2023 (5) TMI 227

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....LP(C) NO. 12613/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 13938/2011) CIVIL APPEAL NO. 3221/2011 CIVIL APPEAL NO. 4219/2011 CIVIL APPEAL NO. 4319/2011 CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 16971/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17134/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17419/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 16972/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17422/2011) CIVIL APPEAL NO. 526/2012 CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 32062/2011) CIVIL APPEAL NO. 4571/2012 CIVIL APPEAL NO. 2227/2012 CIVIL APPEAL NO. 783/2012 CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 17355/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 18692/2011) CIVIL APPEAL NO. OF 2023 (@ SLP(C) NO. 19698/2011) CIVIL APPEAL NO. OF 2023 (@ SLP....

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.... Bahadur Yadav, AOR* Mr. Shashank Bajpai, Adv. Mrs. Gargi Khanna, Adv. Mr. Rupesh Kumar, Adv. Mr. Zoheb Hussain, Adv. Mr. Sandeep Pandhi, Adv. Mr. Mukesh Kumar, Adv. Mr. Vijaynand Tripathi, Adv. Mr. Inderjeet Prasad, Adv. Mr. Vivasvan Gautam, Adv. Mr. Siddhartha Sinha, Adv. Mr. Tathagat Sharma, Adv. Mr. Nring Chamwibo Zeliang, Adv. Mr. Shivam Singhania, Adv. Mrs. Anil Katiyar, AOR ORDER Leave granted. 2. All these appeals filed by the Revenue are directed against various orders passed by the High Court of Delhi dismissing the appeals filed by the Revenue against the orders of the Income Tax Appellate Tribunal (for short "the Tribunal"). 3. We have heard Shri Vikramjeet Banerjee, learned Additional Solicitor General and Shri Arij....

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....t the entire income earned out of India by the respondents is taxable. This was on the basis that the income was earned through the hardware installed by the respondents in the premises of the travel agents and that therefore the total income of USD/EURO 3 is taxable. 8. The orders of assessment so passed, were upheld by the respective Commissioners of Income Tax (Appeals) by independent orders. 9. Appeals were filed by the respondents before the Tribunal and the Revenue also filed cross objections on a different aspect about which, we are not now concerned. The Tribunal held that the respondents herein constituted Permanent Establishment ('PE') in two forms, namely, fixed place PE and dependent agent PE ('DAPE'). At the same time, th....

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....e, learned Additional Solicitor General: (i) that the attribution of only 15% of the revenue as income accruing /arising in India within the meaning of Section 9(1)(i) of the Income Tax Act, 1961 read with Article 7 of the Treaty, was completely wrong; and (ii) that the computers placed in the premises of the travel agents and the nodes/leased lines form a fixed place PE of the respondent in India. 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....

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.... clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India." 18. Under Explanation 1(a), what is reasonably attributable to the operations carried out in India alone can be taken to be the income of the business deemed to arise or accrue in India. What portion of the income can be reasonably attributed to the operations carried out in India is obviously a question of fact. On this question of fact, the Tribunal has taken into account relevant factors. 19. However, learned Additional Solicitor General referred to Article 7 of the 'Convention between the Government of the United States of America and the Government of the Republic of India for the Avoida....