Booking fees received from Airlines is business income: ITAT Delhi

Amadeus IT Group SA Vs Asstt. DIT (ITAT Delhi)

The AO has held that the income received by the assessee with respect to bookings arising from India is also taxable as royalty income. The AO observed that the assessee supplies/ licenses its proprietary products free of charge to Amadeus India for distribution to the Subscribers. As per the Distribution Agreement, the assessee has authorized Amadeus India to conclude “Subscriber Agreement” with the Subscribers which allows the Travel Agents to use the CRS Owned by it. The Assessing Officer has given a finding that the paying airlines have offices in India. The assessee has granted to Amadeus India the right to further grant the right to access and right to use its platforms/ software/ product offerings to Subscribers. Amadeus India has the exclusive rights to distribute the CRS in India.

20. The AO has held that a software is also type of equipment in the facts of the case. The system comprising of equipments is used by the subscribers to book tickets and the same is the source of income for the assessee. The AO held that the income of the assessee is taxable as royalty also as ‘use of process’.

21. The ld. DRP confirmed the order of the Assessing Officer.

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