TMI Blog2019 (5) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Mr.A.R. Malhotra appearing for the revenue that service of providing beverages and refreshments was not the dominant part of service. It may only be incidental to providing quiet, comfortable and clean place for customers to spend some spare time. We do not descreen element of rent being paid by the assessee to the agency. The assessee did not rent out the premises. The assessee did not have exclusive use to the lounge for its customers. The customers of the Airlines along with customers of other Airlines of specified categories, would be allowed to use all such facilities. Section 194I governs the situation where a person is responsible for paying any rent. In such a situation deduction of tax at source while making such payment is obligated. We do not find that the revenue is correct in invoking section 194I of the Act. - Decided against revenue. - Income Tax Appeal No.628 OF 2018 - - - Dated:- 23-4-2019 - Akil Kureshi And Sarang V. Kotwal, JJ. Mr.A.R. Malhotra, Advocate for Appellant. Mr.Percy Pardiwalla, Senior Counsel, a/w Mr.Atul Jasani, Advocate for Respondent. P.C. : 1. This Appeal is filed by the revenue to chal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the charge collected by the Bank for such service, does not amount to commission within the meaning of Section 194H of the Act. 3. The decision of the Delhi High Court in the case of JDS Apparels P. Ltd., (supra) was also rendered in the background of the Revenue's contention of breach of Section 194H of the Act in connection with the credit card charges. The Court, after analyzing the provisions contained in Section 194H of the Act, held and observed as under: 15: Applying the above cited case law to the factual matrix of the present case, we feel that section 194H of the Act would not be attracted. HDFC was not acting as an agent of the respondent assessee. Once the payment was made by HDFC, it was received and credited to the account of the respondentassessee. In the process, a small fee was deducted by the acquiring bank, i.e. the bank whose swiping machine was used. On swiping the credit card on the swiping machine, the customer whose credit card was used, got access to the internet gateway of the acquiring bank resulting in the realization of payment. Subsequently, the acquiring bank realized and recovered the payment from the bank which had issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and treated as services rendered by an agent for the principal during the course of buying or selling of goods as the banker does not render any service in the nature of agency. 4 In view of the decision of the Delhi High Court in JDS Apparels P. Ltd., (supra), we do not find that Tribunal has committed any error. No question of law arises. 5 In order dated 4th December, 2018 in Income Tax Appeal No.769 of 2016, in somewhat similar circumstances, following observations were made: Learned counsel for the Revenue stated that the Revenue had filed an appeal against the judgment of the Tribunal in case of Kotak Securities Ltd., but that the appeal was withdrawn on the ground of low tax effect. He has, however, made available a copy of the judgment of the Tribunal in the said case which contains a detail discussion on the issue at hand. In the said judgment, the Tribunal referred to Section 194H of the Act which requires an assessee responsible for paying any income by way of commission or brokerage to deduct tax at source. The Tribunal was of the opinion that the words commission or brokerage must make colour from each other. The Tribunal was of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard learned Counsel for the parties and having perused documents on record, we notice that the Assessing Officer in the present case, had placed reliance on a decision of Delhi High Court in case of Japan Airlines Ltd., reported in (2009) 325 ITR 298 and United Airlines (2006) 287 ITR 281. We may however note that the Supreme Court in case of Japan Airlines Company limited reported in (2015) 377 ITR 372 has overrulled such decision of Delhi High Court. Supreme Court approved the view of Madras High Court in case of CIT Vs Singapore Airlines Ltd. reported in (2013) 358 ITR 237. The issue before the Supreme Court was regarding nature of payments made by the international Airlines to the Airport Authority of India for availing the services for the purpose of landing and take off of the Aircrafts. The revenue was of the opinion that the charges paid for such purposes were in the nature of rent for use of land, a view which was accepted by the Delhi High Court in the above noted judgment. The Supreme Court in the judgment in case of Japan Airlines (supra) held that the charges paid by the international Airlines for landing and take off services as also for parking of Aircrafts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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