9911796707
TMI Blog2025 (1) TMI 1279X X X X Extracts X X X X X X X X Extracts X X X X ..... g the ATCs as DAPE of the assessee is not sustainable and the AO is directed to delete the addition made in this regard.
Joining & annual fees collected towards IATA clearing house facility (ICH facility) and data processing charges - AR argued that the joining annual fee toward ICH facility is not taxable on the principle of mutualy - HELD THAT:- We notice that addition is made on the similar grounds that the principle of mutuality is not applicable for the charges for provision of Data Processing.
AO/DRP have relied on their own order of AY 2012-13 in this regard. On perusal of nature of charges, we are of the view that Data Processing charges are received towards services to airlines and agents using iiNet and weblink and therefore are similar to ICH facility fees.
As already held that the ICH facility fees is not taxable in India for the reason that the principle of mutuality is applicable as has been held by the Co-ordinate Bench in assessee's own case for AY 2012-13. Therefore, applying the same ratio, we hold that the data processing charges which are similar in nature cannot also be taxed as income in India as attributable to Indian branches. X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices 8,57,33,838 Provision of classroom training course 95,35,130 Royalty from Authorised Training Centres (ATCs) 1,69,89,693 Income from provision of consultancy services 42,18,880 Total 11,64,77,542 The case was selected for scrutiny and the statutory notices were duly served on the assessee. The AO passed the draft assessment order dated 26.12.2018 assessing the income of the assessee at Rs. 49,08,18,300/-. Aggrieved the assessee filed its objections before the DRP. The DRP gave partial relief to the assessee and the AO passed the final assessment order as the directions of the DRP assessing the income at Rs. 36,34,65,110/- by making the following additions - Particulars Rate of tax Amount - Rs. Income not admitted by relying on the treaty a) Provision of distance learning courses 40% 6,52,10,595 b) Sale of physical publications 10% 2,75,28,795 c) Provision of advertising space 10% 4,92,752 d) Data base access facility 10% 1,11,67,607 e) Survey charges 40% 70,95,705 Revenue arising from India a) Joining & annual fees 40% 10,02,46,967 b) Provision of data processing charges 40% 2,72,76,072 c) Provision of IATA clearing house facilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at conditions as per Article 5(4) are not satisfied for treating the ATCs as the DAPE of the assessee. The ld AR took us through the relevant clauses of the Treaty in this regard. Accordingly the ld AR submitted that the revenue is not correct in treating 40% of the revenue generated from sale of distance learning material as the business income attributable to such DAPE, liable to tax in the hands of the assessee in India. The ld AR submitted that similar additions were made in assessee's case for AY 2012-13 and that the coordinate bench while considering the issue has held the same to be not taxable in India. 5. The ld DR on the other hand relied on the order of the AO and the directions of the DRP. 6. We heard the parties and perused the material on record. We notice that the coordinate bench in assessee's own case for AY 2012-13 has considered a similar issue and held that - "9. We have heard at length the authorised representatives for both the parties in context of the issue pertaining to treating of the ATC"s as the DAPE of the assessee, and attribution of 40% of the revenue generated from sale of the distance learning courses as the business income of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for the same to the ATC. The aforesaid transaction between the ATC"s and the students was on an independent basis and the assessee was not a privy to the said arrangement. Also, we find that the ATC would procure the course material as per the number of the students registered with them, and hence, did not maintain a stock of the course material on behalf of the assessee at any time. 10. We have perused the records to which our attention was drawn by the ld. A.R in the course of the hearing of the appeal, and find, that the ATC"s were independent third party organisations that provided training of their various self-designed courses, courses designed by other third parties, and also the courses designed by the assessee viz. Assessee to its students. In fact, the ld. A.R in order to drive home his claim that the ATC"s were not exclusively into providing of courses designed by the assessee and were providing a host of other self-designed/third party courses, had taken us through Page 65-67 of the APB, which revealed the multiple educational programs offered by one of the ATC viz. Srinivassa Sinai Dempo College of Commerce and Economics. On a perusal of the aforesaid sample scre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & Tourism Management, Certificate Course in World Tour Management, PGDM in International Tourism Business-equivalent to MBA (IITTM); and (iii). IATA Courses, viz. IATA Foundation Course, IATA Consultant Course, Corporate Training, and Tourism Board Training. Accordingly, in the backdrop of our aforesaid observations it can safely be concluded that the aforesaid ATC"s could not be held to be exclusively into providing of courses designed by the assessee, but were also providing a host of other self-designed/third party courses. On being