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TMI Blog2022 (2) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... held that the Appellant has no income chargeable to tax in India either under the Act or under the provisions of the Double Taxation Avoidance Agreement between India and the United Kingdom ("DTAA"). 3. That the Assessing Officer and the DRP ought to have held that no income had accrued or deemed to accrue or received or deemed to have received by the Appellant in India. 4. That on the facts & circumstances of the case and in law, the Assessing Officer and the DRP have erred in holding that the Appellant has business connection in India and as such is liable to tax in India as per the provisions of Act 5. That on the facts and circumstances of the case and in law, both the Assessing Officer and the DRP have erred in holding that the Appellant has: ■ A fixed place PE in India under Article 5(1) of the DTAA; and ■ A dependent agent PE in India in the form of Interglobe Technology Quotient Private Limited ('1TQPL') under Article 5(5) of the DTAA. 5.1. That on the facts and in the circumstances of the case and in law, the Assessing Officer and the DRP have erred in holding that the Appellant has a PE in India based on the following allegations: - prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the DRP has erred is not allowing the deduction of Apportionment of Technology service fees for USS 20,20,307 and Vendor cost for USS 38,701 merely by following the DRP directions for AY 2015-16 and not providing any cogent reason for disallowing such expenses 7.3. That on the facts and in the circumstances of the case and in law, the Assessing Officer and the DRP have erred in not allowing deduction of amortization on all the Intangible assets amounting to USS 70,05,778, on the ground that: a) No amortization/depreciation on Goodwill and Trademark/tradename has been claimed in the UK corporate tax return of Company. b) No amount is debited as depreciation on Goodwill and Trademark/tradename in the global accounts therefore there is no base to determine the proportionate expenses to be allowed for the purpose of computing the profit of the alleged PE in India. c) No reasoning has been accorded by the DRP for disallowing amortization / depreciation on Vendor Relationship amounting to USD 32,137 7.3.1. That on the facts and in the circumstances of the case and in law, the Assessing Officer and the DRP have erred by not appreciating that this expense is incurred by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act." 13. The Appellant prays for leave to add, alter, amend and / or' modify any of the grounds of appeal at or before the hearing of the appeal." 3. The assessee has also raised an additional ground of appeal on 24.12.2020 which reads as under:- "On the facts and in the circumstances of the case and in law, and without prejudice to the contention of Appellant that it has Nil taxability in India, in case any such tax liability is determined, the Appellant should be allowed deduction of education cess forming part of such tax liability." 4. The underlying facts of the case including the business model of the assessee remains the same for the AY 2016-17 as it was in the AY 2007-08 to 2012-13 and in AY 2014-15, the appeals for which have already been disposed off by the coordinate bench of the ITAT. We have therefore not gone deep into the factual details except highlighting that with effect from 01.01.2016, the CRS business of Travelport Global Distribution Systems BV (which was assessee's predecessor entity) has been assumed by the assessee and accordingly the assesee has been assessed in India for the first time in AY 2016-17 as a new entity, Travelport International Op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al assessment order on 30.10.2019 which was rectified on 6.11.2020 under section 154 read with section 143(3) of the Act assessing total income at Rs. 47,90,64,317/- as business income to be taxed at the rate of 40% plus applicable surcharge and education cess thereon. 8. Aggrieved, the assessee is before us. We have heard the Ld. Representatives of the parties. Ld. AR submitted that the modified grounds raised by the assessee are squarely covered by the Delhi ITAT's order in ITA No. 163/Del/2021 dated 27.9.2021 in assessee's own case for the subsequent assessment year 2017-18, a copy of which has been filed before us. Ld. AR also submitted that similar grounds taken in the case of the assessee's predecessor entity namely Travelport Global Distribution System BV ("TGDSBV") has also been adjudicated by the Hon'ble ITAT vide its order dated 13.10.2021 in ITA No. 5601/Del/2010, 426/Del/2012, ITA No. 357/Del/2013, 746/Del/2014, ITA Nos. 2101 & 6162/Del/2015 CO No. 01/Del/2021 ITA No. 6515/Del/2017 ITA Nos. 3032, 3033 & 3034/Del/2016 pertaining to the assessment years 2007-08 to 2012-13 and assessment year 2014-15, a copy of which has been submitted before us. Ld. DR had no objection t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isions of Hon'ble Delhi ITAT and Hon'ble Delhi High Court in case of Appellant and its predecessor entities i.e. GII and TGDSBV. The Hon'ble Delhi High Court and Hon'ble Delhi ITAT in Appellant's own/predecessor's case i.e. GII and GNBV, have held that attribution rate to the alleged India PE is 15% of gross booking fees and since Indian related expenses are more than attributed gross booking fees to the PE in India, it would extinguish the assessment as no further income is taxable in India. 38. AY 2017-18, PE attribution at 15% of gross revenue less the expenses (as already allowed by the Ld. AO and Ld. DRP), as per the decision of the Hon'ble Delhi ITAT Benches and Hon'ble Delhi High Court, reduces the taxable income to Nil and thus, no income is taxable in India." Similar view was taken by the coordinate bench of ITAT in its order dated 13.10.2021 for AY 2007-08 to 2012-13 and AY 2014-15 in case of TGDSBV (assessee's predecessor). The relevant paras of the Hon'ble Delhi ITAT's order is reproduced below: "15. The issue of attribution in India is covered in favour of Company by the decisions of Hon'ble Delhi High Court and Delhi ITAT in Company/it's predecessor's case for AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is for maintaining their network of subscribers/ travel agents and thus, an inseparable part of the business and thus it cannot be denied that the expenses have been incurred for the purpose of the business. 26. It is also an accepted fact that there is only one business of the Company i.e., the CRS business. Therefore, all expenses incurred by Company including distribution expenses can only be related to such business. Thus, the AO's argument that distribution fees is not related to its business since its nomenclature in invoices is specified as 'data processing charges' instead of distribution fees lacks basic fallacy. The similar issue has come up before the Delhi ITAT in case of another CRS entity i.e., Amadeus IT Group SA for AY 2007-08 to AY 2012-13 dated 26 October 2020 (ITA No. 4906/Del/2010, ITA No. 5150/Del/2011, ITA No. 60/Del/2013, ITA No. 1824/Del/2014, ITA No. 1204/Del/2015 and ITA No. 1626/Del/2016, wherein the distribution expenses incurred by the assessee were allowed. 28. It is also on record that the distribution commission has been made to resident of India and duly offered to tax. Hence, the provisions of Section 40(a)(ia) are not attracted in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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