales departments of hotels covered by this agreement guidance in installing and maintaining systems and procedures designed inter alia to initiate or service international business and to ensure that business is booked when needed and handled efficiently; (d) Corporate advertising through listing of hotels covered by this agreement in any appropriate corporate Sheraton directory; (e) Corporate advertising of Sheraton name and system i.e. TV, radio, billboards and press; (f) Facilitating cluster advertising (at ITC cost) which allows groups of hotels with like facilities and like markets to advertise together at reduction from cost of going it alone; (g) Make available any corporate divisional and area programmes and promotions to counter problem periods in particular off-season periods for hotels; special efforts towards group bookings including groups for international conventions, congresses, seminars, sales and other meetings, appropriate representation at most important trade shows exhibitions and functions of hotel and travel industry worldwide; (h) Provide assistance, through Sheraton's corporate facilities, in worldwide public relations; (i) Utilisation of worldwide Sheraton reservations offices. Article III Reservation services Sheraton shall arrange for all hotels covered by this Agreement to be included in Sheraton worldwide computerized reservation system ('Reservatron') operated by Sheraton Reservation Corporation for which said corporation normally obtains reimbursement of costs from Sheraton hotels in other countries. Link up with this system from India is through commercial leased telex circuit (Intelnet) with Sheraton and ITC respectively bearing communication costs at each end. ITC shall as early as, technically and commercially feasible, complete modernization of its Welcomnet reservations system into fully computerized Reservation Centre covering all major Welcomgroup-Sheraton hotels in India as well as interface system with Sheraton Reservation system so that parties hereto are able to provide their customers fully integrated worldwide reservations service. cost of hardware and software for Reservation IV System for said Reservation Centre shall be borne by Sheraton. All other costs including those for installation, interfacing and operation of said ITC Reservation Centre in India will be borne by ITC. inclusion of any hotel which is not owned or leased by ITC directly or through subsidiary or otherwise in said Welcomnet Reservation System shall be subject to approval of owner of such hotel. Article IV Maintenance of High/International Standards at Hotel 1. ITC recognizes that : (i) so as to enable Sheraton to achieve maximum marketing and sales results for hotels, it is essential that hotels shall be operated on most efficient basis and maintained according to high international standards for quality hotels as determined by Sheraton from time to time; (ii) Sheraton's record of effectiveness and success achieved over many years in marketing hotels internationally is based upon its reputation of association with hotels representing high quality product; (iii) To sustain high international standards as aforesaid it is necessary that all personnel in key positions are well trained and selected for appointment on principle-best man for job. ITC therefore undertakes to ensure that during term of this agreement hotels are operated and maintained in accordance with high international standards acceptable to Sheraton and manned by personnel appropriately trained for each key position in particular. ITC has represented that while at present it complies with Indian fire safety regulations at each of its three hotels I T C shall ensure that Sheraton Fire safety standards and all other Sheraton Standards and Guidelines are introduced and maintained at all times including, but not limited to installation of sprinklers throughout each of hotels covered by this agreement by 6th April, 1990. Towards this end Sheraton shall assist ITC by making available information of its standards as established worldwide; furthermore, to facilitate coordination between parties hereto, and Sheraton network in area including India, Sheraton shall arrange to make available from time to time advisory services of senior Hotel Specialists from Sheraton Asia Regional Office. ITC shall reimburse Sheraton any actual out-of-pocket expenses incurred related to providing such assistance/services. 2. ITC agrees it will ensure compliance with existing regulations, guidelines and standards of Sheraton as from time to time revised and supplemented by Sheraton with respect to operations and maintenance of standards at hotels. Article V Assistance with training In order to assist ITC with maintenance of high international standards at hotels to be marketed and publicized as provided herein, and its operation by adequately trained personnel, Sheraton shall make available facilities for training within network of Sheraton hotels in area including India or at various locations in other parts of world of selected personnel for employment at hotels. Such training may be in nature of 'on job' or formal training as determined by Sheraton. ITC shall reimburse Sheraton any actual out-of-pocket expenses incurred related to providing any services under this article. Article VI Technical assistance; design and construction Sheraton shall make available its comprehensive standards and technical assistance for design and construction of any new hotels to be covered by this agreement so that such hotel meets Sheraton requirements of operating standards. Sheraton shall not have any architectural or engineering responsibility i n connection with such design or construction. scope and extent of compensation for such services and terms on which such services shall be rendered will be separately negotiated and agreed for each such hotel." 48. careful reading/perusal of obligations stipulated in aforesaid articles would reveal that main intention/purpose of association between assessee and ITC was to publicize, market and promote hotels of ITC and assessee company had undertaken to provide all services as enumerated in various articles to achieve this main intention/purpose. It is no doubt true that such services were multifarious involving utilization of experience and expertise of assessee in relevant field. At same time, it is also true that all these services to be rendered by assessee utilizing its experience and expertise as well as facilities available with it were for purpose of achieving main intention/objective of publicity, marketing and promotion of hotels of ITC situated in India. said services, therefore, were merely incidental to main job undertaken by assessee of publicity, marketing and promotion of hotels of Indian client worldwide and one cannot pick and choose some of such services in isolation in order to describe its nature de hors main intention/objective behind rendering of such services as has been attempted to be done by Revenue. During his arguments before us, Shri Kapur has taken us through various services to be rendered by assessee to ITC as enumerated in various articles of agreement and has tried to explain nature of each such service in attempt to fit it either under provisions of s. 9(1)(vi) or that of relevant articles of DTAA between India and USA. While doing so, he, however, has ignored/overlooked main intention/objective behind association of two parties as clearly spelt out in agreement. If said agreement or for that matter all terms thereof are read together as whole, it explicitly shows that assessee in substance, had mainly undertaken job of publicity, marketing and advertising of hotels of Indian clients worldwide and all services to be rendered by it as enumerated in various articles of agreement were incidental or supplementary to carry out this job effectively and efficiently in interest of its business of which said activity/job was forming part. These services, therefore, were integral part of main work undertaken by assessee of publicity, marketing and promotion of Indian hotels worldwide and nature thereof has to be understood or appreciated keeping in view main intention/objective behind rendering of such services as evident from sum and substance of agreement. 49. services described in various articles of agreement also clearly show that they have no much significance on their own independently and same were integral part of arrangement between assessee n d Indian hotels/clients for publicity, marketing and advertising of hotel business. For instance, marketing advice to be given by assessee to assist management of Indian hotels in planning market strategy was clearly for purpose of enabling it to maximize revenues as mentioned in cl. (b) of art. II of agreement which was integral part of promoting and marketing Indian hotels. Similarly, guidance to be provided by assessee to Indian hotels/clients in installing and maintaining systems and procedures designed by it as mentioned in cl. (c) of art. II was for purpose of initiating and servicing international business to ensure that business is booked and handled efficiently. said guidance, in any case, was to be provided by assessee subject to payment of any actual out of pocket cost incurred by it and as submitted by learned counsel for assessee before us, there being no such guidance provided during years under consideration, no question of any such payment ever arose. information about some specific programmes in terms of cl. (g) of art. II was also to be made available by assessee to Indian clients/hotels to promote business particularly during off-season periods for hotel industry and same by its very nature was entirely directed, towards promotion of hotel business of Indian clients/hotels. Even interface between reservation system of ITC called as "Welcomnet" and that of assessee was to be provided with view to provide customers fully integrated worldwide reservation service which was going to help in promoting not only hotel business of Indian clients but also that of assessee. 50. As per its marketing strategy adopted worldwide, certain international standards were set by assessee to be maintained by hotels being marketed/promoted by them and such standards determined from time to time were communicated also to Indian hotels/clients so that hotels are operated and maintained in accordance with such standards. All these hotels including hotels in India were to comply with standards so that target customers visiting any such hotel will be able to get desired services. All these requirements which were required to be complied with by Indian hotels/clients thus were for purpose of customer satisfaction which was integral part of marketing strategy of assessee. Similarly, training to be imparted by assessee to employees of Indian hotels/clients in order to maintain standards as per art. V was part of marketing and business promotion strategy for which Indian hotels/clients had agreed to pay separately towards reimbursement of expenses actually incurred by assessee. No such training, however, was imparted by assessee to Indian clients/hotels during years under consideration as submitted by learned counsel for assessee and there was no occasion to make such payment. As per art. VI, assessee had agreed to make available its comprehensive standards and technical assistance for design and construction of new hotels, if any, by Indian clients. However, there being no such case of construction of new hotel during years under consideration, no such services as specified in art. VI were provided by assessee to Indian clients as pointed out by learned counsel for assessee. 51. various services agreed to be rendered by assessee to Indian hotels/clients as enumerated in arts. II to VI of relevant agreements thus were integral part of arrangement by which assessee had agreed mainly to provide services relating to publicity, marketing and advertising of hotels of Indian clients covered under said agreements. main purpose/intention of association between assessee and Indian clients/hotels was to promote hotel business in their mutual interest through worldwide publicity, marketing and advertising and various facilities as well as services were merely means to attain this main objective. same, therefore, were ancillary and auxiliary services to main job undertaken by assessee company of promoting hotel business by worldwide publicity, marketing and advertisement. This position which is clearly evident from arts. II to VI of agreements enumerating scope of services gets further strengthened from art. VII containing payment clause which reads as under : "Article VII Payment to Sheraton So as to defray direct and indirect costs incurred by Sheraton in respect of services to be rendered by Sheraton under this agreement ITC shall pay direct to Sheraton in Boston in currency of United States of America for publicity, marketing and sales (including reservations) services to be rendered outside India fee equivalent to 3 (three) per cent of room sales; For any other post opening services fees or expenses payable will be separately agreed by parties and be subject to any requisite approval of Government of India. All payments under this Article shall be subject to applicable Indian Taxes. For purpose of this Agreement "room sales" shall mean gross room sales after deducting commission due to travel agents, airlines and other such agencies and also applicable taxes including any hotel receipts tax, sales-tax, cesses, levies, etc. In support of calculation of such fees ITC shall file with Sheraton within forty-five (45) days after close of each quarter of calendar year (or part thereof after commencement of this agreement) financial statement showing operating results and monthly gross room sales and revenue for such quarterly period and to file within sixty (60) days after close of each such year similar statement certified by chartered accountant acceptable to Sheraton showing balance sheet and result of operations for year including monthly gross room and other sales and revenues. Sheraton shall have right to inspect books and records of hotels at all reasonable times." 5 2 . As mentioned clearly in payment clause of agreement reproduced above, it was agreed that Indian client would pay to assessee fee equivalent to 3 per cent of its room sales expressly for publicity, marketing and sales (including reservation) services. This specific term of payment agreed by both sides and forming part of agreement entered into between them explicitly shows that entire payment made by Indian clients to assessee was on account of services rendered in relation to publicity, marketing and sales services and even quantum of fees agreed to be so paid to extent of 3 per cent of room sales of Indian hotels further shows that assessee was to be compensated on basis of quantum of sales realized/business done by Indian hotels without there being any relation to individual services enumerated in agreements. These payment terms thus also point out clearly that said incidental services had no significance on its own and what really mattered was main job of publicity and business promotion undertaken by assessee as finally reflected/resulted in quantum of room sales. It was thus case of periodical payment agreed to be made by Indian hotels to assessee in form of fees equivalent to 3 per cent of room sales for services rendered in connection with publicity, marketing and sales services and not case of composite payment made by Indian clients/hotels to assessee which could be bifurcated over different services as done by Revenue authorities. Such bifurcation, in our opinion, was neither permissible nor possible in view of arrangement between two parties as reflected from terms of relevant agreements. On other hand, all services rendered by assessee to Indian clients/hotels in terms of agreement were integral part of main job undertaken by assessee of publicity, marketing and sales promotion of Indian hotels and nature of payment made for such services has to be properly appreciated having regard to entire arrangement as whole which, as reflected in agreements, was for publicity, marketing and sales promotion of Indian hotels by assessee. 