TMI Blog2018 (7) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... ntentions or debatable issues are not available for revision under section 263 of the Act. With this view of the matter, we find that in this set of facts and circumstances, the exercise of jurisdiction under section 263 of the Act by the Learned CIT cannot be sustained - decided in favour of assessee. - ITA No. 137/Del/2012 - - - Dated:- 5-7-2018 - SHRI R.S. SYAL, VICE PRESIDENT AND SHRI K.N. CHARY, JUDICIAL MEMBER For The Assessee : Sh. Ronak G.Doshi, FCA And Sh. Hardik Nirmal, CA For The Revenue : Ms. Rachna Singh, CIT DR ORDER PER K. NARSIMHA CHARY, J.M. Aggrieved by the order dated 31/10/2011 passed by the Ld. Commissioner of income tax, Delhi-IV, New Delhi ( Ld. CIT ) under section 263 of the income tax act, 1961 the assessee preferred this appeal. 2. Brief facts of the case are that the assessee company is engaged in developing, operating and maintaining airport and related infrastructure at the New Delhi airport. For the AY 2007-08, the assessee filed the return of income declaring a total loss of ₹ 150,55,30,337/- and revised its return of income on 30/03/2009 declaring a total loss of ₹ 149,48,78,939/-. During the scruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he revenue receipt on account of passenger service fee. Aggrieved by the order under section 263 of the Act, assessee preferred this appeal. 6. It is the argument of the Ld. AR that the passenger service fee is comprised of two components, namely, security component to the extent of 65% and facilitation component to the extent of 35%, collected by the respective airlines wherein the assessee is having control over the 35% only to meet the facilities that are provided to the passengers; whereas the assessee has no control whatsoever over the security component of 65%. It is further submitted that the passenger service fee for the time being in force is ₹ 200 per passenger out of which ₹ 130/-accounts for the security component. It is submitted that as per the Operation, Management and Development Agreement (OMDA) between the Airports Authority of India and a Delhi International Airport Private Ltd , security is a reserved activity. It is further submitted that the Standard Operating Procedure (SOP) for account/audit of passenger service fee prescribes the nature of security component of PSF and it requires the opening of an Escrow account wherein the airlines operator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no flexibility for using the funds elsewhere; that if it any amount is left unspent from this account, then the same has to be transferred to the account of Airport Authority of India permitting security expenses, as such there is no question of there being any income in this exercise much less any income which could be characterised as taxable income in the hands of the assessee company. 9. Basing on these facts and circumstances, it is argued by the Ld. AR that the security component of the PSF is not income in the hands of the assessee as is held by the Mumbai Tribunal in the above referred case. He further submitted that in any case it is a contentious issue not amenable to the jurisdiction of the Learned CIT under section 263 of the Act. 10. Para contra, it is the argument of the Ld. DR that in the Official Memorandum dated 30/06/2006 issued by the Central Board of Direct Taxes(CBDT), Department of Revenue, Ministry of Finance, Government of India it is clearly held that the statutory levies collected by an assessee in the course of its business to be eventually turned over to the Government is income within the meaning of the Income Tax Act (Chowringhee Sales Bure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Case (supra) cannot be followed. 14. The sum and substance of the argument of Ld. DR is that the proper course for the assessee was to declare the income relating to the PSF security component also as income and then to claim the deductions in consonance with the official memorandum dated 30/06/2008 issued by the CBDT in the light of the decision of the Hon ble apex court in Chowringhee Sales Bureau Private Limited (supra). With this view of the matter Ld. DR prayed to dismiss the appeal and to uphold the exercise of jurisdiction under section 263 of the Act by the Learned CIT. 15. We have carefully gone through the record. The OMDA is clear that the security is a reserved activity and out of ₹ 200/-collected by the airliner, ₹ 130/-related to the PSF security component. Further the SOP for account/audit of passenger service fee stipulates that there shall be an escrow account and the escrow bank shall allow the withdrawal by the JVC/private operators of amounts deposited into the PSF (SC) account only towards certain purposes that too to in the order of priority by descending order. The escrow Agreement dated 12/06/2006 clearly establishes that the withdrawal fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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