confronted with the aforesaid factual matrix the ld. D.R failed to dislodge the claim of the counsel for the assessee that the ATC"s were independent third party organisations providing training of their various self designed courses, courses designed by other third parties, and also the courses designed by the assessee viz. Assessee, and were not exclusively into providing of courses designed by the assessee viz. IATA, Canada. In fact, no observation to the said effect is also discernible from the orders of the lower authorities. On the contrary, the DRP at Page 53 - Para 5.3.2(i), had observed, that the ATC"s were independent organizations doing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exclusively into providing of courses designed by the assessee, but were providing a host of other self-designed/third party courses. Further, the factum as regards the miniscule revenue generated by the aforesaid ATC viz. Thomas Cook India Pvt. Ltd. from conducting training programs, as in comparison to its other streams of revenue generation clearly militates against the observation of the DRP that the distance learning courses of the assessee constituted the backbone of the overall operations of the ATC"s. 11. It is in the backdrop of our aforesaid observations that we shall now deliberate on the aspect as to whether or not the ATC"s could be held to be the DAPE of the assessee viz. IATA, Canada. At the outset, we may herein observe that in order to treat the ATC"s as a DAPE of the assessee the provisions of Article 5(5) of the IndiaCanada tax treaty needs to be satisfied prior to evaluating the provisions of Article 5(4) of the said treaty. As per Article 5(5) of the India-Canada tax treaty, an enterprise of a contracting state shall not be deemed to have a PE in the other Contracting state merely because it carries on business in that other state through a broker, gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue that the transactions between the assessee viz. IATA, Canada and ATC"s are not made under arm's length conditions. As observed by us hereinabove, as per Article 5(5) of the India-Canada tax treaty an enterprise carrying on business in the other contracting state through a broker, general commission agent or any other agent of an independent status, or merely maintaining in that other State a stock of goods with an agent of an independent status from which deliveries are made by that agent, shall not be deemed to have a PE in the other Contracting state, subject to the condition that such agent of an independent status is acting in the ordinary course of its business. As regards the rider therein provided in Article 5(5) of the India- Canada tax treaty, the same as observed by us hereinabove would require cumulative satisfaction of two conditions for the purpose of divesting the agent of its status as that of being an independent agent viz. (i). the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise; AND (ii). the transactions between the agent and the enterprise are not made under arm's length conditions. In the case before us t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dependent agent results in creation of PE in the source state. The provisions of Article 5(6) are, however, slightly at variance with standard tax treaty provisions, and need to be analysed in some detail. The significant feature of Article 5(6) of Indo French DTAA, which is somewhat unique in the sense that this provision is in clear deviation from the standard UN and OECD Model conventions, is that even when an agent is wholly or almost wholly dependent on the foreign enterprise, he will still be treated as an independent agent unless additional condition of the transactions being not an arm's length conditions is fulfilled. It is so for the reason that Article 5(6) provides that even when an agent is wholly or almost wholly dependent on the principal, i.e. foreign enterprise, "he will not be considered an agent of an independent status within the meaning of this paragraph if it is shown that the transactions between the agent and the enterprise were not made under at arms length conditions" (emphasis by underlining supplied by us). In other words, as long as it is not shown that the transactions between the agent and the principal are not made under arm's length condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery foundation of DAPE rests on a negative finding with respect to the wholly dependent or almost wholly dependent agent i.e. "if it is shown that the transactions between the agent and the enterprise were not made under at arm's length conditions". Unless this negative finding is on record, it cannot be inferred that the agent is not of an independent status. No such finding was given by the Assessing Officer, or even by the Dispute Resolution Panel. Even in the proceedings before us, no material has been brought on record which at least prima facie demonstrates, or even indicates, that the transactions between the principal and agent are not under arm's length conditions. Once this onus is not discharged by the revenue authorities at any of these stages, and in accordance with the law laid down by Special Bench decision in the case of Motorola Inc, we have to hold that the assessee did not have any PE in India. We are not inclined to grant a fresh inning to the Assessing Officer for making roving and fishing enquiries on the aspect of transactions not having been done in arm's length conditions - particularly as there is