5 3 . Much has been said about trademark, trade names and signs having been made available by assessee to Indian hotels/clients by authorities below in their respective orders as well as by learned special counsel for Revenue before us. attempt has been made in this regard to show as if that use of such trademark, trade names and signs was most vital and crucial aspect of arrangement between assessee and Indian hotels and entire arrangement was made to promote said trademarks or trade names. In his impugned orders, learned CIT(A) has gone to extent of observing that allowing use of trademark, etc. by assessee to Indian hotels/clients was important element of services provided by it and, therefore, payments received for such services were clearly in nature of 'royalty' as defined in s. 9(1)(vi) read with Expln. 2(iii). In order to appreciate and examine this stand taken by Revenue, it would be worthwhile to refer to art. VIII of agreement relating to trademarks, trade names, signs etc. which is reproduced below : "Article VIII Trademarks, trade names, signs, etc. (a) Sheraton shall grant appropriate rights at no cost pursuant to separate agreements and in accordance with terms thereof so as to permit use by hotels covered by this Agreement of Sheraton trade names and trademarks in particular use of name 'Sheraton' and its stylized 'S' service mark and any other identifying characteristics that may be mutually developed by parties hereto. name for each hotel will be jointly determined by parties. Each hotel to be covered by this Agreement shall unless otherwise determined by Sheraton include word 'Sheraton' in its name. three existing Welcomgroup hotels in Agra, Madras and Delhi shall continue to be known as Welcomgroup 'Chola-Sheraton' in Madras, Welcomgroup 'Mughal- Sheraton' in Agra and Welcomgroup 'Maurya-Sheraton' in Delhi. Each of hotels covered by this Agreement shall also be presented and advertised as Welcomgroup hotel. (b) Any use or right to use by ITC of name 'Sheraton' or by stylized 'S' service mark or other Sheraton trademarks or distinguishing characteristics owned by or associated with Sheraton shall cease upon termination or expiry of this Agreement. (c) ITC agrees that it will always acknowledge and recognize both before n d after expiration of this agreement exclusive right of Sheraton (consistent with art. X) to use or to grant to others right or licence to use whether separately or as part of or in connection with other words slogans, symbols or designs name 'Sheraton' stylized 'S' service mark and any other trademarks, trade names or other identifying characteristics which may now or in future be generally used in connection with operation of Sheraton hotels, motels or inns. (d) Consistent with international standards at Sheraton hotels worldwide ITC agrees to make available to partrons supplies bearing in addition to any ITC names or identifying characteristics name 'Sheraton' and stylized 'S' service mark and such other Sheraton emblems, insignias or identifying characteristics use of which is provided for hereunder or in accordance with terms of any special agreement entered into between parties for this purpose. design and quality of all such supplies shall be mutually agreed by Sheraton and ITC." 5 4 . aforesaid article undisputedly shows that its trademark, trade names and signs were allowed to be used by assessee to Indian clients t no cost. Relying on this stipulation in agreement allowing use of trademarks, trade names, etc. by assessee at no cost, it has been vehemently contended by learned special counsel of Department before us that agreement itself was colourable device. We shall deal with this contention separately at appropriate stage. However, suffice it would be to note here that rationale behind providing use of trademarks, trade names etc. by assessee free of cost to Indian hotels was not accepted/appreciated by Department. As already discussed by us with reference to scope of services to be rendered by assessee as well as its intention to have association with Indian hotels/clients that main arrangement between assessee and Indian clients was for rendering services in connection with publicity, advertising and sales promotion of Sheraton hotels in their mutual interest. background of assessee as well as that of ITC given in preamble of relevant agreement shows that even ITC was possessing not only required skills, expertise and knowledge to set up and manage hotels at international standards, but it was also having its own trade name 'Welcomgroup' already established in India. As per art. VIII, hotels in India of ITC were specifically allowed to use both trade names i.e. trade name of assessee as well as its own trade name. Moreover, use of trademark, trade names, etc. of assessee by Indian hotels was not only going to help and assist assessee in rendering its services relating to publicity, advertising and business promotion of Indian hotels, but such use was also going to help assessee in advertising its other hotels worldwide and to promote their business as submitted by learned counsel for assessee before us which is also evident from art. IX of agreement reproduced below : "Article IX Advertising and marketing in India ITC undertakes to maintain and continue to extend facilities in India for sales, advertising and reservations services for hotels covered by this agreement. Furthermore, ITC shall also take steps to recommend and promote all Sheraton inns, hotels and motels worldwide and to make every reasonable effort to encourage use of same by all of its customers and guests, it being intended that each ITC hotel and all other Sheraton hotels will benefit from their mutual promotional efforts." 55. use of assessee's trademark, trade name, etc. by Indian hotels was thus going to benefit both sides mutually to promote their business and this was precisely rationale behind assessee allowing use of its trademark, trade names, etc. by Indian hotels free of cost. Allowing such use again was integral part of main arrangement between assessee and Indian clients/hotels to promote their hotel business in mutual interest by publicity, advertising and sales (including reservations) services. In these circumstances, (singling out aspect of use of trademark, trade names of assessee by Indian hotels/clients to say that same was crucial or important aspect of arrangement between them without appreciating overall arrangement between parties or their nature of relationship was nothing but reading too much between lines. On other hand, rationale behind allowing use of trademark, trade names, etc. by assessee to Indian clients/hotels was properly explained in light of overall arrangement between them as well as arts. VIII and IX dealing with this aspect specifically. Even automatic seizure of use or right to use assessee's trademark, trade names etc. by Indian hotels/clients on termination of agreement was normal or usual business practice and no adverse inference in matter can be drawn on basis thereon divorced from context. 56. In support of Revenue's contention that amount in question paid by Indian hotels/clients to assessee for services rendered was 'royalty' within meaning of s. 9(1)(vi) read with Expln. 2, authorities below in their respective orders as well as learned special counsel for Revenue in his arguments before us have relied heavily on decision of Mumbai Bench of Tribunal in case of CEAT International SA (supra) which was subsequently upheld by Hon'ble Bombay High Court. It is, however, observed that facts involved in said case were materially different from facts involved in present case. Firstly, services for which amount was paid by Indian company to foreign company were classified as per agreement into four categories and such clear-cut classification made in said case as well as apportionment of payment amongst such different services as made by AO was not disputed by assessee. On other hand, payment to extent of 25 per cent attributed for services referred to in cl. (b) of agreement viz., allowing use of channels of distribution in overseas markets to Indian company and after sales service in those markets was impliedly accepted by assessee company itself to be in nature of 'royalty' or 'fees for technical services' before Tribunal liable to tax in India. dispute before Tribunal thus was mainly relating to amount of 75 per cent attributable to other three categories of services referred to in cls. (a), (c) and (d) of agreement and when Tribunal held that payments for three services referred to in cls. (c) and (d) of agreement were in nature of 'royalty' or 'fees for technical services' taxable under s. 9, decision of Tribunal was accepted by assessee during course of hearing of its appeal by Hon'ble Bombay High Court. Hon'ble Bombay High Court thus was required to consider and decide only issue raised by Revenue relating to payment attributable to services referred to in cl. (a) of agreement, according to which, assessee had foregone in favour of CEAT Tyres of India Ltd. export sales in various markets and in certain cases, export orders were also transferred to Indian company and it was held by their Lordships that said payment attributable to services referred to in cl. (a) of agreement could not be treated as 'royalty' or 'fees for technical services' falling under cls. (vi) and (vii) of s. 9(1). It was thus case where different services were classified in agreement itself and it was possible to apportion total payment made in pursuance of agreement amongst these classified services which was accepted by assessee himself. In present case, such classification sought to be made by Revenue authorities was not accepted by assessee, but same was disputed by pointing out that all services rendered by it being integral part of arrangement to promote hotel business in mutual interest by way of publicity, advertisement and marketing, such classification as well as attribution of payment thereto was neither permissible nor possible. Moreover, nature of services rendered in case of CEAT International SA (supra) before Hon'ble Bombay High Court was different than services rendered by assessee company in present case and in any case, nature of such services is required to be ascertained taking into consideration all relevant facts of each case such as nature of business of concerned parties, scope of arrangement between them, etc. Moreover, as pointed out by learned counsel for assessee before us, assessee in said case was admittedly receiving consideration for allowing use of its trademark by Indian company under cl. (d) of agreement and payment attributable thereto was held to be in nature of 'royalty' in terms of Expln. (2) to s. 9(1)(vi). In present case, agreements, however, specifically provide for use of trademark free of cost by Indian hotels/clients and this being materially distinguishable fact, decision rendered in case of CEAT International SA (supra) cannot be applied to facts of present case. It is also pertinent to note that assessment year involved in case of CEAT International SA (supra) was 1978-79 wherein benefit of DTAA was not available to assessee. 57. As held by Hon'ble Andhra Pradesh High Court in case of CIT vs. Klayman Porcelains Ltd. (1998) 229 ITR 735 (AP), question as to whether amount in question paid by Indian company to non-resident company is in nature of royalty or fees for included services is question of fact to be determined on facts and circumstances of each case and terms of agreement under which same has been paid. In this regard, we have already examined and analyzed relevant terms of agreements under which amount in question was paid by Indian hotels/clients to assessee company and on such examination as well as on appreciation of peculiar facts and circumstances of case, we have noted that amount in question was entirely paid by Indian hotels/clients to assessee company for services rendered in relation to publicity, advertisement and sales promotion whereas other services enumerated in agreements were ancillary being incidental to attain main objective. On other hand, facts involved in various cases cited by learned special counsel for Revenue were materially different from facts of present case. For instance, in case of Aziende Colori Nazionali Affini (supra), assessee foreign company had entered into agreement with Indian company for supply of know-how for which fees was payable by Indian company. said agreement also contemplated assistance to be given by assessee foreign company to Indian company in manufacture. On other hand, nature of services rendered by assessee company to Indian hotels/clients in present case is entirely different as already discussed and as per express terms of relevant agreement, entire payment was made for rendering of such services in relation to advertisement, marketing and sales promotion. In case of CIT vs. Stanton & Stavely (Overseas) Ltd. (supra) Indian concern was allowed by non-resident company to use its patent as per agreement and even there was supply of further technical information by non-resident company to Indian concern and in these circumstances, it was held by Hon'ble Calcutta High Court that consideration paid by Indian concern to non-resident company was royalty even though said was described in agreement as "commission". Hon'ble Calcutta High Court observed that documents/agreements have to be interpreted in accordance with commercial principles and nomenclature used by parties is not conclusive in this regard. In its judgment, Hon'ble Calcutta High Court also referred to decision of Court of Appeal in IRC vs. 36/49 Holdings Ltd. (In Liquidation) (1943) 25 ITC 173 and reproduced following observations recorded in said decision at p. 182 : "The true nature of sum payable to recipient for purposes such as present is to be ascertained from all circumstances relevant to that matter. true nature of sum is not necessarily its nature in law but its nature in business or in accountancy whichever way one likes to put it, because from legal point of view there may be no difference whatsoever as between parties between capital and income sum. It may be totally irrelevant to legal relationships into which they are proposing to enter. When, however, tertius gaudens, in shape of Revenue, appears on scene, that matter which as between parties may have been matter of not slightest importance becomes immediately matter of very great importance, and it is necessary to examine circumstances of each individual case, including any documents which require to be construed, in order to ascertain what is character to be attributed to payment." 5 8 . In our opinion, aforesaid observations of Court of Appeal highlighted by learned special counsel for Revenue as well as ultimate decision rendered by Hon'ble Calcutta High Court in case of Stanton & Stavely (Overseas) Ltd. (supra), in fact, support assessee's case as true nature of amount paid by Indian hotels/clients to assessee company has been found to be for services rendered in relation to advertisement, marketing and sales promotion after examining relevant te r m s of agreement, commercial principles, nature of assessee's business and not merely on basis of nomenclature used by parties. 59. In case of CIT vs. Ahmedabad Mfg. & Calico Printing Co. (supra) agreement between assessee and foreign company for ten years was for supply of technical know-how to assessee and assessee was given exclusive license to manufacture, sale and exploit products and improvements thereof in India and in these circumstances, payment made to foreign company b y assessee was held to be 'royalty' for exclusive right to manufacture products. 6 0 . In case of N.V. Philips vs. CIT (supra), as per agreement between foreign company and Indian company, foreign company had supplied technical assistance and technical information regarding manufacture of particular commodity. Distinction, however, was made in agreement between technical assistance and information and since this information was of highly specialized nature and was regarding manufacture of particular commodity directly related to supply of technical assistance by foreign company regarding manufacture of particular commodity, payment received for supply of said information was held to be assessable as 'royalty'. 61. In case of Elkem Technology vs. Dy. CIT (supra), assessee was non-resident company based in Norway. It entered into contract with Indian company for supply of equipment as well as engineering data besides personal services for establishing submerged arc furnace in India. As per terms and conditions of said contract, consideration payable by Indian company was clearly, demarcated and consideration for engineering and personnel services was shown separately independent of supply of equipment. In these facts and circumstances involved in that case, it was held by Hon'ble Andhra Pradesh High Court that consideration for engineering and personnel services was "fees for technical services" under Expln. 