DDIT Vs Travelport L.P. USA (ITAT Delhi)
The issue under consideration is whether revenue generated from the bookings made within India is the revenue attributable to the PE of the assessee is taxable in India?
ITAT states that the major functioning, i.e., collecting data bases with various airlines, hotels etc. and entering or feeding them into the computer took place outside India. It was in the computer in Denver, USA that various processed data with regard to schedule of flights timing, pricing, availability, meal preference, special facilities etc. was stored and process undertaken. The role performed by the computers in India or the Indian agents was to merely get connected or be configured so that the travel agents could perform the booking function. The computers in India were not capable of processing data, which was processed abroad. Further, the functions required huge investment and capacity, which was not installed and available in the computers at the desk of the travel agents in India but were available in the host computer in the USA. Thus, it was looking at the nature and the character of the functions undertaken in India viz., the functions and assets outside India, 15 per cent was attributed to India. In our humble opinion, since no guidelines are available as to how much should income be reasonably attributable to India, the same has to be determined on the basis of the facts of the case and judicial precedents. On finding parity in the facts of the case in hand with the facts of the judicial precedents discussed hereinabove, ITAT are of the considered view that the ld. CIT(A) rightly attributed 15% of the Revenue and therefore, ITAT do not find any error or infirmity in the findings of the ld. CIT(A). To sum up, the appeal of the Revenue for A.Y 2006-07 is dismissed on merits and appeals for A.Ys 2007-08 to 2010-11 are dismissed as barred by limitation.
