9911796707
TMI Blog2022 (10) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Development Fee (UDF) on behalf of Airport Authority of India (AAI) is an activity incidental! ancillary to the 'operation of aircrafts' and therefore, amount allowed by Airport Authority of India (AAI) to the Appellant on account of making payments within a stipulated given period is exempt under Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 India. During the course of assessment proceedings it has been found that the assessee had received an amount of Rs.16,04,623/- as Collection Charges on User Development Fee (UDF). The assessing officer examined and held that the aforesaid income is only a commission and collection charge and not the income from operation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 restrictive in its operation and applies to profits from operation of aircraft. The said collection receipt of UDF can, in no terms, be considered for operation on aircrafts, simply due to the reason that it is collected as a part of the ticketing process. The other arguments raised by the appellant are not relevant to the case as they talk a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management of the enterprise is situated. 2. If the place of effective management of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which the home harbour of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowed 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 collecting UDF and passing it on to AAI. The collection charges paid by AAI to assessee cannot be said to be the income derived from operation of aircraft. Further in assessee's case on identical facts for the assessment year 2013-14 the Ld. DRP approved the order of the assessing officer in holding that the collection charges received by the assessee from AAI on remitting ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