2 to s. 9(1)(vii). I t was thus case involving not only clear-cut demarcation between engineering and personnel services on one part and supply of equipment on other, but even consideration for such services was payable separately as per terms and conditions of relevant agreement. Moreover, nature of services rendered by foreign company was also different from services rendered by assessee company in present case. 62. In case of Union Carbide Corpn. vs. IAC (supra) assessee, non-resident company, had received from Indian company certain amounts under "technical service agreement" and claimed that amounts so received being 'fees for technical service', were exempt under s. 9(1)(vii) read with Explanation thereto as applicable to relevant year i.e. asst. yr. 1982-83. AO did not accept this claim of assessee and matter travelled to Tribunal which was called upon to consider and decide question as to whether amount received by assessee from Indian company under "technical service agreement" dt. 13th Nov., 1973 was taxable in its hands as 'royalty' under s. 9(1)(vi). Since experience of foreign company in field of manufacture of pesticides for long period of years, according to Tribunal, was "fund of knowledge" which was supplied by it to Indian company for utilization for manufacturing of pesticides, it was held that 50 per cent of total amount received by assessee under technical service agreement could be treated as 'royalty' under s. 9(1)(vi). facts of this case before Tribunal clearly show that agreement between two sides was for rendering technical services and knowledge and experience possessed by foreign company referred to as "fund of knowledge" was in field of manufacture of pesticides which was made available to Indian company for manufacturing pesticides. Moreover, issue before Tribunal was also different than one involved in present case inasmuch as assessee company itself had claimed amount received under technical service agreement as 'fees for technical services' under s. 9(1)(vii) whereas Revenue's stand was that same did fall under provisions of s. 9(1)(vi) being 'royalty' which was partly accepted by Tribunal taking into consideration very nature of services being technical as well as fund of knowledge possessed by assessee in field of manufacture of pesticides which was made available for utilization by Indian company. It is also pertinent to note that assessment year involved in this case was 1982-83 and benefit of DTAA between India and USA was not available to assessee. 6 3 . In case of Nisshinbo Industries Inc. vs. Asstt. CIT (supra), assessee was non-resident company which entered into collaboration agreement with Indian company for supply to latter of technical know-how for establishing unit for manufacture of disk pads and brake linings. income derived by way of fees for supplying technical know-how to Indian company was written by it as "fees for technical services". AO, however, treated 2/3rd of assessee's income as 'royalty' and applied higher tax rate of 40 per cent as against 20 per cent applicable in respect of 'fees for technical services'. When matter travelled to Tribunal, Chennai Bench of Tribunal accepted stand of assessee company and held that entire consideration received by it from Indian company was 'fees for technical services' liable, to tax at lower rate of 20 per cent. It is thus clear that not only nature of services rendered by Japanese company to Indian company was different from that of present case but even issue involved before Tribunal, was quite limited relating to rate of tax which was higher if amount received by assessee was treated as 'royalty' than if same was treated as 'fees for included services'. 6 4 . In case of Raymond Ltd. vs. Dy. CIT (supra) assessee company had engaged company incorporated in UK as Lead Manager and since this main job undertaken by UK company involved specialized services rendered by its managers, same were held by Mumbai Bench of Tribunal as managerial or consultancy services within meaning of s. 9(1)(vii) read with Expln. 2. However, as no technical knowledge, experience, skills, know-how or process, etc. "was made available" to assessee company by non-resident managers to GDR issue within meaning of art. 13.4(c) of DTAA between India and UK, it was held by Tribunal that no part of fees for managerial services could be considered as 'fees for technical services' since word 'managerial' did not find place in concerned article. Consequently, it was held by Tribunal that assessee company was under no obligation to deduct tax under s. 195. In present case, no such managerial services were rendered by assessee company to Indian clients/hotels so as to attract provisions of s. 9(1)(vii). 65. resume of various decisions cited by learned special counsel for Revenue, as discussed above, clearly shows that facts involved therein were materially different than facts involved in present case inasmuch as nature of services rendered therein was altogether different from nature of services predominantly rendered by assessee company in present case as discussed hereinabove in detail. learned special counsel for Revenue, however, has attempted to pick out and rely on some sentence from said judgments in support of Revenue's case divorced from text and context thereof. It is first and foremost principle of reviewing binding nature of precedents that precedent is authority for what it actually decides and not what may remotely or even logically follow from it. As held by Hon'ble Supreme Court in case of CIT vs. Sun Engg. Works (P.) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC), it is neither desirable nor permissible to pick out word or sentence from judgment of Court divorced from context of question under consideration and to treat it to be law declared by Court. 66. On other hand, facts involved in case of CIT vs. Nayveli Lignite Corpn. Ltd. (2000) 162 CTR (Mad) 206 : (2000) 243 ITR 459 (Mad) were somewhat similar to facts of present case inasmuch as assessee had entered into agreement with Hungarian company for acquiring steam generating plants with auxiliaries. As per said agreement, drawings and designs were also to be supplied by Hungarian company to Indian company before manufacturing is commenced with help of said plant to ensure that buyer's requirements are fully taken care of and to enable buyer to operate machines and also to assure buyer that machines will perform to specifications required by buyer. This supply of designs and drawings was held to be only incidental to performances of total contract by Hon'ble Madras High Court observing that none of sub- clauses in Expln. (2) under s. 9(1)(vi) would apply to such supply of design and drawings so as to say that any income accrued to foreign supplier in India. Hon'ble Madras High Court also observed that mere passing of information concerning design of machine which is tailor made to meet requirement of buyer does not by itself amount to transfer of any right of exclusive user so as to render payment made therefrom being regarded as 'royalty'. 6 7 . In case of Klayman Porcelains Ltd. (supra), Hon'ble Andhra Pradesh High Court held that question whether amount paid by Indian company to non-resident for imparting of any information concerning working of use of patent, invention, model, design, secret formula or process or trademark or similar property and if it is paid for imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill, would fall within meaning of 'royalty' or not is essentially of facts to be determined on facts and circumstances of each case and terms of agreement under which there has been transfer. In said case, finding was recorded by Tribunal on construing relevant portion of agreement that foreign company had undertaken to supply, erect and commission kiln in India and even though know-how was also provided along with material, entire payment had been considered as cost of kiln by purchaser in India. Keeping in view this finding of fact recorded by Tribunal, it was held by Hon'ble Andhra Pradesh High Court that entire consideration having been paid for construction/ installation of kiln, one is unable to say that any amount was paid for imparting any information concerning working of patent, invention, design, secret formula, etc. falling under cl. (ii) of Explanation or for imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill within meaning of cl. (iv) of Expln. (2). Hon'ble Andhra Pradesh High Court, therefore, upheld conclusion of Tribunal that part of payment made by Indian company to foreign company in pursuance of their agreement could not be regarded as 'royalty' within meaning of Expln. (2) to cl. (vi) of sub-s. (1) of s. 9. 68. To similar effect is decision of Hon'ble Delhi High Court in case of CIT vs. Mitsui Engg. & Ship Building Co. Ltd. (2002) 174 CTR (Del) 66 : (2003) 259 ITR 248 (Del) wherein price paid by Indian company to supplier was total contract price covering all stages involved in supply of machinery from stage of design to stage of commissioning. total consideration payable was Rs. 4,74,000 and it was held by Revenue authorities that consideration attributable to design part was covered by Expln. (2) to s. 9(1)(vi). This stand of Revenue, however, was not accepted by Tribunal and when matter reached to Hon'ble Delhi High Court, it was held by their Lordships, relying on decision of Hon'ble Madras High Court in case of Nayveli Lignite Corpn. Ltd. (supra), that it was not possible to apportion consideration for design on one part and supply and commissioning of machinery on other part. It was also held by Hon'ble Delhi High Court that limited purpose of drawing and design was only to secure interest of purchaser and information concerning working of machine was only incidental to supply of machinery which could not be said to be covered under sub-cl. (vi) and also (vii) of s. 9(1). In case of CIT vs. HEG Ltd. (2003) 182 CTR (MP) 353 : (2003) 263 ITR 230 (MP), Hon'ble Madhya Pradesh High Court has held that payment for any information concerning industries or commercial venture cannot earn status of royalty and to have status of royalty, information must have some special features. 69. In present case, main job undertaken by assessee company was to render services in relation to advertisement, publicity and sales promotion (including reservation) of Indian hotels as is clearly evident from relevant terms of agreements and use of trademark, trade name, etc. as well as provision of other facilities/services was only incidental to rendering of said services. Moreover, payments under agreements were entirely made by Indian hotels/clients to assessee company for these main services as per express payment clause contained in said agreements and said incidental/ancillary services not being independent of and separable from main job undertaken by assessee in peculiar facts of case, it was neither possible nor desirable to apportion or attribute any part of consideration received by assessee thereto. This being factual position and keeping in view aforesaid decisions of Hon'ble High Courts including that of Hon'ble jurisdictional High Court in case of Mitsui Engg. & Ship Building Co. Ltd. (supra), we are of view that payments in question received by assessee or even any part thereof were not in nature of 'royalty' within meaning of s. 9(1)(vi) read with Expln. 2 thereto. 7 0 . Having held that amount in question paid by Indian clients/hotels to assessee company on account of services rendered in pursuance of agreements entered into with them was not in nature of 'royalty' or 'technical services' within meaning of s. 9(1)(vi) read with Expln. 2, next issue which arises for our consideration is whether said payment could be treated as 'royalty' or 'fees for included services' in terms of relevant articles of DTAA between India and America. Although definition of 'royalty' as given in Expln. 2 to s. 9(1)(vi) of IT Act, 1961 is wider in scope and ambit than definition of 'royalty' given in art. 12(3) of Indo-American DTAA, this issue assumes significance firstly because authorities below have held amount in question to be 'royalty' and/or 'fees for included services' relying also on relevant articles of DTAA and secondly, as per specific provisions contained in s. 90(2), provisions of DTAA override provisions of IT Act, 1961 insofar as they are more beneficial to assessee. issue regarding applicability of s. 9(1)(vii) read with Expln. 2 thereto, although not specifically invoked by authorities below in their orders, can also appropriately be considered simultaneously. 71. As per art. 12(1) of DTAA between India and America, royalties and fees for included services arising in contracting state (i.e. India in present case) and paid to resident of other contracting state (i.e. America in present case) are liable to be taxed in that other state (i.e. America in present case). However, as per art. 12(2), such royalties and fees for included services may also be taxed in contracting state (i.e. India in present case) in which they arise according to laws of that state subject to certain concessions as provided in cls. (a) and (b) of art. 12(2). terms "royalties" and "fees for included services" as used in art. 12 are defined in art. 12(3) and 12(4) respectively as follows : "12(3). term "royalties" as used in this article means : (a) payments of any kind received as consideration for use of, or right to use, any copyright of literary, artistic, or scientific work, including cinematograph films or work on film, tape or other means of reproduction for use in connection with radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience including gains derived from alienation of any such right or property which are contingent on productivity, use or disposition thereof; and (b) payments of any kind received as consideration for use of, or right to use, any industrial, commercial or scientific equipment, other than payments derived by enterprise described in para 1 of art. 8 (shipping and air transport) from activities described in para 2(c) or 3 of art. 8. 4. For purposes of this article, "fees for included services", means payments of any kind to any person in consideration for rendering of any technical or consultancy services (including through provision of services of technical or other personnel) if such services : (a) are ancillary and subsidiary to application or enjoyment of right, property or information for which payment described in para 3 is received; or (b) make available technical knowledge, experience, skill, know-how, or processes, or consist of development and transfer of technical plan or technical design." 7 2 . It appears from orders of authorities below passed in present case that while treating amount in question received by assessee from Indian hotels/clients as 'royalty' and/or 'fees for included services' AO relied on arts. 12(3) and 12(4)(b) of Indo-American DTAA besides provisions of s. 9(1)(vi) of IT Act, 1961 whereas learned CIT(A) applied art. 12(3)(a). At time of hearing before us, learned special counsel for Revenue Shri Y.K. Kapur has sought to rely, by way of raising additional grounds in appeals filed by Revenue, art. 12(4)(a) to support Revenue's case that amount in question being in nature of 'fees for included services' was liable to tax in India also. learned counsel for assessee has raised strong objection for admission of these additional grounds stating that neither AO nor learned CIT(A) having applied art. 12(4)(a) of DTAA in their orders passed in assessee's case, Revenue cannot rely on said articles to support its case at this stage during course of appellate proceedings before Tribunal. Keeping in view that issues sought to be raised by Revenue in these additional grounds are purely legal and all facts relevant to consider and adjudicate same are on record, we, however, find no merits in objection raised by learned counsel for assessee and admitting additional grounds raised by Revenue, we now proceed to consider and decide issues raised in these additional grounds also on merits. In support of Revenue's case that impugned amount received by assessee from Indian, hotels/clients was in nature of 'royalty' or 'fees for included services' as per DTAA between India and America, reliance thus has been placed by it mainly on provisions of arts. 12(3)(a) as well as 12(4)(a) and 12(4)(b). Article 12(3)(b) being specifically applicable only to payments received for use of or right to use of any equipment of industrial, commercial or scientific nature, in any case, is not applicable to facts of present case. It is, therefore, relevant to consider as to whether payment received by assessee from Indian hotels/clients was in nature of "royalties" or "fees for included services" within meaning given in art. 12(3)(a), 12(4)(a) or 12(4)(b) of DTAA between India and USA or "fees for technical services" within meaning given in Expln. 