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TMI Blog2014 (9) TMI 650X X X X Extracts X X X X X X X X Extracts X X X X ..... cided against revenue. Short deduction of TDS on Passenger Service Fees – Order u/s 201(1) and 201(1A) – Held that:- It is a statutory liability for every licensee to collect PSF - Since it is a statutory liability and the meaning given by the statute has to be considered and in this case the Indian Aircraft Rules, 1937 has used the term "Fees", therefore, same meaning has to be given while considering the PSF - the assessee is only acting as a conduit between the embarking passengers and the Central Government agency - the assessee only collects the PSF from the passengers for and on behalf of the airport authority/operator and passes the same to the airport authority/operator - The CBDT, thus, clarified that the customer is also not given any right to use any demarcated space/place or the machinery of the cold storage and thus does not become a tenant - the provisions of 194-I is not applicable to the cooling charges paid by the customers of the cold storage - the PSF charges paid by the assessee on behalf of its customers, do not attract the provisions of Section 194-I of the Act - the order of the CIT(A) is upheld – Decided against revenue. - ITA No.5264/Mum/2012 - - - Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal has given its findings in para 9 at page 6 of its order, which reads as under : 9. We have carefully considered the submissions of the ld. Representatives of the parties and the orders of the authorities below. We have also carefully considered the provisions of section 194H of the Act. We observe that the similar issue has been considered by the Jaipur Bench of the Tribunal in the case of Gems Paradise v. ACIT [IT Appeal Nos. 746 841 (JP) of 2011, dated 2-2-2002] and the Tribunal held vide paragraph 27 of the said order that the provisions of section 194H of the Act are not applicable as the banks make payments to the assessee after deducting certain fees as per the terms and conditions in the credit card and it is not a commission but a fee deducted by the banks. The said paragraph 27 of the order is reproduced below : " 27. After considering the orders of the AO and ld. CIT (A), we find that assessee deserves to succeed in this regard. Section 194H is applicable where any commission has been paid by the Principal to the commission agent. This is not a case of commission agent as assessee sold its goods through credit card and on presentation of bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said issue was again considered by the Jaipur Bench of the Tribunal in the case of Bhandari Jewellers v. ACIT [IT Appeal Nos. 745 837 of 2011, dated 2-2-2012] and following the above decision of the Tribunal, the Tribunal vide paragraph 7 of the said order again held that the provisions of section 194H of the Act are not attracted in this type of transactions. It was held that no TDS is required to be deducted on the fees charged by the bank on credit card transactions. We also observe that the similar issue again come up before the Hyderabad Bench of the Tribunal in the case of M/s Dy. CIT v. Vah Magna Retail (P.) Ltd [IT Appeal No. 905 (Hyd.) of 2011, dated 10-4-2012] and the Tribunal vide paragraph 4 of the said order dismissed the appeal of the department by holding that the amount retained by the principal contractor from the payments made to the contracting persons and there was no requirement for making TDS on the amount. The said paragraph 4 of the order reads as under : "4. We heard the Learned Departmental Representative and perused the orders of the lower authorities and other material on record. Assessee is a company engaged in the business of direct reta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e also observe that the Bangalore Bench of the Tribunal by following the said decision of the Hyderabad Bench of the Tribunal has held that the payments made to the banks on account of utilization of credit card facilities would be in the nature of bank charges and not in the nature of commission within the meaning of section 194H of the Act and hence no TDS is required to be deducted u/s 194 H of the Act. In view of the above we hold that the issue is squarely covered in favour of the assessee. Respectfully following the decisions of the Co-ordinate Benches of the Tribunal we uphold the order of the ld. CIT(A) and reject the grounds No.1 to 3 taken by the department for all the three assessment years under consideration.' 6. The facts of the present case and the issues raised vide grounds No.3,4 5 being identical, hence, respectfully following the decision of the Tribunal in assessee's own case i.e for the assessment years 2007-08, 2008-09 2009-10, respectively (supra), the findings of the CIT(A) are hereby confirmed. Accordingly, grounds No.3, 4 5 are dismissed. 7. Now, coming to the first grievance of the revenue, which relates to allowing the relief of tax under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is not required to deduct the tax at source on the PSF collected from the passengers before making payment to the relevant airport operators. Aggrieved thereby, the revenue is in appeal here before us. 10. Learned DR strongly supported the findings of the AO. It is the say of the DR that the PSF so collected and later on paid to the airport operators very much comes within the purview of Section 194I of the Act and the assessee ought to have deducted tax as per the provisions of Section 194-I of the Act. 11. Per Contra, the counsel for the assessee strongly supporting the findings of the CIT(A), contended that the alleged services are used by the passengers and, therefore, even if assuming that liability for TDS exists, then said liability is upon the passenger, who is utilizing the services. Therefore, the assessee cannot be held liable for the same. The counsel further submitted that the payment of PSF is at the rate of ₹ 200/- per passenger, which is much below the threshold limit of ₹ 1.20 lakhs. The counsel strongly contended that the PSF is not a rent under Section 194I of the Act. The transaction is between passengers and the airport operators, whereas the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of composite arrangement for user of premises and provision of manpower for which consideration is paid as a specified percentage of turnover, section 194-I of the Act would be attracted ? Answer : If the composite arrangement is in essence the agreement for taking premises on rent, the tax will be deducted under section 194-I from payments thereof." The facts under consideration show that the PSF is a statutory liability without demarcating/earmarking the area taken on rent , nor it is a case of systematic use of land specified for consideration under an arrangement, which carries the characteristics of lease or tenancy. A mere use of the land and payment charged, which is not for the use of the land but for maintenance of the various services including technical services would not technically bring the transaction and the charges within the meaning of either lease or sub-lease or tenancy or any other agreement or arrangement or any nature of lease or tenancy and rent. For these observations, we draw support from the decision of the Hon'ble Madras High Court in the case of CIT Vs. Singapore Airlines Ltd., reported in (2012) 252 CTR (Mad) 429. 14. It would not be out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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