Travelport Global Distribution system BV Vs ACIT (ITAT Delhi)
ITAT Delhi held that CRS, which was the source of revenue, was partially existent in the machines namely various computers installed at the premises of the subscribers. As assessee exercised complete control over the computers installed at premises of the subscribers. This amounted to a fixed place of business for carrying on the business of the enterprise in India.
Facts- The Assessee is a company incorporated in The United Kingdom. It provided electronic global distribution services in the rest of the world territory (including the Indian region) for the travel industry, by utilizing a Computer Reservation System ( CRS ), which was an automated system which processes booking data. It appointed distributors for marketing its CRS services. In India, the authorized distributor was Interglobe Technologies Quotient India Private Limited (ITQPL/ the distributor ). ITQPL is entitled to receive distribution fees from the Assessee for each segment booked in the Indian Territory. The Distributor/ITQPL independently signed an agreement with the Travel Agent s, to provide booking services. AO held that but for the supply of computers, the configuration of computers and connectivity which were provided by assessee either directly or through its agent Interglobe amounted to operating part of its CRS system through such subscribers in India and accordingly PE in the nature of a fixed place of business in India.
Conclusion- Computer Reservation Service (CRS), which was the source of revenue, was partially existent in the machines namely various computers installed at the premises of the subscribers. In some cases, assessee itself placed those computers and in all the cases, connectivity in the form of nodes leased from SITA were installed by assessee through its agent. The computers so connected and configured which could perform the function of reservation and ticketing was a part and parcel of the entire CRS. The computers so installed required further approval from assessee who allowed the use of such computers for reservation and ticketing. Without the authority of assessee such computers were not capable of performing reservation and ticketing part of the CRS system. The computer so installed could not be shifted from one place to another even within the premises of subscriber, leave apart the shifting of such computer from one person to another. Thus, assessee exercised complete control over the computers installed at premises of the subscribers. This amounted to a fixed place of business for carrying on the business of the enterprise in India. Thus, assessee could be said to have established PE in India.
FULL TEXT OF THE ORDER OF ITAT DELHI
The Composite order deals with the following appeals filed by the revenue as well as the assessee.