2 to s. 9(1)(vii). 73. In order to decide this issue relating to applicability of art. 12(3)(a), 12(4)(a) or 12(4)(b) of DTAA or provisions of s. 9(1)(vii) read with Expln. 2 to payment received or receivable by assessee from Indian hotels/clients in pursuance of agreements entered into with them, it is necessary to appreciate exact nature of services rendered by assessee as is evident from said agreements. In this regard, it is necessary to read said agreements as whole as held in various judicial pronouncements discussed above so as to ascertain exact nature of services as well as relationship between two parties. We have already done this exercise in context of issue relating to applicability of s. 9(1)(vi) read with Expln. 2 and after examining and analyzing all relevant clauses and articles of said agreements in detail, we have come to conclusion that arrangement between assessee company and Indian hotels/clients was in nature of integrated business arrangement predominantly for rendering services in connection with publicity, advertising and sales including reservations of Indian hotels worldwide. main intention/purpose of said arrangement was to promote hotel business worldwide in mutual interest of both sides and other services enumerated in various articles of agreements to be rendered by assessee company were merely ancillary or auxiliary to this main objective/intention. This precisely was sum and substance of agreement if same is read as whole and thus, it was case in which assessee company had undertaken to provide services in connection with advertising, publicity and sales promotion including reservations for Indian hotels/clients. Even payment was entirely made as expressly stipulated in agreement for these services and this is way in which entire arrangement was not only made but was also understood by both sides. Even use of trademark, trade names, etc. of assessee company by Indian hotels/clients was integral part of this arrangement and such use was allowed at no cost as expressly provided in relevant agreements. Moreover rationale behind providing such use at no cost has been explained on behalf of assessee which is found to be satisfactory by us for detailed reasons given in foregoing portion of this order. Having regard to all these aspects, we have come to conclusion that various services rendered by assessee to enable it to complete efficiently and effectively job undertaken by it as integrated business arrangement to provide services relating to advertising, publicity and sales promotion including reservations of Indian hotels worldwide in mutual interest cannot be relied upon by picking and choosing same in isolation so as to say that part of consideration received by assessee, as attributable to said services, was in nature of 'royalties' or 'fees for included services'. Such approach adopted by Revenue authorities, in our opinion, was neither permissible in law nor practicable in facts of case and conclusion drawn by them on basis of such approach to cover said services taken individually or in isolation divorced from main intention within meaning of 'royalties' or 'technical services' as defined in Expln. 2 to s. 9(1)(vi) or to s. 9(1)(vii) and/or that of "royalties" or "fees for included services" as defined in art. 12(3) and 12(4) of DTAA between India and USA was neither well-founded nor justified. 74. On other hand, predominant object/purpose of integrated business arrangement between assessee company and its Indian clients/hotels as reflected in relevant agreements so also as understood by both sides was that of providing services in relation to marketing, publicity and sales promotion and even payments in question were entirely made by Indian hotels/clients to assessee company for such services as expressly provided in relevant agreements. 75. In case of Dy. CIT vs. Boston Consulting Group Pte Ltd. (supra) assessee was foreign company receiving income by providing strategy consultancy services such as marketing and sales strategy, business strategy and portfolio strategy to its clients in India and said income was sought to be held as in nature of 'fees for technical services' within meaning given in relevant articles of DTAA between India and Singapore and after comparing scope of art. 12(4)(b) of India-US Treaty with that of same article of India-Singapore Tax Treaty, it was held by Tribunal that services rendered by assessee company being non-technical services could not be covered by scope of art. 12(4)(b) of Indo-American DTAA as well as that of India-Singapore DTAA. It was held by Tribunal that nature of services being rendered by assessee company such as business strategy, marketing and sales strategy, etc. were materially different and they were not of technical in nature which would enable person acquiring services to apply technology contained therein. Explaining further, it was also observed by Tribunal that so far as provisions of India-Singapore DTAA as well as provisions of Indo-American DTAA are concerned, payments for services which are non-technical in nature or, in other words, payment for services not containing any technology, are required to be treated as outside scope of 'fees for technical services'. It was further held by Tribunal that scope of 'fees for technical services' under art. 12(4)(b) does not cover consultancy services unless these services are technical in nature. 76. In case of Raymond Ltd. vs. Dy. CIT (supra), Mumbai Bench of Tribunal held that normal, plain and grammatical meaning of language employed using expressions 'making available' and 'making use of' is that mere rendering of services is not roped in unless person utilizing services is able to make use of technical knowledge etc. by himself in his business or for his own benefit and without recourse to performer of services in future. technical knowledge, experience, skill etc. must remain with person utilizing services even after rendering of services has come to end. fruits of services should remain available to person utilizing services in some concrete shape such as technical knowledge, experience, skill, etc. 7 7 . As already observed, close reading of relevant agreements especially payment clause, predominant nature of services rendered, integrated arrangement between assessee company and Indian hotels/clients as well as nature of relationship between them as reflected in relevant agreements so also as understood by both sides leaves no doubt that entire consideration was paid by Indian hotels/clients to assessee company for services rendered in relation to advertisement, publicity and sales promotion of hotel business worldwide and this being so as well as considering all facts of case including especially fact that other services to be rendered by assessee as enumerated in various articles of relevant agreements were merely ancillary or auxiliary in nature being incidental to integral job undertaken by assessee to provide services in relation to advertisement, publicity and sales promotion of hotel business worldwide, it is very difficult to accept stand of Revenue that amount so paid by Indian hotels/clients to assessee company or any part thereof was paid for use of patent, invention, model, design, secret formula or process or trademark or similar property or for imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill as envisaged in art. 12(3)(a), 12(4)(a) or 12(4)(b) of DTAA or in s. 9(1)(vii) read with Expln. 2. 78. supply of drawings, design, documents, information etc. such as fire safety system, computer reservation system, etc. as mentioned in relevant articles of agreements on which much emphasis has been laid by t h e learned special counsel for Revenue was made by assessee to enable it to execute job undertaken by it to render services in relation to advertisement, marketing and sales promotion of hotel business worldwide and such supply was merely incidental to performance of integrated business arrangement which included mainly rendering services in relation to advertisement, publicity and sales promotion of hotel business. payment made by Indian hotels/clients to assessee company on account of such job or any part thereof, therefore, cannot be attributed to use of patent, invention, model, design, secret formula or process or trademark or similar property or for imparting of any information concerning technical, industrial, commercial or scientific knowledge, experience or skill. decision of Hon'ble Madras High Court in case of Neyveli Lignite Corpn. Ltd. (supra) and that of Hon'ble Andhra Pradesh High Court in case of Klayman Porcelains Ltd. (supra) fully support this view. Even decision of Authority for Advance Ruling in case of Rotem Co. In re (2005) 198 CTR (AAR) 33 : (2005) 279 ITR 165 (AAR) is to similar effect wherein after discussing various judicial pronouncements, it was held that principle which emerges from various decisions is that in contract for manufacture, installation, sale or supply of goods, element of services will always be present and where such services are inextricably linked with manufacture, installation, sale or supply, they cannot be evaluated for purpose of FTS. It is only where services are separable and independent that FTS will be assessable. In present case, services sought to be treated as 'fees for technical services' or 'fees for included services' were of ancillary or auxiliary in nature and being integral part of job undertaken by assessee company, same were neither independent of nor separable from said job undertaken by assessee in relation to publicity, advertisement and sales promotion of hotel business worldwide. 79. Before us, learned special counsel for Revenue has referred to some of articles of agreements between assessee and Indian hotels/clients to submit that drawings, designs, documents, systems and other facilities agreed to be provided by assessee to Indian hotels/clients in terms of said articles are components which have been provided/supplied in process of rendering of services in relation to advertisement, marketing and sales promotion. He has contended that since same come within purview of one or other clauses contained in Expln. 2 to s. 9(1)(vi) and (vii) as well as art. 12(3) and 12(4) of DTAA between India and USA, payment/consideration attributable to same should be apportioned so as to bring same to tax in India. In this regard, it is observed that similar contention was raised before Hon'ble Delhi High Court on behalf of Revenue in case of CIT vs. Mitsui Engg. & Ship Building Co. Ltd. (supra). same, however, was rejected by Hon'ble jurisdictional High Court holding that it was not possible to apportion consideration for design on one part and engineering, manufacturing, shop testing etc. on other since price paid by assessee to supplier was total contract price which covered all stages involved in supply of machinery from stage of design to stage of commissioning. In present case also, entire price was paid by Indian hotels/clients to assessee company in pursuance of relevant agreements expressly for rendering services in relation to advertisement, publicity and sales promotion and it was neither possible nor practicable nor permissible to apportion said consideration as sought to be done by Revenue authorities. 8 0 . As regards applicability of art. 12(3)(a) of DTAA, we have already held that its trademark, trade name etc. were made available by assessee company to Indian hotels/clients as integral part of business arrangement between them and same, therefore, was merely incidental to carry out job of advertisement, publicity and sales promotion undertaken by assessee company. Moreover, said use was allowed for mutual benefit and exact benefits derived by assessee company from such use have already been discussed by us. As expressly provided in relevant agreements, it was agreed that no cost is to be paid by Indian hotels/clients to assessee company for such use and entire payment/consideration was on account of services rendered in relation to advertisement, publicity etc. This was arrangement between parties as is evident from relevant terms and conditions of agreements and this is way in which both sides had apparently understood and acted upon such arrangement. It was thus neither desirable nor possible to apportion any portion of consideration received by assessee company from Indian hotels/clients towards use of trademark, trade name etc. by Indian hotels/clients. Having regard to all these facts and circumstances of case borne out from record including especially relevant agreements between parties, we find it difficult to accept stand taken by Revenue that payments received by assessee company from Indian hotels/clients in pursuance of said agreements or any part thereof was in nature of royalties within meaning of art. 12(3)(a). 8 1 . As regards art. 12(3)(b) covering payments received as consideration for use of or right to use any industrial, commercial or scientific equipment, we have already noted that neither Revenue has invoked provisions of this article in assessee's case nor same otherwise also is applicable to facts of present case since there was no such use or right to use any industrial, commercial or scientific equipment. This takes us to art. 12(4)(a) of DTAA which covers only payments made for rendering of any technical or consultancy services which are ancillary and subsidiary to application or enjoyment of right, property or information for which payment described in para 3 is received. As clarified and explained in Memorandum of Understanding dt. 15th May, 1989, para 4(a) of art. 12 thus includes technical and consultancy services that are ancillary and subsidiary to application or enjoyment of intangible for which royalty is received under license or sale as described in para 3(a) as well as those ancillary and subsidiary to application or enjoyment of industrial, commercial or scientific equipment for which royalty is received under lease as described in para 3(b). In this regard, we have already held that payments received by assessee in present case from Indian hotels/clients were not in nature of royalties within meaning given in para 3(a) or 3(b) of art. 12. It, therefore, follows that para 4(a) of art. 12 also cannot be applied to cover any of services rendered by assessee company to Indian hotels/clients in present case. 82. This leaves us only with para 4(b) of art. 12 and we have to consider whether services rendered by assessee company are covered under this para. As explained and clarified in MoU dt. 15th May, 1989 in relation to Indo-US Tax Treaty, para 4(b) of art. 12 refers to technical or consultancy services that make available to person acquiring service, technical knowledge, experience, skill, know-how or process or consists of development and transfer of technical plant or technical design to such person. It is also clarified that this category is narrower than category described in para 4(a) because it excludes any service that does not make technology available to person acquiring service. Generally speaking, technology will be considered "made available" when person acquiring service is able to apply technology. As further clarified in aforesaid Memorandum, very fact that provision of service may require technical input by person providing service does not per se mean that technical knowledge, skills etc. are made available to person purchasing service within meaning of para 4(b). Typical categories of services that generally involve either development and transfer of technical plans or technical designs or making technology available as described in para 4(b) have been illustrated in aforesaid MoU as engineering service, architectural services and computer software development none of which covers services rendered by assessee in present case, nature of which is altogether different as already discussed in detail by us. 83. It is also further clarified in MoU that technical and consultancy services as envisaged under para 4(b) of art. 12 could make technology available in variety of settings, activities and industries and some of areas to which such services may relate are also enumerated in MoU which do not include hotel industry. One of such areas as indicated in MoU is "communication through satellite or otherwise" and relying on same, learned special counsel for Revenue has contended that interface between reservation system of assessee company and that of Indian hotels/clients was covered in this category. We, however, find it difficult to agree with this contention of learned special counsel for Revenue. First of all, it is area which has been specified in MoU for ascertaining services relating thereto being of technical and consultancy nature making technology available whereas services rendered by assessee in present case are in field of hotel industries and such services are in relation to advertisement, publicity and sales promotion which are not in nature of technical and consultancy services involving making of any technology available. Secondly, interface between computerized reservation system of assessee and computerized reservation system of Indian hotels/clients was provided to facilitate reservation of hotel rooms by customers worldwide as integral part of integrated business arrangement between assessee and Indian hotels/clients. This interface thus was not separable from and independent of main integrated job undertaken by assessee company of rendering services in relation to marketing, publicity and sales promotion and same, in any case, was not in nature of technical and consultancy services making any technology available to Indian hotels/clients in field/area of communication through satellite or otherwise. Moreover, as pointed out by learned counsel for assessee before us, no communication through satellite was involved in interface between computerized reservation system of assessee and that of Indian hotels/clients. 