TMI Blog2005 (7) TMI 581X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that section 194-I is not applicable with regard to payment of landing and parking charges. However, the Delhi Bench of this Tribunal found that the payment attracts the provisions of section 194C since there was a contract between the assessee-company and the International Airport Authority of India. Therefore, the assessee is liable to deduct tax at the rate of 2%. By following the decision of Delhi Bench of this Tribunal in the case of Japan Airlines (supra) and for the very same reasons stated therein, we hold that the payment of landing and parking charges cannot be termed as payment of rent. Therefore, the provisions of section 194-I is not attract. As held by the Delhi Bench of this Tribunal, the payment attracts the provisions of section 194C. Therefore, the assessee is liable to deduct tax at the rate of 2%. Navigational facilities - In view of the clarification made by the learned counsel for the assessee that the assessee was in fact getting technical services apart from using the equipments for the purpose of communication between the aircraft and the air traffic controller, in our opinion, the provisions of section 194J would be applicable. Accordingly the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals, we heard the same together and disposing of the same by this common order. 2. Mr. R. Vijayaraghavan, the learned counsel for the assessee submitted that the assessee paid charges to International Airport Authority of India towards landing and parking charges. The learned counsel for the assessee further submitted that the assessee has also paid charges for navigational facilities. However, the assessee has not deducted tax at source before making the payment. According to the learned counsel, the recipient of the amount namely International Airport Authority of India has paid the entire tax due on the amount paid by the assessee. Therefore, the assessee cannot be treated as assessee-in-default under section 201(1) of the Income-tax Act. According to the learned counsel, the Assessing Officer treated the payment made by the assessee towards landing and parking charges as rent and ultimately concluded that the assessee ought to have deducted 20% of the amount paid to International Airport Authority of India as tax at source under section 194-I of the Income-tax Act. Since the assessee has not deducted tax at source before making the payment, the Assessing Officer has also l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cell phone subscribers under section 194J. On a specific query from Bench whether the assessee is utilizing the equipments installed by the International Airport Authority of India or getting any other service apart from using the equipments, the learned counsel for the assessee Mr. R. Vijayaraghavan very fairly conceded that the assessee apart from using equipments for navigation, also getting other technical services for which the payments were made. According to the learned counsel, the technical services are like getting weather report, instruction to over flights to fly over Indian territories, such other technical services which are needed to fly the aircraft on the Indian territory. The learned counsel for the assessee Mr. R. Vijayaraghavan clarified that the navigational facilities are not just like using the cell phone subscribers, the sophisticated equipments installed by cell phone companies for the purpose of communication. Therefore, he very fairly conceded the judgment of the Madras High Court in the case of Skycell Communications Ltd. ( supra ) may not be applicable to the facilities and technical services offered by International Airport Authority of India to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Airport Authority of India as tax at source. Moreover, the amount paid for getting navigational facilities has to be treated as fees paid on technical services. Therefore, the assessee has to deduct tax at source at the time of making payment under section 194J. 6. Coming to the levy of interest under section 201(1A), the learned D.R. submitted that since the assessee has not deducted tax at source either under section 194-I in respect of landing and parking charges or under section 194J in respect of navigational charges, the Assessing Officer rightly levied tax till the month of October 1999. 7. We have considered the rival submissions on either side, and also perused the material available on record. The first issue is regarding the liability of the assessee for deduction of tax at source with respect to payment for landing and parking facilities. The only contention of the Revenue is that the landing and parking facilities provided by International Airport Authority of India is in the nature of providing a space for rent, therefore, the payment has to be treated as payment of rent. This issue has been elaborately discussed by the Delhi Bench of this Tribunal in the case of Ja ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r opinion, the provisions of section 194J would be applicable. Accordingly the assessee ought to have deducted tax as provided under section 194J in respect of payment made for navigational facility. 9. Now coming to the application of section 201(1) and 201(1A), admittedly, the assessee failed to deduct tax at source and it is also an admitted fact that the International Airport Authority of India had paid taxes on the amount received from the assessee-company also. Hence, in our opinion, the assessee need not be treated as assessee-in-default. Under the scheme of the Income-tax Act, the deduction of tax at source is only to ensure collection of tax on behalf of Government. Once the recipient paid the tax, the purpose or object sought to be achieved under the scheme of the Act is achieved. Therefore, the tax need not be once again recovered from the assessee. The question of declaring the assessee as assessee-in-default would arise when the recipient failed to pay the tax. Since the recipient company, admittedly, paid the tax, in our opinion, any further recovery from assessee would amount to double taxation which is not permissible under the Act. Accordingly, we hold that there i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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