SABRE ASIA PACIFIC PTE. LIMITED.,SINGAPORE vs. THE ASSISTANT COMMISSIONER OF INCOME-TAX INTERNATIONAL TAX CIRCLE 4(2)(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “I”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.3358/Mum/2023 (Assessment year: 2020-21)

Sabre Asia Pacific Pte. Ltd. vs The Assistant Commissioner of C/o Deloitte Haskins & Sells Income-tax International Tax LLP One International Center Circle 4(2)(1) Tower 3, 30th Floor, Senapati 17th Floor, Room No. 1708, Air Bapat Marg, Elphinstone (W), India Building, Nariman Point, Mumbai - 400013 Mumbai - 400021. PAN: AABCA6590M APPELLANT RESPONDENT Assessee by : Shri Nitesh Joshi, Adv. Revenue by : Shri Ashish Nagesh (Sr. DR)

Date of hearing : 19/05/2026 Date of pronouncement : 29/05/2026 O R D E R Per:Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the Ld. Assistant Commissioner of Income Tax, Circle 4(2)(1), Mumbai [for brevity the “Ld. AO”], order passed under section 143(3) r.w.s. 144C(13) of the Act (for brevity ‘the Act’) for Assessment Year 2020-21, date of order 27.07.2023. The impugned order is originated from the recommendation of the Ld. Commissioner of Income

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. Tax (DRP-2), Mumbai order passed under section 144C(5) of the Act date of order 28.06.2023. 2. The assessee has taken the following grounds: “1. The learned ACIT erred in assessing the total income of the appellant at Rs. 16,51,74,708. 2. Technical 2.1 On a without prejudice to the other grounds, it is submitted that considering the facts and circumstances of its case and the law prevailing on the subject, the impugned order dated 27 July 2023 passed under section 143(3) r.w.s 144C(13) of the Act is passed beyond the period of limitation prescribed under section 153 of the Act (i.e., 30 September 2022) and hence, the said order is void ab initio being barred by limitation and hence, ought to be struck down. 3. Consideration of erroneous income in computation sheet 3.1 The learned ACIT has erred in considering erroneous amount of Rs. 21,96,07,938 as total business income of the appellant in the computation sheet enclosed along with the assessment order as against the alleged business income of Rs. 16,51,74,708 as held in the assessment order. 4. Business connection/permanent establishment in India 4.1 The learned ACIT erred in holding that the appellant had a business connection in India in terms of the Act and a permanent establishment [PE] in India in terms of the India-Singapore Double Taxation Avoidance Agreement [DTAA]. 5. Income attributable to PE 5.1 The learned ACIT erred in holding that income attributable to the PE in India has to be determined on a gross basis and consequently no deduction should be allowed. He

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. thereby erred in determining the income taxable in India at Rs. 16,51,74,708 (being 10% of gross receipts from India amounting to Rs. 1,65,17,47,084). 5.2 The learned ACIT ought to have held that out of the gross receipts in India amounting to Rs. 165,17,47,084, the income attributable to the PE in India is Rs. 16,51,74,708 (being 10% of Rs.165,17,47,084) from which further deduction ought to have been allowed in respect of marketing service fees paid by the Appellant to Sabre Travel Network (India) Private Limited (STN) of Rs. 110,74,14,784. 5.3 On a without prejudice basis, the learned ACIT erred in holding that deduction of marketing service fees is to be allowed from the gross receipts relating to India and income attributable to the PE in India is to be computed by applying 10% of such net income. 5.4 The learned ACIT ought to have held that deduction of marketing service fees is to be allowed from the income attributable to the PE in India. 5.5 The learned ACIT erred in alleging that the Hon'ble ITAT was not made aware of appropriate facts in earlier AYS. 5.6 The learned ACIT erred in observing that the appellant has not furnished how the marketing fees paid to STN is computed. The learned ACIT also erred in observing that the agreement entered dated 31 October 2016 entered into between the appellant and Sabre Travel Network (India) Private Limited [STN] is silent on the manner of quantification of fees payable to STN. The learned ACIT erred in not appreciating that the agreement dated 31 October 2016 includes the manner of calculation of the marketing service fees as mentioned at Article 5 read with Attachment B. 5.7 The learned ACIT erred in not following the Hon'ble ITAT's decision in the appellant's own case for earlier years (i.e., AYs 1999-00 to 2014-15 and AY 2017-18), Hon'ble Delhi High Court's judgment in the case of Galileo International Inc. (336 ITR 264), decision of the Hon'ble Delhi ITAT in the case of Amadeus Global Travel Distribution S.A. v. ADIT &