84. In reality, it is always possible that job undertaken by one party for other party of supply of any goods or services may involve utilization of knowledge, information and expertise of party undertaking said job. This possibility is more in international trade because job is entrusted to foreign party generally having expertise, knowledge, technology and experience to execute said job. However, just because such expertise, knowledge, technology and experience is possessed by said party and same has been utilized for rendering services, it cannot be said that services so rendered are in nature of technical and consultancy services making any technology available to other party. There could be cases like one in hand where nature of services rendered in relation to job undertaken is entirely different and may not involve either development and transfer of technical plans or technical designs, or making technology available as described in para 4(b). It is, however, possible that experience, expertise, knowledge etc. acquired by said party is utilized for rendering services as integral part of arrangement between parties. same, however, cannot be considered as technical or consultancy services of nature envisaged in para 4(b) of art. 12. examples given in MoU to indicate scope of para 4(b) of art. 12 clearly support this view. In example 4 so given, Indian builder hires US company to produce wallboard at their plant outside India. Indian company provides raw material and US manufacturers fabricate wallboard in its plant using advanced technology. On analysis of these facts, it is clarified in MoU that although US company is clearly performing technical service, no technical knowledge, skill etc. are made available to Indian company nor is there any development and transfer of technical plan or design and, therefore, fees payable by Indian company to American company would not be for included services. In another example No. 7, Indian vegetable oil manufacturing firm has mastered science of producing cholesterol free oil and wishes to market product worldwide. It hires American marketing consulting firm to do computer stimulation of world market for such oil and to advice it on market strategy. On analysis of these facts, it is clarified/explained that fees payable by Indian company to US company would not be for included services. It is also explained that even though American company is providing consultancy service which involves use of substantial technical skill and expertise, it is not making available to Indian company any technical experience, knowledge or skill, etc. nor is it transferring technical plan or design. What is transferred to Indian company through service contract is commercial information and mere fact that technical skills were required by performer of service in order to perform commercial information services does not make service technical service within meaning of para 4(b) of art. 12. Since facts of present case are almost similar to facts of this case given in example 7 of MoU, it leaves no doubt that payment in question received by assessee company from Indian hotels/clients or any part thereof could not be treated as 'fees for included services' within meaning of para 4(b) of art. 12. 85. As such, considering all facts of case, relevant provisions of IT Act, 1961 as well as that of DTAA between India and USA and keeping in view legal position emanating from various judicial pronouncements discussed above, we are of opinion that amount received by assessee from Indian hotels/clients for services rendered under relevant agreements was not in nature of 'royalties' within meaning given in s. 9(1)(vi) read with Expln. 2 thereto of IT Act, 1961 or as given in art. 12(3) of Indo-American DTAA. same was also not 'fees for technical services' or 'fees for included services' as defined in s. 9(1)(vii) read with Expln. 2 thereto of IT Act, 1961 or art. 12(4) of Indo-American DTAA respectively. Having regard to integrated business arrangement between assessee company and Indian hotels/clients as evident from relevant agreements as well as nature of assessee's own business, said amount clearly represented its 'business profit' which was not liable to tax in terms of art. 7 of Indo-American DTAA. We, therefore, allow relevant grounds raised in assessee's appeals on this issue and dismiss additional grounds raised by Revenue in its appeals. 86. Before us, learned special counsel for Revenue Shri Y.K. Kapur has also raised alternative contention that affairs between assessee and ITC have been arranged or planned in such way that any payment of income-tax in India can be evaded. He has contended that agreement entered into between them incorporating such design or plan is nothing but colourable device not only to defraud Revenue but also to play fraud upon statute. He submitted that it is thus case not of tax planning but of tax avoidance by adopting colourable device. He took us through copies of various judgments of Hon'ble Supreme Court and High Courts filed in Compilation 2-2A(C-1) to explain concept of "colourable device" and "playing fraud upon statute". In one of these cases cited by Shri Kapur, viz., Bhagat Construction (P.) Ltd. vs. CIT (2001) 165 CTR (Del) 181 : (2001) 250 ITR 291 (Del), Hon'ble Delhi High Court has explained meaning of 'a colourable device' as colourable transaction which is seemingly valid but feigned or counterfeit transaction entered into for some ulterior purpose. It was also observed by Hon'ble jurisdictional High Court in said judgment that conclusion about nature of transaction, whether it was colourable or otherwise, if supported by material or evidence, is essentially one of fact. As further pointed out by Shri Kapur, it was held by Hon'ble Supreme Court in case of Bhaurao Dagdu Paralkar vs. State of Maharashtra & Ors. (2005) 7 SCC 605 that suppression of material document would also amount to fraud on Court. He also relied on decision of Hon'ble Supreme Court in case of McDowell & Co. Ltd. vs. CTO (1985) 47 CTR (SC) 126 : (1985) 154 ITR 148 (SC) wherein it was held that colourable devices cannot be part of tax planning and it is wrong to encourage or entertain belief that it is honourable to avoid payment of tax by dubious methods. It was also observed by Hon'ble apex Court that it is up to Court to take stock to determine nature of new and sophisticated legal devices to avoid tax and to expose devices for what they really are and to refuse to give judicial benediction. He submitted that relying on decision of Hon'ble Supreme Court in case of McDowell & Co Ltd. (supra), it was held by Hon'ble Gujarat High Court in case of Banyan & Berry vs. CIT (1996) 131 CTR (Guj) 127 : (1996) 222 ITR 831 (Guj) that principle enunciated by Hon'ble Supreme Court in McDowell & Co. Ltd.'s case (supra) has not affected freedom of citizen to act in manner according to his requirements, his wishes in manner of doing any trade, activity or planning his affairs with circumspection within framework of law unless same fall in category of colourable device which may properly be called device or dubious method or subterfuge clothed with apparent dignity. He pointed out that these observations of Hon'ble Gujarat High Court have been referred to by Hon'ble Supreme Court in its judgment in case of Union of India vs. Azadi Bachao Andolan (supra) at p. 759 with approval. He contended that manner in which agreements in present case have been drafted clearly shows that it was design to avoid payment of tax in India and same, therefore, was rightly held by CIT(A) as colourable device adopted by assessee to avoid payment of tax legally payable by it relying on decision of Hon'ble Supreme Court in McDowell & Co. Ltd.'s case (supra). He submitted that said agreements were so drafted that trademarks, trade names etc. of assessee company were allowed to be used by Indian hotels/clients at free of cost despite fact that said use was most crucial and important element of arrangement between parties and it was thus clear case of attempt made to avoid payment of tax by resorting to dubious methods. He contended that payment made by Indian hotels/clients to assessee company under agreements or at least part thereof was clearly attributable to such use of trademark, trade names etc., but by showing that said use was allowed free of cost in relevant agreements, attempt was clearly made to avoid payment of tax by artificial device showing apparently nature of income to be different than actual one. He contended that tax was clearly chargeable in India on amount attributable to such use being in nature of 'royalties' which has been avoided by assessee by adopting dubious method or colourable device by drafting relevant agreements to serve its purpose. 8 7 . learned counsel for assessee submitted that relevant agreements entered into by assessee company with Indian hotels/clients were not only approved by different Government authorities like RBI, etc. but even same were examined by IT Department before issuing no objection under s. 195(2) from time to time treating amount received by assessee company from Indian hotels under said agreements as its business profits. He contended that it is, therefore, not permissible for Revenue now to say that said agreements are colourable device adopted by assessee company to avoid payment of tax especially when orders under s. 195(2) were consistently passed up to asst. yr. 1994-95 treating amounts received by assessee company under said agreements as its 'business profit' after examining terms and conditions thereof. He also submitted that similar agreements were entered into by assessee company not only with Indian hotels/clients but even with other hotels situated worldwide. He contended that it is well-settled that apparent is real unless proved otherwise and as held by Hon'ble Supreme Court in case of CIT vs. Daulatram Rawat Mull (supra), onus of proving that apparent is not real is on party who claim it to be so. He submitted that nothing, however, has been brought on record on behalf of Revenue in present case to show that actual arrangement between assessee company and Indian hotels/clients was something different than one apparent from relevant agreements and their allegation that said agreements are colourable device is based purely on guess work and surmises without there being any evidence or material to support and substantiate same. In support of this contention, he relied on decision of Hon'ble Supreme Court in case of Dhakeswari Cotton Mills Ltd. vs. CIT (1954) 26 ITR 775 (SC). He also relied on decision of Hon'ble Supreme Court in case of Union of India vs. Azadi Bachao Andolan (supra). He also pointed out that both parties to agreements, i.e. assessee company and Indian hotels/clients are operating at arms' length and without there being any evidence brought on record to show any collusion between them, agreements between them cannot be held to be sham or collusive merely on basis of suspicion and surmises. 8 8 . After considering rival submissions and perusing relevant material on record, we find it difficult to agree with stand of Revenue that agreements between assessee company and Indian hotels/clients were in nature of colourable device adopted to avoid payment of tax in India. First of all, one of such agreements was entered into between assessee company and ITC initially on 27th Jan., 1979 for period of ten years which was further extended on virtually same terms and conditions for period of ten years vide fresh agreement dt. 30th Dec., 1988. Before entering into said agreements, required approvals of different Government authorities including that of RBI were duly obtained. Even copies of said agreements were produced before concerned IT authorities for obtaining no objection under s. 195(2) and after examining terms and conditions of said agreements, orders under s. 195(2) were passed from time to time treating amount received by assessee company from Indian hotels/clients under said agreements as its 'business profits'. Copies of these orders passed from time to time during relevant period have been placed on record by learned counsel for assessee before us. Further, as pointed out by learned counsel for assessee before us, similar agreements were entered into by assessee company with hundreds of other hotels situated worldwide having similar type of arrangement for services to be rendered in relation to advertisement, publicity and sales promotion. Having regard to all these facts and circumstances of case, it is difficult to accept stand of Revenue that said agreements were nothing but colourable device adopted by assessee to defraud Revenue. 89. As is evident from impugned orders of learned CIT(A) as well as contentions raised by Shri Kapur before us, case of Revenue about colourable device is mainly based on stipulation in agreements whereby trademark, trade names, etc. of assessee company were allowed to be used by Indian hotels/clients free of cost. However, as held by us in foregoing portion of this order, there was valid justification for allowing such use free of cost and explanation offered by assessee company giving rationale behind allowing of such use free of cost has been accepted by us for detailed reasons already given. It is also pertinent to note here that Revenue, on one hand, has treated payment received by assessee company from Indian hotels under said agreements as 'royalties' and/or 'fees for technical/included services' on basis of terms and conditions stipulated therein whereas very same agreement is being labelled as colourable device adopted by assessee to avoid payment of tax on other hand. As rightly contended by learned counsel for assessee, this approach of Revenue is nothing but blowing hot and cold in same breath which, in our opinion, cannot be accepted especially when its case of colourable device is not based on any evidence or material on record but same is based purely on surmises and conjectures. 