9911796707
TMI Blog2022 (3) TMI 1432X X X X Extracts X X X X X X X X Extracts X X X X ..... ircraft is not taxable under Article 8 of DTAA between India and Germany. However, the assessee received collection charges from AAI as the assessee collected UDF from the passengers and the same was passed on to AAI. A duty was cast on the assessee to collect UDF from the passengers and pass it on to the AAI. Assessee was paid collection charges wherever the UDF is remitted to AAI within the stipulated time. As the effective management of the assessee company is situated in Germany the profits from operation of aircraft in international traffic is taxable only in Germany. The UDF is levied at the Indian airports as a measure to increase revenues of the airport operator. UDF is levied to brdge any revenue shortfall so that the airpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... between India and Germany. Thus ground Nos. 1 to 4 raised by the assessee are dismissed. - I.T.A No.6012/Del/2017 - - - Dated:- 24-3-2022 - SHRI G. S. PANNU, PRESIDENT A N D SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER Assessee by : Shri Rajiv Puri, C. A.; Revenue by : Shri Sukesh Kumar Jain, [CIT] D.R.; O R D E R PER C. N. PRASAD, J. M. : 1. This appeal is filed by the assessee against the assessment order passed under Section 143(3) r.w.s 144C(13) of the Income Tax Act, 1961 (the Act) for assessment year 2014-15. 2. The grounds of appeal raised by the assessee are as under:- The appellant seeks to take the following grounds, which are without prejudice to one another: 1) That the Ld. AO/ Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in facts and in law in holding that non-granting of discount by Airport Authority of India due to nonpayment of User Development Fee (UDF) within the stipulated credit period is in the nature of penalty. 5) That, on facts and circumstances of the case and in law, the Ld. AO erred in levying interest under sections 234B and 234C of the Act. 6) That, on facts and circumstances of the case and in law, the Ld. AO erred in initiating penalty proceedings under section 271(1 )(c) of the Act against the appellant. 7) That the order of Ld. AO/ Hon ble DRP is contrary to the facts, law and the principles of natural justice and is, therefore, void and vitiated. 8) The appellant craves leave to add, modify or withdraw any or all of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that these collection charges paid by AAI to the assessee are noting but commission since UDF is collected as part of sale of tickets and remitted to the AAI for airport operations and for this effort AAI paid commission to the assessee. Further the assessing officer was of the view that the collection charges received by the assessee from AAI for the assessee collecting the UDF and passing it on to AAI, are not from the business of operation of aircrafts and these are commercial activities which are independent from the business operations of aircrafts in India. The assessing officer was of the view that the opportunity to earn this income may have arisen due to some connection but these activities are not incidental to the operation of ai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld. DR submits that only the income derived from operation of aircraft is covered under Article 8 of DTAA and the collection charges received by the assessee from AAI is not derived from operation of aircraft. The Ld. DR submits that the collection charges are paid to the assessee for the services rendered by the assessee to AAI in collecting and passing on the UDF to AAI within stipulated time. The Ld. DR submits that the Assessing officer has rightly considered these receipts as business income of the assessee. 8. We have heard rival submissions, perused the order of the Ld. DRP and the Assessment order. It is not in dispute that the assessee s income derived from operation of aircraft is not taxable under Article 8 of DTAA betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the collection charges paid by AAI to the assessee is income derived from operation of aircraft not liable to tax in India as per Article 8 of DTAA between India and Germany. As the effective management of the assessee company is situated in Germany the profits from operation of aircraft in international traffic is taxable only in Germany. The UDF is levied at the Indian airports as a measure to increase revenues of the airport operator. The UDF is levied to brdge any revenue shortfall so that the airport operator is able to get a fair rate of return on investment. The quantum of UDF varies from airport to airport and the rate of UDF at airports is determined by the Airports Economic Regulatory Authority of India (AERA) for major airports ..... X X X X Extracts X X X X X X X X Extracts X X X X
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