TaxTMI 
TaxTMI 
2026 (7) TMI 540
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....4,708. 2. Technical 2.1 On a without prejudice to the other grounds, it is submitted that considering the facts and circumstances of its case and the law prevailing on the subject, the impugned order dated 27 July 2023 passed under section 143(3) r.w.s 144C(13) of the Act is passed beyond the period of limitation prescribed under section 153 of the Act (i.e., 30 September 2022) and hence, the said order is void ab initio being barred by limitation and hence, ought to be struck down. 3. Consideration of erroneous income in computation sheet 3.1 The learned ACIT has erred in considering erroneous amount of Rs. 21,96,07,938 as total business income of the appellant in the computation sheet enclosed along with the assessment order as against the alleged business income of Rs. 16,51,74,708 as held in the assessment order. 4. Business connection/permanent establishment in India 4.1 The learned ACIT erred in holding that the appellant had a business connection in India in terms of the Act and a permanent establishment [PE] in India in terms of the India-Singapore Double Taxation Avoidance Agreement [DTAA]. 5. Income attributab....
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.... Others 6. The learned ACIT erred in holding that a refund of Rs. 36,43,576 has already been received. by the appellant. It is submitted that the appellant has not received the aforesaid refund. 7. The learned ACIT erred by not granting interest under section 244A of the Act for which the appellant is eligible. 8. The learned ACIT has erred in initiating penalty proceedings under section 270A of the Act. 9. Each one of the above grounds of appeal is without prejudice to the other." 3. The brief facts of the case are that the assessee, Sabre Asia Pacific Pte. Ltd. ("SAPPL"/"the assessee"), is a foreign company incorporated in Singapore and is a tax resident of Singapore. The assessee is engaged in the business of facilitating airline reservations for and on behalf of participating airlines through its Computerised Reservation System ("CRS")/Global Distribution System ("GDS") known as "Sabre GDS". The said system is licensed by Sabre GLBL Inc., USA to the assessee. For carrying out its business operations in the Asia-Pacific region, the assessee appoints National Marketing Companies ("NMCs") in various countries. In India, Sabre Travel Network....
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....y, the grounds are adjudicated as under: 5. Ground No. 1: Being general in nature, the same does not require any specific adjudication. 6. Ground No. 2: The same was not pressed by the Ld. AR at the time of hearing. Accordingly, Ground No. 2 is dismissed as not pressed. 7. Ground No. 3: The Ld. AR submitted that the Ld. AO erred in considering the business income of the assessee at Rs. 21,96,07,938/- in the computation sheet annexed with the assessment order dated 27.07.2023, whereas the income attributable to business operations was actually determined by the Ld. AO at Rs. 16,51,74,708/-. It was contended that though the business income was determined at Rs. 16,51,74,708/-, the Ld. AO had erroneously adopted the figure of Rs. 21,96,07,938/- in the computation of income. The Ld. DR did not controvert the submissions advanced on behalf of the assessee. Accordingly, we restore this issue to the file of the Ld. AO for the limited purpose of re-computation of the assessee's income in accordance with law. Hence, Ground No. 3 is allowed for statistical purposes. 8. Ground No. 4 and Ground No. 5: The Ground No. 4 is related to that the assessee had a business connected w....
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....e assessee's appeal stands dismissed. 10. Considering the Ground No.5, the Ld. AR further contended that the Ld. AO erred in computing the taxable income in India at Rs. 16,51,74,708/-, being 10% of the gross receipts from India amounting to Rs. 1,65,17,47,084/-. The Ld. AR submitted that the gross receipts from Indian bookings were Rs. 1,65,17,47,084/- and, in terms of the directions of the Coordinate Bench of the ITAT, Mumbai in the assessee's own case, only 10% thereof could be considered attributable to Indian operations, which worked out to Rs. 16,51,74,708/-. However, against such attributed income, the marketing fees amounting to Rs. 1,10,74,14,784/- paid to STNIPL were required to be considered, resulting in no taxable income in India. The Ld. AR further submitted that the Ld. DRP, however, observed that the entire gross receipts from Indian operations amounting to Rs. 1,65,17,47,084/- represented business income attributable to the PE in India. According to the Ld. DRP, the payment of Rs. 1,10,74,14,784/- made to STNIPL was attributable towards marketing services, and accordingly, the balance amount of Rs. 54,43,32,300/- was considered attributable to the assessee's inc....
