Brief of the case:
In the case of Travelport LP USA Vs. DDIT Delhi Bench of ITAT observed that assessee has a dependent agent in form of distributor in India and held that assessee has a business connection in India u/s 9(1) (i) of the act and its income is deemed to accrue or arise in India.
Facts of the case:
- Assessee is a Limited partnership based in the State of Delaware, USA, having its principal place of business at Georgia. It is engaged in the business of providing information, reservations, transaction processing and related services for airlines, Travel agencies and other travel-related entities.
- Assessee owns and operates a Global Distribution System located outside India known as computerized reservation system(CRS) and provides subscribers with access to and use of this GDS.
- Assessee has entered into agreement World Span services Ltd. (WSL), which is 100% subsidiary of the assessee, to market the CRS and other services of assessee in UK, Europe, the Middle East, Africa, and parts of Asia.
- The worlds Span Ltd. was marketing and distributing CRS through its nonexclusive representative Calleo Distribution Technologies Pvt. Ltd. in India. For this, WSL and Calleo entered into an agreement appointing Calleo as the distributor of WSL for CRS.
- Assessee filed its return of Income declaring income at NIL on the basis that
(a) There is no business connection of assessee in India u/s 9(1) (i) of the Income Tax act as the calleo carrying out activities in India as per nonexclusive Representation agreement with WSL.
(b) Assessee does not have Permanent establishment In India as per Indo US DTAA.
(c) Assuming while denying the PE of the assessee in India, as Caello has been remunerated at 57 % of the revenue; no further income can be attributed to such PE.
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