Amadeus IT Group SA, New Delhi V. DCIT(International Taxation), Circle-9(1)(1), New Delhi

ITA 7970/DEL/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6366 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 14-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRABHA KANT; REVENUE MANAGEMENT SYSTEM. WE
• Keywords: Business income; Double taxation relief; Permanent establishment; Question of law; Competent authority; Set aside
• Section: 69; 244A; 234B; 201; 208; 9(1); 9(1); 9(1); 44DA; 13; 22; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCE) ITA NO.2007/DEL./2017 (ASSESSMENT YEAR : 2013-14) ITA NO.3494/DEL./2018 (ASSESSMENT YEAR : 2014-15) ITA NO.7970/DEL./2018 (ASSESSMENT YEAR : 2015-16) ITA NO.7047/DEL./2019 (ASSESSMENT YEAR : 2016-17) AMADEUS IT GROUP SA, VS. DCIT, CIRCLE 1(1)(1), C/O VAISH ASSOCIATES, ADVOCATES, INTL. TAXATION, 1 ST FLOOR, MOHAN DEV BUILDING, NEW DELHI. 13, TOLSTOY MARG, NEW DELHI 110 001. (PAN : AAFCA9629P) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY VOHRA, SENIOR ADVOCATE SHRI NEERAJ JAIN, ADVOCATE SHRI ANSHUL SACCHAR, CA SHRI KARAN JAIN, CA REVENUE BY : DR. PRABHA KANT, CIT DR DATE OF HEARING : 20.01.2021 DATE OF ORDER : 29.01.2021 O R D E R ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 2 PER KULDIP SINGH, JUDICIAL MEMBER : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN THE INTER-CONNECTED APPEALS, THE SAME ARE BEING DISPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DI SCUSSION. 2. APPELLANT, AMADEUS IT GROUP SA (HEREINAFTER REFE RRED TO AS THE TAXPAYER) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 04.01.2017, 24.11.2017, NIL & 27.06.2019 PASSED BY THE ASSESSING OFFICER (AO) IN CONSONANCE WITH THE ORDERS PASSED BY THE LD. DRP/TPO UNDER SECTION 143 (3) READ WITH SECTION 144C(13) OF THE INCOME-TAX ACT, 1961 (FOR S HORT THE ACT) QUA THE ASSESSMENT YEARS 2013-14, 2014-15, 2015-16 & 2016-17 RESPECTIVELY ON THE IDENTICAL GROUNDS, EXCEPT THE D IFFERENCE OF ADDITIONS/DISALLOWANCES, INTER ALIA THAT :- 1. THAT THE ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN COMPUTING THE INCOME OF THE APPELLANT FOR THE RELEV ANT ASSESSMENT YEAR AT RS.416,18,80,875/- AS AGAINST NIL INCOME RETURNED BY THE APPELLANT. 2. THAT THE ASSESSING OFFICER ERRED ON FACTS AND I N LAW IN ALLEGING THAT THE APPELLANT AVOIDED FURNISHING SPEC IFIC INFORMATION CALLED FOR IN THE ASSESSMENT, PARTICULARLY THE VARI OUS AGREEMENTS WITH THE AIRLINES. RE: CRS INCOME - PERMANENT ESTABLISHMENT 3. THAT THE DISPUTE RESOLUTION PANEL (DRP)/ASSES SING OFFICER ERRED ON FACTS AND IN LAW IN HOLDING THE APPELLANT TO BE LIABLE TO TAX IN INDIA IN RESPECT OF RECEIPTS FROM AIRLINES, ETC. RELATING TO SEGMENTS BOOKED FROM INDIA THROUGH THE APPELLANTS COMPUTER RESERVATION SYSTEM, NOT APPRECIATING THAT NO INCOME ACCRUED OR AROSE TO THE APPELLANT IN INDIA. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 3 4. THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN HOLDING THAT COMPUTERS, ELECTRONIC HARDWARE/SOFTWAR E AND THE CONNECTIVITY PROVIDED BY THE APPELLANT TO THE TRAVE L AGENTS THROUGH SITA/ THIRD PARTY NODES LOCATED IN INDIA, COLLECTIV ELY, CONSTITUTED PE OF THE APPELLANT IN INDIA UNDER ARTICLE 5 OF THE IN DO-SPAIN DTAA (THE TREATY) AND THE INCOME ARISING TO THE APPELL ANT FROM THE AIRLINES, ETC. WAS ATTRIBUTABLE TO THE ACTIVITIES O F THE ALLEGED PE IN INDIA. 4.1 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN HOLDING THAT AS THE WEBSITE OF THE APPELLANT SHOWS THAT IT HAS VARIOUS OFFICES IN INDIA FOR PERFORMING FUNCTIONS LIKE TRAI NING, PRODUCT DEVELOPMENT, TECHNICAL SUPPORT, ETC. SUCH OFFICE PR EMISES CONSTITUTE FIXED PLACE PE OF THE APPELLANT IN INDIA. 5. THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN ALLEGING THAT AMADEUS INDIA (P) LTD. (AIPL) CONSTIT UTED DEPENDENT AGENT PERMANENT ESTABLISHMENT (PE) OF THE APPELLANT IN INDIA AND THE INCOME ARISING TO THE APPELLANT FROM THE AIRLIN ES, ETC., WAS ATTRIBUTABLE TO THE ACTIVITIES OF THE ALLEGED PE IN INDIA. 5.1 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE APPELLANT WAS NOT MAKING ANY PAYM ENT TO AIPL TOWARDS THE ACTIVITIES OF MARKETING THE APPELLANTS CRS AND PROVIDING THE HARDWARE SUPPORT TO THE TRAVEL AGENT AND THEREFORE, THE DISTRIBUTION FEE PAID TO AIPL WAS NOT AT ARMS LENGTH AND CONSEQUENTLY, AIPL CONSTITUTED DEPENDENT AGENT PE O F THE APPELLANT. 5.2 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE APPELLANT EXERCISED CONTROL OVER THE SUBSCRIBERS/ TRAVEL AGENTS THROUGH AIPL. 5.3 THAT THE DRP/ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN HOLDING THAT THE AIPL CONSTITUTED PE OF THE APPELLA NT UNDER ARTICLE 5(4) OF THE TREATY ON THE GROUND THAT AIPL WAS CARR YING OUT NEGOTIATIONS WITH THE SUBSCRIBERS/TRAVEL AGENTS WIT HOUT APPRECIATING THAT IN TERMS OF THE SAID ARTICLE, PE IS CONSTITUTE D ONLY WHEN SUCH ENTERPRISE HAS AND HABITUALLY EXERCISES AUTHORITY T O CONCLUDE CONTRACTS ON BEHALF OF THE FOREIGN ENTERPRISE. 6. THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS A ND IN LAW IN HOLDING THAT THE OFFICES OF AIPL CONSTITUTE PE OF T HE APPELLANT IN INDIA WITHOUT EVEN SPECIFYING UNDER WHICH PARAGRAPH OF ARTICLE 5 OF THE TREATY DO SUCH OFFICES OF AMADEUS CONSTITUTE PE OF THE APPELLANT. RE: ATTRIBUTION OF INCOME WITHOUT PREJUDICE 7. THAT THE DRP/ASSESSING OFFICER ERRED ON FACTS A ND IN LAW IN COMPUTING THE PROFITS ATTRIBUTABLE TO THE ALLEGED P E OF THE APPELLANT IN INDIA AT RS.311,87,23,875/-. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 4 8. THAT THE DRP/ASSESSING OFFICER ERRED ON FACTS A ND IN LAW IN NOT APPRECIATING THAT EVEN IF IT IS ASSUMED THAT AI PL OR THE COMPUTERS, ELECTRONIC HARDWARE PROVIDED TO THE TRAV EL AGENTS ETC., CONSTITUTED PE OF THE APPELLANT IN INDIA, THE INCOM E DERIVED FROM SUCH PE WAS COMPLETELY CONSUMED BY DISTRIBUTION AND OTHER EXPENSES ATTRIBUTABLE THERETO AND THAT NO INCOME SU RVIVES FOR TAXATION. 9. THAT THE DRP/ASSESSING OFFICER ERRED ON FACTS A ND IN LAW IN NOT FOLLOWING THE ORDER OF THE DELHI BENCH OF THE T RIBUNAL IN THE APPELLANTS CASE FOR THE ASSESSMENT YEARS 1996-97 T O 1998-99, WHEREIN THE TRIBUNAL HAD ATTRIBUTED 15% OF THE REVE NUES RELATING TO THE BOOKINGS MADE FROM INDIA AS ATTRIBUTABLE TO THE APPELLANTS PE IN INDIA AND HELD THAT NO INCOME IS TAXABLE AS THE PAYMENT MADE TO DEPENDENT AGENT WAS MORE THAN THE REVENUES SO ATTRI BUTED, AND IN FOLLOWING THE RATE OF ATTRIBUTION OF 75% ADOPTED IN THE ORDER FOR ASSESSMENT YEARS 2007-08 TO 2012-13. 9.1 THAT THE DRP/ASSESSING OFFICER ERRED ON FACTS AND LAW IN MISINTERPRETING THE AFORESAID ORDER OF THE TRIBUNAL AND ALLEGING THAT THE TRIBUNAL HAS ATTRIBUTED REVENUES TO ONLY THE SO FTWARE DEVELOPMENT RELATED SERVICES PROVIDED BY AIPL, NOT APPRECIATING THAT THE TRIBUNAL CONSIDERED ALL THE SERVICES REQUI RED TO BE PROVIDED BY AIPL UNDER THE DISTRIBUTION AGREEMENT AND AIPL C ONTINUED TO PROVIDE THE SAME SERVICES UNDER THE DISTRIBUTION AG REEMENT DURING THE PREVIOUS YEAR UNDER CONSIDERATION, TOO. 10. THAT THE DRP/ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN FOLLOWING THE ORDER FOR ASSESSMENT YEAR 2007-08 TO ALLEGE THAT NO REMUNERATION WAS PAID BY THE APPELLANT TO AIPL FOR MAIN ACTIVITY OF MARKETING THE CRS AND PROVIDING THE HARDWARE SUPPOR T TO TRAVEL AGENTS AND, THEREFORE, PROFITS FROM SUCH FUNCTIONS WERE REQUIRED TO BE ATTRIBUTED TO THE APPELLANTS DEPENDENT AGENCY P E IN INDIA. 11. THAT THE DRP/ASSESSING OFFICER ERRED ON FACTS A ND IN LAW IN DISALLOWING EXPENDITURE OF EURO 27,577,000 INCURRED BY THE APPELLANT UNDER THE HEAD DISTRIBUTION FEE', WHILE COMPUTING' THE INCOME ATTRIBUTABLE TO THE ALLEGED PE, FOLLOWING T HE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08. 11.1 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE APPELLANT WAS ENGAGED IN THE BUSINESS OF PROVIDING CRS SERVICES AND THE EXPENSES INCURRED IN CONNECTION WITH PRODUCT DEVELOPMENT FUNCTION CARRIED OUT OUTSI DE INDIA WERE REQUIRED TO BE EXCLUDED WHILE COMPUTING THE INCOME OF THE ALLEGED PE OF THE APPELLANT IN INDIA. 12. THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN DISALLOWING EXPENDITURE OF EURO 6,139,000/- INCURRE D BY THE APPELLANT UNDER THE HEAD 'DEVELOPMENT FEES', WHILE COMPUTING THE INCOME ATTRIBUTABLE TO THE ALLEGED PE, FOLLOWING TH E ASSESSMENT ORDER FOR ASSESSMENT YEAR 2007-08. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 5 13. THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN DISALLOWING EXPENDITURE OF EURO 8,909,000/- INCURRE D BY THE APPELLANT UNDER THE HEADS 'MARKETING COST', 'DATA P ROCESSING COST' AND 'CENTRAL OPERATING COST', WHILE COMPUTING THE I NCOME ATTRIBUTABLE TO THE ALLEGED PE, ON THE GROUND THAT THE APPELLANT HAS NOT BEEN ABLE TO ESTABLISH THAT THE AFORESAID EXPEN DITURE HAS BEEN INCURRED SPECIFICALLY FOR THE INDIAN DISTRIBUTION A CTIVITY AND THE JUSTIFICATION OF INCURRING SUCH EXPENDITURE. 13.1 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACT S AND IN LAW IN HOLDING THAT ALLOCATION OF COST, PARTICULARLY MARKE TING COSTS, ON THE BASIS OF NUMBER OF BOOKINGS GENERATED WILL ALWAYS R ESULT IN OVER ALLOCATION OF COST TO A FULLY GROWN UP MARKET LIKE INDIA AND CONSEQUENTLY, ERRED IN NOT ACCEPTING THE COST ALLOC ATION METHOD ADOPTED BY THE APPELLANT. 13.2 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE AFORESAID COSTS HAVE A DI RECT NEXUS WITH THE BOOKING FEES RECEIVED FROM BOOKINGS MADE FROM INDIA AND, THEREFORE, THE SAME WERE REQUIRED TO BE TAKEN INTO CONSIDERATION WHILE COMPUTING THE INCOME ATTRIBUTABLE TO THE ALLE GED PE. 13.3 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACT S AND IN LAW IN, ALTERNATIVELY, DISALLOWING THE AFORESAID EXPENSES B Y INVOKING PROVISIONS OF SECTION 40(A)(I) OF THE ACT. 13.4 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACT S AND IN LAW IN HOLDING THAT PART OF THE ALLOCATED EXPENSES HAS ALR EADY BEEN INCLUDED IN THE EXPENSES INCURRED IN INDIA RESULTING IN DUPL ICATION OF DEDUCTION. 13.5 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN ALLEGING THAT THE AFORESAID EXPENSES WERE IN THE NA TURE OF 'HEAD OFFICE' EXPENSES AND ALLOWED DEDUCTION @S% OF ADJUS TED INCOME UNDER SECTION 44C OF THE ACT. 14. THAT WITHOUT PREJUDICE THE DRP/ ASSESSING OFFIC ER ERRED IN FACTS AND IN LAW IN ERRONEOUSLY COMPUTING THE INCOM E OF THE ALLEGED PE OF THE APPELLANT. RE: CRS INCOME - ROYALTY 15. THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN, ALTERNATIVELY, HOLDING THAT BOOKING FEE OF EURO 104 ,673,000 RECEIVED BY THE APPELLANT WAS TAXABLE IN INDIA AS 'ROYALTY' BOTH UNDER SECTION 9(1)(VI) OF THE ACT AND ARTICLE 13(3) OF THE TREATY . 16. THAT WITHOUT PREJUDICE, THE DRP/ ASSESSING OFFI CER ERRED ON FACTS AND IN NOT APPRECIATING THAT THE BOOKING FEE RECEIVED FROM NON- RESIDENT AIRLINES WAS NOT SOURCED IN INDIA IN TERMS OF ARTICLE 13(6) OF THE TREATY AND WAS NOT LIABLE TO TAX IN INDIA AS 'R OYALTY'. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 6 16.1 THAT THE DRP/ ASSESSING OFFICER ERRED ON FACT S AND IN LAW IN HOLDING THAT SOURCE OF INCOME ACCRUING TO THE APPEL LANT WAS LOCATED IN INDIA BY ALLEGING THAT THE MOST OF THE AIRLINES FROM WHICH REVENUES WERE RECEIVED WERE RESIDENT IN INDIA, WHICH IS FACT UALLY INCORRECT. 17. WITHOUT PREJUDICE, THAT THE DRP/ ASSESSING OFFI CER, HAVING HELD THE APPELLANT TO HAVE PERMANENT ESTABLISHMENT IN INDIA, ERRED ON FACTS AND IN LAW IN BRINGING TO TAX THE ALLEGED 'ROYALTY' INCOME ON GROSS BASIS, WITHOUT APPRECIATING THAT IN TERMS OF SECTION 44DA OF THE ACT AND ARTICLE 13(5) OF THE TREATY, ROYALTY INCOME EFFECTIVELY CONNECTED WITH THE 'PE OF THE NON-RESIDENT IS REQUI RED TO BE TAXED AS BUSINESS INCOME ON NET BASIS. RE: ALTEA SYSTEM 18. THAT THE DRP/ ASSESSING OFFICER ERRED ON FACTS AND IN LAW IN HOLDING THAT PAYMENTS 'RECEIVED BY THE APPELLANT FR OM BRITISH AIRWAYS IN RELATION TO THE ALLEGED USE OF ALTEA SYS TEM WAS TAXABLE IN INDIA AS 'ROYALTY' BOTH UNDER SECTION 9(1)(VI) OF T HE ACT AND ARTICLE 13(3) OF THE TREATY. 19. THAT WITHOUT PREJUDICE, THE ASSESSING OFFICER E RRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE PAYMENTS RE CEIVED FROM BRITISH AIRWAYS IN RELATION TO THE ALTEA SYSTEM WER E NOT SOURCED IN INDIA IN TERMS OF ARTICLE 13(6) OF THE TREATY, THER EFORE, WERE NOT LIABLE TO TAX IN INDIA AS 'ROYALTY'. 20. FURTHER WITHOUT PREJUDICE, THE DRP/ASSESSING O FFICER ERRED ON FACTS AND IN LAW IN HOLDING ON ADHOC BASIS A SUM OF EURO 15 MILLION AS THE INCOME OF THE APPELLATE LIABLE TO TA X IN INDIA AS ROYALTY FOR THE ALLEGED USE OF ALTEA SYSTEM BY BR ITISH AIRWAYS. RE: CHARGE OF INTEREST 21. THAT THE DRP/ASSESSING OFFICER ERRED ON FACTS A ND IN LAW IN LEVYING INTEREST UNDER SECTION 234B AND 234D AND WI THDRAWING INTEREST UNDER SECTION 244A OF THE ACT. 3. SINCE ALL THE APPEALS ARE HAVING IDENTICAL GROUN DS, FOR THE SAKE OF BREVITY, WE ARE TAKING BRIEF FACTS OF ITA N O.2007/DEL/2017 FOR AY 2013-14 TO DECIDE THE ISSUES IN CONTROVERSY IN ALL THE AFORESAID APPEALS. 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : THE TAXPAYER, A TAX RESID ENT OF SPAIN ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 7 ALONG WITH ITS AFFILIATED COMPANIES, HAS DEVELOPED A FULLY AUTOMATIC COMPUTER INFORMATION SYSTEM, WHICH ENABLES DISPLAY AND DISSEMINATION OF INFORMATION SUPPLIED BY VARIOUS AI RLINES, WHICH IN TURN FACILITATES, INTER ALIA, RESERVATIONS, COMM UNICATIONS, TICKETING AND RELATED FUNCTIONS ON A WORLD-WIDE BA SIS (HEREINAFTER REFERRED TO AS CSR) FOR THE TRAVEL INDUSTRY. THE A FORESAID SYSTEM IS FOR THE FACILITY OF BOTH TRAVEL AGENCIES AND AIRLIN E OFFICES WORLDWIDE. THE TAXPAYER HAS ALSO DEVELOPED ALTEA S YSTEM WHICH IS A THREE-MODULE SOLUTION THAT MANAGES RESERVATION S, INVENTORY AND DEPARTURES FOR ALL INVOLVED IN GETTING PASSENGERS O N BOARD. THE TAXPAYER CLAIMED TO HAVE ENTERED INTO AGREEMENTS WI TH VARIOUS AIRLINES (PARTICIPATING CARRIER AGREEMENT) BY PROVI DING INTERCONNECTIVITY BETWEEN THE HOST COMPUTER OF THE INDIVIDUAL AIRLINE AND THE AMADEUS CRS CREATED BY THE TAXPAYER AT ERDING, GERMANY. THE TAXPAYER ALSO PROVIDES CONNECTIVITY T O ITS CRS TO THE TRAVEL AGENTS. AFTER ANALYSIS OF THE FACTS AND CONTENTIONS RAISED BY THE TAXPAYER, LD. DRP REACHED THE CONCLUSION THA T THE ASSESSEE IS HAVING A FIXED PLACE PERMANENT ESTABLISHMENT (PE) A ND A DEPENDENT AGENT PE IN INDIA AND ATTRIBUTION OF PROF IT TO SUCH PE. ASSESSING OFFICER (AO) COMPUTED THE PROFIT EARNED B Y THE TAXPAYER AT RS.415,82,98,500/- OR EURO 59,793,950 FROM INDIA AND ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 8 COMPUTED THE PROFIT ATTRIBUTED TO INDIAN PE AT RS.3 11,87,23,875/- TAXABLE @ 40% PLUS SURCHARGE AND EDUCATION CESS I.E . 42.024%. AO ALSO PROCEEDED TO CONCLUDE THAT THE INCOME FROM BOOKING FEES IS ALSO TAXABLE ON GROSS BASIS AS ROYALTY INCOME BE ING IN THE NATURE OF ROYALTY. AO ALSO PROCEEDED TO HOLD THAT RECEIPT S OF THE TAXPAYER PERTAINING TO LICENCING OF SOFTWARE ARE TAXABLE AS ROYALTY AS PER PROVISIONS OF SECTION 9(1)(VI) OF THE ACT. SO, AO COMPUTED THE BOOKING FEES RECEIVED BY THE TAXPAYER FROM CRS IN T HE NATURE OF ROYALTY INCOME TAXABLE IN INDIA, BOTH UNDER THE ACT AS WELL AS UNDER THE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA ) (BETWEEN INDIA & SPAIN) AND TAXED THE SAME AT 10%. THE GROSS BOOKING REVENUE IN RESPECT OF BOOKINGS ARISING FROM INDIA COMES TO ERUO 104,673,000 (RS.7,279,366,551) AND TAX HAS BEEN COMPUTED AT RS.727,936,655. AO ALSO COMPUTED THE A MOUNT OF EURO 15 MILLION WHICH IS HELD TO BE THE RECEIPT OF THE TAXPAYER ON ACCOUNT OF USE OF THE ALTEA SYSTEM FOR ITS OPERATIO N IN INDIA WHICH COMES TO RS.104,31,57,000 AND SAME IS TAXED AS ROYA LTY @ 10% AS PER ARTICLE 13(2)(II) OF THE DTAA BETWEEN INDIA & S PAIN AMOUNTING TO RS.104,31,57,000/-. AO ALSO LEVIED TH E INTEREST UNDER SECTION 234B AND CHARGING OF INTEREST LEVIED U/S 234A, 234C AND 234D IS MANDATORY AND CONSEQUENTIAL. AO ACCORD INGLY ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 9 ASSESSED THE TOTAL INCOME OF THE TAXPAYER AT RS.416 ,18,80,875/- AND THE PROFIT ATTRIBUTABLE TO PE IS TAXED AT NORMAL RA TE AND THE INCOME FROM ROYALTY IS TAXED @ 10% AS PER THE PROVISIONS O F ARTICLE 13 OF INDIA-SPAIN DTAA. 5. THE TAXPAYER CARRIED THE MATTER BEFORE THE LD. D RP BY WAY OF FILING THE OBJECTIONS WHO HAVE DISMISSED THE SAM E. FEELING AGGRIEVED, THE TAXPAYER HAS COME UP BEFORE THE TRIB UNAL BY WAY OF FILING THE PRESENT APPEAL. 6. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. AT THE VERY OUTSET, LD. AR FOR THE TAXPAYER CONT ENDED THAT THE GROUNDS RAISED IN THE PRESENT APPEALS ARE COVERED I N TAXPAYERS OWN CASE VIDE ORDER DATED 26.10.2020 PASSED IN AYS 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 & 2012-13 IN ITA NOS.4906/DEL/2010, 5150/DEL/2011, 60/DEL/2013, 1824 /DEL/2014, 1204/DEL/2015 & 1626/DEL/2016 RESPECTIVELY . 8. LD. DR FOR THE REVENUE, ON THE OTHER HAND, HAS R ELIED ON THE ORDER PASSED BY THE AO/DRP AND HAS FAILED TO POINT OUT ANY ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 10 DISTINGUISHING FACTS OF THE INSTANT APPEALS VIS--V IS TAXPAYERS APPEALS IN THE EARLIER YEARS AND LAW APPLICABLE THE RETO. 9. THE ISSUES RAISED BY THE TAXPAYER VIDE DIFFERENT GROUNDS ARE DISCUSSED AS UNDER. GROUNDS NO.1 & 2 OF ITA NO.2007/DEL./2017 (AY 2013-14) ITA NO.3494/DEL./2018 (AY 2014-15) ITA NO.7970/DEL./2018 (AY 2015-16) ITA NO.7047/DEL./2019 (AY 2016-17) 10. GROUNDS NO.1 & 2 ARE GENERAL IN NATURE, HENCE D O NOT REQUIRE ANY SPECIFIC ADJUDICATION. GROUNDS NO.3, 4, 5 & 6 OF ITA NO.2007/DEL./2017 (AY 2013-14) ITA NO.3494/DEL./2018 (AY 2014-15) ITA NO.7970/DEL./2018 (AY 2015-16) ITA NO.7047/DEL./2019 (AY 2016-17) 11. GROUNDS NO.3, 4, 5 & 6 ARE PERTAINING TO THE IS SUE THAT THE COMPUTERS INSTALLED AT THE PREMISES OF THE SUBSCRIB ERS CONSTITUTE A PE OF THE TAXPAYER IN INDIA IN TERMS OF ARTICLE 5(1 ) OF INDIA SPAIN TAX TREATY. IT IS THE CASE OF THE REVENUE THAT THA T COMPUTERS PROVIDED TO THE TRAVEL AGENT THROUGH WHICH SALES AR E CONSTITUTED AMOUNTS TO FIXED PLACE PE OF THE TAXPAYER IN INDIA UNDER ARTICLE 5 (1) OF THE INDIA-SPAIN TAX TREATY AND LIKEWISE HELD THE TAXPAYER TO ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 11 BE DEPENDENT AGENCY PE IN TERMS OF PARA 5(4) OF THE INDIAN SPAIN TAX TREATY. 12. AO COMPUTED THE PROFIT ATTRIBUTED TO PE AT RS.311,87,23,875/- TAXABLE @ 40% PLUS SURCHARGE AND EDUCATION CESS I.E. 42.024%. WHICH HAS BEEN CONFIRMED BY TH E LD. DRP. 13. LD. AR FOR THE TAXPAYER FAIRLY CONCEDED THAT TH IS ISSUE HAS BEEN DECIDED BY HONBLE HIGH COURT AGAINST THE TAXP AYER IN ITS OWN CASE FOR AYS 1996-97 TO 2006-07 AND HELD THAT C OMPUTERS INSTALLED AT THE PREMISES OF THE SUBSCRIBER CONSTIT UTE A PE OF THE ASSESSEE IN INDIA IN TERMS OF ARTICLE 5 (1) OF INDO -SPAIN TREATY. IT IS ALSO HELD THAT SINCE THE AMADEUS INDIA IS FUNCTI ONALLY DEPENDENT UPON THE ASSESSEE, IT ALSO CONSTITUTE AN AGENCY PE IN INDIA IN TERMS OF ARTICLE 5 (IV) OF THE INDO-SPAIN TREATY. 14. AFORESAID APPEALS BEARING THE IDENTICAL FACTS O F THE TAXPAYERS CASE DECIDED VIDE ORDER DATED 24.01.2011 BY THE HONBLE HIGH COURT IN ITA NOS.191, 192, 193/2011 IN WHICH IT IS HELD THAT THE ASSESSEE CONSTITUTES AN AGENCY PE. T HOUGH IT IS BROUGHT TO THE NOTICE OF THE BENCH THAT THE MATTER IS PENDING BEFORE THE HONBLE SUPREME COURT BUT NO INTERFERENCE IS CA LLED FOR FROM THE BENCH. CONSEQUENTLY, ADDITIONS MADE BY THE AO/ DRP ARE HEREBY CONFIRMED AND GROUNDS NO.3, 4, 5 & 6 OF ITA ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 12 NOS.2007/DEL./2017, 3494/DEL./2018, 7970/DEL./2018 & 7047/DEL./2019 FOR ASSESSMENT YEARS 2013-14, 2014-1 5, 2015-16 & 2016-17 RESPECTIVELY ARE DECIDED AGAINST THE ASSE SSEE. GROUNDS NO.7, 8, 9 & 10 OF ITA NO.2007/DEL./2017 (AY 2013-14) ITA NO.3494/DEL./2018 (AY 2014-15) ITA NO.7970/DEL./2018 (AY 2015-16) ITA NO.7047/DEL./2019 (AY 2016-17) 15. UNDISPUTEDLY, THE TAXPAYER OR THE COMPUTERS, EL ECTRONIC HARDWARE PROVIDED TO THE TRAVEL AGENTS ETC. CONSTIT UTED PE OF THE TAXPAYER IN INDIA AND THE INCOME DERIVED FROM SUCH PE IS TAXABLE IN INDIA. AO BY FOLLOWING ITS EARLIER YEARS ORDER ATTRIBUTED 75% OF THE INCOME EARNED IN INDIA TO THE PE AFTER ADDING D EVELOPMENT COST, DISTRIBUTION FEES, ETC.. LD. DRP HAS ALSO CO NFIRMED THE FINDINGS RETURNED BY THE AO. 16. HOWEVER, IT IS BROUGHT TO OUR NOTICE BY THE LD. AR FOR THE TAXPAYER THAT THIS ISSUE HAS ALREADY BEEN DECIDED I N FAVOUR OF THE TAXPAYER BY THE COORDINATE BENCH OF THE TRIBUNAL F OR AYS 1996-97 TO 2006-07 AND HELD 15% OF THE REVENUE RELATING TO BOOKINGS M ADE FROM INDIA BEING ATTRIBUTABLE TO THE TAXPAYERS PE IN INDIA AFTER CONSIDERING THE NATURE AND EXTENT OF ACTIVITIES IN INDIA AND ABROAD AND ASSETS EMPLOYED & RISK ASSUMED. ORDER PASSED B Y THE TRIBUNAL HAS BEEN AFFIRMED BY THE HONBLE DELHI HIG H COURT AND ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 13 DEPARTMENT REPORTED TO HAVE CHALLENGED THE ORDER OF HONBLE HIGH COURT BEFORE THE HONBLE SUPREME COURT. 17. LD. DR FOR THE REVENUE HAS NOT CONTROVERTED THE SE FACTS NOR CONTROVERTED THE FACT THAT THE GROUNDS RAISED AND F ACTS AND LAW ARE IDENTICAL TO THE EARLIER ASSESSMENT YEARS 2006-07 A ND 2007-08 TO 2012-13 ALREADY DECIDED IN FAVOUR OF THE TAXPAYER. 18. WE HAVE PERUSED THE ORDER PASSED BY THE COORDIN ATE BENCH OF THE TRIBUNAL DATED 26.10.2020 IN TAXPAYERS OWN CASE FOR AY 2007-08 TO 2012-13 WHICH IS ON IDENTICAL FACTS AND OPERATIVE PART THEREOF IS EXTRACTED FOR READY PERUSAL :- 9. THE AO HELD THAT THE ASSESSEE HAS EARNED A PROF IT OF RS.1,452,550,424/- OR EURO 2,50,90,000 FROM INDIA. THE RATIO OF ATTRIBUTION IS TO BE WORKED OUT, BY CONSIDERING THE IMPORTANCE & RANGE OF FUNCTIONS OF AIPL ESPECIALLY IN THE NEW AG REEMENT DATED 01.10.2004. THE AO HELD THAT AS THE COMPETITI ON IS GROWING IN THE MARKET, THE ROLE OF MARKETING FUNCTIONS IN E ARNING PROFIT INCREASES. FURTHER, IT WAS HELD THAT THE NUMBER OF ASSETS OF THE ASSESSEE IS GROWING IN INDIA AND NEW FACTS RELATING TO PRESENCE OF ASSETS IN INDIA HAVE ALSO BEEN FOUND OUT. HOLDING T HUS, THE AO WORKED OUT THE PROFIT ATTRIBUTABLE TO INDIA @ 75% O F THE TOTAL PROFIT. THE AO HELD THAT THE PROFIT ATTRIBUTABLE TO INDIAN PERMANENT ESTABLISHMENTS WAS RS.1,08,94,12,818/- TA XABLE AT THE RATE OF 40% PLUS SURCHARGE & EDUCATION CESS I.E. 41 .82%. 10. THE LD. DRP CONFIRMED THE ORDER OF THE ASSESSI NG OFFICER. 11. THIS ISSUE HAS BEEN ADJUDICATED OVER A PERIOD OF TIME FOR VARIOUS YEARS AND THE DECISION OF THE TRIBUNAL HAS BEEN AFFIRMED BY THE HON'BLE JURISDICTIONAL HIGH COURT. THE CO-OR DINATE BENCH OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 1996 -97 TO 1998- 99, AFTER CONSIDERING THE EXTENT OF ACTIVITIES IN I NDIA AND ABROAD, THE ASSETS EMPLOYED AND RISKS ASSUME D, HELD 15% OF THE REVENUES RELATING TO THE BOOKINGS MADE FROM INDIA AS ATTRIBU TABLE TO THE ASSESSEE'S PE IN INDIA. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 14 12. THE CO-ORDINATE BENCH OF ITAT, VIDE ORDER DATE D 16.11.2016 PASSED FOR ASSESSMENT YEARS 1999-00 AND 2000-01, FOLLOWING THE ORDER FOR THE ASSESSMENT YEARS 1996-9 7 TO 1998- 99, HELD THAT 15% OF THE REVENUES EARNED BY AMADEUS FRO M ITS ACTIVITIES IN INDIA SHALL BE ATTRIBUTABLE TO THE PE . IT IS ALSO PERTINENT TO POINT OUT THAT THE ITAT, VIDE ORDER DA TED 24.04.2009, IN MA NOS. 212 TO 213/D/2008, FILED BY THE DEPARTME NT AGAINST THE ORDER DATED 30.11.2007 RELATING TO AYS 1997-98 AND 1998-99, CATEGORICALLY HELD THAT REVENUE S OF 15% ATTRIBUTED BY IT TO THE PE WERE IN RELATION TO ACTIVITY OF THE PE AS A WHOLE, I.E., CONSIDERING THE AGENCY AND AS WELL AS FIXED PLACE OF BUSINESS F UNCTIONS. 13. THE HON'BLE DELHI HIGH COURT FOLLOWING ITS DEC ISION IN THE CASE OF DIT V. GALILEO INTERNATIONAL 224 CTR 25 1, HAS AFFIRMED THE ORDERS OF THE TRIBUNAL PASSED FOR ASSE SSMENT YEARS 1996-97 TO 2006-07. 14. IT WAS BROUGHT TO OUR NOTICE THAT THE ASSESSIN G OFFICER HAD, IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 20 05-06, SOUGHT TO DISTINGUISH THE DECISION OF THE TRIBUNAL IN ASSE SSEE'S OWN CASE FOR ASSESSMENT YEARS 1996-97 TO 1998-99 ON SIMILAR GROUNDS. HOWEVER, THE LD. CIT (A), VIDE ORDER DATED 25.02.20 10, ALLOWED THE APPEAL OF THE ASSESSEE HOLDING THAT NO MORE THA N 15% OF THE REVENUES GENERATED FROM INDIA COULD BE ATTRIBUTED T O THE ALLEGED PE OF THE ASSESSEE IN INDIA. THE AFORESAID ORDER PA SSED BY THE LD. CIT(A) FOR ASSESSMENT YEAR 2005-06 HAS BEEN CONFIRM ED BY THE ITAT, VIDE ORDER DATED 29.10.2010 AND THE HON'BLE H IGH COURT VIDE ORDER DATED 31.05.2011 (REVENUE APPEAL) AND DA TED 13.08.2013 (ASSESSEE APPEAL). 