GALILEO NEDERLAND Vs. ASSISTANT DIRECTOR OF INCOME TAX

JUDGEMENT

(1.) This common judgment will dispose of appeals filed by Galileo Nederland BV, now known as Travelport Global Distribution System BV, pertaining to Assessment Years 2003-04 to 2006-07. These appeals arise out of a common order of the Income Tax Appellate Tribunal (Tribunal, in short) dated 29th June, 2012 by which the issue/question of profits attributable to Indian operations was remitted to the Assessing Officer for fresh determination. The case of the appellant-assessee is that the order of the Tribunal is erroneous as the question of profits attributable to Indian operations has already been determined in Assessment Years 1995-96 to 2002-03 and does not require reconsideration. The impugned order of the Tribunal mistakenly understands and interprets the order passed by the High Court in the case of Amadeus IT Group and, therefore, incorrectly observes that the ratio or formula applied in earlier years cannot be applied in respect of Assessment Years 2003-04 to 2004-07. It is submitted that similar reasoning by the Tribunal was rejected by the High Court in Amadeus IT Group. Submission of the Revenue is that in view of globalisation, the earlier formula or profit attribution ratio should not be applied and the Tribunal was justified in remitting the question of profits attributable to the Assessing Officer.

(2.) We begin with a caveat that a limited issue and question arises for consideration in these appeals and we are not required and are not pronouncing any opinion and finding on whether the appellant-assessee had a Permanent Establishment (PE) in India and other related issues. The only question and issue raised in these appeals relates to profit attribution to Indian operations on the assumption that the appellant-assessee had a PE in India.

(3.) By order dated 14th December, 2012, the following substantial questions of law were admitted for hearing:-