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2017 (1) TMI 450 - ITAT MUMBAI

2017 (1) TMI 450 - ITAT MUMBAI - TMI - TDS u/s 194I OR 194C - Short deduction of TDS - TDS on Passenger Service Fees - TDS on PSF and X-Ray charges to MIAL - Held that:- both the sides agreed that the issue raised by the AO in the appeal for the year under consideration is covered against him by the order of the Tribunal(2016 (10) TMI 314 - ITAT MUMBAI). - Decided against the revenue. - ITA/6397/Mum/2014 - Dated:- 3-1-2017 - Sh. Rajendra Accountant Member And Pawan Singh Judicial Member Revenue .....

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ther related activities. ITA/6397/Mum/2014-AY. 2011-12 2. During the course of hearing before us Representatives of both the sides agreed that the issue raised by the AO in the appeal for the year under consideration is covered against him by the order of the Tribunal(ITA. s. 4982-84/Mum/2013 AY. s. 2008-09 to 2010-11 dated 03. 08. 2016). 3. We find that the effective ground of appeal is about allowing relief of tax u/s. 201(1)and interest u/s. 201(1A)of the Act for short deduction of TDS on Pas .....

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ection 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 I .....

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other agreement or arrangement for the use of any land or any building would also be treated as rent . Whether or not such building is owned by the payee is not relevant. The expressions any payment by whatever name called and any other agreement or arrangement have the widest import. Likewise payment made for the use of any land or any building widens the scope of the proviso. A bare reading of the definition of rent contained in the Explanation to section 194- I would make it clear that in the .....

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such agreement or arrangement gives the definition of rent of very wide connotation. To that extent the scope of the definition of rent is wide and not limited to what is understood as rent in common parlance. The facts of the case were that the assessees were foreign airline companies which were members of the International Air Transport Agreement and during the relevant year serviced inward and outbound air traffic to and from India. The Airports Authority of India levied certain charges on t .....

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/s. 194C and not in the nature of rent as defined in section 194-I the Hon ble Apex Court held as follow: ………. the charges fixed by the Airports Authority of India for landing and take-off services as well as for parking of aircraft were not for the use of the land . These charges were 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 .....

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ided 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. Tec .....

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within the meaning of section 194-I of the Act. Respectfully following the above judgment we hold that payment made by the assessee to MIAL cannot be treated rent as per the provisions of section 194-I of the Act. There was no use of land by the assessee for both the charges collected by it. Thus the basic ingredient i. e. use of land plant machinery etc. is missing and hence it can safely be held that the assessee had rightly deducted the tax at the rate of 2% as per the provisions of section 1 .....

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