9911796707
TMI Blog2022 (10) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... mission income taxable in the hands of the Appellant in India? - HELD THAT:- As decided in own case [ 2022 (3) TMI 1432 - ITAT DELHI] 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 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 and ministry of civil aviation for not major airports. Presently UDF collection charge at a flat rate of Rs.5/- per passenger (all inclusive) is allowed to airlines subject to payment of UDF collection to AAI within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is directed against the order of the ld. CIT (Appeals)-43, New Delhi dated 16.05.2019 for the Assessment Year 2015-16. 2. The grounds of appeal raised by the assessee read as under :- 1. That the Ld. AO/ Hon'ble CIT (A) erred in facts and in law in not accepting the contentions of the Appellant that collection charges allowed to the Appellant by Airport Authority of India (AAI) on payments made by them to AAI within a stipulated given period is a discount in nature and not in the nature of commission income taxable in the hands of the Appellant in India. 2. That the Ld. AO/ Hon'ble CIT (A) erred in facts and in law in rejecting the contentions of the Appellant that the so called collection charges on User ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the international traffic i.e. transportation of passengers and cargo. The assessee has claimed its entire income exempt from taxation in India under Article 8 of the Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Germany read with section 90 of the Income Tax Act, 1961. As per the claim by the assessee the gross revenue from business in India comprises of passenger Revenue and cargo revenue and income from this had been claimed as not taxable under the above discussed provision of the Treaty. The details of these revenues have been examined with reference to their taxability as per Article 8 of the Treaty and found to be covered under that article. No other income has been reported or offered to tax in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. The finding of the DRP is as under: 4.2.1 Ground E: the Assessing Officer is not justified in holding that the collection charges allowed by Airport Authorities on payment of User Development Fee (UDF) to the assessee in India is not from operation of aircraft as referred in section 44BBA of the Income Tax Act and Article 8 of the DTAA between India and Malaysia. 5.5 It is clear that the' aforesaid receipt is basically paid to the appellant as a collection charge and also on account of timely payment which is chargeable from all passengers and the said amount is passed on to the Airport Authority. This part of the operation by the appellant is solely collection and deposit of a specific charge. The Article 8 is restric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 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. The taxability of income in the hands of the is governed by Article 8 of the treaty and it reads as under: ARTICLE 8 SHIPPLING AND AIR TRANSPORT 1. Profits from the opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and ministry of civil aviation for not major airports. Presently UDF collection charge at a flat rate of Rs.5/- per passenger (all inclusive) is allowed to airlines subject to payment of UDF collection to AAI within 15 days of receipt of bill. Airlines will make full payment of UDF to AAI and raise a separate invoice for the collection charges on UDF to AAI. The collection charges paid by AAI to the assessee in whatever name called i.e., either discount or commission is nothing but service charges paid, for assessee collect ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
