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2021 (3) TMI 208 - AT - Income TaxAttribution of 15% Revenue to the PE in India - invocation of Rule 27 for challenging the decision of the CIT (A) - Doctrine of Merger - assessee moved applications u/r 11 and u/r 27 of the ITAT Rules, raising an additional plea, which was never taken in the first round of litigation, challenging the jurisdiction of the Assessing Officer claiming that the assessments for Assessment Years 2007-08, 2008-09 and 2009-10 are barred by limitation and further, assessment for Assessment Year 2010-11 is also barred by limitation on the ground that provisions of section 144C of the Act do not apply - DR vehemently stated that the order of the Tribunal is merged with the order of the Hon’ble Delhi High Court and therefore, on Doctrine of Merger, these applications should not be allowed - HELD THAT:- Submissions of the ld. DR are not acceptable for the simple reason that the issues which have been considered and decided get merged with the findings of the superior court but the issues which have neither been considered or have been decided by inferior court cannot merge with the orders of the superior court. In our considered view, the logic underlying the Doctrine of Merger is that there cannot be more than one decree or operative orders governing the same subject matter at a given point of time. Once the superior court has disposed of the list before it either way - it is the decree or order of the superior court which is final and binding. In the present case, the point of jurisdiction was never raised before the lower authorities and accordingly, the same never formed the subject matter of appeal before the Hon'ble High Court and hence the doctrine of Merger will not be applicable in the case in hand. Therefore, in our view, the distinction sought by the ld. DR in the decision of the Hon'ble High Court of Gujarat in the case of P.V. Doshi [1977 (8) TMI 29 - GUJARAT HIGH COURT] does not hold any water. DR has heavily relied upon the decision of the Hon'ble High Court of Delhi in the case of Sanjay Sawhney [2020 (5) TMI 441 - DELHI HIGH COURT] which is more in favour of the assessee than to the Revenue. Assessment for A.Ys 2007-08, 2008-09 and 2009-10 as barred by limitation - AO has framed draft assessment order when the provisions were not there in the statute. Therefore, the period of limitation, as prescribed u/s 153 of the Act were applicable and, therefore, the date of final assessment order makes the assessment barred by limitation. Attribution of 15% Revenue to the PE in India - Since major part of the business activities were carried out outside of India and only limited activities were attributable to India and finding parity in the facts with those of Galileo International Inc [2014 (8) TMI 902 - DELHI HIGH COURT] we are of the considered view that 15% of the revenue is enough to attribute towards the activities done in India. On identical facts, the Tribunal in the case of SABRE Inc.[2009 (6) TMI 1021 - ITAT DELHI] has held that the said company had a PE in India but only 15 per cent of revenue accruing to assessee in respect of bookings made in India should be treated as income accrued or assessed in India. Facts considered in the case of Amadeus Global Travel Distribution SA [2007 (11) TMI 330 - ITAT DELHI-B] are identical to the facts of the present appeal in as much as in the present appeal also, Travelport LP owned and maintained a CRS and had the same distribution and revenue earning model. Hence, a similar attribution of 15% of the revenue accruing to the assessee in respect of bookings made in India as income accruing or arising in India is also warranted in the case at hand. Since no guidelines are available as to how much should income be reasonably attributable to India, the same has to be determined on the basis of the facts of the case and judicial precedents. On finding parity in the facts of the case in hand with the facts of the judicial precedents discussed hereinabove, we are of the considered view that the ld. CIT(A) rightly attributed 15% of the Revenue and therefore, we do not find any error or infirmity in the findings of the ld. CIT(A).
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