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2014 (8) TMI 902 - HC - Income TaxProfit attribution to Indian operations – Permanent Establishment (PE) in India or not - business connection in India u/s 9(1)(i) – booking of air tickets - electronic distribution services to travel industry through Computerised Reservation System (CRS) - Held that:- Each assessment year is separate and distinct and principle of res judicata does not apply to proceedings for subsequent or other years - it was/is possible for the AO to depart from the finding or a decision in one year as it is final and conclusive only in relation to a particular year for which it is made but as observed in Radhasoami Satsang versus Commissioner of Income Tax, [1991 (11) TMI 2 - SUPREME Court] - when a fundamental aspect pervading through different assessment years has been found as a fact in one way or the other, it would inappropriate to allow the position to be changed in a subsequent year particularly when the said finding has been accepted - The principle is also based upon the rules of certainty and consistency that a decision taken after due application of mind should be followed consistently as this lead to certainty, unless there are valid and good reasons for deviating and not accepting the earlier decision. The role performed by the computers in India or the Indian agents was to merely get connected or be configured so that the travel agents could perform the booking function - The computers in India were not capable of processing data, which was processed abroad - the functions required huge investment and capacity, which was not installed and available in the computers at the desk of the travel agents in India but were available in the host computer in the USA - it was looking at the nature and the character of the functions undertaken in India viz., the functions and assets outside India, 15% was attributed to India - This worked out to Euro 0.45 and this was less than the commission of Euro 1, which was paid by the appellant-assessee to the distributor in India - The Tribunal has wrongly observed that earlier appellant-assessee was in losses - There is no such finding in the earlier orders - assessee was maintaining globalised accounts and India specific attribution of profits/losses was not undertaken in the accounts being maintained – Decided in favour of assessee.
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