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. Anr. (3 taxmann.com 777) and decision of the Hon'ble Delhi ITAT in case of Sabre Inc. (2009 taxmann.com 1020). Others 6. The learned ACIT erred in holding that a refund of Rs. 36,43,576 has already been received. by the appellant. It is submitted that the appellant has not received the aforesaid refund. 7. The learned ACIT erred by not granting interest under section 244A of the Act for which the appellant is eligible. 8. The learned ACIT has erred in initiating penalty proceedings under section 270A of the Act. 9. Each one of the above grounds of appeal is without prejudice to the other.” 3. The brief facts of the case are that the assessee, Sabre Asia Pacific Pte. Ltd. (“SAPPL”/“the assessee”), is a foreign company incorporated in Singapore and is a tax resident of Singapore. The assessee is engaged in the business of facilitating airline reservations for and on behalf of participating airlines through its Computerised Reservation System (“CRS”)/Global Distribution System (“GDS”) known as “Sabre GDS”. The said system is licensed by Sabre GLBL Inc., USA to the assessee. For carrying out its business operations in the Asia-Pacific region, the assessee appoints National Marketing Companies (“NMCs”) in various countries. In India, Sabre Travel Network India Pvt. Ltd. (“STNIPL”/“STN”), a wholly owned subsidiary of the assessee, acts as the NMC and markets the Sabre GDS directly to travel agents in India. The airlines pay booking fees to the assessee for reservations made through the Sabre GDS system. In turn, the assessee pays Marketing Service Fees (“MSF”) to STNIPL in terms of the Marketing Agreement

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. dated 31.10.2016, as amended from time to time. During the course of assessment proceedings for AY 2020-21, the Ld. AO held that the assessee has a Permanent Establishment (“PE”) in India under the India-Singapore Double Taxation Avoidance Agreement (“DTAA”). The Ld. AO further held that income attributable to the alleged PE in India is taxable in India and proposed an addition of Rs.16,51,74,708/-, being 10% of the gross receipts from Indian operations amounting to Rs.1,65,17,47,084/-. The assessee contended that no PE exists in India and further submitted that even otherwise no income is taxable in India since substantial marketing and distribution functions are carried out by STNIPL, to whom Marketing Service Fees amounting to Rs.1,10,74,14,784/- were paid. The assessee also submitted that the alleged attribution of income at 10% of gross receipts without allowing deduction of marketing fees is contrary to settled judicial precedents, including the decisions of the Hon’ble ITAT in assessee’s own case for earlier assessment years, the judgment of the Hon’ble Delhi High Court in the case of Galileo International Inc. (336 ITR 264), and other coordinate bench decisions. However, the Ld. AO rejected the contentions of the assessee and proposed to tax the entire amount of Rs.16,51,74,708/- on gross basis. Alternatively, on a without prejudice basis, the Ld. AO computed income attributable to India at Rs.5,44,33,230/- by first reducing the marketing fees from gross receipts and thereafter applying a 10% attribution rate on the balance amount. Aggrieved by the draft assessment order, the assessee filed objections challenging the existence of PE in India, the attribution of income to the alleged PE, and the computation methodology adopted by the Ld. AO. The Ld. DRP rejected the assessee’s plea. Considering the direction of the DRP the Ld. AO has

