Case Law Details
CIT Vs Travelport Global Distribution Systems B.V. (Delhi High Court)
The Delhi High Court recently ruled on the appeal, ITA 748/2023, filed by the appellant/revenue concerning Assessment Year (AY) 2015-16 against the order passed by the Income Tax Appellate Tribunal (Tribunal) on 27.09.2022.
Delay Condoned for Meritorious Consideration: In the application filed by the appellant/revenue, a delay of 220 days in re-filing the appeal was acknowledged. The court, emphasizing its intention to decide the appeal on merits, inclined to condone the delay, leading to the disposal of the application accordingly.
Supreme Court Precedent Holds Sway: Mr. Ruchir Bhatia, the learned senior standing counsel for the appellant/revenue, conceded that the merits of the case were significantly influenced by the Supreme Court’s decision in the case of Commissioner of Income-tax (International Taxation) v. Travelport L.P. USA, [2023] 153 taxmann.com 176 (SC). The Supreme Court’s order referred to a judgment of the Delhi High Court and affirmed the decision against the Revenue in the case of DIT v. Travelport Inc. [2023] 149 taxmann.com 470/454 ITR 289 (SC).
Merit of the Appeal and Attribution Rate: The core issue in the appeal revolved around the sustainability of the Dispute Resolution Panel’s view that 75 percent of gross profits earned from Indian operations, attributed to the respondent/assessee, was justifiable. The Tribunal, in alignment with its own decision for AYs 2007-08 to 2014-15, directed the Assessing Officer to adopt an attribution rate of revenue for the Indian operations of the Permanent Establishment at 15 percent of gross booking fees for AY 2015-16.
Consistency in Previous Bench Decisions: The coordinate bench’s decision in AY 2006-07, addressed in ITA 301/2022, sustained the conclusion on the attribution rate and held that no substantial question of law arose for consideration. This decision found affirmation from the Supreme Court, leading to the dismissal of the Special Leave Petition (SLP).
Conclusion: Considering the alignment with the Supreme Court’s precedent and the absence of substantial questions of law, the Delhi High Court concluded the appeals and directed the registry to dispatch the order to the respondent/assessee via various modes, including e-mail. The ruling underlines the influence of established judicial precedents in shaping outcomes in taxation matters.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. This is an application filed by the appellant/revenue, seeking condonation of delay in re-filing the appeal.
2. According to the appellant/revenue, there is a delay of 220 days in re- filing the appeal.
3. Since we intend to decide the appeal on merits, we are inclined to condone the delay.
3.1 It is ordered accordingly.
4. The application is, accordingly, disposed of.
ITA 748/2023
5. This appeal concerns Assessment Year (AY) 2015-16.
6. Via the instant appeal, the appellant/revenue seeks to assail the order dated 27.09.2022 passed by the Income Tax Appellate Tribunal [in short, “Tribunal”].
7. Mr Ruchir Bhatia, learned senior standing counsel, who appears on behalf of the appellant/revenue, fairly concedes that insofar as the merits of the case are concerned, the decision of the Supreme Court rendered in the case of the group entity of the respondent/assessee holds the field.
7.1 Mr Bhatia, in this behalf, has drawn our attention to the following order passed by the Supreme Court in the case of Commissioner of Income- tax (International Taxation) v. Travelport L.P. USA, [2023] 153 taxmann.com 176 (SC). Since the order of the Supreme Court refers to a judgment of this court, the order is extracted hereafter:
“1. Delay of 146 days is condoned.
2. Learned Additional Solicitor General appearing for the petitioner has submitted that the issues which arise in this petition have been considered and held against the Revenue in [Civil Appeal Nos. 6511- 6518/2010] DIT v. Travelport Inc. [2023] 149 taxmann.com 470/454 ITR 289 (SC) by affirming the judgment of the High Court. His submission is placed on record.
3. In the circumstances, the special leave petition is Pending application(s) shall stand disposed of.”
8.The moot point on merits which obtained in the appeal preferred by the respondent/assessee before the Tribunal was, whether the view taken by the Dispute Resolution Panel [in short, “the DRP”] that 75 percent of the gross profits earned from Indian operations, attributed to the respondent/assessee, was sustainable. The Tribunal partly allowed the appeal of the respondent/assessee by following its own decision for AYs 2007-08 to 2014-15, thereby directing the Assessing Officer to adopt the attribution rate of revenue for the Indian operations of the Permanent Establishment at 15 percent of gross booking fees for the AY in issue, i.e., AY 2015-16.
8.1 The coordinate bench in AY 2006-07, while dealing with ITA 301/2022, has sustained the said conclusion and gone on to hold that no substantial question of law arose for its consideration. It is this decision which was affirmed by the Supreme Court with the dismissal of the SLP, as noted hereinabove.
9. Given this position, we are of the opinion that no substantial question of law arises for our consideration.
10. The appeals are, accordingly, closed.
11. The registry will dispatch a copy of the order passed today to the respondent/assessee via all modes, including e-mail.