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....e receives its fee from airlines whose tickets are booked through CRS. The assessee sub-licences the right to market CRS to a marketing company in each of the Asia Pacific countries known as National Marketing Company (NMC). In India the assessee has NMC Sabre Travel Network (India) Pvt. Ltd. The airlines pay the assessee booking fee for each booking made by the agents. The NMC is paid commission/marketing service fee by the assessee for each booking made through NMC subscribers. Sabre Travel Network India Pvt. Ltd. is a wholly owned Indian subsidiary of the assessee. The assessee has entered into marketing agreement dated 31/10/2016 with the said company. 4. During the period relevant to the assessment year under appeal, the assessee has paid Rs. 100,6,2,95,387/- as, marketing fee to its AE i.e. Sabre Travel Network India Pvt. Ltd.. The Assessing Officer held Indian subsidiary of the assessee as assessee's PE in India in terms of Article-5 of India -Singapore DTAA. Further the Assessing Officer attributed 10% of the gross receipts from operation in India to the PE. 4.1 During the period relevant to the assessment year under appeal the assessee had claimed rei....
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.... remained to be claimed. The assessee had received refund of tax for the preceding assessment years and assessee had also received interest refund. The Assessing Officer deducted the tax at source on said interest income. The total TDS credit available to the assessee is Rs. 10, 16,74,847/-. As against the said amount the Assessing Officer has granted TDS of Rs. 9,25,35,482/-. Thus, the balance TDS of Rs. 91,39,365/- is yet to be granted. The Ld.Counsel for the assessee referred to reconciliation statement of TDS as per ITR, Form 26AS and credit granted by the Assessing Officer at page 140 of the paper book. 4.7 In ground No.6 of appeal, the assessee has claimed short grant of interest u/s. 244A of the Act. The Ld.Counsel for the assessee submits that the Assessing Officer has computed interest upto date of draft assessment order i.e. September, 2021. The final assessment order was passed in July, 2022, the assessee had filed rectification application u/s. 154 of the Act on 06/01/2023 along with annexure. Directions may be given to the Assessing Officer for deciding the assessee's said rectification application. The Ld.Counsel for the assessee pointed that while filing....
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....reasons ground No.2 of the appeal is dismissed. 8. In ground No.3 of appeal the assessee has assailed income attribution to PL. We find that in assessment year 2017-18 identical issue was considered by the Tribunal. Once it was held that assessee has PE in India, the consequent we to it is attribution of income. The Co-ordinate Bench decided the issue as under: "13 Ground 3 is with respect to the income attributable to the permanent establishment. This issue is first decided in assessment year 1999-2000. Subsequently, the co-ordinate benches followed the above decision. The co-ordinate bench held that the income attributable to the functions performed by the permanent establishment is 15% of the gross receipts. It further held that if the omount paid by the assessee to its agency PE is higher than the above amount, then no further income is attributable to the permanent establishment in India. In the present case, we find that the gross receipts attributable to India is Rs. 231,77,31,028/- and 15% thereof is the income which amounts to Rs. 34,76,59,654/- against which the subsidiary has offered the service for income of Rs. 78,32,46,525/-and, therefore, no further....
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....peal. Thus, ground No.3 of appeal is allowed in the terms aforesaid." 13. The Ld. DR argued and stands in favour of the order of the revenue authorities. The Ld. DR invited our attention in impugned assessment order and the relevant para of the said order is reproduced as below: "9. A look at the statement as per Annexure 4 to its submissions dated 17.11.2021 shows that the assessee received gross receipts for India is Rs. 165,17,47,084/-. Against this receipt, the STN was paid an amount of Rs. 110,74,14,784/- (as per 3 CEB report). There is no doubt that the entire gross receipts for India are routed through STN for which it pays STN fees as marketing fees/commission. Thus the amount of Rs. 110,74,14,784/- is attributable to the entire gross receipts for India though the assessee has not furnished how the marketing fees paid is computed. 9.1. The agreement between the assessee and the STN dated 31.10.2016 (effective from 01.04.2016) is silent on the manner of quantification of fees payable to STN. Thus when marketing fees paid of Rs. 110,74,14,784/- is attributable to the entire gross receipts from India, the claim of the assessee to set off the entire marketi....
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....nst only the attributed income from India. The Ld. DR further contended that once income was computed on gross basis, no deduction was allowable there from. 15. On perusal of the records, we find that the issue is squarely covered in favour of the assessee by the decisions of the Coordinate Bench of the ITAT, Mumbai in the assessee's own case for earlier assessment years, including AY 2017-18 and AY 2018-19. The Coordinate Bench has consistently held that though the assessee has a PE in India, the income attributable to such PE is to be determined at a prescribed percentage of the gross receipts from Indian bookings and, where the commission/marketing fees paid to the Indian subsidiary exceeds such attributed income, no further income is chargeable to tax in India. We further find that no distinguishing facts or contrary judicial precedent have been brought on record by the revenue. The findings of the Ld. DRP that the balance amount remaining after deduction of marketing fees from gross receipts is taxable in India are contrary to the ratio laid down by the Coordinate Bench in the assessee's own case. Respectfully following the binding precedent in the assessee's own case for e....