DCIT (IT) Vs Sita Information Networking Computing USA Inc. (ITAT Mumbai)
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Mumbai dismissed appeals filed by the Deputy Commissioner of Income Tax against Sita Information Networking Computing USA Inc., holding that receipts from Passenger System Solutions are not taxable as Fees for Technical Services (FTS) in India.
Case Background
Sita Information Networking Computing USA Inc., incorporated and tax resident in the USA, provides application services to the global air transport sector, including Airport Systems Solutions and Passenger Systems Solutions. The company earned income from licensing Airport Services software and from Passenger Services contracts with Indian airlines, particularly National Aviation Company of India Limited (Air India).
The Assessing Officer had treated income from both services as FTS under Section 9(1)(vii) of the Income Tax Act and Article 12 of the India-USA Double Taxation Avoidance Agreement (DTAA), making them taxable in India. On appeal, the Commissioner of Income Tax (Appeals) deleted these additions, leading to the revenue department’s appeal before the ITAT.
Services Provided
The Passenger Services, provided from Sita’s data center in Atlanta, Georgia, included:
- Reservations
- Fares and pricing
- Departure control
- Message switching
- Flight information and tracking
- Baggage reconciliation
- Internet booking
- Frequent flyer services
Key Findings