15. SINCE, THE FACTS REMAINED UNALTERED AND SINCE PAYMENT TO THE AGENT IS ALREADY @33%, NO FURTHER ADDITION IS W ARRANTED IN THE CASE OF THE ASSESSEE. 19. SO, FOLLOWING THE ORDER PASSED BY THE COORDINAT E BENCH OF THE TRIBUNAL IN EARLIER YEARS AND AFFIRMED BY THE H ONBLE DELHI HIGH COURT, WE ARE OF THE CONSIDERED VIEW THAT SINC E THERE IS NO CHANGE IN THE BUSINESS MODEL AND FACTS OF THE CASES AT HAND AND THE EXTENT & NATURE OF THE ACTIVITIES OF THE PE IN INDI A AND ABROAD, AND THE ASSETS EMPLOYED AND RISK ASSUMED IS SAME AS IN THE EARLIER ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 15 YEARS, DISTRIBUTION FEE PAID IN THOSE YEARS @ 33% A PPROXIMATELY OF THE BOOKING FEE PER SEGMENT, NO FURTHER ADDITION CA N BE MADE DURING THE YEAR UNDER ASSESSMENT. CONSEQUENTLY, GR OUNDS NO.7, 8, 9 & 10 OF ITA NOS.2007/DEL./2017, 3494/DEL./2018, 7970/DEL./2018 & 7047/DEL./2019 FOR ASSESSMENT YEAR S 2013-14, AY 2014-15, AY 2015-16 & AY 2016-17 RESPECTIVELY AR E DETERMINED IN FAVOUR OF THE TAXPAYER. GROUNDS NO.11, 12, 13 & 14 OF ITA NO.2007/DEL./2017 (AY 2013-14) ITA NO.3494/DEL./2018 (AY 2014-15) ITA NO.7970/DEL./2018 (AY 2015-16) ITA NO.7047/DEL./2019 (AY 2016-17) 20. AO DISALLOWED EXPENDITURE TO THE TUNE OF EURO 2 7,577,000 CLAIMED TO HAVE INCURRED BY THE TAXPAYER UNDER THE HEAD DISTRIBUTION FEE WHILE COMPUTING THE INCOME ATTRI BUTED TO THE TAXPAYERS PE IN INDIA BY FOLLOWING ASSESSMENT ORD ER FOR ASSESSMENT YEAR 2007-08. 21. IT IS CONTENDED BY THE LD. AR FOR THE TAXPAYER THAT DESCRIPTION OF SERVICES IS EXPORT OF PROCESSED DAT A/SOFTWARE AND NOT DISTRIBUTION FEE, AS HAS BEEN HELD BY THE AO. IT IS ALSO CONTENDED BY THE LD. AR FOR THE TAXPAYER THAT AO AL SO DISALLOWED DEVELOPMENT COST AND MARKETING COSTS INCURRED FOR E ARNING REVENUE FROM BOOKINGS MADE FROM INDIA. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 16 22. LD. DR FOR THE REVENUE CONFIRMED THE FINDINGS R ETURNED BY THE AO/DRP. 23. UNDISPUTEDLY, THIS ISSUE HAS ALSO BEEN DECIDED IN FAVOUR OF THE TAXPAYER BY THE TRIBUNAL VIDE ORDER DATED 26.10.2020 FOR AYS 2007-08 TO 2012-13 (SUPRA). IT IS ALSO NOT IN DISPUTE THAT FACTS OF THE PRESENT CASE AND BUSINESS MODEL OF THE TAXPAYER AND ITS PE IN INDIA ARE IDENTICAL TO THE EARLIER YEARS. WE HAVE PERUSED THE ORDER PASSED BY THE TRIBUNAL IN TAXPAYERS OWN CASE VIDE ORDER (SUPRA). OPERATIVE PART OF WHICH IS AS UNDER :- 16. THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF THE ASSESSEE ON ACCOUNT OF THE DISTRIBUTION EXPENSES. T HE LD. DRP UPHELD THE ADDITION ON THE GROUNDS THAT NO DOCUMENT S HAVE BEEN FILED IN SUPPORT OF THE DISTRIBUTION ACTIVITY. 17. WE HAVE GONE THROUGH THE HISTORY OF SUCH EXPEN DITURE AND FIND THAT THE ADDITION IS BEING MADE OWING TO C ONFUSION IN THE DESCRIPTION OF THE SERVICES AS 'EXPORT OF PROCE SSED DATA/SOFTWARE' OR 'DISTRIBUTION FEE' 18. THIS EXPENDITURE HAS BEEN ALLOWED BY THE CO-OR DINATE BENCH OF THE TRIBUNAL FROM THE ASSESSMENT YEARS 199 6-97 TO 2006-07. SINCE, THE FACTS HAVE NOT BEEN DISPUTED, I N THE ABSENCE OF ANY MATERIAL CHANGE, WE HEREBY ALLOW THE CLAIM O F DISTRIBUTION EXPENSES. 24. SO, FOLLOWING THE ORDER PASSED BY THE COORDINAT E BENCH OF THE TRIBUNAL IN TAXPAYERS OWN CASE VIDE ORDER (SUP RA), WE ARE OF THE CONSIDERED VIEW THAT THE AO HAS ERRED IN TREATI NG THE EXPORT OF PROCESSED DATA/SOFTWARE AS DISTRIBUTION FEE AND HA S ALSO ERRED IN DISALLOWING DEVELOPMENT COST AND MARKETING COST INC URRED FOR ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 17 EARNING REVENUE FROM BOOKING MADE FROM INDIA. ALL THESE EXPENDITURE HAVE BEEN ALLOWED BY THE COORDINATE BEN CH OF THE TRIBUNAL IN EARLIER YEARS. SO, THE CLAIM OF THE TA XPAYER RAISED VIDE GROUNDS NO.11, 12, 13 & 14 OF ITA NOS.2007/DEL./201 7, 3494/DEL./2018, 7970/DEL./2018 & 7047/DEL./2019 FOR ASSESSMENT YEARS 2013-14, AY 2014-15, AY 2015-16 & AY 2016-17 RESPECTIVELY ARE ALLOWED. GROUNDS NO.15, 16 & 17 OF ITA NO.2007/DEL./2017 (AY 2013-14) ITA NO.3494/DEL./2018 (AY 2014-15) ITA NO.7970/DEL./2018 (AY 2015-16) ITA NO.7047/DEL./2019 (AY 2016-17) 25. IN THE ALTERNATIVE, ASSESSING OFFICER HELD THAT BOOKING FEE OF EURO 104,673,000 RECEIVED BY THE TAXPAYER IN INDIA AS ROYALTY BOTH UNDER SECTION 9(1)(VI) OF THE ACT AND ARTICLE 13 (3 ) OF INDO-SPAIN TREATY FOR THE REASON THAT BOOKING FEE RECEIVED B Y THE TAXPAYER FROM VARIOUS AIRLINES IS PAYMENT FOR USE OF PROCESS AND SCIENTIFIC EQUIPMENT. AGAIN, IT IS NOT IN DISPUTE THAT FACTS OF THE YEARS UNDER CONSIDERATION ARE IDENTICAL TO THE EARLIER YEARS DE CIDED BY THE COORDINATE BENCH OF THE TRIBUNAL IN AYS 2006-07 & 2007-08 TO 2012-13 . 26. LD. AR FOR THE TAXPAYER CONTENDED THAT THE PAYM ENT FOR USE OF SOFTWARE IS NOT IN THE NATURE OF ROYALTY UNDER D TAA AND RELIED ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 18 UPON THE DECISION RENDERED BY HONBLE DELHI HIGH COURT IN CASE OF DIT VS. TINTO TECHNICAL SERVICES 340 ITR 507 (DE L.). 27. COORDINATE BENCH OF THE TRIBUNAL IN TAXPAYERS OWN CASE FOR AYS 2007-08 TO 2012-13, AFFIRMED BY THE HONBLE DELHI HIGH COURT, HELD THAT BOOKING FEE RECEIVED BY THE TAXPAY ER IS TAXABLE AS BUSINESS INCOME AND NOT UNDER THE HEAD ROYALTY BY RETURNING FOLLOWING FINDINGS :- 19. THE AO HAS HELD THAT THE INCOME RECEIVED BY T HE ASSESSEE WITH RESPECT TO BOOKINGS ARISING FROM INDIA IS ALSO TAXABLE AS ROYALTY INCOME. THE AO OBSERVED THAT THE ASSESSEE S UPPLIES/ LICENSES ITS PROPRIETARY PRODUCTS FREE OF CHARGE TO AMADEUS INDIA FOR DISTRIBUTION TO THE SUBSCRIBERS. AS PER THE DIS TRIBUTION AGREEMENT, THE ASSESSEE HAS AUTHORIZED AMADEUS INDI A TO CONCLUDE 'SUBSCRIBER AGREEMENT' WITH THE SUBSCRIBER S WHICH ALLOWS THE TRAVEL AGENTS TO USE THE CRS OWNED BY IT . THE ASSESSING OFFICER HAS GIVEN A FINDING THAT THE PAYI NG AIRLINES HAVE OFFICES IN INDIA. THE ASSESSEE HAS GRANTED TO AMADEUS INDIA THE RIGHT TO FURTHER GRANT THE RIGHT TO ACCESS AND RIGHT TO USE ITS PLATFORMS/ SOFTWARE/ PRODUCT OFFERINGS TO SUBSCRIBE RS. AMADEUS INDIA HAS THE EXCLUSIVE RIGHTS TO DISTRIBUTE THE CR S IN INDIA. 20. THE AO HAS HELD THAT A SOFTWARE IS ALSO TYPE O F EQUIPMENT IN THE FACTS OF THE CASE. THE SYSTEM COMPRISING OF EQUIPMENTS IS USED BY THE SUBSCRIBERS TO BOOK TICKETS AND THE SAM E IS SOURCE OF INCOME FOR THE ASSESSEE . THE AO HELD THAT THE INCO ME OF THE ASSESSEE IS TAXABLE AS ROYALTY ALSO AS 'USE OF PROC ESS'. 21. THE LD. DRP CONFIRMED THE ORDER OF THE ASSESSI NG OFFICER. 22. IN THE ASSESSMENT FRAMED FOR ASSESSMENT YEAR 2 006-07, THE ASSESSING OFFICER HAD SUBSTANTIVELY BROUGHT TO TAX, THE BOOKING FEE AS BUSINESS INCOME AND PROTECTIVELY HEL D THE SAME TO ROYALTY SINCE IN THAT YEAR THE TAX WORKED OUT IN TR EATING THE INCOME AS ROYALTY WAS LESS THAN THE TAX WORKED OUT AFTER ATTRIBUTING INCOME TO THE ALLEGED PE OF THE ASSESSE E. 23. THE DELHI TRIBUNAL IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2006-07 HAS HELD THAT BOOKING FEE R ECEIVED BY ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 19 THE ASSESSEE IS TAXABLE AS BUSINESS INCOME AND NOT UNDER THE HEAD ROYALTY. FOR THE SAKE OF READY REFERENCE AND B REVITY, THE RELEVANT PORTION OF THE ORDER OF THE ITAT IN ITA NO . 1494/DEL/2011 IS REPRODUCED BELOW: 'IN THE PRESENT CASE, TOO, AS SUB MITTED HEREIN ABO VE, THE APPELLANT USES SOPHISTICATED TECHNOLOGY/SOFTWARE IN THE COURSE OF PROVIDING A SERVICE/FACILITY BUT THE APPE LLANT DOES NOT DIVULGE ANY PROCESS INVOLVED IN THE TECHNOLOGY/SOFTWARE TO THE USER OF THE CRS. THE APP ELLANT DOES NOT MAKE AVAILABLE TO THE PARTICIPATING AIRLIN ES ANY SECRET FORMULA OR PROCESS. ALSO, NO EQUIPMENT IS PR OVIDED BY THE APPELLANT FOR USE TO THE PARTICIPATING AIRLI NES. FURTHER, NO PAYMENT IS MADE BY THE SUBSCRIBERS, VIZ ., THE TRAVEL AGENTS TO THE APPELLANT, UNLIKE THE AFORESAI D CASE. IN THAT VIEW OF THE MATTER, THE BOOKING FEE RECEIVE D BY THE APPELLANT FROM THE PARTICIPATING AIRLINES DOES NOT ANSWER THE DESCRIPTION OF 'ROYALTY' AND, THUS, IS NOT CHAR GEABLE TO TAX IN INDIA.' 