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. confirmed addition amount to Rs. 16,51,74,708/-. Being aggrieved the assessee filed an appeal before us. 4. The Ld. AR advanced arguments ground-wise. Accordingly, the grounds are adjudicated as under: 5. Ground No. 1: Being general in nature, the same does not require any specific adjudication. 6. Ground No. 2: The same was not pressed by the Ld. AR at the time of hearing. Accordingly, Ground No. 2 is dismissed as not pressed. 7. Ground No. 3: The Ld. AR submitted that the Ld. AO erred in considering the business income of the assessee at Rs. 21,96,07,938/- in the computation sheet annexed with the assessment order dated 27.07.2023, whereas the income attributable to business operations was actually determined by the Ld. AO at Rs. 16,51,74,708/-. It was contended that though the business income was determined at Rs. 16,51,74,708/-, the Ld. AO had erroneously adopted the figure of Rs. 21,96,07,938/- in the computation of income. The Ld. DR did not controvert the submissions advanced on behalf of the assessee. Accordingly, we restore this issue to the file of the Ld. AO for the limited purpose of re-computation of the assessee’s income in accordance with law. Hence, Ground No. 3 is allowed for statistical purposes. 8. Ground No. 4 and Ground No. 5: The Ground No. 4 is related to that the assessee had a business connected with India in terms of the Act and PE in India in terms of the India-Singapore DTAA.

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. Considering this ground the Ld. AR conceded that the Ld. DRP has taken view on considering the order of The Coordinate Bench of ITAT, Mumbai in assessee’s own case reported at (2018) 91 taxmann.com 434 (Mumbai-Trib). The relevant observations of the Ld. DRP in para no. 6.3.2 are reproduced as below: “6.3.2. Further Discussion on the issue of Permanent Establishment: The Hon'ble Income Tax Appellate Tribunal in applicant's own case vide Sabre Asia Pacific Pte Ltd. v. Deputy Commissioner of Income-tax. (International Taxation) 1(1)(1). Mumbai. [2018] 91 taxmann.com 434 (Mumbai Trib.) has held that: “…We find that though the assessee had raised a ground of appeal assailing the observations of the DRP that the assessee had a PE in India in terms of Article 5(1) and 5(8) of the India- Singapore DTAA. but however, during the course of the hearing of the appeal no contention was advanced by the Id AR to support his aforesaid claim. the Tribunal in the assesses own case in A.Ys 1999-2000 to 2004-05, uphold the order of the DRP that the assessee had a business connection/PE in India. The Ground of appeal No. 1 raised by the assessee before us is dismissed.....” Hence, the issue has been covered against the applicant assessee. 6.4. Directions of the DRP: On the basis of facts and circumstances of the case, the Applicant has a subsidiary company in India which undertakes the business contracts on behalf of the applicant and also provides marketing services. The Indian subsidiary is completely dependent on the Applicant for its sustenance and has no other source of income than the Applicant's Marketing Service Fees. Therefore, following the directions of the Hon. Tribunal as well DRP, we reject the objection of the Applicant.” 9. We heard the rival submission and considered the documents available in the record. We find that the issue is already decided by the Coordinate Bench of