nothing on record to even remotely suggest a prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avail either. In view of these discussions, as also bearing in mind entirety of the case, we set aside and vacate the Assessing Officer's findings with regard to existence of assessee's PE in India. We may, at the cost of repetition, clarify that these conclusions are arrived at in the light of the factual position that there are no findings by the Assessing Officer, or the Dispute Resolution Panel, to the effect that the transactions between the agent and the assessee are not at an arm's length price, and that, in view of the provisions of Article 5(6) of Indo French DTAA, such a finding by the revenue is a sine qua non for existence of DAPE. To this extent, our decision is confined to the facts of this case for the particular assessment year before us". 10. In the absence of any distinguishing feature brought on record by the Revenue, we respectfully following the order of the Tribunal in assessee's own case (supra) hold that the assessee has no PE in India and, hence, not liable to tax and accordingly the grounds taken by the assessee are allowed." On further appeal by the revenue, the Hon'ble High Court of Bombay in its order passed in the case of DIT(International Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the transactions, but they have not been examined in the manner indicated by us above by the Assessing Officer, therefore the matter should be restored to file of the Assessing Officer for specific adjudication of the transactions between the Assessee and the agent. The Tribunal did not accept this. Not because of any broad legal principle, but there being no finding of this nature on record at all. If the Assessing Officer or the DRP failed to render the finding and which would indicate the applicability of the Article and as pressed by the departmental representative, then, to our mind, the Tribunal was under no obligation to remand the matter back to the Assessing Officer. The Tribunal has rightly observed that even during the course of the proceedings before it, no material was placed on record, which would prima facie demonstrate or even indicate that the transactions between the principal namely the Assessee and the agent are not under at arm's length conditions. Once this onus is not discharged by the Revenue and the Tribunal has confined its observations and conclusions to the facts and circumstances peculiar to the Assessee's case and for the particular assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the A.O for making roving and fishing enquiries on the aspect of transactions not having been done in arm's length conditions. On further appeal, the Hon'ble High Court approved the view taken by the Tribunal. In the case before us also neither the lower authorities had established that the transactions between the assessee viz. IATA, Canada and the ATC"s were not done under arm's length condition, nor any material was placed on our record by the ld. D.R to demonstrate any such fact. Accordingly, in the absence of any finding by the lower authorities that the transactions between the assessee and the ATC"s were not at arm's length, we thus on a similar footing conclude that as per a conjoint reading of Article 5(4) and Article 5(5) of the India-Canada tax treaty, the ATC"s being an independent agent within the meaning of Article 5(5) of the India-Canada tax treaty could not have been held to be the DAPE of the assessee in India. 12. As we have concluded hereinabove that the ATC"s are the agent's of an independent status of the assessee viz. IATA, Canada, within the meaning of Article 5(5) of the India-Canada tax treaty, therefore, there remains no occasion for us to deal with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k, including cinematograph films or work on film paper or other means or reproduction for use in connection with radio or television broadcasting, any patent, trademark, design or model, plan, secret formula or process, or for information concerning industrial, commercial or scientific experience, including gains derived from the alienation of any such right or property which are contingent on the productivity, use, or disposition thereof; and (b) payments of any kind received as consideration for the use of, or the right to use, any industrial, commercial, or scientific equipment, other than payments derived by an enterprise described in paragraph 1 or Article 8 from activities described in paragraph 3(c) or 4 of Article 8." As observed by us hereinabove, the assessee pursuant to the request from the student's/ATC"s despatches the course material i.e the learning kit in the form of books or CD"s directly to the students or ATC"s. Although, the course material providing knowledge, information and training about the aviation and travel and tourism industry in general is sold to the students/ATC"s, but no "use" or "right to use" any copyright in relation to such study material is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke the nature of royalty as contemplated under Clause 3(a) of Article 12 of the Indo-US DTAA." Accordingly, not finding favour with the alternative observation of the DRP that the consideration received by the assessee for providing course material to the students/ATC"s was liable to be assessed as royalty, we vacate the same. The Ground of appeal No. 2 raised by the assessee is allowed in terms of our aforesaid observations. As we have held that the ATC"s are not the DAPE of the assessee, therefore, the Ground of appeal No. 1 raised by the revenue, wherein it had challenged the scaling down of the quantum of revenue attributed by the A.O pursuant to the directions of the DRP is dismissed as having been rendered as infructuous." 