TMI Blog2009 (7) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... x in India and consequently the appeals of the revenue are dismissed. In the result, all the appeals of the assessee are allowed and the appeals of the revenue are dismissed. - Mr. R.P. GARG, VICE-PRESIDENT AND Mr. Rajpal Yadav, JUDICIAL MEMBER For the Appellant : Bikramij Singh Bedi and S.K. Kamboj For the Respondent : L.M. Pandey, CIT (DR) ORDER Per Bench 1. The assessee and revenue are in cross-appeals against the common order of learned CIT(A) dated 14.3.2008 passed for A.Y. 1999-00 to 2005-06. 2. Since the common issues are involved in all the appeals, they are heard together and we deem it appropriate to dispose of them by this common order. 3. The learned counsel for the assessee at the very outset submitted that ITAT has already heard the appeals of the assessee for assessment year 1997-98 and 1998-99 wherein identical issues are involved. The learned DR was unable to controvert the contentions of the learned counsel for the assessee: 3. With the assistance of learned representatives, we have gone through the records carefully. We find that the grounds of appeals taken by the assessee as well as revenue in all the assessment years of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the CIT(Appeals) has erred, on the facts and circumstances of the case and in law, in either not allowing or restricting the allowability of expenses, being legitimate business expenses incurred outside India and relates to India generated booking fees, while computing the profits for the purpose of attribution. 5.1 That on the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in ignoring the submissions of the Appellant and restricting the allowability of deduction for allocable head office expenditure as per section 44C of the Act. 5.2 That on the facts and in the circumstances of the case and in law, the learned CIT(Appeals) has erred in ignoring the submissions of the Appellant and restricting the allowability of deduction for allocable head office expenditure as per section 44C of the Act. 6. The learned CIT(Appeals) has erred, on the facts and circumstances of the case and in law, in upholding the chargeability of interest under sec. 234B of the Act. 7. The appellant craves leave to alter, amend, modify, amplify or withdraw any or all the above grounds of appeal, or add any farther grounds, before or at the time of hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -98 1998-99 wherein it was held that income was chargeable to tax under sec. 5(2) of the Act as assessee had business connection in India as per section 9(1)(i) of the Act. However, with regard to the quantification of income accrued to the assessee with the business connection in India it has been held by the ITAT that 15% of the revenue accrued to the assessee in respect of the booking made in India that should be treated as income accrued or assessed in India. The facts noticed by the ITAT and the findings recorded on the dispute in assessment years 1997-98 and 1998-99 in ITA No.1215 1216/Del/05 Ors. read as under: 5. In respect of question no.1, the Tribunal held that income was chargeable to tax under section 5(2) of the Act as the assessee had business connection in India as per section 9(1)(i) of the Act. It however held that 15% of the revenue accrued to the assessee in respect of the bookings made in India that should be treated as income accrued or assessed in India and since the assessee is charging Euro-3 per booking, 15% thereof would be 0.45 Euro against which Interglobe was paid one Euro per booking. The Tribunal therefore held that there was no income or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber in India. On this basis, the Tribunal formed the opinion that major part of the work are processed at the host computer in Denver in USA and the activities in India are only minuscule portion. Taking into consideration all these factors the Tribunal was of the opinion that one could reasonably attribute 15% of the revenue accruing to the assessee in respect of bookings made in India as major expenses in that behalf is incurred in activities carried out in US. The relevant portion of the discussion arriving at the aforesaid figure is reproduced below: Though no guidelines are available as to how much should be the income reasonably attributable to the operations carried out in India, the same has to be determined on the factual situation prevailing in each case. However, broadly to determine such attribution one has to look into the factors like functions performed, assets used and risk undertaken. On the basis of such analysis of functions performed, assets used and risk shared in two different countries, the income can be attributed. In the present case, we have found that majority of the assets i.e., host computer which is having very large capacity which processes i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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