90. As already observed by us after taking into consideration all facts of case that arrangement between assessee company and Indian hotels as evidenced by agreements was for rendering services in relation to advertisement, publicity and sales promotion of hotel business worldwide and entire payment was made by Indian hotels to assessee company for such services. This is what has been reflected in agreement and this is way in which both sides have not only understood but acted upon said agreements. Nothing, however, has been brought on record by Revenue authorities to show that intention of said arrangement or even any action taken by either of parties was different or at variation with any of terms of said agreements. As described in said agreements, both parties thereto i.e. assessee company and Indian hotels/clients were reputed and renowned parties having no relation whatsoever between them besides their business association and since both of them were clearly operating t arms' length, it cannot be alleged that there was some sort of collusion between them to draft agreement in such way to serve purpose of assessee company to avoid tax in India especially when there was no evidence whatsoever to support and substantiate said allegation. On other hand, due compliance of all statutory requirements was apparently done by them b y obtaining necessary permissions and approvals from time to time and even all agreements were produced before IT authorities from time to time for getting no objection under s. 195(2). concerned IT authorities thus not only had knowledge of said agreements but after examining terms and conditions thereof, orders under s. 195(2) were passed on different occasions treating amount received by assessee under said agreements as its 'business profit'. In case of Bhagat Construction Co. (P) Ltd. (supra), Hon'ble Delhi High Court has held that conclusion about nature of transaction whether it was colourable or otherwise is essentially one of fact and same is required to be considered on basis of supporting material or evidence available on record. 91. In case of Union of India vs. Azadi Bachao Andolan (supra), Hon'ble Supreme Court has held that act which is otherwise valid in law cannot be treated as non est merely on basis of some underlying motive supposedly resulting in some economic detriment or prejudice to national interest. It is also observed by Hon'ble apex Court that principle in Duke of Westminster not only is alive and kicking in India, but it also seems to have acquired judicial benediction of Constitutional Bench in India notwithstanding temporary turbulence created in case of McDowell (supra). If facts and circumstances of present case are considered and appreciated in light of decision of Hon'ble Supreme Court in case of Azadi Bachao Andolan (supra) as well as that of Hon'ble Delhi High Court in case of Bhagat Construction Co. (P) Ltd. (supra), we find it difficult to accept alternative stand of Revenue that said agreements were colourable device adopted by assessee to avoid payment of tax in India. 92. We also find no merits in contention of Shri Kapur based on s. 25 of Contract Act because agreements between assessee company and Indian hotels/clients represented integrated business arrangement for which assessee company was to receive from Indian hotels/clients consideration @ 3 per cent of room sales. In these circumstances, when payment was agreed to be made by Indian hotels/clients for job of publicity, advertisement and sales promotion undertaken by assessee company, provision of other services/facilities and use of trademark, trade names, etc. which were integral part of said arrangement without any separate cost, in our opinion, would not make entire contract to be null and void as sought to be contended by Shri Kapur. 9 3 . Before us, learned counsel for assessee has raised alternative contention that even if it is assumed for sake of argument that payments in question received by assessee company from Indian hotels/clients are in nature of 'royalties' or 'fees for included services' within meaning given in art. 12(3) or 12(4), same may be charged to tax only in USA in terms of art. 12(1). He has contended that art. 12(2) no doubt provides that same may also be brought to tax in India at rate not exceeding 15 per cent, but in absence of any such rate prescribed by CBDT or any other competent authority of Indian Government or any instructions or guidelines specifically issued by them, in this regard, AO is not competent to charge tax on such income in India by pressing into service art. 12(2). In support of this contention, he has relied on decision of Delhi Bench of Tribunal in case of Modiluft Ltd. vs. Asstt. CIT (supra) wherein while dealing with similar issue in context of DTAA between India and Germany, Tribunal held that relevant art. 12(2) of DTAA being vague and there being no guidelines issued by CBDT or any competent authority as to when such amount can be taxed in India and what may be criterion for arriving at appropriate rate of tax, benefit of this lacuna has to be extended to assessee. learned special counsel for Revenue, on other hand, has put forth Revenue's stand on this issue in written submissions at page Nos. 26 to 31. main plank of his arguments is that having regard to all facts of case, payments in question received by assessee company from Indian hotels/clients gave rise to income which has been accrued or arisen in India or deemed to have accrued or arisen in India and same, therefore, was chargeable to tax in India. Keeping in view our decision on main issue rendered hereinabove holding that entire amount in question representing business profit of assessee company was not liable to be taxed in India, this issue raised by learned counsel for assessee by way of alternative contention, however, has been rendered only academic in nature. We, therefore, do not deem it necessary or expedient to consider and decide same. 94. There are three more issues raised by assessee company in present appeals. Out of them, first issue relates to validity of initiation of reassessment proceedings for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 under s. 148 r/w s. 147 and same is raised by taking following common ground as ground No. 1 in respective appeals of assessee for relevant four years : "1(a) That Department having accepted contention of appellant that it was not liable to tax in India in respect of impugned income and accordingly having granted no objection certificate under s. 195(2) for making remittance to appellant without deduction of tax at source over past several years, acted whimsically and illegally in reopening assessment for impugned assessment year under s. 147 on mere change of opinion. 1(b) That accordingly, order of AO under s. 147 is bad-in-law and void ab initio and order of learned CIT(A) confirming said order of AO is also unsustainable in law." 95. learned counsel for assessee submitted before us that assessee company had been receiving impugned payments of identical nature consistently from 1979 onwards and after being satisfied that income arising from said payments was not taxable in India, concerned IT authority had granted no objection certificate under s. 195(2) to Indian companies for making remittance to assessee company without deduction of t x at source. He submitted that as per provisions of s. 40(a)(i), any remittance of sum chargeable to tax in India to foreign company without deduction of tax at source is not deductible as business expenditure in hands of payer and considering this repercussion of non-deduction of tax at source by payer, Department exercises due diligence before granting of no objection certificate for making remittance to non-resident without deduction of tax at source. He submitted that remittances of amount in question to assessee company by Indian hotels/clients in present case were permitted by Department without deduction of any tax at source as per orders passed under s. 195(2) from time to time and even said payments were allowed as deduction in assessments completed regularly in cases of Indian hotels/clients. He contended that said amounts thus were treated as "business profits" of assessee company not only in orders passed under s. 195(2) but even in regular assessments completed in cases of Indian hotels/clients being payers of said amounts. He contended that this treatment given earlier in period spanning for nearly nine years, however, was changed by AO while issuing notices under s. 148 initiating reassessment proceedings for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 and since reassessment proceedings so initiated were clearly based on mere change of opinion, same were bad in law. Relying on decision of Hon'ble Supreme Court in case of Radhasoami Satsang vs. CIT (1991) 100 CTR (SC) 267 : (1992) 193 ITR 321 (SC), Hon'ble Delhi High Court in case of CIT vs. Neo Poly Pack (P) Ltd. (2000) 245 ITR 492 (Del) and that of Hon'ble Punjab & Haryana High Court in case of CIT vs. Girish Mohan Ganeriwala (2003) 260 ITR 417 (P&H), he contended that where issue had been decided consistently in particular manner for earlier assessment years, same view should continue to prevail for subsequent years for sake of consistency unless there is material change in facts. He further contended that reassessment proceedings for all these four years were initiated by AO on basis of assessments completed by him in assessee's own case for asst. yrs. 1997-98 and 1998-99 and since said assessments completed by him were finally set aside by Tribunal vide its order dt. 23rd Oct., 2002, initiation of reassessment proceedings on basis of said orders, in any case, was bad in law. He contended that reassessments completed by AO for all these four years in pursuance of invalid initiation thus are liable to be quashed. 9 6 . learned special counsel for Revenue submitted that no assessment for any of four years under consideration was originally made in case of assessee nor even any return of income for said years was filed by assessee. He contended that there was thus no occasion for AO to express any opinion on issues involved in assessee's case and consequently, question of initiating reassessment proceedings on basis of "change of opinion" does not arise at all as alleged by learned counsel for assessee. He contended that when there were no assessments completed by AO originally in case of assessee for all four years under consideration, question of formation of any opinion about any issue did not arise at all. As regards contention of learned counsel for assessee that orders passed under s. 195(2) involved expression of opinion, he submitted that order passed under s. 195(2) is not order of assessment but it is only interim order which is subject to final assessment. In this regard, he relied on decision of Hon'ble Supreme Court in case of Transmission Corpn. of A.P. Ltd. vs. CIT (1999) 155 CTR (SC) 489 : (1999) 239 ITR 587 (SC) wherein it was held that order passed under s. 195 does not affect rights of parties and taxability of receipt in hands of recipient has to be examined independently in assessment proceedings without having regard to issuance of no objection certificate issued under s. 195(2). He also relied on decision of Hon'ble Bombay High Court in case of CIT vs. Tata Engineering & Locomotive Co. Ltd. (supra) and in case of CIT vs. Elbee Services (P) Ltd. (supra) for similar proposition. He contended that initiation of reassessment proceedings in present case thus was not based on change of opinion as alleged by learned counsel for assessee and there was no infirmity much less illegal infirmity in reassessments completed in pursuance of said initiation. 9 7 . We have considered rival submissions and also perused relevant material on record. It is observed that case of change of opinion has been attempted to be made out by learned counsel for assessee on basis that orders passed under s. 195(2) on examination of terms and conditions of relevant agreements holding amounts in question received by assessee from Indian hotels/clients to be its business profits amounted to expression of opinion by AO and therefore, taking different view in reasons recorded on similar issue involving similar facts for initiating reassessment proceedings was nothing but change of opinion. However, as held by Hon'ble Bombay High Court in case of CIT vs. Elbee Services (P) Ltd. (supra) cited by learned special counsel for Revenue, orders passed under s. 195(2) of IT Act are not conclusive and they do not pre-empt Department from passing appropriate orders of assessment. Further, as held by Hon'ble Bombay High Court in another case i.e. CIT vs. Tata Engineering & Locomotive Co. Ltd. (supra) cited by learned special counsel for Revenue, findings given under s. 195(2) of IT Act would not preclude Department from taking contrary view in assessment proceedings. Similarly, in case of Transmission Corpn. of A.P. Ltd. vs. CIT (supra), Hon'ble Supreme Court has held that provisions of s. 195 are for tentative deduction of income-tax subject to regular assessment and by deduction of income-tax, rights of parties are not in any manner adversely affected. proposition propounded in these judicial pronouncements thus is very clear that order passed under s. 195(2) are only interim orders passed for limited purpose of tentative deduction of income-tax and they do not pre-empt Department from passing appropriate orders of assessment taking even contrary view than what was expressed in orders passed under s. 195(2). said orders, therefore, cannot be equated with regular assessments and view expressed therein cannot be construed as opinion expressed in regular assessment. In order to say that initiation of reassessment proceedings is based on "change of opinion", change should be in opinion already expressed by AO on same issue in regular assessment originally completed and one cannot look into anything else than regular assessment originally completed for same year to say that reassessment proceedings initiated by taking different/contrary view is based on change of opinion. It is pertinent to note here that even intimation issued under s. 143(1)(a) is held to be not order of assessment expressing any opinion, in similar context by Hon'ble Delhi High Court in case of Mahanagar Telephone Nigam Ltd. vs. Chairman, CBDT (2000) 162 CTR (Del) 554 : (2000) 246 ITR 173 (Del) observing that there being no assessment as such under s. 143(1)(a), there is no question of change of opinion in issuing notice under s. 148. In case of Dr. Amin's Pathology Laboratory vs. P.N. Prasad, Jt. CIT (2002) 172 CTR (Bom) 704 : (2001) 252 ITR 683 (Bom), return of income filed by assessee was accepted under s. 143(1)(a) and there being no assessment of assessee made under s. 143(3) for relevant year, it was held by Hon'ble Bombay High Court that there was no question of reopening of assessment on change of opinion as alleged. To similar effect is decision of Hon'ble Rajasthan High Court in case of Suman Steels vs. Union of India (2004) 269 ITR 412 (Raj) wherein it was held that original assessment having been done under s. 143(1)(a) and not under s. 143(3), there was no occasion for Department to express any opinion and it, therefore, cannot be said that while issuing notice under s. 148, there was change of opinion involved. 98. resume of aforesaid judicial pronouncements clearly shows that unless there is regular assessment made under s. 143(3) in assessee's own case for very same year, there cannot be expression of any opinion by Department and this being so, initiation of reassessment proceedings for that year cannot be said to be based on change of opinion. decision of Hon'ble Calcutta High Court in case of CWT vs. Sardar Bahadur Sardar Indra Singh Trust (1993) 114 CTR (Cal) 65 is directly on this point wherein it was held that question of change of opinion arises only when assessment has been made and such assessment is sought to be reopened on same materials without there being any new or fresh information. In said case, not only any regular assessment was made for relevant year but even no return of income was filed by assessee for that year and on these facts, it was held by Hon'ble Calcutta High Court that question of change of opinion would not arise at all. In present case, as rightly pointed out by learned special counsel for Revenue, no returns of income were filed by assessee for years under consideration i.e. asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000- 01 and this being undisputed position, there was no occasion to make any assessment for said years expressing any opinion. question of change of opinion in issuing notices under s. 148, therefore, would not arise and argument of learned counsel for assessee that mere change of opinion is not sufficient to issue notices under s. 148, has no relevancy at all in present case. It is also pertinent to note here that assessments originally made by AO for asst. yrs. 1997-98 and 1998-99 were set aside by Tribunal vide its common order passed only on 23rd Oct., 2002 whereas reassessment proceedings for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 has been initiated on basis of said assessments on 18th Jan., 2002 itself. We, therefore, reject contention raised by learned counsel for assessee in this regard and holding that there was no legal infirmity in initiation of reassessment proceedings for four years under consideration i.e. asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 as alleged by learned counsel for assessee, we dismiss common ground No. 1 taken on this issue in assessee's appeals. 