24. SINCE, THE FACTS HAVE NOT BEEN DISPUTED IN THE ABSENCE OF ANY MATERIAL CHANGES, WE HEREBY HOLD THAT THE BOOKI NG FEE RECEIVED IS IN THE NATURE OF BUSINESS INCOME. 28. SO, FOLLOWING THE ORDER PASSED BY THE COORDINAT E BENCH OF THE TRIBUNAL IN TAXPAYERS OWN CASE FOR AYS 2006-07 & 2007-08 TO 2012-13, WE ARE OF THE CONSIDERED VIEW THAT BOOKING FEE RECEIVED BY THE TAXPAYER IS TO BE TAXED AS BUSINESS INCOME A ND NOT UNDER THE HEAD ROYALTY. ACCORDINGLY, WE DECIDE GROUNDS NO. 15, 16 & 17 OF ITA NOS.2007/DEL./2017, 3494/DEL./2018, 7970/DEL./2 018 & 7047/DEL./2019 FOR ASSESSMENT YEARS 2013-14, AY 201 4-15, AY 2015-16 & AY 2016-17 RESPECTIVELY IN FAVOUR OF THE TAXPAYER. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 20 GROUNDS NO.18, 19 & 20 OF ITA NO.2007/DEL./2017 (AY 2013-14) ITA NO.3494/DEL./2018 (AY 2014-15) ITA NO.7970/DEL./2018 (AY 2015-16) ITA NO.7047/DEL./2019 (AY 2016-17) 29. AO AS WELL AS LD. DRP HAS ON AD HOC BASIS TAXED THE AMOUNT OF EURO 50 MILLION AS ROYALTY IN RESPECT OF ALTEA SYSTEM, INVENTORY MANAGEMENT AND HOSTING SYSTEM DEVELOPMENT . 30. IT IS CONTENDED BY THE LD. AR FOR THE TAXPAYER THAT AO/DRP HAVE ERRED IN HOLDING THAT PAYMENT RECEIVED FROM TH E BRITISH AIRWAYS FOR ALLEGED USE OF ALTEA SYSTEM AS TAXABLE IN INDIA AS ROYALTY BOTH UNDER SECTION 9(1)(VI) AND UNDER ART ICLE 13 (3) OF THE TREATY ON THE GROUND THAT ALTEA SYSTEM IS NOT MEREL Y AN INVENTORY MANAGEMENT AND HOSTING SYSTEM RATHER IT PROVIDES KE Y OPERATIONAL SERVICES TO VARIOUS AIRLINES LIKE ACCEPTING PAYMENT AND ISSUANCE OF TRAVEL DOCUMENTS, PERFORMING CREDIT CARD VALIDATION , MAINTAINING DATA SECURITY, MANAGE CUSTOMER CHECK-INS, ETC.. IT IS BROUGHT TO OUR NOTICE THAT THIS ISSUE HAS ALSO BEEN DECIDED BY THE COORDINATE BENCH OF THE TRIBUNAL IN TAXPAYERS OWN CASE FOR ASSESSMENT YEARS 2007-08 TO 2012-13 (SUPRA) BY HOLDING THAT ALTEA SYSTEM CANNOT BE CHARACTERIZED AS ROYALTY EITHER UNDER THE ACT OR UNDER THE TREATY BY RETURNING FOLLOWING FINDINGS :- ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 21 27. IT WAS CANVASSED BEFORE US, THE ARS SYSTEM IS INSTALLED AT THE AIRPORTS AND IS ACCESSED ONLY BY THE AIRLINES A ND NO T BY THE AGENTS OF THE ASSESSEE. IT WAS ARGUED THAT THE SYST EM WAS AVAILABLE ONLY TO BRITISH AIRWAYS FOR THE PURPOSE O F ACCEPTING PAYMENT AND TRAVELLED DOCUMENTATION ONLY AT THE AIR PORT COUNTERS. IT WAS ARGUED THAT THE PAYMENT MADE BY BR ITISH AIRWAYS TO THE ASSESSEE IN RELATION TO THE ARS IS F OR SERVICES RENDERED BY THE AMADEUS AND NOT FOR USE OF ANY PROC ESS. IT WAS ARGUED THAT SINCE THE INVENTORY HOSTING TAKES PLACE OUTSIDE INDIA AND PAYMENT IS MADE BY NON-RESIDENT AIRLINES TO ANO THER NON- RESIDENT OUTSIDE INDIA, IN TERMS OF ARTICLE 13(6) OF THE TREATY, THE PAYMENTS DEEMED TO HAVE BEEN NOT SOURCED IN INDIA. WE FIND THAT THE REVENUE HAS BROUGHT OUT INFORMATION WHICH PROCL AIM THAT THE ASSESSEE WITH BRITISH AIRWAYS DEVELOPED ALTEA RESER VATION SYSTEM FOR DISTRIBUTION THROUGH BRITISH AIRWAYS SAL ES OUTLETS, THE PRODUCTS NAMELY ALTEA INVENTORY FOR GLOBAL INVE NTORY MANAGEMENT AND ALTEA DEPARTURE CONTROL FOR PASSENGE R CHECKING AND FLIGHT DEPARTURE MANAGEMENT. THE BRITI SH AIRWAYS USES ARS ON ITS WEBSITE AND FOR REVENUE MANAGEMENT SYSTEM. WE ALSO HEARD THE ARGUMENT OF THE ASSESSEE THAT THE AR S HAS NO RELATION TO THE PE OF THE ASSESSEE IN INDIA. THE SO URCE OF REVENUE RECEIVED BY THE ASSESSEE IN CONNECTION WITH ARS IS NOT SITUATED IN INDIA. WE FIND THAT ARS IS ESSENTIALLY AN INVENTORY HOSTING AND MANAGEMENT SYSTEM DEVELOPED BY THE ASSESSEE WHICH S OME AIRLINES OUTSOURCED TO AMADEUS, WITH BRITISH AIRWAY S AS A LAUNCH CUSTOMER. THE PAYMENT FOR THE ARS IS MADE BY THE BRITISH AIRWAYS FOR THE USE OF THE SYSTEM FOR THE B USINESS IN INDIA AT THE INDIAN AIRPORT IS AN UNDISPUTABLE FACT. WHIL E THE CONTENTION OF THE ASSESSEE IS THAT THE SOFTWARE WAS NOT AVAILABLE OUTSIDE THE INDIAN AIRPORT OR TO ANY OF THE AGENTS OF THE ASSESSEE IN INDIA, THE REVENUE CONTENDED THAT THE ARS ALSO P ROVIDES KEY OPERATIONAL SERVICES TO BRITISH AIRWAYS LIKE ACCEPT ING PAYMENT AND ISSUANCE OF TRAVEL DOCUMENTS AND MANAGE CUSTOME R CHECKING. IT WAS ALSO SUBMITTED BY THE ASSESSEE THA T THE ARGUMENTS TAKEN UP WITH REGARD TO CRS ACTIVITY AS R OYALTY MAY ALSO BE CONSIDERED WHILE DEALING WITH ARS ISSUE. 28. THE ARTICLE 7 READS AS UNDER: ARTICLE 7 BUSINESS PROF ITS 1. THE PROFITS OF AN ENTERPRISE OF ONE OF THE STAT ES SHALL BE TAXABLE ONLY IN THAT STATE UNLESS THE ENTE RPRISE CARRIES ON BUSINESS IN THE OTHER STATE THROUGH A PERMANENT ESTABLISHMENT SITUATED THEREIN. IF THE ENTERPRISE CARRIES ON BUSINESS AS AFORESAID, THE PR OFITS OF ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 22 THE ENTERPRISE MAY BE TAXED IN THE OTHER STATE BUT ONLY SO MUCH OF THEM AS IS ATTRIBUTABLE TO THAT PERMANENT ESTABLISHMENT. 2. SUBJECT TO THE PROVISIONS OF PARAGRAPH 3, WHERE AN ENTERPRISE OF ON E OF THE STATES CARRIES ON BUSINES S IN THE OTHER STATE THROUGH A PERMANENT ESTABLISHMENT SITUA TED THEREIN, THERE SHALL IN EACH STATE BE ATTRIBUTED TO THAT PERMANENT ESTABLISHMENT THE PROFITS WHICH IT MIGHT BE EXPECTED TO MAKE IF IT WERE A DISTINCT AND SEPARATE ENTERPRISE ENGAGED IN THE SAME OR SIMILAR ACTIVITIE S UNDER THE SAME OR SIMILAR CONDITIONS AND DEALING WHOLLY INDEPENDENTLY WITH THE ENTERPRISE OF WHICH IT IS PE RMANENT ESTABLISHMENT. IN ANY CASE WHERE THE CORRECT AMOUNT OF PROFITS ATTRIBUTABLE TO A PERMANENT ESTABLISHMENT I S INCAPABLE OF DETERMINATION OR THE DETERMINATION THE REOF PRESENTS EXCEPTIONAL DIFFICULTIES, THE PROFITS ATTR IBUTABLE TO THE PERMANENT ESTABLISHMENT MAY BE ESTIMATED ON THE BASIS OF AN APPORTIONMENT OF THE TOTAL PROFITS OF T HE ENTERPRISE TO ITS VARIOUS PARTS, PROVIDED, HOWEVER, THAT THE RESULT SHALL BE IN ACCORDANCE WITH THE PRINCIPLES CONTAINED IN THIS ARTICLE. 3. (A) IN DETERMINING THE PROFITS OF A PERMANENT ESTABLISHMENT, THERE SHALL BE ALLOWED AS DEDUCTIONS , EXPENSES WHICH ARE INCURRED FOR THE PURPOSES OF THE PERMANENT ESTABLISHMENT, INCLUDING EXECUTIVE AND GENERAL ADMINISTRATIVE EXPENSES SO INCURRED, WHETHE R IN THE STATE IN WHICH THE PERMANENT ESTABLISHMENT IS S ITUATED OR ELSEWHERE, IN ACCORDANCE WITH THE PROVISIONS OF AND SUBJECT TO THE LIMITATIONS OF THE TAXATION LAWS OF THAT STATE. PROVIDED THAT WHERE THE LAW OF THE STATE IN WHICH T HE PERMANENT ESTABLISHMENT IS SITUATED IMPOSES A RESTR ICTION ON THE AMOUNT OF THE EXECUTIVE AND GENERAL ADMINIST RATIVE EXPENSES WHICH MAY BE ALLOWED, AND THAT RESTRICTION IS RELAXED OR OVERRIDDEN BY ANY CONVENTION BETWEEN THA T STATE AND A THIRD STATE WHICH ENTERS INTO FORCE AFT ER THE DATE OF ENTRY INTO FORCE OF THIS CONVENTION, THE CO MPETENT AUTHORITY OF THAT STATE SHALL NOTIFY THE COMPETENT AUTHORITY OF THE OTHER STATE OF THE TERMS OF THE CORRESPONDIN G PARAGRAPH IN THE CONVENTION WITH THAT THIRD STATE IMMEDIATELY AFTER THE ENTRY INTO FORCE OF THAT CONV ENTION AND, IF THE COMPETENT AUTHORITY OF THE OTHER STATE OR REQUESTS, THE PROVISIONS OF THIS SUB-PARAGRAPH SHAL L BE AMENDED BY PROTOCOL TO REFLECT SUCH TERMS. (B) HOWEVER, NO SUCH DEDUCTION SHALL BE ALLOWED IN RESPECT OF AMOUNTS, IF ANY, PAID (OTHERWISE THAN TO WARDS ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 23 REIMBURSEMENT OF ACTUAL EXPENSES) BY THE PERMANENT ESTABLISHMENT TO THE HEAD OFFICE OF THE ENTERPRISE OR ANY OF ITS OTHER OFFICES, BY WAY OF ROYALTIES, FEES OR OTH ER SIMILAR PAYMENTS IN RETURN FOR THE USE OF PATENTS OR OTHER RIGHTS, OR BY WAY OF COMMISSION, FOR SPECIFIC SERVICES PERF ORMED OR FOR MANAGEMENT, OR, EXCEPT IN THE CASE OF A BANK ING ENTERPRISE, BY WAY OF INTEREST ON MONEYS LENT TO TH E PERMANENT ESTABLISHMENT. LIKEWISE, NO ACCOUNT SHALL BE TAKEN, IN THE DETERMINATION OF THE PROFITS OF A PER MANENT ESTABLISHMENT, FOR AMOUNTS CHARGED (OTHERWISE THAN TOWARDS REIMBURSEMENT OF ACTUAL EXPENSES), BY THE PERMANENT ESTABLISHMENT TO THE HEAD OFFICE OF THE ENTERPRISE OR ANY OF ITS OTHER OFFICES, BY WAY OF R OYALTIES, FEES OR OTHER SIMILAR PAYMENTS IN RETURN FOR THE US E O F PATENTS OR OTHER RIGHTS, OR BY WAY OF COMMISSION FO R SPECIFIC SERVICES PERFORMED OR FOR MANAGEMENT, OR, EXCEPT IN THE CASE OF A BANKING ENTERPRISE, BY WAY OF INTE REST ON MONEYS LENT TO THE HEAD OFFICE OF THE ENTERPRISE, O R ANY OF ITS OTHER OFFICES. 