9911796707
TMI Blog2025 (1) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... brought on record, and rather unnecessary and irrelevant for deciding the issue, as to whether, assessee s income is taxable in India or not. Appeal filed by the assessee is allowed. - Shri Saktijit Dey, Vice President And Shri S. Rifaur Rahman, Accountant Member For the Assessee : Shri S. K. Aggarwal, CA For the Revenue : Shri Vijay B Vasanta, CIT DR ORDER PER S. RIFAUR RAHMAN, AM : 1. This appeal has been filed by the assessee against the final assessment order dated 31.05.2023 passed u/s 143(3) r.w.s.144C(13) of the Income Tax Act, 1961 (hereinafter called the Act ) subsequent to the directions of the Ld. Dispute Resolution Panel (DRP)/TPO vide order dated 20.04.2023 for Assessment Year 2020-21. 2. At the time of hearing, ld. AR for the assessee submitted as under :- 1. BRIEF BACKGROUND 1.1. Business model of Appellant 1.1.1. The Appellant is a company incorporated in the United Kingdom. The Appellant provides electronic global distribution services ( GDS ) in the rest of the world territory (including the Indian region) for the travel industry, by utilizing a Computer Reservation System ( CRS ), which is an automated system which processes booking data. The CRS is an automate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in case the pending appeals before Hon ble Supreme Court for predecessor s companies i.e. Galileo International Inc ( GII ) and Travelport Global Distribution System BV ( TGDSBV ) (earlier known as Galileo Nederland BV), stand decided, then follow the judgment of the Hon ble Supreme Court on this issue. 1.1.7. It is submitted that the Hon ble Supreme Court vide their order dated 19 April 2023(PB Vol-II- Page 395 to 414), in the case of Company s predecessor entities for AY 1995-96 to AY 2006-07 upheld the order of Hon ble ITAT and Hon ble Delhi High Court attributing 15% of revenue to the PE on basis of FAR less payment made to distributor resulting in Nil income. The relevant extracts of Hon ble Supreme Court decision dated 19th April 2023 is as under 11. Appeals were filed both by the Revenue and Assesses against the orders of the Tribunal before the Delhi High Court. The Delhi High Court dismissed the appeals filed by the Revenue on the ground that no question of law arose in these matters. The Delhi High Court held that insofar as attribution is concerned, the Tribunal had adopted a reasonable approach. 14. We do not think that we need to go into the second contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition. This Hon ble Bench in the stay matter held that the dispute arising in the appeal are squarely covered by the decisions of the Hon ble Tribunal, Jurisdictional High Court and Hon ble Supreme Court of India passed in favour of Appellant and its predecessor s entities, therefore, 100% stay of demand was granted to the Appellant.(Stay order PB Vol-I-Page 53 to 56). 1.2. The Tax litigation history of CRS business by the Appellant and its predecessor entities i.e. GII and TGDSBV 1.2.1. The CRS was earlier owned and managed by Galileo International Inc. (GII), a USA based entity, which operated worldwide. Thereafter, in year 2002, the territory of operations of GII was split into two parts: T-1 (USA and Canada) and T-2 (Rest of the world). The responsibility of carrying out business in T-2 territory was given to the Travelport Global Distribution System BV ( TGDSBV ) (earlier known as Galileo Netherland BV or GNBV). TGDSBV was a Netherland based entity and carried on such CRS business till 31 December 2015. 1.2.2. With effect from 01 January 2016, the CRS operations of TGDSBV has been operated by the Appellant pursuant to group reorganization and accordingly, the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted before your Honors that there is no change in business model of Appellant its predecessors and hence, the issue is covered in favour of the Appellant by earlier years appellate order upto AY 2019-20. 