TaxTMI 
TaxTMI 
2025 (1) TMI 759
X X X X Extracts X X X X
X X X X Extracts X X X X
....territory (including the Indian region) for the travel industry, 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unal before the Delhi High Court. The Delhi High Court dismissed the appeals filed by the Revenue on the ground that no question of law arose in these 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. Theref....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ponsibility of carrying out business in T-2 territory was given to the Travelport Global Distribution System BV ('TGDSBV') (earlier known as Galileo Netherland BV or GNBV). TGDSBV was a Netherland based entity and carried 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....HC and ITAT order 99-00 to 02-03 GII Delhi ITAT Yes 15% of revenue less distributor fee, resulting in 'Nil' Income Delhi HC Academic Upheld the ITAT order Supreme Court Academic Upheld Delhi HC and ITAT order 03-04 to 06-07 TGDSBV Delhi ITAT Yes After remand back, 15% was accepted pursuant to High Court order 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n case the Hon'ble Apex Court has already given it's decisions, the AO is directed to follow the same. The above objections of the assessee are accordingly disposed off. 1.3. Favourbale Order of Hon'ble ITAT for AY 2018-19 and AY 2019-20 in case of Appellant 1.3.1. The Hon'ble ITAT in their combined order for AY 2018-19 and AY 2019-20 dated 10th January 2023 held as under (Pages 471 to 496 of PB -Vol-II) "12. Facts being identical, 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 a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ated 20th April 2023 for AY 2020-21, held that the issues involved are legal issues in the case of the Appellant and are identical to those in case of the Appellant for AY 2018-19 and AY 2019-20. 1.3.6. The Hon'ble DRP, while re-producing the directions of AY 2018-19 and AY 2019-20, directed the AO to follow the directions of Hon'ble Supreme Court in this issue while passing final assessment order for AY 2020-21. The relevant extracts of DRP directions dated 20th April 2023 is as under - "5.1 The issues involved 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 th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iscussed 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." 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 afores....