4. NO PROFITS SHALL BE ATTRIBUTED TO A PERMANENT ESTABLISHMENT BY REASON OF THE MERE PURCHASE BY THA T PERMANENT ESTABLISHMENT OF GOODS OR MERCHANDISE FOR THE ENTERPRISE. 5. FOR THE PURPOSES OF THE PRECEDING PARAGRAPHS, THE PROFITS TO BE ATTRIBUTED TO THE PERMANENT ESTABLISH MENT SHALL BE DETERMINED BY THE SAME METHOD YEAR BY YEAR UNLESS THERE IS GOOD AND SUFFICIENT REASON TO THE C ONTRARY. 6. `WHERE PROFITS INCLUDE ITEMS OF INCOME WHICH ARE DEALT WITH SEPARATELY IN OTHER ARTICLES OF THIS CONVENTIO N, THEN THE PROVISIONS OF THOSE ARTICLES SHALL NOT BE AFFEC TED BY THE PROVISIONS OF THIS ARTICLE.' 29. ARTICLE 13 READS AS UNDER: ARTICLE 13 ROYALT IES AND FEE S FOR TECHNICAL SERVICE S 1. ROYALTIES AND FEES FOR TECHNICAL SERVICES ARISI NG IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE O THER CONTRACTING STATE MAY BE TAXED IN THAT OTHER STATE. 2. HOWEVER, SUCH ROYALTIES AND FEES FOR TECHNICAL SERVICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 24 WHICH THEY ARISE AND ACCORDING TO THE LAW OF THAT S TATE, BUT IF THE RECIPIENT IS THE BENEFICIAL OWNER OF THE ROYALTIES OR FEES FOR TECHNICAL SERVICES THE TAX SO CHARGED S HALL NOT EXCEED : (I) IN THE CASE OF ROYALTIES RELATING TO THE PAYME NTS FOR THE USE OF, OR THE RIGHT TO USE, INDUSTRIAL, COMMER CIAL OR SCIENTIFIC EQUIPMENT, 10 PER CENT OF THE GROSS AMOU NT OF THE ROYALTIES; (II) IN THE CASE OF FEES FOR TECHNICAL SERVICES AN D OTHER ROYALTIES, 20 PERCENT OF THE GROSS AMOUNT OF FEES F OR TECHNICAL SERVICES OR ROYALTIES. 3. THE TERM 'ROYALTIES' AS USED IN THIS ARTICLE ME ANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FO R THE USE OF OR THE RIGHT TO USE, ANY COPYRIGHT OF LITERA RY, ARTISTIC OR SCIENTIFIC WORK, INCLUDING CINEMATOGRAPHIC FILMS OR FILMS OR TAPES USED FOR RADIO OR TELEVISION BROADCA STING, ANY PATENT, TRADEMARK, DESIGN OR MODEL, PLAN, SECRE T FORMULA OR PROCESS, OR FOR THE USE OF OR THE RIGHT TO USE, INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE. 4. THE TERM 'FEES FOR TECHNICAL SERVICES' AS USED IN T HIS ARTICLE MEANS PAYMENTS OF ANY KIND TO ANY PERSO N OTHER THAN PAYMENTS TO AN EMPLOYEE OF THE PERSON MA KING THE PAYMENTS AND TO ANY INDIVIDUAL FOR INDEPENDENT PERSONAL SERVICES MENTIONED IN ARTICLE 15 (INDEPEND ENT PERSONAL SERVICES), IN CONSIDERATION FOR THE SERVIC ES OF A TECHNICAL OR CONSULTANCY NATURE, INCLUDING THE PROV ISION OF SERVICES OF TECHNICAL OR OTHER PERSONNEL. 5. THE PROVISIONS OF PARAGRAPHS 1 AND 2 SHALL NOT APPLY IF THE BENEFICIAL OWNER OF THE ROYALTIES OR F EES F OR TECHNICAL SERVICES, BEING A RESIDENT OF A CONTRACTI NG STATE, CARRIES ON BUSINESS IN THE OTHER CONTRACTING STATE IN WHICH THE ROYALTIES OR FEES FOR TECHNICAL SERVICES ARISE, THROUGH A PERMANENT ESTABLISHMENT SITUATED THEREIN, OR PERFORMS IN THAT OTHER STATE INDEPENDENT PERSONAL S ERVICES FROM A FIXED BASE SITUATED THEREIN, AND THE RIGHT, PROPERTY OR CONTRACT IN RESPECT OF WHICH THE ROYALTIES OR FE ES FOR TECHNICAL SERVICES ARE PAID IS EFFECTIVELY CONNECTE D WITH SUCH PERMANENT ESTABLISHMENT OR FIXED BASE. IN SUCH CASE, THE PROVISIONS OF ARTICLE 7 OR ARTICLE 15, AS THE CASE MAY BE, SHALL APPLY. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 25 6. ROYALTIES AND FEES FOR TECHNICAL SERVICES SHALL BE DEEMED TO ARISE IN A CONTRACTING STATE WHEN THE PAY ER IN THAT STATE ITSELF, A POLITICAL SUB-DIVISION, A LOCA L AUTHORITY OR A RESIDENT OF THAT STATE. WHERE, HOWEVER, THE PE RSON PAYING THE ROYALTIES OR FEES FOR TECHNICAL SERVICES WHETHER HE IS A RESIDENT OF A CONTRACTING STATE OR NOT, HAS IN A CONTRACTING STATE A PERMANENT ESTABLISHMENT OR FIXE D BASE IN CONNECTION WITH WHICH THE LIABILITY TO PAY THE ROYALTIES OR FEES FOR TECHNICAL SERVICES WAS INCURR ED , AND SUCH ROYALTIES OR FEES FOR TECHNICAL SERVICES ARE B ORNE BY SUCH PERMANENT ESTABLISHMENT OR FIXED BASE, THEN SU CH ROYALTIES OR FEES FOR TECHNICAL SERVICES SHALL BE D EEMED TO ARISE IN THE STATE IN WHICH THE PERMANENT ESTABLISH MENT OR FIXED BASE IS SITUATED. 7. WHERE, BY REASON OF A SPECIAL RELATIONSHIP BETW EEN THE PAYER AND THE BENEFICIAL OWNER OR BETWEEN BOTH OF THEM AND SOME OTHER PERSON, THE AMOUNT OF THE ROYAL TIES OR FEES FOR TECHNICAL SERVICES PAID, EXCEEDS THE AM OUNT WHICH WOULD HAVE BEEN PAID IN THE ABSENCE OF SUCH RELATIONSHIP, THE PROVISIONS OF THIS ARTICLE SHALL APPLY ONLY TO THE LAST MENTIONED AMOUNT. IN SUCH CASE, THE EXC ESS PART OF THE PAYMENTS SHALL REMAIN TAXABLE ACCORDING TO THE LAWS OF EACH CONTRACTING STATE, DUE REGARD BEIN G HAD TO THE OTHER PROVISIONS OF T HIS CONVENTION.' 30. AFTER GOING THROUGH THE ARTICLE 13 AND ARTICLE 7 AND KEEPING IN VIEW THE FACT THAT THE COMPUTER TERMINAL S ARE AT AIRPORT TERMINALS AND SINCE THE AMOUNTS HAVE BEEN R ECEIVED FOR UTILIZATION OF ARS WHICH IS PREDOMINANTLY A RESERVA TION SYSTEM, THE SAME MAY BE TREATED AS 'INCOME FROM ROYALTY'. W E UPHELD THE ACTION OF THE AO TO THIS EXTENT. 31. DURING THE ARGUMENTS, THE LD. AR RAISED A POIN T REGARDING THE TAXABILITY OF ROYALTY INCOME IN THE HANDS OF TH E ASSESSEE AS PER DTAA. HE ARGUED THAT IN THE ABSENCE OF CORRESPO NDING CHANGE IN THE DTAA WITH REGARD TO INTERPRETATION OF ROYALTY IN THE DOMESTIC LAW. HE RELIED ON THE RATIO LAW LAID D OWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF DI RECTOR OF INCOME TAX VS NEW SKIES SATELLITE BV VIDE ORDER DATED 8 FEBRUARY, 2016. THE LD. DR ARGUED THAT THE PROVISIO NS OF DTAA WOULD HAVE PRIMACY OVER THE DOMESTIC PROVISIONS. 32. THE OPERATIVE PART OF THE SAID JUDGMENT IS AS UNDER: '54. NEITHER CAN AN ACT OF PARLIAMENT SUPPLY OR ALT ER THE BOUNDARIES OF THE DEFINITION UNDER ARTICLE 12 OF THE DTAAS BY SUPPLYING REDUNDANCY TO ANY PART OF IT. TH IS ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 26 BECOMES ESPECIALLY IMPORTANT IN THE CONTEXT OF EXPLANATION 6, WHICH STATES THAT WHETHER THE 'PROCE SS' IS SECRET OR NOT IS IMMATERIAL, THE INCOME FROM THE US E OF SUCH PROCESS IS TAXABLE, NONETHELESS. EXPLANATION 6 PRECIPITATED FROM CONFUSION ON THE QUESTION OF WHET HER IT WAS VITAL THAT THE 'PROCESS' USED MUST BE SECRET OR NOT. THIS CONFUSION WAS BROUGHT ABOUT BY A DIFFERENCE IN THE PUNCTUATION OF THE DEFINITIONS IN THE DTAAS AND THE DOMESTIC DEFINITION. FOR GREATER CLARITY AND TO ILL USTRATE THIS DIFFERENCE, WE REPRODUCE THE DEFINITIONS OF RO YALTY ACROSS BOTH DTAAS AND SUB CLAUSE (III) TO EXPLANATI ON 2 TO 9(1)(VI). ARTICLE 12(3 ), INDO THAI DOUBLE TAX AVOIDANCE AGREEMENT: 3. THE TERM 'ROYALTIES' AS USED IN THIS ARTICLE ME ANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FO R THE ALIENATION OR THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT OF LITERARY, ARTISTIC OR SCIENTIFIC WORK (INCLUDING CINEMATOGRAPH FILMS, PHONOGRAPHIC RECORDS AND FILMS OR TAPES FOR RADIO OR TELEVISION BROADCASTING), ANY PA TENT, TRADE MARK, DESIGN OR MODEL, PLAN, SECRET FORMULA O R PROCESS, OR FOR THE USE OF, OR THE RIGHT TO USE IND USTRIAL, COMMERCIAL OR SCIENTIFIC EQUIPMENT, OR FOR INFORMAT ION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE .' (EMPHASIS SUPPLIED) ARTICLE 12(4 ), INDO NETHERLANDS DOUBLE TAX AVOIDANCE AGREEMENT '4. THE TERM 'ROYALTIES' AS USED IN THIS ARTICLE ME ANS PAYMENTS OF ANY KIND RECEIVED AS A CONSIDERATION FO R THE USE OF, OR THE RIGHT TO USE, ANY COPYRIGHT O F LITE RARY, ARTISTIC OR SCIENTIFIC WORK INCLUDING CINEMATOGRAPH FILMS, ANY PATENT, TRADE MARK, DESIGN OR MODEL, PLAN, SECR ET FORMULA OR PROCESS, OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE.' (EMPHASIS SUPPLIED) SECTION 9(1)(VI) , EXPLANATION 2, INCOME TAX ACT , 1961 (III) THE USE OF ANY PATENT, INVENTION, MODEL, DES IGN, SECRET FORMULA OR PROCESS OR TRADE MARK OR SIMILAR PROPERTY; (EMPHASIS SUPPLIED) 55. THE SLIGHT BUT APPARENTLY VITAL