75% Gross Profit Earned from Indian Operations: Delhi HC upholds Direction of the AO to Adopt Attribution Rate of Revenue [Read Order]
Delhi High Court upheld the direction of the AO to adopt the attribution rate of revenue as 75% gross profit earned from Indian operations
delhi high court – delhi hc – Delhi High Court ruling on AO’s direction – Gross Profit Earned from Indian Operations – taxscan
delhi high court – delhi hc – Delhi High Court ruling on AO’s direction – Gross Profit Earned from Indian Operations – taxscan
The Delhi High Court upheld the direction of the Assessing Officer ( AO ) to adopt the attribution rate of revenue as 75% gross profit earned from Indian operations.
By the instant appeal, the appellant/revenue sought to assail the order dated 27.09.2022 passed by the Income Tax Appellate Tribunal ( ITAT ).
The senior standing counsel, who appeared on behalf of the appellant/revenue, fairly conceded that insofar as the merits of the case are concerned, the decision of the Supreme Court rendered in the case of the group entity of the respondent/assessee holds the field. The counsel also drew attention to the following order passed by the Supreme Court in the case of Commissioner of Income tax ( International Taxation ) v. Travelport L.P. USA.
The moot point on merits which obtained in the appeal preferred by the respondent/assessee before the Tribunal was, whether the view taken by the Dispute Resolution Panel [ “the DRP” ] that 75 percent of the gross profits earned from Indian operations, attributed to the respondent/assessee, was sustainable. The Tribunal partly allowed the appeal of the respondent/assessee by following its own decision for AYs 2007-08 to 2014-15, thereby directing the Assessing Officer to adopt the attribution rate of revenue for the Indian operations of the Permanent Establishment at 15 percent of gross booking fees for the AY in issue, i.e., AY 2015-16
A Division Bench comprising observed that “The coordinate bench in AY 2006-07, while dealing with ITA 301/2022, has sustained the said conclusion and gone on to hold that no substantial question of law arose for its consideration. It is this decision which was affirmed by the Supreme Court with the dismissal of the SLP, as noted hereinabove. Given this position, we are of the opinion that no substantial question of law arises for our consideration.”
To Read the full text of the Order CLICK HERE
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