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2024 (6) TMI 817 - AT - Income TaxIssues Involved: 1. Validity of the final assessment order u/s 143(3) r.w.s. 144C(13). 2. Validity of DRP Directions issued u/s 144C(5) due to invalid Document Identification Number (DIN). 3. Taxability of receipts on account of Marketing, Distribution Marketing, Frequency Marketing Programme, and SCHI Facility charges. 4. Taxability of Travel Agent Commission (TACP) amounting to Rs. 1,23,46,336. 5. Initiation of penalty proceedings u/s 270A. Summary: Issue 1: Validity of the Final Assessment Order The assessee challenged the final assessment order passed by the AO on the grounds that it was not in conformity with the provisions of section 144C of the Act. The Tribunal noted that the AO did not follow the directions of the DRP to verify the favorable ITAT orders in the assessee's own case. The Tribunal allowed the appeal on this ground, stating that the addition of Rs. 6,13,91,631 was deleted. Issue 2: Validity of DRP Directions due to Invalid DIN The assessee contended that the DRP directions were invalid due to an invalid DIN as per CBDT Circular No. 19/2019. However, during the hearing, the assessee did not press this ground, and hence, it was dismissed as not pressed. Issue 3: Taxability of Marketing and Reservation Related Receipts The AO and DRP treated the System Fund support fee and Technology Services Fees as Fee for Technical Services (FTS) under section 9(1)(vii) of the Act and as Fee for Included Services (FIS) under Article 12 of India-USA DTAA. The Tribunal noted that the issue had been consistently held in favor of the assessee in past years by various ITAT orders. The Tribunal allowed the appeal on this ground, deleting the addition of Rs. 6,13,91,631. Issue 4: Taxability of Travel Agent Commission (TACP) The AO disallowed the TACP amount of Rs. 1,23,46,336, treating it as FTS/FIS under the Act and India-USA DTAA. The Tribunal found that the assessee had provided necessary details and invoices during the assessment proceedings, which the AO did not verify. The Tribunal directed the AO to verify the documents and decide the matter, keeping in view the ITAT's directions that the amount would not be taxable if it was reimbursement in nature. Issue 5: Initiation of Penalty Proceedings u/s 270A The assessee challenged the initiation of penalty proceedings on account of underreporting of income by way of misreporting. The Tribunal did not provide specific details on this issue in the summary. Conclusion: The appeal of the assessee was partly allowed, with the Tribunal directing the deletion of certain additions and remanding the matter back to the AO for verification of documents related to TACP.
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