DIFFERENCE BET WEEN THE DEFINITIONS UNDER THE DTAA AND THE DOMESTIC ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 27 DEFINITION IS THE PRESENCE OF A COMMA FOLLOWING THE WORD PROCESS IN THE FORMER. IN THE INITIAL DETERMINATION S BEFORE VARIOUS ITATS ACROSS THE COUNTRY, MUCH DISCUSSION T OOK PLACE ON THE IMPLICATIONS OF THE PRESENCE OR ABSENC E OF THE 'COMMA'. A LOT HAS BEEN SAID ABOUT THE RELEVANC E OR OTHERWISE OF PUNCTUATION IN THE CONTEXT OF STATUTOR Y CONSTRUCTION. IN SPOKEN ENGLISH, IT WOULD BE UNWISE TO ARGUE AGAINST THE IMPORTANCE OF PUNCTUATION, WHERE THE PLACEMENT OF COMMAS IS NOTORIOUS FOR DIAMETRICALLY OPPOSITE IMPLICATIONS. HOWEVER IN THE REALM OF STAT UTORY INTERPRETATION, COURTS ARE CIRCUMSPECT IN ALLOWING PUNCTUATION TO DICTATE THE MEANING OF PROVISIONS. J UDGE CALDWELL ONCE FAMOUSLY SAID 'THE WORDS CONTROL THE PUNCTUATION MARKS, AND NOT THE PUNCTUATION MARKS TH E WORDS.' HOLMES V. PHEONIX INSURANCE CO. 47. IT HAS BEEN HELD IN CGT V. BUDUR AND HINDUSTAN CONST V. CIT THAT WHILE PUNCTUATION MAY ASSIST IN ARRIVING AT THE CORRECT CONSTRUCTION, YET IT CANNOT CONTROL THE CLEAR MEANING OF A STATUTORY PROVISION. IT IS BUT, A MINO R ELEMENT IN THE CONSTRUCTION OF A STATUTE, HINDUSTAN CONST50. 56. THE COURTS HAVE HOWEVER CREATED AN EXCEPTION T O THE GENERAL RULE THAT PUNCTUATION IS NOT TO BE LOOK ED AT TO ASCERTAIN MEANING. THAT EXCEPTION OPERATES WHEREVER A STATUTE IS CAREFULLY PUNCTUATED. ONLY THEN SHOULD W EIGHT UNDOUBTEDLY BE GIVEN TO PUNCTUATION; CIT V. LOYAL TEXTILE51 ; SAMA ALANA ABDULLA VS. STATE OF GUJARAT52 ; MOHD SHABBIR VS. STATE OF MAHARASHTRA53 ; LEWIS PUGH EVANS PUGH VS. ASHUTOSH SEN54 ; ASHWINI KUMAR GHOSE V. ARBINDA BOSE55 ; POPE ALLIANCE CORPORATION V. SPANISH RIVE R PULP AND PAPER MILLS LTD.56. AN ILLUSTRATION OF THE AID DERIVED FROM PUNCTUATION MAY BE FURNISHED FROM THE CASE OF MOHD. SHABBIR V. STATE OF MAHARASHTRA WHERE SECTION 27 OF THE DRUGS AND COSMETICS ACT , 1940 CAME UP FOR CONSTRUCTION. BY THIS SECTION WHOEVER 'MANUFACT URES FOR SALE, SELLS, STOCKS OR EXHIBITS FOR SALE OR DIS TRIBUTES' A DRUG WITHOUT A LICENSE IS LIABLE FOR PUNISHMENT. IN HOLDING THAT MERE STOCKING SHALL NOT AMOUNT TO AN O FFENCE UNDER THE SECTION, THE SUPREME COURT POINTED OUT TH E PRESENCE OF COMMA 98 F 240 (1899) 103 ITR 189 208 I TR 291 SUPRA NOTE 46 231 ITR 573 AIR 1996 SC 569 AIR 1979 SC 564 AIR 1929 PRIVY COUNCIL 69 AIR 1952 SC 369 AIR 1929 PC 38 AIR 1979 SC 564 AFTER 'MANUFACTURES FOR SALE' AND 'SELLS' AND THE ABSENCE OF ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 28 ANY COMMA AFTER 'STOCKS' WAS INDICATIVE OF THE FACT 'STOCKS' WAS TO BE READ ALONG WITH 'FOR SALE' AND N OT IN A MANNER SO AS TO BE DIVORCED FROM IT, AN INTERPRET ATION WHICH WOULD HAVE BEEN SOUND HAD THERE BEEN A COMMA AFTER THE WORD 'STOCKS'. IT WAS THEREFORE HELD THAT ONLY STOCKING FOR THE PURPOSE OF SALE WOULD AMOUNT TO AN OFFENCE BUT NOT MERE STOCKING. 57. HOWEVER, THE QUESTION, WHICH THE N ARISES, IS AS FOLLOWS. HOW IS THE COURT TO DECIDE WHETHER A PROVI SION IS CAREFULLY PUNCTUATED OR NOT? THE TEST- TO DECIDE WH ETHER A STATUTE IS CAREFULLY (READ CONSCIOUSLY) PUNCTUATED OR NOT- WOULD BE TO SEE WHAT THE CONSEQUENCE WOULD BE HAD T HE SECTION BEEN PUNCTUATED OTHERWISE. WOULD THERE BE A NY SUBSTANTIAL DIFFERENCE IN THE IMPORT OF THE SECTION IF IT WERE NOT PUNCTUATED THE WAY IT ACTUALLY IS? WHILE T HIS MAY NOT BE CONCLUSIVE EVIDENCE OF A CAREFULLY PUNCTUATE D PROVISION, THE REPERCUSSIONS GO A LONG WAY TO SIGNI FY INTENT. IF THE INCLUSION OR LACK OF A COMMA OR A PE RIOD GIVES RISE TO DIAMETRICALLY OPPOSITE CONSEQUENCES O R LARGE VARIATIONS IN TAXING POWERS, AS IS IN THE PRESENT C ASE, THEN THE ASSUMPTION MUST BE THAT IT WAS PUNCTUATED WITH A PARTICULAR END IN MIND. THE TEST THEREFORE IS NOT T O SEE IF IT MAKES 'GRAMMATICAL SENSE' BUT TO SEE IF IT TAKES ON ANY 'LEGAL CONSEQUENCES'. 58. NEVERTHELESS, WHETHER OR NOT PUNCTUATION PLAYS AN IMPORTANT PART IN STATUTE INTERPRETATION, THE CONST RUCTION PARLIAMENT GIVES TO SUCH PUNCTUATION, OR IN THIS CA SE, THE IRRELEVANCY THAT IT IMPUTES TO IT, CANNOT BE CARRIE D OVER TO AN INTERNATIONAL INSTRUMENT WHERE SUCH COMMA MAY OR MAY NOT HAVE BEEN EVIDENCE OF A DELIBERATE INCLUSIO N TO INFLUENCE THE READING OF THE SECTION. THERE IS SUFF ICIENT EVIDENCE FOR US TO CONCLUDE THAT THE PROCESS REFERR ED TO IN ARTICLE 12 MUST IN FACT BE A SECRET PROCESS AND WAS ALWAYS MEANT TO BE SUCH. IN ANY EVENT, THE PRECINCTS OF INDIAN LAW MAY NOT D ICTATE SUCH CONCLUSION. THAT CONCLUSION MUST BE THE RESULT OF AN INTERPRETATION OF THE WORDS EMPLOYED IN THE LAW AND THE TREATISES, AND DISCUSSIONS THAT ARE APPLICABLE AND SPECIALLY FORMULATED FOR THE PURPOSE OF THAT DEFINITION. THE FOLLOWING EXTRACT FROM ASIA SATELLITE58 TAKES NOTE OF THE OECD COMMENTARY AND KLAUS VOGEL ON DOUBLE TAX CONVENTIONS, TO SHOW THAT THE PROCESS MUST IN FACT BE SECRET AND THAT SPECIFICALLY, INCOME FROM DATA TRANSMISSION SERVICES DO NOT PARTAKE OF THE NATURE OF ROYALTY. ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 29 '74. EVEN WHEN WE LOOK INTO THE MATTER FROM THE STANDPOINT OF DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA), THE CASE OF THE APPELLANT GETS BOOST. THE ORGANISATION OF ECONOMIC COOPERATION AND DEVELOPMEN T (OECD) HAS FRAMED A MODEL OF DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA) ENTERED INTO BY INDIA AR E BASED. ARTICLE 12 OF THE SAID MODEL DTAA CONTAINS A DEFINITION OF ROYALTY WHICH IS IN ALL MATERIAL RESP ECTS VIRTUALLY THE SAME AS THE DEFINITION OF ROYALTY CON TAINED IN CLAUSE (III) OF EXPLANATION 2 TO SECTION 9(1) (VI) OF THE ACT. THIS FACT IS ALSO NOT IN DISPUTE. THE LEARNED COUNS EL FOR THE APPELLANT HAD RELIED UPON THE COMMENTARY ISSUED BY THE OECD ON THE AFORESAID MODEL DTAA AND PARTICULARLY, REFERRED TO THE FOLLOWING AMENDMENT PROPOSED BY OECD TO ITS COMMENTARY ON ARTICLE 12 , WHICH READS AS UNDER: '9.1 SATELLITE OPERATORS AND THEIR CUSTOMERS (INCLU DING BROADCASTING AND TELECOMMUNICATION ENTERPRISES) FREQUENTLY ENTER INTO TRANSPONDER LEASING AGREEMENT S UNDER WHICH THE SATELLITE OPERATOR ALLOWS THE CUSTO MER TO UTILIZE THE CAPACITY OF A SATELLITE TRANSPONDER TO TRANSMIT OVER LARGE GEOGRAPHICAL AREAS. PAYMENTS MADE BY CUSTOMERS UNDER TYPICAL TRANSPONDER LEASING AGREEME NTS ARE MADE FOR THE USE OF THE TRANSPONDER TRANSMITTIN G CAPACITY AND WILL NOT CONSTITUTE ROYALTIES UNDER TH E DEFINITION OF PARAGRAPH 2; THESE PAYMENTS ARE NOT M ADE IN CONSIDERATION FOR THE USE OF, OR RIGHT TO USE, PROP ERTY, OR FOR INFORMATION, THAT IS REFERRED SUPRA NOTE TO IN THE DEFINITION (THEY CANNOT BE VIEWED, FOR INSTANCE, AS PAYMENTS FOR INFORMATION OR FOR THE USE OF, OR RIGH T TO USE, A SECRET PROCESS SINCE THE SATELLITE TECHNOLOGY IS NOT TRANSFERRED TO THE CUSTOMER). AS REGARDS TREATIES T HAT INCLUDE THE LEASING OF INDUSTRIAL, COMMERCIAL OR SC IENTIFIC (ICS) EQUIPMENT IN THE DEFINITION OF ROYALTIES, THE CHARACTERIZATION OF THE PAYMENT WILL DEPEND TO A LA RGE EXTENT ON THE RELEVANT CONTRACTUAL ARRANGEMENTS. WH ILST THE RELEVANT CONTRACTS OFTEN REFER TO THE LEASE OF A TRANSPONDER, IN MOST CASES THE CUSTOMER DOES NOT AC QUIRE THE PHYSICAL POSSESSION OF THE TRANSPONDER BUT SIMP LY ITS TRANSMISSION CAPACITY: THE SATELLITE IS OPERATED BY THE LESSOR AND THE LESSEE HAS NO ACCESS TO THE TRANSPON DER THAT HAS BEEN ASSIGNED TO IT. IN SUCH CASES, THE PAYMENT S MADE BY THE CUSTOMERS WOULD THEREFORE BE IN THE NATURE O F PAYMENTS FOR SERVICES, TO WHICH ARTICLE 7 APPLIES, RATHER THAN PAYMENTS FOR THE USE, OR RIGHT TO USE, ICS EQU IPMENT. A DIFFERENT, BUT MUCH LESS FREQUENT, TRANSACTION WO ULD BE WHERE THE OWNER OF THE SATELLITE LEASES IT TO ANOTH ER PARTY SO THAT THE LATTER MAY OPERATE IT AND EITHER USE IT FOR ITS ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 30 OWN PURPOSES OR OFFER ITS DATA TRANSMISSION CAPACIT Y TO THIRD PARTIES. IN SUCH A CASE , THE PAYMENT MADE BY THE SATELLITE OPERATOR TO THE SATELLITE OWNER COULD WEL L BE CONSIDERED AS A PAYMENT FOR THE LEASING OF INDUSTRI AL, COMMERCIAL OR SCIENTIFIC EQUIPMENT. SIMILAR CONSIDERATIONS APPLY TO PAYMENTS MADE TO LEASE OR PURCHASE THE CAPACITY OF CABLES FOR THE TRANSMISSIO N OF ELECTRICAL POWER OR COMMUNITIES (E.G. THROUGH A CON TRACT GRANTING AN INDEFEASIBLE RIGHT OF USE OF SUCH CAPAC ITY) OR PIPELINES (E.G. FOR THE TRANSPORTATION OF GAS OR OI L). 