1.2.8. The litigation history in case of the Appellant upto AY 2019-20 has been provided in below tabular format: AY Entity Forum Decision of Forum PE/BC Determination of taxable income 95-96 to 98-99 GII Delhi ITAT Yes 15% of revenue less distributor fee, resulting in Nil income Delhi HC Academic Upheld the ITAT order Supreme Court Academic Upheld Delhi HC and ITAT order 99-00 to 02-03 GII Delhi ITAT Yes 15% of revenue less distributor fee, resulting in Nil Income Delhi HC Academic Upheld the ITAT order Supreme Court Academic Upheld Delhi HC and ITAT order 03-04 to 06-07 TGDSBV Delhi ITAT Yes After remand back, 15% was accepted pursuant to High Court order Delhi HC Academic Upheld the ITAT order Supreme Court Academic Upheld Delhi HC and ITAT order 07-08 to 12-13 14-15 TGDSBV Delhi ITAT Yes 15% of revenue less distributor fee and 70% of other expenses, resulting in 'Nil' income Delhi HC Yes Upheld ITAT order 15-16 TGDSBV Delhi ITAT Yes 15% of revenue less distributor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue and the taxpayer are pending in the Hon'ble Supreme Court. 3.2 The AO is directed to verify whether the appeal of the Revenue is pending in the Hon'ble Supreme Court or not on the above issue. In case the appeal of the Revenue is pending in the Hon'ble Supreme Court, the findings of the AO on the above grounds are upheld. In case the Hon'ble Apex Court has already given it's decisions, the AO is directed to follow the same. The above objections of the assessee are accordingly disposed off. 1.3. Favourbale Order of Hon ble ITAT for AY 2018-19 and AY 2019-20 in case of Appellant 1.3.1. The Hon ble ITAT in their combined order for AY 2018-19 and AY 2019-20 dated 10th January 2023 held as under (Pages 471 to 496 of PB -Vol-II) 12. Facts being identical, respectfully following the consistent view of Hon ble Jurisdictional High Court and Coordinate Bench in assessee s own case, as discussed above, we decide these grounds against the assessee by holding that the assessee has business connection and PE in India. These grounds are dismissed. 18. Thus, considering the consistent view of the Hon ble Jurisdictional High and the Tribunal in assessee s own case in past as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, assessee s income is taxable in India or not. (Emphasis Supplied) 1.3.5. For captioned year i.e AY 2020-21, the Ld. AO passed identical draft assessment order as in AY 2018-19 and AY 2019-20. The Hon ble DRP in their directions dated 20th April 2023 for AY 2020-21, held that the issues involved are legal issues in the case of the Appellant and are identical to those in case of the Appellant for AY 2018-19 and AY 2019-20. 1.3.6. The Hon ble DRP, while re-producing the directions of AY 2018-19 and AY 2019-20, directed the AO to follow the directions of Hon ble Supreme Court in this issue while passing final assessment order for AY 2020-21. The relevant extracts of DRP directions dated 20th April 2023 is as under 5.1 The issues involved in the ground numbers 1 to 3 are legacy issue in the case of the assessee and are identical to those in the case of the case of the assessee for AY 2018-19 and AY 2019-20 while adjudicating on the issue for AY 2019-20 the panel held as under:- 5.2 Since there is no change in factual matrix or the issue involved the panel finds no ground to deviate from its decision in AY 2018-19 and A Y 2019-20. Accordingly the decision of the panel in AY 2018-19 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tfully following the consistent view of Hon ble Jurisdictional High Court and Coordinate Bench in assessee s own case, as discussed above, we decide these grounds against the assessee by holding that the assessee has business connection and PE in India. These grounds are dismissed. 18. Thus, considering the consistent view of the Hon ble Jurisdictional High and the Tribunal in assessee s own case in past assessment years, we hold that 15% of the booking fees should be attributed to the PE in India. Ground no. 7 is allowed. 21. Facts being identical in the impugned assessment year, we direct the Assessing Officer to allow deduction of expenses following the directions of the Tribunal in the past assessment years, as discussed above. This ground is allowed. 6. Further, with regard to issue of whether the assessee a conduit entity, the coordinate bench has not adjudicated the issue in the order however, in the MA Nos. 316 and 317/Del/2023, the issue was raised by the assessee are adjudicated as under: 5. Keeping in view the past history of such dispute, learned DRP directed the Assessing Officer to verify, whether the department is in appeal against the order of the Tribunal and Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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