Travelport International Operations Limited, Berkshire V. ACIT Circle-3(1)(1),International Taxation-3, New Delhi

MA 316/DEL/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 6771 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 05-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 05-10-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 27-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rectification of order
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘D’ NEW DELHI BEFORE SHRI G. S. PANNU, PRESIDENT AND SHRI SAKTIJIT DEY, VICE PRESIDENT M.A. Nos. 316 & 317/Del/2023 [Arising out of ITA Nos.1566 & 1567/Del/2022] Assessment Years: 2018-19 & 2019-20 Travelport International Operations Ltd., Berkshire, Axis One, Axis Park, 10 Hurricane Way, Langey, Berkshire, United Kingdom, SL38 AG, United Kingdom Vs. ACIT, Circle-3(1)(1), International Taxation-3, New Delhi PAN :AAFCT4788G (Applicant) (Respondent) ORDER Captioned applications have been filed by the assessee seeking rectification of order dated 10.01.2023 passed in ITA Nos. 1566 & 1567/Del/2022. 2. Learned Authorized Representative of the assessee submitted, while disposing of the appeal, ground no. 5 raised by the assessee in both the appeals remained undecided. He further Applicant by Sh. S.K. Aggarwal, CA Respondent by Sh. Sanjay Kumar, Sr. DR Date of hearing 06.10.2023 Date of pronouncement 06.10.2023 M.A. Nos.316 & 317/Del/2023 2 | P a g e submitted, in paragraph 13 of the appellate order, due to typographical mistake, ‘ground no. 7’ has been wrongly mentioned as ‘ground no. 6’. 3. Learned Departmental Representative could not controvert the submissions of the assessee. 4. We have considered rival submissions and perused the materials on record. It is observed, while deciding the appeals, inadvertently, ground no. 5 remained undecided. To that extent, there is a mistake apparent on the face of record. As far as ground no. 5 in assessee’s appeals, the issue is with regard to certain observations of the Assessing Officer, denying treaty benefit to the assessee alleging that the assessee is a conduit entity under the stepping stone of conduit frame work. Further, the Assessing Officer held that the assessee had a Permanent Establishment (“PE”) in India and accordingly attributed 25% of the total turnover of the assessee as profit to the PE. When the issue came before learned DRP, it was found that in past assessment years both the Tribunal and Hon’ble Jurisdictional High Court, though, have held that the assessee had a PE in India, however, they reduced the attribution of profit to the PE at 15% of the gross revenue less expenses. M.A. Nos.316 & 317/Del/2023 3 | P a g e 5. Keeping in view the past history of such dispute, learned DRP directed the Assessing Officer to verify, whether the department is in appeal against the order of the Tribunal and Hon’ble Delhi High Court and if it is found to be so, sustain the addition. Thus, from the aforesaid observations of learned DRP, it is evident that they have impliedly not accepted the allegations of the Assessing Officer regarding assessee, being a stepping stone conduit entity. This may be because it was never an issue in the past assessment years. Assessment of income at the hands of the assessee was only because of existence of PE in India. 6. In any case of the matter, considering the decisions of the Tribunal and Hon’ble Jurisdictional High Court in past assessment years, it cannot be said that the status of the assessee as a conduit entity was ever an issue. Therefore, in our considered opinion, the observations of the Assessing Officer regarding the status of the assessee as a conduit company are not based on any cogent material brought on record, and rather unnecessary and irrelevant for deciding the issue, as to whether, assessee’s income is taxable in India or not. 8. In view of the aforesaid, we decide ground no. 5 in favour of the assessee. M.A. Nos.316 & 317/Del/2023 4 | P a g e 7. In paragraph 13 of the appellate order, ‘ground no. 6’ should be read as ‘ground no. 7’. The appellate order is modified to this extent. 8. In the result, both the miscellaneous applications stand allowed. Order pronounced in the open court on 6 th October, 2023 Sd/- Sd/- (G. S. PANNU) (SAKTIJIT DEY) PRESIDENT VICE-PRESIDENT Dated: 6 th October, 2023. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi