TMI Blog2016 (10) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... na and Ms. Anusha Singh ORDER Per Bench Challenging the order, dated 18/04/2011, of the CIT (A)-14, Mumbai, the Assessing Officer(AO)and the assessee have filed appeals/cross objections for the above-mentioned three AY. s, raising various grounds. As the issues involved in the appeals /Cross objections(CO. s. ) are common, so, for the sake of convenience, we are adjudicating all the matters by a single order. Assessee company is engaged in the business of operation of aircraft and other related activities. ITA/4982/Mum/2013-AY. 2008-09. Brief Facts: 2. A survey action u/s. 133A of the Act was conducted at the office premises of the assessee. On verification of the TDS-returns, it was found that the assessee had deducted tax at various rates for payments made to Mumbai International Airports Ltd. (MIAL) and Airports Authority of India, that it was deducting TDS @of 2% on exercises and Passenger Service Fees(PSF). The assessee was asked to explain as to why the TDS was deducted at 2% instead of 10%. Accordingly, a show cause notice, dated 24/ 01/ 2011, was issued calling for various details and to explain as to why the assessee should not be treated as an assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest (Rs.) Interest U/s. 201(1A)(Rs.) Total(Rs.) 24Q 2857620 1384620 330 4242570 26Q 1st 13715390 6230700 138690 65790 757800 20908370 26Q 2nd 9929880 4289280 1194290 513550 78500 16005500 26Q 3rd 10577670 4225800 14803470 26Q 4th 12603120 4664630 110 40 88350 17356250 Total 46826060 19410410 3084800 1964000 924980 73316160 The AO calculated short deduction of tax, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (345ITR288), Mahindra and Mahindra Ltd. (22DTR361), Vedanta Math(55 SOT470) and stated that the AO had not follow the provisions of section 191 of the Act. With regard to the nature of X-Ray charges paid to MIAL, the assessee further argued that it had entered into an agreement with MIAL to avail X-Ray services for the scanning of the cargo carried by the assessee to/from the Mumbai airport, that it was paying the screening charges at pre-agreed rates based on the total quantum of cargo, that the rates for the X-Ray screening facilities were better back by the Airports Economic Regulatory Authority of India. About PSF charges, the assessee contended same represented fees paid by the passengers for the provision of security and passengers facilitation services provided by MIAL, that assessee was required to collect PSF from embarking passengers and remit it to MIAL, that it was acting merely as a collecting agent of MIAL. It submitted a copy of notification dated 05/07/2004, issued by Government of India to the Airports Authority of India in connection with levy of PSF charges and stated that same constituted a statutory collection from passengers, that the airline companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te information being in certain fields of TDS return forms completed by the assessee, that it had already filed revised TDS returns in which the errors were corrected, that assessee could not be treated as an assessing the fourth for the principal amount of TDS on technical default, assessee would be liable to pay interest only till the date of payment of taxes by the payee or date of filing of return of income by the payee and not till date of order, that the AO had incorrectly computed interest on the alleged TDS default till the date of assessment order, that lower/middle withholding tax certificate, issued as per the provisions of section 197 of the Act, provided by MIAL covered both PSF charges and X-Ray charges, that the AO had wrongly held that the certificates covered only PSF charges. 3. 1. After considering the submission of the assessee and the order passed by the AO u/s. 201(1)/201(1A), the FAA held that PSF was collected by it was handed over to the relevant Airport Authority, that it had duly withheld tax at the rate of 2% u/s. 194C of the Act from payments of X-Ray charges and PSF charges to MIAL. He referred to Rule 88 of the Aircraft Rules and order, dated 09/05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ord. We find that the assessee had paid PSF and X-Ray charges to MIAL as per the agreement entered with it, that it had deducted tax at the rate of 2%, that the AO had held that the payment made by the assessee was covered by the provisions of section 194-I of the Act, that he treated the assessee in default for not deducting the taxed at higher rate, that it had hired a office premises at the international airport, that a separate agreement was entered into with regard to hiring of that premises, that it was deducting tax as per the provisions of section 194-I of the Act for the said premises. In our opinion PSF/X-Ray charges cannot be treated as rent as envisaged by section 194 I. In the case of Japan Airlines Co. Ltd. others(377 ITR 372)the Hon bel Apex Court has defined the word Rent as under: The expression rent is given a much wider meaning u/s. 194-I than is normally known in common parlance. In the first instance, it means any payment which is made under any lease, sub-lease, tenancy. Once the payment is made under lease, sub-lease or tenancy, the nomenclature which is given is inconsequential. Such payment under lease, sub-lease or tenancy would be treated as ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for services and facilities offered in connection with the aircraft operation at the airport, which included providing of air traffic services, ground safety services, aeronautical communication facilities, installation and maintenance of navigational aids and meteorological services at the airport. The Airport Economics Manual and the International Airports Transport Agreement among contracting States on charges for airport and air navigation services showed that there were various international protocols which mandated that all authorities manning and managing these airports construct airports of desired standards which were stipulated in the protocols. The services required to be provided by authorities like the Airports Authority of India were aimed at passengers safety as well as safe landing and parking of the aircraft. Therefore, it was not mere use of the land . On the contrary, it was the facilities, that were to be compulsorily offered by the Airports Authority of India in tune with the requirements of the protocol, which was the primary focus. For example, special technology was required for the construction of runways for smooth landing and take-off of the aircrafts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not given any right to use any demarcated space less place for the machinery of the cold storage and thus does not become a tenant. Therefore, the provisions of section 194 I is not applicable to the cooling charges paid by the customers of the cold storage. Applying the same technology, the PSF charges paid by the assessee on behalf of its customer, did not attract the provisions of section 194 I. After considering the above, we are of the opinion that the order of the FAA does not suffer from any legal or factual infirmity. Therefore, upholding his order, we decide the effective ground of appeal against the AO. CO/215/Mum/2014, AY. -2008 -09: 6. The grounds raised by the assessee, in the CO, are allowed for statistical purposes, as we have already decided the issue of applicability of provisions of section 194-I of the Act, against the AO i. e. in favour of the assessee. ITA. s. /2983-84/Mum/2013 CO. s. /216-17/Mum/2014-AY. s. 2009-10, 2010- 2011: 7. As the facts and circumstances of the appeals/cross objections are identical to the facts of the AY. 2008-09, except for the amounts involved, so, we dismiss the effective ground raised by the AO for both the years a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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