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2022 (2) TMI 1294 - AT - Income TaxInclusion of profit / loss of passenger service fee (security component) managed in Fiduciary Capacity - AO had included surplus in Passenger Service Fee (Security Component) [PSF(SC)] as income assessable in the hands of the assessee - HELD THAT:- In view of the Bangalore Bench order in assessee’s own case [2019 (7) TMI 1956 - ITAT BANGALORE] we direct the A.O. to consider the issue afresh. A.O. is directed to examine the judicial pronouncements relied on by the assessee and take a decision in accordance with law after affording a reasonable opportunity of being heard to the assessee. It is ordered accordingly. TDS u/s 194H - Disallowance u/s 40(a)(ia) towards amount retained by airlines while remitting the amount of Passenger Service Fees (PSF) and User Development Fees (UDF) - HELD THAT:- Respectfully following the Hon’ble High Court judgment in the case of Delhi International Airport (P) Ltd. [2018 (5) TMI 334 - ITAT BANGALORE] we restore this issue to the files of the A.O. A.O. is directed to re-adjudicate the issue in light of proviso to section 40(a)(ia) of the Act. The A.O. shall afford a reasonable opportunity of hearing to the assessee. If it is established that the Airline Operators have offered receipt of commission as income in the respective assessment years in their returns of income and paid tax on the same, then the assessee shall not be held “as an assessee in default”. In such a scenario, the provisions of section 40(a)(ia) does not have any application. It is ordered accordingly. Disallowance u/s 14A - HELD THAT:- As per the order of Special Bench of the Tribunal in the case of Veerat Investments [2017 (6) TMI 1124 - ITAT DELHI] only those investments, which have yielded exempt income has to be considered for the purpose of computing average value of investments for computing disallowance under Rule 8D(2)(iii). Hence, the issue of disallowance u/s 14A r.w.r.8D(2)(iii) is restored to the files of the A.O. A.O. is directed to follow the dictum laid down by the Special Bench order of the Tribunal in the case of Veerat Investments (supra) and compute the disallowance accordingly. Addition / deduction by treating the duty credit entitlement under SFIS accrued as grant related to revenue - HELD THAT:- On identical facts, in the case of group company, namely, M/s.Delhi International Airport (Pvt.) Ltd. [2018 (5) TMI 334 - ITAT BANGALORE] the issue was restored to the files of the CIT(A). Thus we restore this issue to the files of the A.O. The A.O. is directed to follow the directions of the Tribunal given above. Addition by including the revenue from NACIL on accrual basis - HELD THAT:- On identical facts, the Hon’ble jurisdictional High Court in the case of M/s.Delhi International Airport (Pvt.) Ltd. [2022 (1) TMI 841 - KARNATAKA HIGH COURT] had decided the issue against the assessee. Thus we hold that the revenue from NACIL are to be recognized on accrual basis. Further, in tune with the finding of the Hon’ble High Court, we direct the A.O. to exclude the income offered by the assessee on receipt basis. It is ordered accordingly. Disallowance of Community Development expenditure - HELD THAT:- As decided in assessee’s own case for assessment year 2009- 2010 [2019 (7) TMI 1956 - ITAT BANGALORE] though the assessee has furnished details of expenditure, it has not demonstrated the connection between the expenditure and the business advantage to the assessee. Further, as stated earlier, the nature of payment as well as the nature of expenditure incurred by GMR Varalaskhmi Foundation require examination. Under these set of facts, we are of the view that, in the interest of natural justice, the assessee may be provided with one more opportunity to explain its case before the AO. Accordingly, we set aside the order passed by the ld CIT(A) on this issue and restore the same to the file of the AO for examining this issue afresh - In the light of the order of the Tribunal, which has restored an identical issue to the files of the A.O., we restore the issue raised as regards the allowability of expenditure incurred on community development expenses to the files of the A.O. for de novo consideration
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