Facts of the Case

The Revenue filed multiple appeals before the Delhi High Court challenging a common order dated 13.10.2021 passed by the Income Tax Appellate Tribunal (ITAT).

The dispute pertained to the attribution of profits arising from Indian operations of the assessee, Travelport Global Distribution System B.V.

Additionally, there was a delay of 460 days in re-filing the appeals, for which condonation was sought by the Revenue. 

Issues Involved

  1. Whether the delay of 460 days in re-filing the appeals should be condoned.
  2. Whether the Tribunal was correct in upholding that 15% of profits from Indian operations are attributable to the assessee.
  3. Whether any substantial question of law arises for consideration under Section 260A. 

Petitioner’s Arguments (Revenue)

  • The Revenue challenged the ITAT’s order on profit attribution.
  • It sought reconsideration of the finding that only 15% of profits could be attributed to Indian operations.
  • However, during arguments, the Revenue fairly conceded that the issue was already covered by the Supreme Court judgment in a related case of the same group entity.

Respondent’s Arguments (Assessee)

  • The respondent relied on binding judicial precedents, particularly:
    • Supreme Court ruling affirming earlier High Court decisions.
  • It was contended that:
    • The issue of profit attribution had already attained finality.
    • No fresh legal question arose requiring reconsideration. 

Court’s Findings / Order

  • The Court condoned the delay of 460 days in re-filing the appeals in the interest of deciding the matter on merits.
  • On merits, the Court observed:
    • The issue is squarely covered by Supreme Court decisions, including:
      • CIT (International Taxation) vs Travelport L.P. USA
      • DIT vs Travelport Inc.
  • The Court held:
    • The Tribunal’s view that 15% of profits attributable to Indian operations is sustainable.
    • No substantial question of law arises.

Important Clarification

  • Once a binding precedent of the Supreme Court exists, the High Court will not re-examine identical issues.
  • The Court reaffirmed that:
    • Profit attribution in international taxation matters, when settled by higher courts, cannot be reopened unless new facts or legal questions emerge.
  • The dismissal of SLP by the Supreme Court further strengthens the finality of the issue. 

Sections Involved

  • Section 260A – Appeal to High Court
  • Provisions relating to International Taxation & Profit Attribution under the Income Tax Act, 1961

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS08122023ITA7182023_153642.pdf

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