Facts of the Case

The present appeals were filed by the Revenue challenging a common order dated 13.10.2021 passed by the Income Tax Appellate Tribunal concerning multiple assessment years (AY 2007–08 to AY 2014–15).

The dispute pertained to the attribution of profits arising from Indian operations of the respondent/assessee, i.e., Travelport Global Distribution System B.V., a foreign entity engaged in providing global distribution systems.

The Tribunal upheld the view that only 15% of profits from Indian operations could be attributed to the assessee.

Additionally, there was a delay of 460 days in re-filing the appeals, which was condoned by the Court.

Issues Involved

  1. Whether the Tribunal was correct in upholding that 15% of profits from Indian operations are attributable to the assessee.
  2. Whether any substantial question of law arises under Section 260A of the Income-tax Act.
  3. Whether the matter stands covered by prior judgments of higher courts, particularly the Supreme Court.

Petitioner’s Arguments (Revenue)

  • The Revenue challenged the Tribunal’s order attributing only 15% of profits to Indian operations.
  • It sought reconsideration of the attribution methodology adopted by CIT(A) and upheld by the Tribunal.
  • However, during the hearing, the Revenue fairly conceded that the issue is already covered against it by the decision of the Supreme Court in the case of:
    • Commissioner of Income Tax (International Taxation) v. Travelport L.P. USA

Respondent’s Arguments (Assessee)

  • The assessee relied on settled legal position and earlier decisions in its own group cases.
  • It was contended that:
    • The issue of profit attribution is no longer res integra.
    • The Tribunal’s order follows binding judicial precedents.
  • The assessee emphasized that the Supreme Court has already affirmed similar findings in its favour. 

Court’s Findings / Order

  • The High Court noted that:
    • The issue is squarely covered by the Supreme Court judgment in the Travelport group cases.
    • Earlier decisions, including those of the coordinate bench and Supreme Court, have upheld similar findings.
  • The Court held:
    • No substantial question of law arises for consideration under Section 260A.
    • The Tribunal’s conclusion attributing 15% of profits is valid and sustainable.
  • Accordingly:
    • All appeals filed by the Revenue were dismissed/closed.

Important Clarifications

  • The judgment reinforces that:
    • When an issue is settled by the Supreme Court, High Courts will not re-examine it.
    • Profit attribution disputes involving multinational enterprises must follow consistent judicial precedents.
    • Mere dissatisfaction with quantum (e.g., 15% attribution) does not give rise to a substantial question of law.

 

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

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