Dismissing the appeals the Court held\u00a0 that the approach of the High Court on the question of attribution was fair and reasonable. The Tribunal arrived at the quantum of revenue accruing to the assessee in respect of bookings in India attributable to activities carried out in India, on the basis of a \u201cfunctions performed, assets used and risks\u201d analysis undertaken. The commission paid to the distribution agents by the assessee was more than twice the amount of attribution and this had already been taxed. Therefore, the Tribunal rightly concluded that this extinguished the assessment. The question as to what proportion of profits arose or accrued in India is essentially one of fact. On this question of fact, the Tribunal had taken into account relevant factors. Therefore, the concurrent orders of the Tribunal and the High Court did not call for any interference. Article 7 of the Double Taxation Avoidance Agreement between India and the United States of America would not apply, as in the contracting State, the entire income derived by the assessee\u00a0 would be taxable. This is why section 9(1) confines the taxable income to that proportion which is attributable to the operations carried out in India. The court did not go into the question whether the computers placed in the premises of the travel agents and the nodes and leased lines formed a fixed place permanent establishment of the assessee in India, as it had affirmed the High Court on the first issue. (AY. 2003-04 to 2006-07)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 9(1)(i) : Income deemed to accrue or arise in India-Business connection-Permanent Establishment-Portion of income reasonably attributable to operations in India-Question of fact-Tribunal attributing 15 Per Cent. of total revenues as income accruing or arising in India on basis of functions performed, assets used and risks-Commission paid to distribution agents more than twice this amount and taxed-No further income taxable in India-DTAA-India-USA. [S. 9(1)(i ),n Explanation 1(a), Art. 7] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-38803","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-a5R","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/38803","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=38803"}],"version-history":[{"count":2,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/38803\/revisions"}],"predecessor-version":[{"id":40917,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/38803\/revisions\/40917"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=38803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=38803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=38803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}