TaxTMI 
TaxTMI 
2025 (7) TMI 436
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.... system is for facility of both travel agencies and airline offices worldwide. 4. M/s Amadeus I.T. Group S.A. filed its return of income for the Assessment Year ('AY') 2022-23 on 29.12.2022 declaring NIL income and claiming refund of Rs. 44,68,11,192/-. The case was selected for scrutiny and notice u/s 143(2) of the Income Tax Act, 1961 ("the Act") was issued to the assessee on 31.05.2023. 5. The assessee, during the year under consideration, received a gross booking revenue/fees arising from India of Rs. 4,46,01,71,932/-. The Assessing Officer held that the booking fee received by the assessee was taxable as royalty both u/s 9(1)(vi) of the Act and Article 13 of the Indo-Spain Treaty on the ground that the booking fees received by the assessee from various airlines is payment for use of process and scientific equipment. Accordingly, the Assessing Officer made addition of Rs. 4,46,01,71,932/- as gross booking revenue arising from India and taxed it at the rate of tax applicable to royalty at 10% as per the DTAA which worked out to Rs. 44,60,17,193/- with which the DRP agreed. 6. Aggrieved, the assessee is before us. 7. At the very outset, the ld. counsel for the assesse....
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....der: "21. We have heard the Ld. Representative of the parties and perused the records. We find that the impugned issue is squarely covered by the decision of the Hon'ble Delhi High Court in assessee's favour wherein it has been held that the booking fee received by the assessee is taxable as 'business income' and not as 'royalty'. The Hon'ble Delhi High Court vide its order dated 04.05.2023 for AY 2013-14 to 2016-17, order dated 23.05.2023 for AY 2009-10 and order dated 30.05.2023 for AY 2012-13 (placed at pages 364 to 376 of the Paper Book-II) has dismissed the appeals filed by the Revenue by recording its common finding for all the AYs involved as under: "7. Mr Ruchir Bhatia, learned senior standing counsel, who appears on behalf of the appellant/revenue, says that the following questions have been, broadly, proposed in support of the above-captioned appeals: (a) ... (b) Whether in the facts and in circumstances of the case, the Tribunal erred in law in holding that booking fee received by the appellant/assessee is taxable as business income, and not as royalty? (c) ... 8.2 Insofar as the proposed q....
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....tware was not available outside the Indian airport or to any of the agents of the assessee in India since the agents were booking the tickets only through the CRS of the assessee. 16. The ld. counsel for the assessee continued by saying that payment made by British Airways to the assessee in relation to the Altea system is for services rendered by Amadeus and not for use of any process, or equipment, etc. since the control to such inventory system is never transferred by Amadeus to British Airways. Further, the inventory hosting takes place outside India and payment is made by non-resident airlines to another non-resident outside India. The various services like accepting payments, credit card validation, etc. are incidental to reservation, which services had not been subscribed to by British Airways during the relevant previous year. 17. The ld. counsel for the assessee sought to reiterate and rely upon the submissions, case law and legal analysis made while dealing with the issue of taxation of income from CRS activity as 'royalty'. The ld AR pointed out that the co-ordinate bench in assessee's own case for the A.Ys 2007-08 to 2021-22 under similar circumstances hel....
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....o the Permanent Establishment in India wherein it has upheld the order of the High Court on the aspect that 15% of the revenue earned by the assessee being taxable in India and that since the assessee pays 33% of the booking fees to the distributors, no income is attributable to tax in India. We therefore are of the considered view that the issue of attribution has attained finality. Ground No. 5 is accordingly dismissed. 23. Ground No. 6 pertains to interest u/s 234B of the Act. 24. At the very outset, the ld. counsel for the assessee submitted that in the absence of any liability for payment of advance tax since tax is deductible at source on the income of the assessee held liable to tax in India, the levy of interest under section 234B of the Act is not warranted. The ld. counsel for the assessee continued by saying that the aforesaid proviso would apply only in a scenario where person responsible for deducting tax has paid or credited such income without deduction of tax. In the present case since the income has been received by the assessee after deduction of tax at source, therefore, the aforesaid proviso is not applicable. 25. We have heard the rival submissions and....