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2015 (12) TMI 97 - ITAT MUMBAI

2015 (12) TMI 97 - ITAT MUMBAI - TMI - Deduction of tax at source on ‘berth hire charges paid to Mumbai Port Trust - TDS u/s 194C or 194I - Held that:- The parity of reasoning laid down by the Hon’ble Supreme Court in the case of Japan Airlines Co. Ltd. (2015 (8) TMI 185 - SUPREME COURT) are required to be applied to the present case also. As per Hon’ble Supreme Court to treat the charges paid to the Airport Authority of India as merely for use of land would a be simplistic approach and that one .....

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to Mumbai Port Trust in terms of section 194C of the Act as contractual charges - Decided in favour of assessee. - ITA No.7017/MUM/2013, ITA No.7018/MUM/2013 - Dated:- 31-8-2015 - SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER For The Assessee : Shri Harsh Shah For The Revenue : Shri Akhilendra Yadav ORDER PER G.S.PANNU, A.M: The captioned are two appeals by the assesee for assessment years 2008- 09 and 2010-11 and one appeal by the Revenue for assessment year 2009-10 ag .....

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hat it is a partnership firm engaged in the business of shipping agency and it inter-alia, provides stevedoring and bulk cargo operations, clearing & forwarding, shipping logistics support services and project logistics amongst other services. It was noticed that assessee made payments on Mumbai Port Trust towards various charges including berth hire charges to which tax was deducted at source in terms of section 194C of the Act as contractual charges. As per Assessing Officer such payments .....

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/- Amount of TDS as per AO applying rate prescribed u/s 194I 7,90,850/- 25,12,914 27,81,281/- Shortfall in deduction of taxes and assessee u/s 201(1) 3,95,426/- 11,91,243 8,03,704/- Interest u/s 201(1A) of the act 181896/- 381198/- 1,84,852/- 4. Against the aforesaid, in so far as the assessment years 2008-09 and 2010-11 are concerned, the CIT(A) vide orders dated 24/09/2013 held the issue against the assessee by referring to the judgement of Hon ble Delhi High Court in the case of United Airlin .....

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apore Airlines Ltd., vs. ITO (2006) 7 SOT 84 (Chennai). Therefore, whereas the assessee is in appeal for assessment year s 2008-09 and 2010-11, for assessment year 2009-10 the Revenue is in appeal on the singular Ground relating to the nature of payments made to Mumbai Port Trust on account of berth hire charges . 5. Before us, the Ld. Representative for the assessee submitted that the decision of the Chennai Bench of the Tribunal in the case of Singapore Airlines Ltd. (supra), which has been re .....

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I of the Act. 7. We have carefully considered the rival submissions. Notably, the Hon ble Supreme Court in a recent decision in the case of Japan Airlines Co. Ltd. Vs. CIT, (2015) 60 taxmann.co 71(SC) has disproved the judgement of the Hon ble Delhi High Court in the case of United Airlines (supra) and has instead approved the contrary view rendered by the Hon ble Madras High Court in the case of Singapore Airlines Ltd. (supra). The issue before the Hon ble Supreme Court related to the amounts p .....

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use of the land. On the contrary, the protocol prescribes a detailed methodology of fixing these charges. Chapter 4 of Airport Economics Manual issued by International Civil Aviation Organization deals with 'Determine the cost basis for charging purposes'. The charges on air-traffic which includes Landing Charges, Lighting Charges, Approach and Aerodrome Control Charges, Aircraft Parking Charges, Aerobridge Charges, Hangar Charges, Passenger Service Charges, Cargo Charges etc. are to be .....

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mind, it becomes very clear that the charges are not for use of land per se and, therefore, it cannot be treated as 'rent within the meaning of Section 194-1 of the Act. 22. We, therefore, are of the considered opinion that the view taken by the Madras High Court is correct and we are unable to subscribe to the view taken by Delhi High Court in United Airlines case. The judgment in United Airlines case as well as the impugned judgment of the Delhi High Court are accordingly over-ruled. 7.1 .....

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poses of section 194-I of the Act. In our considered opinion, in the present case what is of relevance is to examine the substance of the transaction namely the exact scope and services rendered by Mumbai Port Trust in return of receiving berth hire charges. In this context, Ld. Representative for the assessee has referred to the following assertions made before the CIT(A):- 1. Berth hire charges are fixed and realized according to the provisions under section 48 and 49 of Major Port Trusts Act, .....

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