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 Tax (DRP-2), Mumbai order passed under section 144C(5) of the Act date of order 28.06.2023.

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 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 & Anr. (3 taxmann.com 777