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. ITAT, Mumbai in the assessee’s own case. Further, the Ld. AR had conceded the fact that the assessee is treated as PE in India. The Ld. DR has supported the order of the Ld. DRP. Accordingly, respectfully relying on the order of The Coordinate Bench of ITAT, Mumbai, we dismiss the Ground of the assessee’s appeal. So, the Ground No. 4 of the assessee’s appeal stands dismissed. 10. Considering the Ground No.5, the Ld. AR further contended that the Ld. AO erred in computing the taxable income in India at Rs. 16,51,74,708/-, being 10% of the gross receipts from India amounting to Rs. 1,65,17,47,084/-. The Ld. AR submitted that the gross receipts from Indian bookings were Rs. 1,65,17,47,084/- and, in terms of the directions of the Coordinate Bench of the ITAT, Mumbai in the assessee’s own case, only 10% thereof could be considered attributable to Indian operations, which worked out to Rs. 16,51,74,708/-. However, against such attributed income, the marketing fees amounting to Rs. 1,10,74,14,784/- paid to STNIPL were required to be considered, resulting in no taxable income in India. The Ld. AR further submitted that the Ld. DRP, however, observed that the entire gross receipts from Indian operations amounting to Rs. 1,65,17,47,084/- represented business income attributable to the PE in India. According to the Ld. DRP, the payment of Rs. 1,10,74,14,784/- made to STNIPL was attributable towards marketing services, and accordingly, the balance amount of Rs. 54,43,32,300/- was considered attributable to the assessee’s income from India. The Ld. AR contended that such computation and reasoning adopted by the Ld. DRP are contrary to the findings and directions of the Coordinate Bench of the ITAT in the assessee’s own case for earlier assessment years.

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. 11. The Ld. AR has drawn our attention in the order of the Ld. DRP. The relevant paragraphs are reproduced as below: “The Ld. A.O. has observed that the Applicant has received gross receipts for India at Rs. 165,17,47,084/-. There is no doubt that such income is directly or indirectly attributable to the Permanent Establishment in India and the Permanent Establishment in India has played active part in 100% business of the Applicant. The fact that certain sums have been paid to Sabre Travel Network India Pvt. Ltd. (Rs. 110,74,14,784/-) does not alter the fact that the remaining sums Rs. 54,43,32,300/-(Rs. 165,17,47,084 Rs. 110,74,14,784) have been received from India and are attributable to the Permanent Establishment in India. Thus, we agree with the finding of the Ld. AO that the amount of Rs. 54,43,32,300/-is attributable to the Applicant as income from India. 7.4. Directions of the DRP: In light of the above discussion, we hold that the Ld. Assessing Officer has been right in holding income of the Applicant taxable in India to the extent of Rs. 54,43,32,300/-. Accordingly, the objection of the Applicant is rejected.” 12. The Ld. AR further argued that the income attributable to India is duly adjudicated & decided by the order of The Coordinate Bench of ITAT, Mumbai ‘I’ Bench in assessee’s own case bearing ITA No. 2360/Mum/2022 for A.Y. 2018-19 date of pronouncement 31.01.2023. The relevant observations contended in para no. 3 to para no. 8 are reproduced as below: “3. Shri Nitesh Joshi appearing on behalf of the assessee submits that the assessee company is based in Singapore and hence, is a tax resident of Singapore. The assessee is engaged in the business of promotion, development, operation, marketing and maintenance of Computerised Reservation System(CRS). The primary business of the assessee is to facilitate airline reservation

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. for and on behalf of participating airlines. The participating airlines provide necessary information which is displayed to the travel agents. The travel agents arrange booking of airline tickets on behalf of their customers using CRS. The assessee receives its fee from airlines whose tickets are booked through CRS. The assessee sub-licences the right to market CRS to a marketing company in each of the Asia Pacific countries known as National Marketing Company (NMC). In India the assessee has NMC Sabre Travel Network (India) Pvt. Ltd. The airlines pay the assessee booking fee for each booking made by the agents. The NMC is paid commission/marketing service fee by the assessee for each booking made through NMC subscribers. Sabre Travel Network India Pvt. Ltd. is a wholly owned Indian subsidiary of the assessee. The assessee has entered into marketing agreement dated 31/10/2016 with the said company. 4. During the period relevant to the assessment year under appeal, the assessee has paid Rs.100,6,2,95,387/- as, marketing fee to its AE i.e. Sabre Travel Network India Pvt. Ltd.. The Assessing Officer held Indian subsidiary of the assessee as assessee's PE in India in terms of Article-5 of India -Singapore DTAA. Further the Assessing Officer attributed 10% of the gross receipts from operation in India to the PE. 4.1 During the period relevant to the assessment year under appeal the assessee had claimed reimbursement of expenses amounting to Rs.5,00,007/-incurred by it on behalf of Sabre Travel Network India Pvt. Ltd.. These expenses include courier charges, marketing and consultancy fees, e-learning charges, maintenance of e-learning website, etc. The Assessing Officer made addition of 10% reimbursements holding that the assessee has failed to show there is no profit element in such payments. Once it is established that the assessee has PF in India all profits attributable to the same would be taxable in India irrespective of the classification of the same by the assessee. Consequently, the Assessing Officer taxed 10% of the reimbursement as the income of the assessee. 4.2 The Ld.Counsel for the assessee submits at the outset that the primary issue raised in the appeal have already been considered and decided by the Tribunal in assessee's own case for the preceding assessment years i.e. from assessment year 2005-06 onwards.

