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2021 (11) TMI 317 - AT - Income TaxNature of receipt - suppliers credit received from various suppliers of aircraft - capital ad revenue receipt - HELD THAT:- As decided in own case [2017 (2) TMI 630 - ITAT DELHI] the supplier’s credit received by the assessee from various suppliers of aircrafts is a capital receipt. Accordingly, ground number 1 of the appeal of the learned assessing officer is dismissed. Whether the above receipt constituted receipt from exploitation of valuable commercial rights and chargeable to tax u/s 28 (iv)? - In view of the above findings of the special bench that credit receives are also not taxable either u/s 28 (i) or u/s 28(iv) of the act we dismiss ground number 2 of the appeal of the learned AO. Disallowance u/s 37 (1) of the lease rent payable - HELD THAT:- No disallowance u/s 37 (1) of the lease rent payments could be made. Accordingly, the AO is directed to delete the same. Disallowance u/s 40 a (i) on account of payment of supplementary rent for non-deduction of the tax - HELD THAT:- Respectfully following the decision of Tribunal for A.Y. 2007- 2008 which has also been followed in subsequent years, we hold that payment of Supplementary Rent is exempt from tax in hands of Lessors as per provisions of section 10(15A) and hence, disallowance under section 40(a)(i) is not called for. However, the above figure is subject to verification by the AO. Disallowance of supplementary rent for lease agreements executed after 1 April 2007 - HELD THAT:- Profits from rental of Aircrafts is taxable only in state of residence of Lessor. We, therefore, find merit in the arguments of the Learned Senior Counsel for the Assessee that as per Articles 12 and 8 of the Tax Treaty with Ireland, profits derived by an enterprise of a contracting State from rental of Aircraft are taxable “only” in Ireland. Supplementary Rent paid for Lease Agreements executed after 01.04.2007 are, therefore, not chargeable to tax in India. However, the above figure is subject to verification by the A.O.
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