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TMI Blog2023 (5) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... he meaning of Section 9(1)(i) read with Article 7 of the Treaty, was completely wrong. HELD THAT:- Under Explanation 1(a), what is reasonably attributable to the operations carried out in India alone can be taken to be the income of the business deemed to arise or accrue in India. What portion of the income can be reasonably attributed to the operations carried out in India is obviously a question of fact. On this question of fact, the Tribunal has taken into account relevant factors. Additional Solicitor General referred to Article 7 of the Convention between the Government of the United States of America and the Government of the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (@ SLP(C) NO. 17134/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17419/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 16972/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17422/2011) CIVIL APPEAL NO. 526/2012 CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 32062/2011) CIVIL APPEAL NO. 4571/2012 CIVIL APPEAL NO. 2227/2012 CIVIL APPEAL NO. 783/2012 CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17355/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 18692/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 19698/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17354/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17425/2011) CIVIL APPEAL NO. 8060/2011 CIVIL APPEAL NO. 7779/2011 CIVIL APPEAL NO. 8061/2011 HON'BLE MR. JUSTICE V. RAMASUBRAMANIAN And HON'BLE MR. JUSTICE PA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Vivasvan Gautam, Adv. Mr. Siddhartha Sinha, Adv. Mr. Tathagat Sharma, Adv. Mr. Nring Chamwibo Zeliang, Adv. Mr. Shivam Singhania, Adv. Mrs. Anil Katiyar, AOR ORDER Leave granted. 2. All these appeals filed by the Revenue are directed against various orders passed by the High Court of Delhi dismissing the appeals filed by the Revenue against the orders of the Income Tax Appellate Tribunal (for short the Tribunal ). 3. We have heard Shri Vikramjeet Banerjee, learned Additional Solicitor General and Shri Arijit Prasad, learned Senior Counsel appearing for the Union of India and Shri Arvind Datar Shri Percy J Pardiwalla, learned Senior Counsel appearing for some of the respondents-Assesses. 4. The respondents in these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore the total income of USD/EURO 3 is taxable. 8. The orders of assessment so passed, were upheld by the respective Commissioners of Income Tax (Appeals) by independent orders. 9. Appeals were filed by the respondents before the Tribunal and the Revenue also filed cross objections on a different aspect about which, we are not now concerned. The Tribunal held that the respondents herein constituted Permanent Establishment ( PE ) in two forms, namely, fixed place PE and dependent agent PE ( DAPE ). At the same time, the Tribunal also held that the Lion s share of activity was processed in the host computers in USA/Europe and that the activities in India were only minuscule in nature. Therefore, as regards attribution to the PE const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Treaty, was completely wrong; and (ii) that the computers placed in the premises of the travel agents and the nodes/leased lines form a fixed place PE of the respondent in India. 14. We do not think that we need to go into the second contention of the learned Additional Solicitor General, for the simple reason that the approach of the Tribunal and the High Court on the question of attribution appears to be fair and reasonable. 15. It is seen from the orders of the Tribunal that the Tribunal arrived at the quantum of revenue accruing to the respondent in respect of bookings in India which can be attributed to activities carried out in India, on the basis of FAR analysis (Functions performed, assets used and risks undertaken). The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied out in India alone can be taken to be the income of the business deemed to arise or accrue in India. What portion of the income can be reasonably attributed to the operations carried out in India is obviously a question of fact. On this question of fact, the Tribunal has taken into account relevant factors. 19. However, learned Additional Solicitor General referred to Article 7 of the Convention between the Government of the United States of America and the Government of the Republic of India for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income which is called in popular parlance as Double Taxation Avoidance Agreement . This Article 7 reads as follows: Article 7 Busi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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