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. 4.3 In respect of ground No.2 of appeal assailing the findings of Assessing Officer in holding that the assessee has PE in India, the Ld.Counsel for assessee pointed that this issue has been decided against the assessee by the Tribunal in appeal for assessment year 2017-18 i.e. ITA No.154/Mum/2021 decided on 24/01/2022. 4.4 In respect of ground no.3, the Ld.Counsel for the assessee submits that once the Tribunal has held that the assessee has a PE in India 15% of the commission income received by the assessee was attributed to the PE. The Ld.Counsel for the assessee submitted that this issue is also covered by the Tribunal order for assessment year 2017-18 (supra). 4.5. In respect of ground No.4, the Ld. Counsel for assessee submits that it is a settled principle that reimbursement of expenses cannot be regarded as income and hence, not liable to tax. However, this issue was decided against the assessee by the Tribunal for the first time in assessment year 2005-06 and thereafter the Tribunal has consistently following the same view. The Ld. Counsel for the assessee submits that in appeal for assessment year 2017-18 (supra), the Tribunal has held 10% of reimbursement as income of the assessee. 4.6 In respect of ground No.5, the Ld.Counsel for the assessee submits that TDS as per Form - 26AS is Rs. 9,27,61,127/-. Thereafter, Form 26AS statement was revised and additional TDS of Rs. 2,25,645/- remained to be claimed. The assessee had received refund of tax for the preceding assessment years and assessee had also received interest refund. The Assessing Officer deducted the tax at source on said interest income. The total TDS credit available to the assessee is Rs. 10, 16,74,847/-. As against the said amount the Assessing Officer has granted TDS of Rs.9,25,35,482/-. Thus, the balance TDS of Rs.91,39,365/- is yet to be granted. The Ld.Counsel for the assessee referred to reconciliation statement of TDS as per ITR, Form 26AS and credit granted by the Assessing Officer at page 140 of the paper book. 4.7 In ground No.6 of appeal, the assessee has claimed short grant of interest u/s.244A of the Act. The Ld.Counsel for the assessee submits that the Assessing Officer has computed interest upto date of draft assessment order i.e. September, 2021. The final assessment order was passed in July, 2022, the assessee had filed rectification application u/s. 154 of the Act on 06/01/2023 along with annexure. Directions may be given to the Assessing Officer for deciding 11