75. MUCH RELIANCE WAS PLACED UPON THE COMMENTARY WRITTEN BY KLAUS VO GEL ON DOUBLE TAXATION CONVENTI ONS (3 RD EDITION)'. IT IS RECORDED THEREIN: 'THE USE OF A SATELLITE IS A SERVICE, NOT A RENTAL (THUS CORRECTLY, RABE, A., 38 RIW 135 (1992), ON GERMANY' S DTC WITH LUXEMBOURG); THIS WOULD NOT BE THE CASE ON LY IN THE EVENT THE ENTIRE DIRECTION AND CONTROL OVER THE SATELLITE, SUCH AS ITS PILOTING OR STEERING, ETC. W ERE TRANSFERRED TO THE USER.' 76. KLAUS VOGEL HAS ALSO MADE A DISTINCTION BETWEE N LETTING AN ASSET AND USE OF THE ASSET BY THE OWNER FOR PROVIDING SERVICES AS BELOW: 'ON THE OTHER HAND, ANOTHER DISTINCTION TO BE MADE IS LETTING THE PROPRIETARY RIGHT, EXPERIENCE , ETC., O N THE ONE HAND AND USE OF IT BY THE LICENSOR HIMSELF, E.G., W ITHIN THE FRAMEWORK OF AN ADVISORY ACTIVITY. WITHIN THE RANGE FROM SERVICES', VIZ. OUTRIGHT TRANSFER OF THE ASSET INVO LVED (RIGHT, ETC.) TO THE PAYER OF THE ROYALTY. THE OTHER, JUST AS CLEAR- CUT EXTREME IS THE EXERCISE BY THE PAYEE OF ACTIVIT IES IN THE SERVICE OF THE PAYER, ACTIVITIES FOR WHICH THE PAYE E USES HIS OWN PROPRIETARY RIGHTS, KNOW-HOW, ETC., WHILE NOT L ETTING OR TRANSFERRING THEM TO THE PAYER.' 77. THE TRIBUNAL HAS DISCARDED THE AFORESAID COMMENTARY OF OECD AS WELL AS KLAUS VOGEL ONLY ON T HE GROUND THAT IT IS NOT SAFE TO RELY UPON THE SAME. H OWEVER, WHAT IS IGNORED IS THAT WHEN THE TECHNICAL TERMS US ED IN THE DTAA ARE THE SAME WHICH APPEAR IN SECTION 9(1)(VI) , FOR BETTER UNDERSTANDING ALL THESE VERY TERMS, OECD COMMENTARY CAN ALWAYS BE RELIED UPON. THE APEX COUR T HAS EMPHASIZED SO IN NUMBER OF JUDGMENTS CLEARLY HOLDING THAT THE WELL-SETTLED INTERNATIONALLY ACCEP TED MEANING AND INTERPRETATION PLACED ON IDENTICAL OR S IMILAR TERMS EMPLOYED IN VARIOUS DTAAS SHOULD BE FOLLOWED BY ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 31 THE COURTS IN INDIA WHEN IT COMES TO CONSTRUING SIM ILAR TERMS OCCURRING IN THE INDIAN INCOME TAX ACT .... ***** ********** ***** 78. THERE ARE JUDGMENTS OF OTHER HIGH COURTS ALSO TO THE SAME EFFECT. (A) COMMISSIONER OF INCOME TAX VS. AHMEDABAD MANUFACTURING AND CALICO PRINTING CO., [139 ITR 806 (GUJ.)] AT PAGES 820-822. (B) COMMISSIONER OF INCOME TAX VS. VISHAKHAPATNAM PORT TRUST [(1983) 144 ITR 146 (AP)] AT PAGES 156-157. (C) N.V. PHILIPS VS. COMMISSIONER O F INCOME TAX [172 ITR 521] AT PAGES 527 & 5 38-539.' 59. ON A FINAL NOTE, INDIA'S CHANGE IN POSITION TO THE OECD COMMENTARY CANNOT BE A FACT THAT INFLUENCES TH E INTERPRETATION OF THE WORDS DEFINING ROYALTY AS THE Y STAND TODAY. THE ONLY MANNER IN WHICH SUCH CHANGE IN POSI TION CAN BE RELEVANT IS IF SUCH CHANGE IS INCORPORATED I NTO THE AGREEMENT ITSELF AND NOT OTHERWISE. A CHANGE IN EXE CUTIVE POSITION CANNOT BRING ABOUT A UNILATERAL LEGISLATIV E AMENDMENT INTO A TREATY CONCLUDED BETWEEN TWO SOVER EIGN STATES. IT IS FALLACIOUS TO ASSUME THAT ANY CHANGE MADE TO DOMESTIC LAW TO RECTIFY A SITUATION OF MISTAKEN INTERPRETATION CAN SPONTANEOUSLY FURTHER THEIR CASE IN AN INTERNATIONAL TREATY. THEREFORE, MERE AMENDMENT TO SECTION 9(1)(VI) CANNOT RESULT IN A CHANGE. IT IS I MPERATIVE THAT SUCH AMENDMENT IS BROUGHT ABOUT IN THE AGREEME NT AS WELL. ANY ATTEMPT SHORT OF THIS, EVEN IF IT IS E VIDENCE OF THE STATE'S DISCOMFORT AT LETTING DATA BROADCAST RE VENUES SLIP BY, WILL BE INSUFFICIENT TO PERSUADE THIS COUR T TO HOLD THAT SUCH AMENDMENTS ARE APPLICABLE TO THE DTAAS. 60. CONSEQUENTLY, SINCE WE HAVE HELD THAT THE FINANCE ACT , 2012 WILL NOT AFFECT ARTICLE 12 OF THE DTAAS, IT WOULD FOLLOW THAT THE FIRST DETERMINATIVE INTERPRETATION GIVEN TO THE WORD 'ROYALTY' IN ASIA SATELLITE, WHEN THE DEFI NITIONS WERE IN FACT PARI MATERIA (IN THE ABSENCE OF ANY CONTOURING EXPLANATIONS), WILL CONTINUE TO HOLD THE FIELD FOR THE PURPOSE OF ASSESSMENT YEARS PRECEDING THE FINANCE ACT , 2012 AND IN ALL CASES WHICH INVOLVE A DOUBLE TAX AVOIDANCE AGREEMENT, UNLESS THE SAID DTAAS ARE AMENDED JOINTLY BY BOTH PARTIES TO INCORP ORATE ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 32 INCOME FROM DATA TRANSMISSION SERVICES AS PARTAKING OF THE NATURE OF ROYALTY, OR AMEND THE DEFINITION IN A MANNER SO SUPRA NOTE THAT SUCH INCOME AUTOMATICALLY BECOME S ROYALTY. IT IS REITERATED THAT THE COURT HAS NOT RE TURNED A FINDING ON WHETHER THE AMENDMENT IS IN FACT RETROSP ECTIVE AND APPLICABLE TO CASES PRECEDING THE FINANCE ACT OF 2012 WHERE THERE EXISTS NO DOUBLE TAX AVOIDANCE AGREEMEN T. 61. FOR THE ABOVE REASONS, IT IS HELD THAT THE INTERPRETATION ADVANCED BY THE REVENUE CANNOT BE ACCEPTED. THE QUESTION OF LAW FRAMED IS ACCORDINGLY ANSWERED AGAINST THE REVENUE. THE APPEALS FAIL AND ARE DISMISSED, WITHOUT ANY ORDER AS TO COSTS.' 32. IN VIEW OF THE LAW LAID DOWN, THE REVENUE IS H ERE BY DIRECTED NOT TO TAX THE ROYALTY IN ACCORDANCE WITH THE JUDGMENT OF THE HON'BLE HIGH COURT. 31. FOLLOWING THE ORDER PASSED BY THE COORDINATE BE NCH OF THE TRIBUNAL IN AYS 2007-08 TO 2012-13, WE ARE OF THE C ONSIDERED VIEW THAT PAYMENT RECEIVED BY THE TAXPAYER FROM BRI TISH AIRWAYS IN RELATION TO ALLEGED USE OF ALTEA SYSTEM CANNOT BE CHARACTERIZED AS ROYALTY EITHER UNDER THE ACT OR UNDER THE INDO -SPAIN TREATY BECAUSE ALTEA SYSTEM WAS INSTALLED AT THE AIRPORT A ND WAS ACCESSED ONLY BY THE AIRLINES AND NOT BY THE AMADEUSS AGENT S VIZ. RESBIRD, AMADEUS INDIA AND THAT DURING THE YEAR, THE SAID SY STEM WAS AVAILABLE TO BRITISH AIRWAYS FOR THE AFORESAID PURP OSE AND THAT TOO ONLY AT THE AIRPORT COUNTER AND THE SAID SOFTWARE W AS NOT AVAILABLE OUTSIDE THE INDIAN AIRPORT OR TO ANY OF THE AGENTS OF THE TAXPAYER SINCE THE AGENTS WERE BOOKING THE TICKETS ONLY THRO UGH THE CRS OF THE TAXPAYER. CONSEQUENTLY, GROUNDS NO.18, 19 & 20 OF ITA ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 33 NOS.2007/DEL./2017, 3494/DEL./2018, 7970/DEL./2018 & 7047/DEL./2019 FOR ASSESSMENT YEARS 2013-14, AY 201 4-15, AY 2015-16 & AY 2016-17 RESPECTIVELY ARE DETERMINED IN FAVOUR OF THE TAXPAYER. GROUND NO.21 OF ITA NO.2007/DEL./2017 (AY 2013-14) ITA NO.3494/DEL./2018 (AY 2014-15) ITA NO.7970/DEL./2018 (AY 2015-16) ITA NO.7047/DEL./2019 (AY 2016-17) 32. AO/DRP LEVIED THE INTEREST U/S 234B OF THE ACT. 33. LD. AR FOR THE TAXPAYER CONTENDED THAT IN THE A BSENCE OF ANY LIABILITY FOR PAYMENT OF ADVANCE TAX SINCE TAX IS D EDUCTIBLE AT SOURCE ON THE INCOME OF THE TAXPAYER HELD LIABLE TO TAX IN INDIA, THE LEVY OF INTEREST U/S 234B IS NOT WARRANTED. 34. PROVISIONS CONTAINED BELOW SECTION 209(1)(D) OF THE ACT INTRODUCED BY FINANCE ACT, 2012 W.E.F 01.04.2012 WO ULD APPLY ONLY IN A SITUATION WHERE PERSONS RESPONSIBLE FOR T AX HAS PAID OR CREDITED SUCH INCOME WITHOUT DEDUCTION OF TAX. IN THE INSTANT CASE, SINCE THE INCOME HAS BEEN RECEIVED BY THE TAXPAYER AFTER DEDUCTION OF TAX AT SOURCE, THE PROVISO IS NOT APPLICABLE AS HAS BEEN HELD BY THE COORDINATE BENCH OF THE TRIBUNAL IN BG INTERNATIONAL LTD. VS. DCIT IN ITA NO.31/DDN/2020 ORDER DATED 31.12.2020. EVEN OTHERWISE, WHEN NO ADDITION SUSTAINS SECTION 234B W OULD NOT ITA NO.2007/DEL./2017 ITA NO.3494/DEL./2018 ITA NO.7970/DEL./2018 ITA NO.7047/DEL./2019 34 APPLY. SO, GROUND NO.21 OF ITA NOS.2007/DEL./2017, 3494/DEL./2018, 7970/DEL./2018 & 7047/DEL./2019 FOR ASSESSMENT YEARS 2013-14, AY 2014-15, AY 2015-16 & AY 2016-17 RESPECTIVELY IS DETERMINED IN FAVOUR OF THE TAXPAYE R 35. RESULTANTLY, ALL THE APPEALS BEING ITA NOS.2007 /DEL./2017, 3494/DEL./2018, 7970/DEL./2018 & 7047/DEL./2019 FOR ASSESSMENT YEARS 2013-14, AY 2014-15, AY 2015-16 & AY 2016-17 RESPECTIVELY ARE PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 29 TH DAY OF JANUARY , 2021. SD/- SD/- (ANIL CHATURVEDI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 29 TH DAY OF JANUARY, 2021 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.DRP 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.