9 9 . other preliminary issue relating to scope of set aside proceedings is raised by assessee company in common ground Nos. 1 and 2 of its appeals for asst. yrs. 1997-98 and 1998-99 which read as follows : "1(a) That AO erred in not following directions contained in order of Hon'ble Tribunal while restoring matter to file of AO for readjudication. 1(b) That accordingly, order of AO and order of learned CIT(A) confirming order of AO are bad-in-law. 2(a) That AO erred in having differed from original orders of his predecessors for impugned assessment year wherein 25 per cent of total income was assumed to be fees for marketing, publicity and reservation services which was held to be "Business profits" of appellant and hence, not chargeable to tax in India in absence of PE. 2(b) That AO while passing order under s. 143(3) r/w s. 254 of Act, erred in treating, entire income of appellant as royalty and fees for technical services, thereby not appreciating that original order of learned CIT(A) had reached finality to extent of treatment of 25 per cent of profits as business profits not chargeable to tax in India, inasmuch as same was not challenged in appeal by Department before Hon'ble Tribunal." 100. learned counsel for assessee submitted before us that out of total amounts received by assessee company from Indian hotels/clients, 25 per cent was held by learned CIT(A) to be in respect of publicity, marketing and promotion services. He submitted that said receipts to extent of 25 per cent thus were held by learned CIT(A) to be business income of assessee company in his original appellate orders dt. 22nd March, 2001 and 13th Nov., 2001 for asst. yrs. 1997-98 and 1998-99 respectively not chargeable to tax in India in absence of PE of assessee company in India. He submitted that this relief allowed by learned CIT(A) to extent of 25 per cent of total receipts for asst. yrs. 1997-98 and 1998-99 was not challenged by Revenue by filing any appeals before Tribunal and orders of learned CIT(A) to that extent had attained finality at that stage itself. He submitted that said orders of learned CIT(A) holding that remaining 75 per cent of amounts in question are chargeable to tax being in nature of 'royalty' or 'fees for included services' were challenged by assessee company in its appeals preferred before Tribunal and, therefore, limited issue before Tribunal was about taxability of said amount to extent of 75 per cent. He contended that subject-matter of appeals before Tribunal thus was relating to taxability of such 75 per cent of amounts in question and powers of Tribunal were confined to this subject-matter only. In support of this contention, he relied on decision of Hon'ble Supreme Court in case of Hukum Chand Mills Ltd. vs. CIT (1966) 63 ITR 232 (SC). He also relied on decision of Hon'ble Allahabad High Court in case of S.P. Kochhar vs. ITO (1983) 37 CTR (All) 49 : (1984) 145 ITR 255 (All) to contend that powers of Tribunal were confined to subject- matter of appeals and when assessments were set aside by Tribunal and matter was remanded to AO for making fresh assessment, power of AO was confined to such subject-matter only. He contended that since issue relating to taxability of 25 per cent of amount in question was not subject-matter of appeals before Tribunal, it was not permissible to AO to travel beyond scope of remand proceedings and consider and decide said issue relating to taxability of 25 per cent of amount in question when same had already attained finality and was not subject- matter of appeal before Tribunal. 101. Relying on decision of Hon'ble Calcutta High Court in case of V.P. Samtani vs. CIT (1981) 23 CTR (Cal) 268 : (1982) 135 ITR 313 (Cal), learned counsel for assessee contended that even powers of Tribunal itself were restricted to subject-matter of appeal and directions given by Tribunal, in any case, were confined to such subject- matter. He also cited decision of Hon'ble Mysore High Court in case of Pathikonda Balasubba Setty (Decd.) vs. CIT (1967) 65 ITR 252 (Mys) wherein it was held that Tribunal's powers are limited to passing such orders as they may think fit on appeal and expression "on appeal" clearly and indubitably points to conclusion that powers of Tribunal are limited to subject-matter of appeal. It was also held by Hon'ble Mysore High Court that Tribunal has no jurisdiction to set aside entire order of AAC when only part of AAC's order is agitated before him. He contended that only part of CIT(A)'s order for asst. yrs. 1997-98 and 1998-99 upholding action of AO in bringing to tax 75 per cent of amount in question in India was agitated before Tribunal in present case and relief allowed by learned CIT(A) in respect of remaining amount of 25 per cent, having not been challenged by Revenue, was not subject-matter of appeal before Tribunal. In these circumstances, what was set aside by Tribunal was only issue relating to taxability of 75 per cent of amount in question and not issue relating to taxability of remaining amount of 25 per cent. He contended that AO, however, considered and decided this issue relating to taxability of remaining amount of 25 per cent in assessments completed in set aside proceedings which was clearly beyond scope of remand. He contended that AO thus has clearly exceeded his jurisdiction in framing orders under s. 143(3) r/w s. 254 in bringing to tax amount of 25 per cent which was not in dispute before Tribunal. 102. learned special counsel for Revenue, on other hand, submitted that as per clear cut decision rendered by Tribunal, entire assessments for asst. yrs. 1997-98 and 1998-99 were set aside by it and matter was restored to file of AO for fresh adjudication in accordance with law. He submitted that entire matter thus was left at large by Tribunal and AO was at liberty to deal with matter de novo. He contended that powers of AO thus were not circumvented by Tribunal in any manner while remanding matter back to him and therefore, it could not be said that he exceeded his jurisdiction while framing assessments in set aside proceedings for both years i.e. asst. yrs. 1997-98 and 1998-99 de novo. In support of this contention, he relied on decision of Hon'ble Madras High Court in case of CIT vs. D. Veerappan (1996) 130 CTR (Mad) 422 : (1995) 215 ITR 533 (Mad) wherein it was held that once assessments are set aside and remitted back for doing same afresh, it is open to Income-tax Officer to redo assessments under s. 143(3) and his jurisdiction cannot be restricted in any sense. He also relied on decision of Hon'ble Gauhati High Court in case of CIT vs. Highway Construction Co. (P) Ltd. (1997) 140 CTR (Gau) 482 : (1997) 223 ITR 498 (Gau) wherein it was held that when direction given was to make fresh assessment, earlier assessment had become non est and it was open to AO to make assessment afresh in accordance with law. Reliance was also placed by him on decision of Hon'ble Orissa High Court in case of CIT vs. S.V. Diwakar (1992) 105 CTR (Ori) 115 : (1993) 201 ITR 914 (Ori) wherein it was held that wherever assessment is set aside without imposing any restrictions or limitations, AO has same power of making assessment afresh as he could have originally done. He contended that Tribunal while remanding matter to AO in present case for asst. yrs. 1997-98 and 1998-99 did not put any restrictions on powers of AO to frame fresh assessment and this being so, AO was duly empowered to make assessments afresh in accordance with law without any limitations or restrictions. He contended that said assessments made by AO bringing to tax even remaining amount of 25 per cent in India in accordance with law thus was well within scope of set aside proceedings and there was no transgression of any limits on his part, as alleged by learned counsel for assessee. In support of this contention, he also relied on decision of Hon'ble Rajasthan High Court in case of CIT vs. Fundilal Rikhabchand (1994) 121 CTR (Raj) 176 : (1994) 208 ITR 348 (Raj) and Hon'ble Kerala High Court in case of CIT vs. A.M. Zainalabdeen Musaliar (1995) 123 CTR (Ker) 51 : (1995) 212 ITR 20 (Ker). 103. We have considered rival submissions in light of material available on record and case laws cited at Bar. It is observed that in assessments originally completed for asst. yrs. 1996-97 and 1997-98 in assessee's case, entire amounts received by it from Indian hotels/clients under relevant agreements @ 3 per cent on room sales were held to be taxable in India by AO. assessee company challenged these assessments by preferring appeals before learned CIT(A) who held that 75 per cent of said amounts was taxable in India. Accordingly, he sustained additions made by AO to that extent. As regards remaining portion of 25 per cent, he, however, held that same represented business profits/commercial income of assessee not liable to tax in India as per art. 7 of DTAA between India and USA. In its appeals filed before Tribunal, assessee company challenged orders of learned CIT(A) for both years i.e. asst. yrs. 1996-97 and 1997-98 disputing additions sustained by him to extent of 75 per cent. Revenue, however, did not prefer any appeals or even cross-objections before Tribunal challenging relief allowed by learned CIT(A) to assessee by deleting additions made by AO to extent of 25 per cent. Tribunal disposed of appeals filed by assessee for both years vide its common order dt. 23rd Oct., 2002 (supra), operative portion of which as contained in para 24, is reproduced below : "24. Both parties have been heard at length. After going through orders of authorities below and considering arguments of parties, we are of view that issue has not been dealt with in right perspective inasmuch as AO as well as CIT(A) had proceeded on assumption as if covenants of DTAA authorizes levy of tax on income of non- resident. parties before us also have not addressed any argument as to whether income of non-resident assessee is chargeable to tax under provisions of IT Act, 1961 or not. They simply have proceeded on same footings on which lower authorities decided issue. We are unable to uphold such approach adopted by lower authorities for simple reason that taxability of income of non-resident has to be first determined in light of charging provisions of IT Act. scheme of Act is that taxability of income of non-resident has to be determined with reference to charging provisions of ss. 4, 5 and 9. However, s. 5 is subject to other provisions of Act. Sec. 90 authorizes Central Government to enter into agreement with Government of any other country for : (a) granting of relief in respect of income on which have been paid both income-tax under this Act and income-tax in that country; or (b) For avoidance of double taxation of income under this Act and under corresponding law in force in that country; or (c) For exchange of information for prevention of evasion or avoidance of income-tax chargeable under this Act or under corresponding law in force in that country or investigation of cases of such evasion or avoidance; or (d) For recovery of income-tax under this Act and corresponding law in force in that country. combined reading of these provisions clearly reveals that provisions of s. 90 are to be invoked for granting relief to assessee if income of non-resident assessee is chargeable to tax under ss. 4, 5 and 9. If income of non-resident itself is not chargeable to tax under IT Act, there question of invoking provisions of s. 90 would not arise at all. None of parties below decided issue as to whether income of non-resident was taxable as royalty under charging provisions of IT Act. Therefore, we set aside orders of CIT(A) for both years and restore matter to file of AO for fresh adjudication in accordance with law. At this stage, we may also refer to decision rendered by Authority for Advance Rulings in case of Cyril Eugene Pereira, In re (1999) 154 CTR (AAR) 281 wherein it has been held that provisions of DTAA cannot be availed of if non-resident is taxable only in one country. other view has also been expressed by said Authority in cases Mohsinally Alimohammed Rafik, In re (1995) 126 CTR (AAR) 311 : (1995) 213 ITR 317 (AAR) and Dr. Rajnikant R.Bhatt, In re (1996) 135 CTR (AAR) 472 [sic-The AO will take into consideration these decisions while deciding] issue. assessee shall also be given reasonable opportunity of being heard and to lead evidence in support of its case." 104. Tribunal thus set aside orders of learned CIT(A) for asst. yrs. 1997-98 and 1998-99 impugned in appeals filed before it and restored matter to file of AO for fresh adjudication after taking into consideration first taxability of amounts in question under charging provisions contained in ss. 4, 5 and 9 of IT Act, 1961. 105. Relying on aforesaid observations of Tribunal, learned special counsel for Revenue has submitted before us that decision of Tribunal was clearly to effect that entire assessments had been set aside and matter was restored to file of AO for fresh consideration. He has contended that entire matter was thus left at large by Tribunal to AO to be decided in accordance with law without circumventing his powers in any manner during remand proceedings. In support of this contention, he has cited following case laws : (i) CIT vs. D. Veerappan (supra); (ii) CIT vs. Highway Construction Co. (P) Ltd. (supra); (iii) CIT vs. S.V. Diwakar (supra); (iv) CIT vs. Fundilal Rikhabchand (supra); (v) CIT vs. A.M. Zainalabdeen Musaliar (supra). 106. perusal of aforesaid decisions cited by learned special counsel for Revenue, however, shows that they were rendered in context of scope of proceedings in pursuance of remand by first appellate authority i.e. CIT(A), AAC, etc. except case of CIT vs. D. Veerappan (supra) decided by Hon'ble Madras High Court wherein matter was remanded by Tribunal. Their Lordships of Hon'ble Madras High Court, however, rendered this decision mainly relying on its earlier decision in case of CIT vs. Seth Manicklal Fomra 1975 CTR (Mad) 222 : (1975) 99 ITR 470 (Mad) which again was in context of scope of set aside proceedings in pursuance of remand by first appellate authority and not in context of scope of set aside proceedings in pursuance of remand by Tribunal. This vital and material distinguishing feature, however, was not brought to kind notice of Hon'ble Madras High Court apparently because nobody appeared on behalf of assessee before their Lordships in said case and matter was decided ex parte. 107 . In case of S.P Kochhar vs. ITO (supra), Hon'ble Allahabad High Court has clearly brought out difference between scope of proceedings in pursuance of remand by first appellate authority like CIT(A)/AAC and by second appellate authority, i.e. Tribunal, as follows : "If AAC sets aside assessment and remands case to ITO for making fresh assessment, powers of ITO while making fresh assessment are same as if he were making original assessment under s. 143(3). AAC can, however, limit powers of ITO by giving suitable directions in regard to scope of enquiry by ITO. In absence of such direction or restriction on power of ITO, while making fresh assessment, ITO is not bound by anything that had happened either when he made original assessment or when appeal was heard. When remand is made by Tribunal position is different. powers of Tribunal are confined to subject-matter of appeal as constituted by original grounds of appeal and such additional grounds as may be raised by leave of Tribunal. Thus, when Tribunal allows appeal and sets aside assessment and remands case for making fresh assessment, power of ITO is confined to such subject-matter only. He cannot take up questions which were not subject-matter of appeal before Tribunal. This will be so even though no specific direction has been given by Tribunal. If specific direction is given, then there is no scope whatsoever for ITO to travel beyond those directions or restrictions." 