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TMI Blog2024 (3) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... of Processed Data/ software and not Distribution fee and also disallowed development cost and marketing costs incurred for earning revenue from bookings made from India - It may be pertinent to note that similar expenditure has been allowed deduction since inception, i.e., assessment years 1996-97 to 2006-07 and in view of there being no change in facts or law, no disallowance is warranted in the present year, too. The aforesaid position has been upheld by the Tribunal in appellant s own case for assessment years 2007-08 to 2020-21. This issue has attained finality since revenue has accepted the said aforesaid findings of Tribunal. Respectfully following the earlier orders of the Tribunal, the addition is directed to be deleted. CRS Income-Royalty This issue is intra-polated on the issue of PE and attribution of profits as dealt above. Payment made to Altea System The Co-ordinate Bench of Tribunal in assessee s own case for the assessment years 2007-08 to 2020-21 held that payment received by the appellant from the airlines for the Altea system cannot be characterized as royalty either under the Act or under the Treaty. Respectfully following the earlier orders of the Tribunal, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided by the appellant to the travel agents through SITA/ third party nodes located in India, collectively, constituted PE of the appellant in India under Article 5 of the Indo-Spain DTAA ( the Treaty ) and the income arising to the appellant from the airlines, etc. was attributable to the activities of the alleged PE in India. 5.2. That the DRP/ assessing officer erred on facts and in law in holding that as the website of the appellant shows that it has various offices in India for performing functions like training, product development, technical support, etc., such offices premises constitute fixed place of the appellant in India. 5.3. That the DRP/ assessing officer erred on facts and in law in alleging that Amadeus India constitute dependent agent permanent establishment (PE) of the appellant in India and the income arising to the appellant from the airlines was attributable to the alleged PE in India. 5.4. That the DRP/ assessing officer erred on facts and in law in alleging that the appellant was not making any payment to AIPL towards the activities of marketing the appellant s CRS and providing the hardware support to the travel agent and therefore, the distribution fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el agents and, therefore, profits from such functions were required to be attributed to the appellant's dependent agency PE in India. 7. That the DRP/ assessing officer erred on facts and in law in disallowing expenditure of Euro 3,574,000/- incurred by the appellant under the head Distribution fee , while computing the income attributable to the alleged PE, following the assessment order for assessment year 2007-08. 8. That the DRP/ assessing officer erred on facts and in law in not appreciating that the appellant was engaged in the business of providing CRS services and the expenses incurred in connection with product development function carried out outside India were required to be excluded while computing the income of the alleged PE of the appellant in India. 9. That the DRP/ assessing officer erred on facts and in law in disallowing expenditure of Euro 16,205,000/- incurred by the appellant under the head Development fees , while computing the income attributable to the alleged PE, following the assessment order for assessment year 2007-08. 10. That the DRP/ assessing officer erred on facts and in law in disallowing expenditure of Euro 11,454,000/- incurred by the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 9(1)(vi) of the Act and Article 13(3) of the Treaty. 15. That without prejudice, the DRP/ assessing officer erred on facts and in law in not appreciating that the payments received from various airlines in relation to the Altea System were not sourced in India in terms of Article 13(6) of the Treaty, therefore, were not liable to tax in India as royalty . 16. Further without prejudice, the DRP/ assessing officer erred on facts and in law in holding on adhoc basis a sum of Euro 43.88 million as the income of the appellant liable to tax in India as royalty for the alleged use of Altea system by various airlines, without affording an opportunity of being heard to the appellant, in gross violation of the principles of natural justice. Re: Charge of interest 17. That the DRP/ assessing officer erred on facts and in law in levying interest of Rs. 7,30,88,005 under section 234A of the Act. 18. That the DRP/ assessing officer erred on facts and in law in levying interest of Rs. 45,31,45,631 under section 234B of the Act. 3. DIN Not pressed 4. Permanent Establishment As per the order of the Hon ble Supreme Court for A.Y. 2020-21 in assessee s own case vide order dated 20.07.2023 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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