7. The facts for the year under consideration being identical, we are of the considered view that the impugned issue is covered by the above decision of coordinate bench. Respectfully following the same we hold that addition made towards provision of distance learning courses by treating the ATCs as DAPE of the assessee is not sustainable and the AO is directed to delete the addition made in this regard. Sale of physical publications - Ground No.3 8. F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as held the issue in favour of the assessee. 10. We heard the parties and perused the material on record. We notice that the coordinate bench in assessee's case for AY 2012-13, has held as under while considering a similar issue - "16. Aggrieved, the assessee has assailed the treating of the sale consideration of DGR manuals/publications as "royalty" by the A.O/DRP. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. As observed by us hereinabove, the DGR manuals published by the assessee were a compilation of the Instructions on Dangerous Goods developed by ICAO, which in a comprehensive manner provided a user friendly compilation of instructions for safe transport of goods as laid down by ICAO. In the backdrop of the aforesaid facts, we find substance in the claim of the ld. A.R that the sale of DGR manuals was a simplicitor sale of a manual/book and did not involve any transfer of intellectual property. As the DGR manuals were a comprehensive and a user friendly compilation of instructions for safe transport of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... main and it was not something which was exclusively available with the assessee. In fact, the assessee merely compiled and presented information in a proper form by applying its own methodology; • Further, the information concerning any industrial, commercial or scientific experience (i.e., know-how) generally implies undivulged technical information in the areas of industry, commerce or science, which however, was not so insofar the information published in the DGR manuals was concerned. Accordingly, on the basis of our aforesaid observations, we are of a strong conviction that the consideration received by the assessee on sale of DGR manuals cannot be brought within the realm of the definition of "royalty" as provided in Article 12(3) of the IndiaCanada tax treaty. Our aforesaid view is fortified by the judgment of the Hon'ble High Court of Madhya Pradesh in the case of CIT Vs. HEG Ltd. (2003) 263 ITR 230 (MP). In the said case, it was observed by the Hon'ble High Court that it is not any information concerning the industrial or commercial venture that could earn the status as that of royalty, as some expertise or skill in providing of such information would be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t get any rights in the publication or the website, it merely provides the advertisement. The provision of the advertisement space in both the website and the publications was managed by Assessee from outside India and the consideration for rendering such services was also received directly in a bank account outside India. The AO held that the source of income from providing advertising space is from India and therefore held the same to be in the nature of Royalty to be taxed in India. 13. We heard the parties and perused the material on record. During the course of hearing the ld AR submitted that the issue is covered by the decision of the coordinate bench in assessee's own case of AY 2012-13 and the ld DR did not controvert the submission of the ld AR. We notice that the coordinate bench has made the following observations while considering the identical issue in assessee's case for AY 2012-13 - "18. We shall now advert to the claim of the assessee that the A.O/DRP had erred in taxing the receipts from provision of advertising space by the assessee on its website and publications as "royalty" income within the meaning of Article 12(3) of the IndiaCanada tax treaty, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gle, as the customers by obtaining an advertising space in the website or publications/manuals of the assessee in no way get vested with any right to commercially exploit the brand or logo of the assessee, therefore, the consideration therein received by the assessee for providing such advertising space would fall beyond the meaning of the term "royalty" as defined in Article 12(3) of the India-Canada tax treaty. Our aforesaid view that consideration received by an assessee for providing advertising space cannot be held as "royalty" in its hands is fortified by the order of the ITAT, Mumbai in the case of Yahoo India (P) Ltd. Vs. DCIT (2011) 140 TTJ 195 (Mum). In the said case, it was observed by the Tribunal that the payment made by the assessee to a foreign company for the services rendered by it for uploading and display of the banner advertisement on its portal was in the nature of business profit and not royalty. It was held by the Tribunal as under : "8. As already noted by us, the payment made by assessee in the present case to Yahoo Holdings (Hong Kong) Ltd. was for services rendered for uploading and display of the banner advertisement of the Department of Tourism of Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was observed by the tribunal that the amount paid by the assessee to M/s. Google Ireland Ltd. for the services rendered for uploading and display of banner advertisement on its portal was in the nature of business profit on which no tax was deductible at source since the same was not chargeable to tax in India in the absence of any PE. Accordingly, on the basis of our aforesaid observations we are unable to persuade ourselves to subscribe to the characterisation of the consideration received by the assessee for providing advertising space to its customers, as royalty, by the A.O/DRP. As such, the view taken by the lower authorities wherein they had taxed the receipts from provision of advertising space as "royalty" income in the hands of the assessee is vacated. The Ground of appeal No. 5 is allowed in terms of our aforesaid observations." 14. The facts for the year under consideration being identical, in our view the impugned issue is covered by the above decision of the coordinate bench and accordingly we hold that the provision of advertising space cannot be considered as royalty. The AO is directed to delete the addition made in this regard. Data base access facility - Gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlines, customer etc. In view of these facts, we see merit in the argument of the ld AR that the data base access is similar to the DGR manual which is again a compilation of DGR rules which is sold to the customers. Further by making these information to be accessed by the customers, the assessee allowing only the use of copyrighted information and not the copyright itself. Accordingly we are of the view that the decision of Hon'ble Supreme Court in the case of Engineering Analysis (supra) is applicable to the issue under consideration also. Accordingly following the judicial precedence we hold that the income received by the assessee towards facilitating the access to various database which are otherwise available in public domain, cannot be held as Royalty. The AO is directed to delete the addition made in this regard. Survey charges - Ground No.6 19. Facts pertaining to the issue are that the assessee has received income from Air India for conducting passenger satisfaction survey with the assistance of a third party i.e., mind-set SA. Mind-set SA is an independent third party which is engaged in the business of research and consulting. Mind-set SA is based in Switzerland ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R accordingly submitted that the ratio laid down by the coordinate bench in assessee's own case for AY 2012-13 while deciding the issue of provision of distance learning courses by the ATCs will be applicable to the present issue of treating M1nd-setSA as an agent of the assessee. 21. We heard the parties and perused the material on record. The assessee has entered into a tripartite agreement with Air India and M1nd-setSA to provide certain services related to customer satisfaction is to be provided jointly by the assessee and M1nd-setSA to Air India. The AO held the payment received by the assessee from Air India towards the services rendered by M1nd-setSA treating M1nd-setSA as the DAPE of the assessee. The reason for AO treating M1ndsetSA as DAPE of the assessee is that most of the Air India operations start and end in India and the majority of the customer base who participated in the survey are from India which according to the AO makes the source of Income arising out of India. It is an undisputed fact that M1nd-setSA does not have a PE in India and that the customer satisfaction survey is carried out by M1nd-setSA outside India. It is submitted by the ld AR that as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andise; or (c) he habitually secures orders in the first-mentioned State, wholly or almost wholly for the enterprise. 5. An enterprise of a Contracting State shall not be deemed to have a permanent establishment in the other Contracting State merely because it carries on business in that other State through a broker, general commission agent, or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise and the transactions between the agent and the enterprise are not made under arm's length conditions, he shall not be considered an agent of independent status within the meaning of this paragraph. 22. A combined perusal of the above article with the facts pertaining to the relationship between the assessee and Mind-set SA makes it clear that the Mindset SA cannot be treated as a DAPE within the meaning of the above Articles. Accordingly in our view, the decision on the issue of provision of distance learning course by ATCs is equally applicable to Mind-set SA also. In view of these discussions we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s should not be allowable to tax having regard to the principles of mutuality under the Act. The learned Authorized Representative, after discussing the concept of mutuality held that the learned Dispute Resolution Panel for A.Y. 2014-15, in assessee's own case has accepted that assessee is a mutual concern. Therefore, the Revenue has accepted ground no.6(c). The direction of the learned Dispute panel-1, Mumbai in objection no.157, dated 22nd September 2017, was produced before us, wherein this issue was decided as per paragraph no.7 at page no.20-25 of the direction. The learned Authorized Representative has categorically argued that assessee is a mutual concern. 12. The learned Departmental Representative vehemently opposed and stated that the surplus arising in the hands of the assessee cannot be considered as not taxable in India on the principle of mutuality. 13. We have carefully considered the rival contentions and perused the orders of the lower authorities. The only dispute is whether surplus arising to the assessee is chargeable to tax in India based on the principle of mutuality or not. We find that the Dispute Resolution Panel in its direction for A.Y. 2014-15 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of which Assessee has earned income is carried out independently by Assessee outside India, without any involvement of IATA India branch in carrying out such activities in India. In fact, as mentioned earlier, LATA India branch is not permitted to undertake/ provide any services apart from the billing and related services (as per the approval of the RBI)". 7.2 There are numerous judgements passed by various Courts, including the Apex Court, which explain the principle of mutuality. As per judicial precedents, an entity would be required to fulfil the following conditions in order to qualify as a mutual concern: Condition 1: There must be complete identity between the contributors and participators: Condition 2: The organisation must be set up for achieving a common objective of the members and the contribution received from the members must be for such common purpose; and Condition 3: There should be no scope of profiteering by the contributors and no element of commerciality 7.3 After careful consideration of the detailed facts, legal submissions filed by the assessee and the year-wise statement evidencing refund of the surplus of revenues for various AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward for utilization in the subsequent years and subsequently refunded to the members to the extent of their contributions received from such members. In fact, the assessee has submitted a statement showing the manner in which such surplus for the various AYs has been refunded to the member airlines. Similarly, the surplus of Rs 69,21,015 for the subject AY has been carried forward by the assessee to the subsequent years for utilization against the expenses to be incurred by the assessee. This clearly demonstrates and evidences that the surplus arising to the assessee for the various AYS Including the subject year under consideration) is not in the nature of profits, In fact, if the surplus is in the nature of 'profits', the assessee would not have refunded such surplus to the members. Thus, the airlines and the agents are both the contributors and the participants to the contributions/ funds received by the assessee for providing the billing and settlement relater services. Hence, in our opinion, we agree with the assessee that there is complete identity between the contributors and the participants (i.e. the airlines and agents) to the contributions (i.e. common fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly mentions that the assessee can provide the billing and settlement related services only on a non-commercial and no-profit basis. In other words, the assessee is not permitted to provide the billing and settlement related activities to the airlines and agents on a commercial or profit basis. As stated above, in case the contributions from the members fall short of the expenses incurred by the assessee, the members contribute funds to make up for the shortfall. Similarly, in case the contribution is more than the expenses, such excess contribution is utilized against the cost to be incurred by the assessee in the subsequent year for the benefit of members. Hence, it is evident that the assessee does not carry out the billing and settlement related activities on a 'commercial' basis and there is no element of profit involved in its activities. Hence, in our opinion, the third and last test is also satisfied by the assessee. 7.4 Having regard to the above, we are of the considered opinion that the assessee qualifies as a 'mutual concern' having regard to the tests laid down by various courts. 7.5 Further, having regard to the approval of the RBI which requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facility provides the mechanism by which the ticket booking is made by the agent and allows the agent to pay on the BSP system. Thus, these facilities act as a communicating link between the systems of the airlines, agents and the billing and settlement system which undertakes the settlement activities between airlines and agents. The assessee's argument before the AO/DRP is that the consideration in respect of such services is received directly outside India for the services rendered by the third party outside India. Therefore it is submitted that the income is not taxable in India. However the revenue treated the income as business profits by holding the Indian Branches as the PE of the assessee. 28. We heard the parties and perused the material on record. We notice that addition is made on the similar grounds that the principle of mutuality is not applicable for the charges for provision of Data Processing. We further notice that the AO/DRP have relied on their own order of AY 2012-13 in this regard. On perusal of nature of charges, we are of the view that Data Processing charges are received towards services to airlines and agents using iiNet and weblink and therefore are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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