108. As held by Hon'ble Supreme Court in case of Hukum Chand Mills Ltd. vs. CIT (supra), powers of Tribunal in dealing with appeals are expressed in s. 33(4) of 1922 Act (which are analogous to provisions of s. 254 of 1961 Act) in widest possible terms, but word "thereon" used therein restricts jurisdiction of Tribunal to subject-matter of appeal. Further, as held by Hon'ble Calcutta High Court in case of V.P. Samtani vs. CIT (supra), subject-matter of appeal is primarily power of Tribunal as circumscribed by provisions of statute and it is not open to Tribunal to enlarge subject-matter of appeal. In case of Pathikonda Balasubba Setty (Deceased) (supra), it was held by Hon'ble Mysore High Court that Tribunal's powers are limited to passing such orders as they may think fit on appeal and expression "on appeal" clearly and indubitably points to conclusion that powers of Tribunal are limited to subject-matter of appeal. Explaining further, Hon'ble Mysore High Court observed that at stage of second appeal to Tribunal, liberty is given to both sides to go up in appeal to Tribunal and when Tribunal comes to deal with matter, law regards it sufficient to leave it to parties going up as appellants before Tribunal to limit their attack on order of first appellate authority and to seek intervention of Tribunal only to extent necessary to correct errors in order of AAC according to case of appellant. In said case before Hon'ble Mysore High Court, only two additions of Rs. 16,845 and Rs. 27,563 confirmed by AAC were disputed by assessee in appeal filed before Tribunal and third addition of Rs. 20,000 on account of unexplained stock was not subject-matter of appeal preferred before Tribunal. Tribunal, however, gave direction to AAC to examine question of unaccounted stock afresh and while holding this direction to be beyond appellate powers of Tribunal, their Lordships of Hon'ble Mysore High Court observed that Tribunal had no jurisdiction to set aside entire order of AAC when only part of said order was challenged before it. It was also observed by Hon'ble Mysore High Court that fundamental idea is that appellant seeks relief from appellate court and not detriment to himself. Even under general provisions of law of procedure, worst detriment which appellate court may visit on appellant is to dismiss appeal with direction in appropriate case to pay costs to opposite side. order adverse to interest of appellant adverse in sense that it takes away from him benefit which he has already acquired under order appealed from'is possible only by means of order made either upon cross-appeal filed by other side or on basis of memorandum of cross-objections presented by him wherever law permits him to do so. 109. As already noted, addition of impugned amounts to extent of 75 per cent as sustained by learned CIT(A) was disputed by assessee in appeals filed before Tribunal in first round for asst. yrs. 1996-97 and 1997-98. No cross-appeal or even cross-objection, however, was filed by Revenue challenging deletion of remaining portion of 25 per cent of said amounts as made by learned CIT(A) and subject-matter of appeals before Tribunal thus was only about taxability of 75 per cent of impugned amounts received by assessee company from Indian hotels/clients whereas remaining portion of 25 per cent deleted by learned CIT(A) was not subject-matter of appeals before Tribunal. This being undisputed position and keeping in view legal position emanating from aforesaid judicial pronouncements including fundamental principle explained by Hon'ble Mysore High Court in case of Pathikonda Balasubba Setty (Deceased) (supra), we are of view that when assessments for asst. yrs. 1996-97 and 1997-98 had been set aside by Tribunal and matter was remanded to AO for making said assessments afresh, power of AO was confined to consider and decide only issue relating to taxability of 75 per cent of amounts in question received by assessee company from Indian hotels/clients in India which was subject-matter of appeals disposed of by Tribunal vide its common order dt. 23rd Oct., 2002. He was not entitled to take up issue relating to taxability of remaining portion of 25 per cent in India for consideration and decision since same was not subject-matter of appeals before Tribunal, notwithstanding fact that there was no specific direction given by Tribunal to this effect. In that view of matter, we hold that additions of this remaining portion of 25 per cent made by AO in assessments completed for asst. yrs. 1996-97 and 1997-98 in set aside proceedings were clearly outside scope of remand and learned CIT(A) was not justified in confirming same. We, therefore, delete these additions made by AO and confirmed by learned CIT(A) and allow ground Nos. 1 and 2 of assessee's appeals for asst. yrs. 1997-98 and 1998-99. 110. As regards last issue raised by assessee company in all its six appeals relating to levy of interest under s. 234B, it is observed that this issue is squarely covered in favour of assessee by decision of Delhi Special Bench of Tribunal in case of Motorola Inc. vs. Dy. CIT (2005) 96 TTJ (Del)(SB) 1 : (2005) 95 ITD 269 (Del)(SB) wherein it was held that when all payments made to assessee are subject to deduction of tax at source, he cannot be held to have committed default in paying advance tax. Explaining further, it was observed by Special Bench that assessee is entitled to take into account tax which is deductible by payer though not actually deducted and consequently, there could be no liability to pay tax under s. 234B. To similar effect are decisions of Delhi Bench of Tribunal in case of Sedco Forex International Drilling Inc. vs. Dy. CIT (2000) 67 TTJ (Del) 670 : (2000) 72 ITD 415 (Del) and in case of Asia Satellite Telecommunications Co. Ltd. vs. Dy. CIT (2003) 78 TTJ (Del) 489 : (2003) 85 ITD 478 (Del). In present case, all payments made to assessee by Indian hotels/clients were subject to deduction of tax at source and although no tax was actually deducted at source, assessee could not be held to have committed default in paying advance tax. Consequently, there could be no liability to pay interest under s. 234B. We, therefore, cancel interest charged under s. 234B in assessee's case for all six years under consideration and allow relevant grounds raised by assessee on this issue. 111. As regards issue raised by Revenue in its appeals relating to deletion by learned CIT(A) of additions made by AO on account of amount of contribution received by assessee company from Indian hotels/clients in respect of 'Sheraton Club International' (SCI)/'Starwood Preferred Guest' (SPG) Programme and 'Frequent Flyer Programme' (FFP) for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 amounting to Rs. 1,06,17,408, Rs. 96,48,432, Rs. 62,99,457 and Rs. 46,52,763 respectively, it is observed that additions made by AO on these counts were deleted by learned CIT(A) for following reasons given in his impugned orders which are identical for all four relevant years : "5.4 I have considered submissions of learned Authorised Representative and have perused material on record. From perusal of assessment order dt. 20th March, 2001 for asst. yr. 1998-99 (p. 198 of paper book) it is noticed that appellant had shown contributions in respect of Sheraton Club International (SCI) and Frequent Flyer Programme (FFP) in asst. yr. 1998-99 also but no addition in respect of these contributions was made either in this order or in order under s. 143(3) r/w s. 254 passed on 28th Nov., 2003. To this extent submissions of Authorised Representative are correct. However, Authorised Representative's contention that this issue was examined by CIT(A) in asst. yr. 1997-98 is factually not correct because no addition in respect of these contributions was made in asst. yr. 1997-98. It is also noticed that addition has been made in assessment year under consideration without giving any reasons for making said addition. From perusal of agreements with hotels in India vide which appellant was to render various services to hotels in India, it is noticed that these contributions are not in pursuance of these agreements. These contributions are towards promotional programme called Sheraton Club International which was later known as Starwood Preferred Guest (SPG) programme. As per this programme, contributions received from hotels providing services to SCI members are given back to guest in form of various rewards through SCI points. From perusal of SPG Programme guide and specimen invoices for SCI contributions/award redemption payments which were filed before me, it is noticed that contributions received are for facilitating operation of promotional programme in order to promote business of hotels worldwide. Therefore, these contributions are not in nature of fees for technical services or royalty. These contributions will constitute commercial income of appellant and since AO has nowhere established either during course of assessment proceedings or during course of remand proceedings that appellant had PE in India these contributions cannot be brought to tax in India. Therefore, I am of considered view that AO was not justified in making addition of Rs. 1,06,17,408 towards these contributions and hence addition is deleted." 112. Before us, learned special counsel for Revenue Shri Y.K. Kapur submitted that while giving aforesaid relief in his impugned orders, learned CIT(A) failed to appreciate properly applicability of art. 12(3)(a) and 12(4)(a) to services rendered by assessee company in respect of concerned programmes known as SCI/SPG and FFP. He submitted that any service which helps to promote enjoyment of property for which payment under art. 12(3)(a) is made, would fall within domain of included services. He contended that 'fees for included services' as mentioned in para 12(4)(a) includes any services which are ancillary or subsidiary to enjoyment of right or property or information for which payment described in para 12(3)(a) is made. He submitted that relevant programmes were going to augment enjoyment of property or right to property and since they were going to help in generating revenue, same clearly were covered under art. 12(4)(a). He contended that by its very nature, relevant programmes thus were going to increase revenue for which assessee had passed on information to Indian hotels/clients and it was thus clear case of information provided by assessee of commercial nature based on its experience in field of hotel industry. He also contended that this information was privy to assessee and since supply of said information was ancillary and subsidiary to application or enjoyment of right to property, payment made for same would fall within category of 'fees for included services' as held by AO. 113. learned counsel for assessee, at outset, pointed out that it was held by AO himself in assessment order for asst. yr. 1998-99 that amount received by assessee company from Indian hotels/clients on account of contribution in respect of SCI/SPG programme and FFP was not chargeable to tax in India and this finding given in asst. yr. 1998-99 has not been disturbed even in fresh assessment for said year completed in set aside proceedings under s. 143(3) r/w s. 254. He submitted that claim of assessee that said amounts are in nature of its business income was accepted by AO himself in asst. yr. 1998-99 and learned CIT(A) also has accepted same in his appellate order for asst. yr. 1996-97. Referring to various documents explaining features of said programmes, he pointed out that same were in nature of promotional programmes with main object of promoting hotel business of Sheraton Group worldwide. He explain that as per scheme/programmes, hotels providing services to members were to pay, by way of contribution fee, certain fixed percentage of revenue collected and amount so contributed was to be spent on members again in form of various rewards, etc. through SCI points. He submitted that this scheme was uniformly applicable worldwide to all Sheraton hotels and programmes laid out under said schemes were self- sustaining based on concept of mutuality. He contended that amount received by assessee company from Indian hotels/clients on account of contribution in respect of said programmes thus could not be treated as 'royalty' or 'fees for included services' and no basis was given even by AO to treat same as such in his assessment order. He submitted that learned CIT(A), however, appreciated object of programmes as well as nature of receipts in right perspective while holding that amount in question received by assessee company was its 'business income' not chargeable to tax in India in absence of any PE in India. 114. After considering rival submissions and perusing relevant material on record, we find no justifiable reason to interfere with impugned orders of learned CIT(A) giving relief to assessee on this issue. As already held by us, job undertaken by assessee company was in nature of integrated business arrangement whereby services were to be rendered to Indian hotels/clients predominantly in relation to advertisement, publicity and sales promotion of hotel business worldwide in mutual interest and use of trademark, trade names etc. of assessee company by Indian hotels/clients as well as provision of other services and facilities as enumerated in relevant agreements were merely incidental to undertaking of this main job in sense that they spelt out only manner and method in which said job was to be accomplished. Similarly, programmes in question known as SCI/SPG and FFP implemented in Sheraton Group of Hotels including Indian hotels were also incidental to said business arrangement between assessee company and Indian hotels which was neither independent of nor separable from main job undertaken by assessee company to render services relating to advertisement, publicity and sales promotion of Indian hotels/clients. In these circumstances, it is very difficult to accept stand of Revenue that implementation of Sheraton's programme by Indian hotels/clients was ancillary or subsidiary to enjoyment of right or property or information as envisaged in art. 12(3)(a) of DTAA so as to treat same as 'included services' within meaning given in art. 12(4)(a) of DTAA. implementation of said programmes, on other hand, was integral part of main services rendered by assessee company to Indian hotels/clients in relation to advertisement, publicity and sales promotion and since entire amount paid for such services under agreements has been held by us to be 'business income' of assessee, it follows that amount received as contribution in respect of these programmes also represented its 'business income'. perusal of copy of relevant programme guide placed at page No. 189 of assessee's paper book-II also clearly shows that purpose of said programme was to promote hotel business worldwide in mutual interest which was ancillary and incidental to main job undertaken by assessee company to render services in relation to advertisement, publicity and sales promotion of Indian hotels/clients worldwide and has nothing to do with enjoyment of any right to property or information as contended by learned special counsel for Revenue before us. Moreover, as rightly observed by learned CIT(A) in his impugned orders, payment of contributions in respect of said programme was not made by Indian hotels/clients to assessee company in pursuance of agreements entered into between them and whole of amount received as contribution under these programmes was to be given back to members in form of various rewards through SCI points as per scheme itself as is evident from relevant programme guide. In these circumstances, amount received by assessee company from Indian hotels/clients in respect of said programmes could not be treated as 'royalty' or 'fees for technical or included services' either under relevant provisions of IT Act or even under DTAA as rightly held by learned CIT(A). We, therefore, uphold his impugned orders on this issue and dismiss relevant grounds raised by Revenue in its appeals. 115. In result : (a) appeals of assessee for asst. yrs. 1997-98 and 1998-99 are allowed; (b) appeals of assessee for asst. yrs. 1995-96, 1996-97, 1999-2000 and 2000-01 are partly allowed; and (c) all four appeals of Revenue are dismissed. *** SHERATON INTERNATIONAL INC. v. DEPUTY DIRECTOR OF INCOME TAX