TaxTMI 
TaxTMI 
2022 (2) TMI 1058
X X X X Extracts X X X X
X X X X Extracts X X X X
....cer and the Dispute Resolution Panel ("DRP") ought to have held that the Appellant has no income chargeable to tax in India either under the Act or under the provisions of the Double Taxation Avoidance Agreement between India and the United Kingdom ("DTAA"). 3. That the Assessing Officer and the DRP ought to have held that no income had accrued or deemed to accrue or received or deemed to have received by the Appellant in India. 4. That on the facts & circumstances of the case and in law, the Assessing Officer and the DRP have erred in holding that the Appellant has business connection in India and as such is liable to tax in India as per the provisions of Act 5. That on the facts and circumstances of the case and in law, both the Assessing Officer and the DRP have erred in holding that the Appellant has: ■ A fixed place PE in India under Article 5(1) of the DTAA; and ■ A dependent agent PE in India in the form of Interglobe Technology Quotient Private Limited ('1TQPL') under Article 5(5) of the DTAA. 5.1. That on the facts and in the circumstances of the case and in law, the Assessing Officer and the DRP hav....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot deducted on such payments, expenses should be disallowed under Section 40a(ia) of the Act 7.2. That on the facts and in the circumstances of the case and in law, the Ld. AO and the DRP has erred is not allowing the deduction of Apportionment of Technology service fees for USS 20,20,307 and Vendor cost for USS 38,701 merely by following the DRP directions for AY 2015-16 and not providing any cogent reason for disallowing such expenses 7.3. That on the facts and in the circumstances of the case and in law, the Assessing Officer and the DRP have erred in not allowing deduction of amortization on all the Intangible assets amounting to USS 70,05,778, on the ground that: a) No amortization/depreciation on Goodwill and Trademark/tradename has been claimed in the UK corporate tax return of Company. b) No amount is debited as depreciation on Goodwill and Trademark/tradename in the global accounts therefore there is no base to determine the proportionate expenses to be allowed for the purpose of computing the profit of the alleged PE in India. c) No reasoning has been accorded by the DRP for disallowing amortization / depreciation on Vendor Rel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. 11. That on the facts and in the circumstances of the case and in law, the Ld. AO and the DRP have erred in making factually incorrect allegations with respect to the various expenses and income. 12. That on the facts and in the circumstances of the case and in law, the authorities below have erred in charging interest under section 234B of the Act." 13. The Appellant prays for leave to add, alter, amend and / or' modify any of the grounds of appeal at or before the hearing of the appeal." 3. The assessee has also raised an additional ground of appeal on 24.12.2020 which reads as under:- "On the facts and in the circumstances of the case and in law, and without prejudice to the contention of Appellant that it has Nil taxability in India, in case any such tax liability is determined, the Appellant should be allowed deduction of education cess forming part of such tax liability." 4. The underlying facts of the case including the business model of the assessee remains the same for the AY 2016-17 as it was in the AY 2007-08 to 2012-13 and in AY 2014-15, the appeals for which have already been disposed off by the coordinate bench of the I....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... nature. 7. The assessee filed objection before the Hon'ble Dispute Resolution Panel ("DRP") against the draft assessment order. The Hon'ble DRP vide its order dated 29.08.2019 upheld most of the findings of the Ld. AO including the presence of BC/PE of the assessee in India and attribution at 75% of the net profits. The Ld. AO following the directions of the Hon'ble DRP passed the final assessment order on 30.10.2019 which was rectified on 6.11.2020 under section 154 read with section 143(3) of the Act assessing total income at Rs. 47,90,64,317/- as business income to be taxed at the rate of 40% plus applicable surcharge and education cess thereon. 8. Aggrieved, the assessee is before us. We have heard the Ld. Representatives of the parties. Ld. AR submitted that the modified grounds raised by the assessee are squarely covered by the Delhi ITAT's order in ITA No. 163/Del/2021 dated 27.9.2021 in assessee's own case for the subsequent assessment year 2017-18, a copy of which has been filed before us. Ld. AR also submitted that similar grounds taken in the case of the assessee's predecessor entity namely Travelport Global Distribution System BV ("TGDSBV") has also been adjudica....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in India is 15% of the gross booking fees. The coordinate bench of ITAT followed the decisions of Hon'ble Delhi High Court and Hon'ble ITAT in the case of assessee/ assessee's predecessor entities i.e. TGDSBV and GII to arrive at the above conclusion. The relevant paras of the Hon'ble ITAT's order is reproduced below: "33. Ground No. 6 is covered in favour of the Appellant by virtue of the application of the decisions of Hon'ble Delhi ITAT and Hon'ble Delhi High Court in case of Appellant and its predecessor entities i.e. GII and TGDSBV. The Hon'ble Delhi High Court and Hon'ble Delhi ITAT in Appellant's own/predecessor's case i.e. GII and GNBV, have held that attribution rate to the alleged India PE is 15% of gross booking fees and since Indian related expenses are more than attributed gross booking fees to the PE in India, it would extinguish the assessment as no further income is taxable in India. 38. AY 2017-18, PE attribution at 15% of gross revenue less the expenses (as already allowed by the Ld. AO and Ld. DRP), as per the decision of the Hon'ble Delhi ITAT Benches and Hon'ble Delhi High Court, reduces the taxable income to Nil and thus, no income is taxab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion expenses by relying on Hon'ble Delhi High Court's decision in case of Company/its predecessor company for AY 1995-96 to AY 2006-07... 24. For AY 2015-16, the Id. DRP in its direction in Company's own case accepted that distribution expenses are integral expenses for CRS companies like Company and therefore a deduction should be allowed of such expenses... 25. Thus, it was duly accepted by the revenue authorities that the distribution expenses incurred by the assessee is for maintaining their network of subscribers/ travel agents and thus, an inseparable part of the business and thus it cannot be denied that the expenses have been incurred for the purpose of the business. 26. It is also an accepted fact that there is only one business of the Company i.e., the CRS business. Therefore, all expenses incurred by Company including distribution expenses can only be related to such business. Thus, the AO's argument that distribution fees is not related to its business since its nomenclature in invoices is specified as 'data processing charges' instead of distribution fees lacks basic fallacy. The similar issue has come up before the Delhi ITAT....