9911796707
TMI Blog2025 (1) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... by utilizing a Computer Reservation System ('CRS'), which is an automated system which processes booking data. The CRS is an automated system, which process booking data and other data to provide the following functions: a) The ability to display flight schedule and seat availability b) The ability to display and/or quote airline fare c) The ability to make airline seat reservation d) The ability to issue airline tickets, etc. These services are primarily provided to airlines and help in facilitation of booking of tickets. For each completed booking using Appellant's CRS/GDS, airlines pay booking fees to it. 1.1.2. The Appellant appoints distributors for marketing its CRS services. In India, the authorized distributor is Interglobe Technologies Quotient India Private Limited (ITQPL/ 'the distributor'). ITQPL is entitled to receive distribution fees from the Appellant for each segment booked in the Indian Territory. The Distributor/ ITQPL independently signs an agreement with the Travel Agent's, to provide booking services. 1.1.3. The master computer system (MCS) stationed in USA is connected to travel agents in India through a communication network owned by SITA (thir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 Commission paid to the distribution agents by the respondents was more than twice the amount of attribution and this has already been taxed. Therefore, the Tribunal rightly concluded that the same extinguished the assessment. 16. The question as to what proportion of profits arose or accrued in India is essentially one of facts. Therefore, we do not think that the concurrent orders of the Tribunal and the High Court call for any interference. 21. Therefore, we are of the view that the impugned order( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 order has been passed in the name of the Appellant from AY 2016-17 onwards, following the earlier assessment orders on this issue. The table below further clarifies the history of Appellant and its predecessor entities operating the CRS Relevant AY Entity catering to Indian market Country of residence 1995-96 to 2002-03 Galileo International Inc. ('GII') USA 2003-04 to 2016-17 (upto 31 Dec'15) TGDSBV (earlier called GNBV) Netherland 2016-17 onwards TIOL or Appellant United Kingdom 1.2.3. Basic structure of the business, risks, functionalities and assets remain same, unaffected by above territorial reorganization and such fact has even been admitted, relied and emphasized by the Ld. AO and DRP in their respective orders/ directions and Hon'ble ITAT has also noted the above in passing appellate order in favour of the appellant following its earlier orders and following the orders of the Hon'ble Delhi High Court on this issue. 1.2.4. The issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 fee and 70% of other expenses, resulting in 'Nil' income 16-17 Appellant Delhi ITAT Yes 15% of revenue less distributor fee and 70% of other expenses, resulting in 'Nil' income 17-18 Appellant Delhi ITAT Yes 15% of revenue less distributor fee and 70% of other expenses, resulting in 'Nil' income 18-19 Appellant Delhi ITAT Yes 1. Hon'ble ITAT following earlier year's ITAT orders held that attribution shall be at 15% of revenue less distributor fee and 70% of other expenses, resulting in 'Nil' taxable income 1.2.9. As the factual and legal matrix of the case is the same, the decision in the earlier years appellate orders has been followed by Hon'ble ITAT upto AY 2019-20. 1.2.10. The Company would like to submit before your Honors that Ld. AO while passing the draft assessment order for AY 2018-19 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tical, 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 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." 1.3.2. The Appellant filed a Miscellaneous Application ('MA') before Hon'ble ITAT for AY 2018-19 and AY 2019-20 for specifically disposing the grounds regarding the allegation of Ld. AO on 'Conduit Entity' under the Stepping-Stone framework and denying the benefits of India-UK Treaty. 1.3.3. The Hon'ble ITAT was pleased to pass the order in the above MA on 06th October 2023 holding that the Appellant is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and AY 2019-20 will apply for AY 2020-21 as well. The objections raised in ground numbers 1 to 3 are accordingly disposed of." 1.3.7. From the above, it is apparent clear that factual and legal matrix of the Appellant is identical for AY 2018-19 and AY 2019-20, as upheld by Hon'ble DRP. Further, Hon'ble ITAT is its combined order dated 10th January 2023 for AY 2018-19 and AY 2019-20 have already decided the issue in favour of the Appellant by following decision of Co-ordinate bench in earlier years and High Court, upholding order of Delhi ITAT. 1.3.8. Therefore, the issues of appeals for AY 2020-21 are squarely covered in the favour of the Appellant by the earlier year's appellate orders. 1.3.9. Also, it is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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'ble Delhi High Court and if it is found to be so, sustain the addition. Thus, from the aforesaid observations of learned DRP, it is evident that they have impliedly not accepted the allegations of the Assessing Officer regarding assessee, being a stepping-stone conduit entity. This may be because it was never an issue in the past assessment years. Assessment of income at the hands of the assessee was only because of existence of PE in India. 6. In any case of the matter, considering the decisions of the Tribunal and Hon'ble Jurisdictional High Court in past assessment years, it cannot be said that the status of the assessee as a conduit entity was ever an issue. Therefore, in our considered opini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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