COMMISSIONER OF INCOME TAX INT. TAXATION-3 vs. TRAVELPORT L.P. USA (FORMERLY WORLDSPAN L.P. USA)

$~46&47 •. - ' •.. . IN THE HIGH COURT OF DELHI AT NEW DELHI ,+ ITA 603/2016 & CM Nos.30033-34/2016 .+• ITA 604/2016 & CM Nos.30035-36/20i6 ' PR. COMMISSIONER OF INCOME TAX INT. TAXATION-3 r ; Appellant -Through: - Mr. R,ahui Chaudhary, Senior / ^' St^ding Counsel, , . Versus' • TRAVELPORT L.P; USA (FORMERLY WORLDSPAN L.P. USA) , . , ; Respondent . ^ Throu^; Ajay Vohr^ Senior Advocate , , , - with Mr. Prakash Kumar, Advocate. -•GORA]V[: . - • -• ^ HON'BLE MR. JUSTICE S. RAVINDRA BHAT HbN'BLE MR. JUSTICE NAJMIWAZIRI ORDER , % , 20.12.i2016 CM No. 30034 & 30036 of 2016 (for exemption) . 1. . Allowed, .subject 'to all just exceptions.' The applications 'stand disposed off. ' - , ; , CM Nos.30033 & 30035/2016 (for delay) 2. ,; These applicatiohs seek condonation ofdelay, which isstated to be of 22 days in filing ,the aforenotbd appeal. For the reasons' stated in these applications, the delay is condoned and the appeals are taken on record. 3. . The applications are disposed off. . / ITANos. 603 & 604/2016 4.. Issue notice. Mr.'Prakash Kumar, Advocate accepts notice on behalf ofthe respondents; • ; / • . ~ ^ Digitally Signed By:AMULYA Signature Not Verified

L 5. The Revenue urges a substantial question as to the teiiability ofthe impugned order ofthe Income Tax Appellate Tribunal (ITAT) to, the extent it attributed 15%ofthe assessee's iricome to India? 6. The assessee provides online airline booking services. It is a Delaware,.USA;based limited partnership concern and atax resident of the USA. Its portal provides information, reservation, transaction processing and related services for airlines, travel agencies and the other like business entities. In the relevant order, premised upon an approval report submitted by it to the Income Tax Authorities and the revenue generated in India, the Tribunal held that the.assessee had a Permanent Establishment (PE) within the meaning under Article 5 oif the Double Taxation Avpidance Agreement (DTAA) between India and USA. It then went on to analyze the exact income derived by the assessee from its PE. In doing so, the Assessment Officer based his conclusions and fmdings upon the information and materials furnished by the assessee. The net taxable income determined to be USD 73,376/- upon which, after conversion, the taxable income was determined at Rs.13,24,707/- in ITA No.604/2016 and in ITA No.603/2016, the net taxable income determined to be USD 7,14,039/- upon which, after conversion, the taxable income was determined at ? 3,28,45,794/-. The Commissioner of Income Tax (Appeals) [CIT (A)], before whom the assessee had urged its grievances, rejected the plea. Even the plea of the assessee to carry out on an upward refund based upon additional material furnished by it under Rule 46A was examined on merits and after aremand report, rejected. , 7. In these circumstances, in the assessee's cross-appeal to the ITAT against the findings with respect to its PE, the Tribunal attributed 15%

income to the assessee's India operations, following the previous judgment ofthis Court in DIT Fs. Galileo International Inc. (2009) 336ITR 264. 8. Mr. Vohra, Senior Advocate, who appears for the assessee, contends that 15% attribution by the ITATin the impugned orderwas warranted. He justifies his submissions with reference to the conclusions recorded in Director ofIncome Tax Fs. Galileo InternationalInc. (2009) 336 ITR 264 and a subsequentjudgment in Galileo Nederland BF Fs. AssistantDirector ofIncome-tax, Circle-1 (2), (Intl. Tax), New Delhi 367ITR 319 (2014). A reference was made to the observations of the ITAT recording that the parties were uibroad agreement as to the applicability ofthe Galileo rule, both withrespect to the PE question aswell astheruleof.attribution. 9. The Revenue's limited and specific case in this appeal is that the exact particulars with respect to the Revenue's operations from India were available; attribution of 15% was not warranted. The learned counsel for the assessee resisted the appeal and submitted that the ITAT was correct in following the decision of Galileo International Inc 's case {supra) in the circumstances. 10. It is apparent from the above discussion that the specific and limited challenge by the Revenue in this appeal is to the ITAT's order, rather mechanical adherence to the Galileo International Inc's case {supra) attribution, principally to. the extent it followed the 15% ratio. In the present case, the AOhad based his conclusions and determined the income based upon figures furnished by the assessee, as is apparent from a plain reading of the order. In the circumstances, the ITAT, in our opinion, ought not to have disturbed that order, without a finding. 11. This Court has also in its order dated 19.12.2016 recorded a similar conclusion in ITA No.827/2016 between the same parties. Accordingly, the

present appeal is disposed off with a direction to the ITAT to render specific findings on the questions urged after hearing both the parties. 12. The earlier date fixed i.e., 04.01.2017 is cancelled., 13. The appeals are allowed in the above terms. S. RAVINDRA BHAT, J. NAJMIWAZIRI,J. DECEMBER 20,2016 sb ' -