| Case ID |
7ed1d33c-e583-404a-ad74-d8e42466b7c6 |
| Body |
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| Case Number |
D-2741 of 2016 |
| Decision Date |
Nov 30, 2011 |
| Hearing Date |
|
| Decision |
The Tribunal concluded that the income of the respondent was chargeable to tax in India under section 5(2) of the Income-tax Act, 1961, as it had business connections in India as per section 9(1)(i). The Tribunal determined that 15 percent of the revenue accruing to the respondent from bookings made in India was to be treated as income arising in India. However, after accounting for the commission paid to the agent, there was no taxable profit remaining. The High Court upheld the Tribunal's findings, noting that the revenue's appeal did not raise any substantial question of law. |
| Summary |
In the case of Director of Income Tax v. Galileo International Inc., the Delhi High Court addressed the taxation of income generated by a US-based company operating a computerized reservation system in India. The court examined whether the income was chargeable to tax in India under the Income-tax Act, 1961, specifically focusing on sections 5 and 9. The Tribunal determined that while the respondent's income was subject to taxation due to its business connections in India, only 15 percent of the revenue from bookings made in India was taxable. After considering the commission paid to the local agent, the Tribunal concluded that no taxable profit remained. This case highlights the complexities of international taxation and the importance of understanding revenue attribution in cross-border transactions. |
| Court |
Delhi High Court
|
| Entities Involved |
Director of Income Tax,
Galileo International Inc.
|
| Judges |
A.K. Sikri,
Suresh Kait
|
| Lawyers |
Sanjeev Sabharwal,
Dinesh Vyas,
F.V. Irani,
Satyen Sethi,
Johson Bara
|
| Petitioners |
Director of Income Tax
|
| Respondents |
Galileo International Inc.
|
| Citations |
2011 SLD 2786 = (2011) 336 ITR 264
|
| Other Citations |
DIT (International Taxation) v. Morgan Stanley & Co. Inc. [2007] 292 ITR 416/ 162 Taxman 165 (SC),
Hukam Chand Mills Ltd. v. CIT [1976] 103 ITR 548 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
5,
9
|