INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER ITA No. 410/Del/2019 (Assessment Year: 2015-16)

ITA No. 7534/Del/2019 (Assessment Year: 2016-17)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

ITA No. 381/Del/2019 (Assessment Year: 2017-18)

O R D E R PER M. BALAGANESH, A. M.:

1. The Assessee Sabre Marketing Nederland, B.V. (hereinafter referred to as ‘assessee) by filing the present appeal sought to set aside the impugned order dated 31.10.2018 for AY 2015-16, 19.07.2019 for AY 2016-17 and 05.02.2021 for AY 2017-18 passed by the Assessing Officer (AO) under section 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (for short ‘the Act’) inconsonance with the order passed by the Dispute Resolution Panel (DRP)-2, New Delhi dated 25.09.2018, 13.05.2019 and 18.03.2020 u/s 144C(5). Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.

2. The facts relevant for assessment year 2015-16 are taken up for adjudication and the decision rendered thereon shall apply mutatis mutandis for assessment years 2016-17 and 2017-18 also, in view of identical facts, except with variance in figures.

3. Though the Assessee has raised several grounds of appeal before, the only effective issue to be decided is as to whether the amounts received from Airlines by the Assessee constitute Royalty chargeable to tax as per the provisions of section 9(1)(vi) of the Act and as per Article 12 of India Netherlands Double Taxation Avoidance Agreement (DTAA) or not.

4. We have heard the rival submissions and perused the materials available on record. The Assessee is a tax resident of Netherlands. The Assessee is a technology solutions provider to the airline industry. The company markets and distributes travel related products and services to airlines which include airline decision support applications and implementation and support services for Sabre software packages. For rendering the above mentioned services, the Assessee primarily makes use of software hosted on its vendors servers located outside India. The Assessee had entered into Master Agreements with various airlines wherein the Assessee has agreed to facilitate provision of aforementioned solutions and implementation and support services. Assessee earns fees from participating airlines for abovementioned services / solutions which are based on activities originating in India or on number of transactions originating in India and such fee is received by the Assessee outside India.

5. The Learned AO in the draft assessment proceedings observed that Assessee has received India generated booking fees, which would be considered as income earned by the PE in India and in view of the decision in Assessee’s own case for assessment years 1997-98 to 2005-06, where the Hon’ble Delhi High Court had held that the Assessee has PE in India under the India- Netherlands DTAA and also has business connection within the meaning of section 9 of the Act under the domestic law. Further in the case of a group company of the Assessee i.e. Sabre GLBL INC, the Hon’ble Delhi High Court had held that Sabre GLBL INC has PE in India and had applied 15% attribution of profits resulting from booking fee generated from India to the PE. Accordingly in the draft assessment order, the Learned AO proposed determined the income of the Assessee at the rate of 15 percent to the PE in India of total business receipts of Rs 16,00,76,064/-. Accordin