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. the assessee's said rectification application. The Ld.Counsel for the assessee pointed that while filing rectification petition the assessee had filed working of rectification order as annexure -4 to the said application. In the said working the assessee had inadvertently mentioned interest u/s. 244 of the Act is due from 01/04/2019 to 31/12/2022 ie. 45 months. In fact the interest u/s 244A of the Act is due from 01/04/2018 to 31/12/2022 i.e. for 57 months. 5. Per contra, Shri Soumendu Kumar Dash representing the Department vehemently supported the findings of Assessing Officer and the DRP. 6. We have heard the submissions made by rival sides and have examined the orders of authorities below. In so far as the facts of the case are concerned, they are not in dispute. It is also an accepted fact that the issue raised in ground No.2, 3 and 4 of appeal have been decided by the Tribunal in assessee's own case for the preceding assessment years. Both sides are unanimous in stating the facts in the impugned assessment year are similar to the fact in assessment year 2017-18. 7. In ground No.2 of appeal, the assessee has assailed findings of Assessing Officer in holding that the assessee has PE in India. The Ld.Counsel for the assessee has fairly conceded that in assessment year 2017-18 this issue has been decided against the assessee. We find that in assessee's own case for assessment year 2017-18 in ITA No.154/Mum/2021 decided on 24/01/2022 the Co-ordinate Bench following the order of Tribunal in assessee's own case for assessment year 1999-2000 in ITA NO.3903/Mum/2006 decided on 28/08/2010 concluded as under: "12 In the orders of the subsequent years, the coordinate benches followed the above extracted order for assessment year 1999-2000. There is no change in the facts and circumstances of the case, as agreed by both the parties. Therefore, we, respectfully following the decisions of the co-ordinate benches in assessee's own case for assessment years 1999-2000 and the orders of the subsequent assessment years, we also hold that there is no infirmity in the order of the learned assessing officer in holding that assessee has permanent establishment in India and, therefore, income of the assessee is chargeable to tax in India. It 12

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. further held that assessee has also a business connection in India in terms of the provisions of the Income-Tax Act. Accordingly, ground 2 of the appeal is dismissed" For parity of reasons ground No.2 of the appeal is dismissed. 8. In ground No.3 of appeal the assessee has assailed income attribution to PL. We find that in assessment year 2017-18 identical issue was considered by the Tribunal. Once it was held that assessee has PE in India, the consequent we to it is attribution of income. The Co-ordinate Bench decided the issue as under: "13 Ground 3 is with respect to the income attributable to the permanent establishment. This issue is first decided in assessment year 1999-2000. Subsequently, the co-ordinate benches followed the above decision. The co- ordinate bench held that the income attributable to the functions performed by the permanent establishment is 15% of the gross receipts. It further held that if the omount paid by the assessee to its agency PE is higher than the above amount, then no further income is attributable to the permanent establishment in India. In the present case, we find that the gross receipts attributable to India is Rs. 231,77,31,028/- and 15% thereof is the income which amounts to Rs. 34,76,59,654/- against which the subsidiary has offered the service for income of Rs. 78,32,46,525/-and, therefore, no further income is required to be attributed. No change in the facts and circumstance of the case has been pointed out before us. Therefore, respectfully following the decision of the co-ordinate benches in assessee's own case for earlier assessment years, we allow ground 3 of the appeal of the assessee. We also hold that as in the present case, income attributed to the permanent establishment of assessee is much higher than the amount paid by the assessee to its dependent agency PE in India, no further income is chargeable to tax. Further with respect to the determination of the income attributable to PE in India, the assessee has not offered any sum in the return of income, but the revenue authorities have determined the 10% gross

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. receipts from India of the total sum of Rs. 231,77,31,028/. The co ordinate bench in assessee's own case has decided the identical issue for earlier assessment years. The co-ordinate bench for assessment years 2005-06 to 2011-12, vide its consolidated order dated 16/02/2018 held that 15% of the gross receipts pertaining to India booking shall be the income attributable to the India operations of the assessee. Such is the view also followed for assessment years 1999-2000 to 2004-05. Further, the commission paid by assessee to its subsidiary company @25% of the gross receipts pertaining to India booking is higher than the income attributable being 15% of the gross receipts pertaining to India and, therefore, no further attribution is required. Therefore, respectfully following the decision of the co-ordinate bench in assessee's own case for earlier years, in absence of any difference in facts and circumstances of the case, we allow ground 3 of the appeal of the assessee." The assessee has filed estimated working of profit and loss account. The same is reproduced herein below: Estimated profit and loss account working

Particular Amount(Rs.) Particulars Amount (Rs.) s

Amounts 1,006,295,387 15% of the Gross 224,617,796 paid to Receipts STN attributable to Marketin India (i.e.15% of g services Rs. 1,49,74,51,973 fees 10% of 50,001 reimbursement of

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. expenses Treated as income (i.e. 10% of Rs.5,00,007)

Loss

781,627,590

The Assessing Officer may consider the estimated computation given by the assessee while giving effect to ground No.3 of appeal. Thus, ground No.3 of appeal is allowed in the terms aforesaid.” 13. The Ld. DR argued and stands in favour of the order of the revenue authorities. The Ld. DR invited our attention in impugned assessment order and the relevant para of the said order is reproduced as below: “9. A look at the statement as per Annexure 4 to its submissions dated 17.11.2021 shows that the assessee received gross receipts for India is Rs. 165,17,47,084/-. Against this receipt, the STN was paid an amount of Rs. 110,74,14,784/- (as per 3 CEB report). There is no doubt that the entire gross receipts for India are routed through STN for which it pays STN fees as marketing fees/commission. Thus the amount of Rs. 110,74,14,784/- is attributable to the entire gross receipts for India though the assessee has not furnished how the marketing fees paid is computed. 9.1. The agreement between the assessee and the STN dated 31.10.2016 (effective from 01.04.2016) is silent on the manner of quantification of fees payable to STN. Thus when marketing fees paid of Rs. 110,74,14,784/- is attributable to the entire gross receipts from India, the claim of the assessee to set off the entire marketing fees against 10% of gross receipts is incorrect.

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. 9.2. It appears that Hon. ITAT, was not made aware of the fact that the 25% of gross receipts paid as commission corresponds to the entire gross receipts and not only to income attributed to India. After considering the quantum in the earlier year or this year, it would lead to an absurd conclusion that the assessee is incurring a net loss from its operations in India by the logic of attribution of income to India at 10% of gross receipts and paying 25% of gross receipts as commission. That is not the case. 9.3. Firstly when the income is considered on gross basis, no deductions are allowed. Accordingly the amount of Rs16,51,74,708/- (being 10% of gross receipts in India amounting to Rs. 165,17,47,084/- as per Annexure 4 to assessee's submission dated 17.11.2021) is taxed.”

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. income attributable to India were contrary to the binding decisions of the Coordinate Bench in the assessee’s own case. On the other hand, the Ld. DR relied upon the orders of the revenue authorities and submitted that the entire gross receipts from India were routed through STNIPL and, therefore, the payment made to STNIPL could not be set off against only the attributed income from India. The Ld. DR further contended that once income was computed on gross basis, no deduction was allowable there from.

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. 16. Ground No.6 relates to withholding of refund amounting to Rs.36,43,576/-. In this regard, the assessee had filed a rectification application dated 14.10.2023. Since Ground No. 5 of the assessee’s appeal has been adjudicated in favour of the assessee, Ground No. 6, being consequential in nature, is restored to the file of the Ld. AO for appropriate adjudication in accordance with law. 17. Ground No. 7 pertains to the levy of interest under section 244A of the Act, which is consequential in nature. Accordingly, this ground is restored to the file of the Ld. AO for consequential relief, if any, in accordance with law. 18. Ground No. 8 relates to initiation of penalty proceedings under section 270A of the Act. Since the penalty proceedings are premature at this stage, the ground raised by the assessee is dismissed. 19. In the result, the appeal of the assessee bearing ITA No.3358/Mum/2023 is partly allowed. Order pronounced in the open court on 29th day of May 2026. Sd/- Sd/- (ARUN KHODPIA) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 29/05/2026 Soumili Das, PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , �ितवादी/ The Respondent. 2. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 18

ITA No. 3358/Mum/2023; Sabre Asia Pacific Pte. Ltd. 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI