Permanent establishment and profit attribution follow earlier bench rulings, with distribution expenses allowed and head office cost remanded.

Earlier coordinate bench rulings in the assessee's own and predecessor cases governed the year under review: the Indian presence and activities were held to constitute a business connection and permanent establishment in India, so that issue went against the assessee. On attribution, the Tribunal followed the settled approach that 15% of gross booking fees was attributable to the Indian operations, while distribution expenses were allowable in full and other related expenses were subject only to partial disallowance consistent with the non-discrimination principle, so that issue favoured the assessee. The claim for head office expenditure under section 44C required verification of the working and was remanded for recomputation.

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Issues: (i) Whether the assessee had a business connection and permanent establishment in India; (ii) whether attribution to the Indian operations and allowability of distribution and other expenses were to be determined at 15% of gross booking fees and by restricting disallowance of other expenses; (iii) whether the correct claim of head office expenditure under section 44C required recomputation.

Issue (i): Whether the assessee had a business connection and permanent establishment in India.

Analysis: The facts for the year were found to be materially similar to earlier assessment years already decided in the assessee's own case and in the case of its predecessor entities. Following the earlier coordinate bench decisions, the Tribunal treated the Indian presence and activities as sufficient to constitute business connection and permanent establishment in India.

Conclusion: The issue was decided against the assessee and in favour of the Revenue.

Issue (ii): Whether attribution to the Indian operations and allowability of distribution and other expenses were to be determined at 15% of gross booking fees and by restricting disallowance of other expenses.

Analysis: The Tribunal followed the earlier decisions holding that the proper attribution to the alleged Indian permanent establishment was 15% of gross booking fees. It also followed the settled view in the assessee's own and predecessor cases that distribution expenses were allowable in full, while other related expenses were to be subjected only to partial disallowance in line with the non-discrimination principle.

Conclusion: The issue was decided in favour of the assessee.

Issue (iii): Whether the correct claim of head office expenditure under section 44C required recomputation.

Analysis: The assessee sought correct allowance of head office expenditure on the basis that the amount had been computed incorrectly. As the record required verification of the details and working, the Tribunal sent the matter back for fresh consideration.

Conclusion: The issue was remanded to the Assessing Officer for recomputation.

Final Conclusion: The appeal succeeded only in part, with the findings on Indian tax presence maintained, the attribution and related expense claims substantially modified in the assessee's favour, and the head office expenditure claim left for fresh computation.

Ratio Decidendi: Where the facts of the year are identical to those already decided in earlier years in the same line of business, the earlier binding coordinate bench view on Indian permanent establishment, attribution of profits, and corresponding expense allowability governs the later year, subject to fresh verification only where the expenditure computation itself is in dispute.

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