TMI Blog2008 (10) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Prakash Kumar for the Respondent JUDGMENT The judgment of the court was delivered by BADAR DURREZ AHMED, J (ORAL) - 1. These appeals under Section 260A of the Income Tax Act, 1961 arise out of the common order dated 31.03.2008 passed by the Income Tax Appellate Tribunal in ITA Nos. 96-97/Del/2002 relating to the assessment years 1996-1997 and 1997-1998. 2. The limited question that arose for consideration before the Tribunal was whether the recovery/ adjustment of rent from CSC Private Limited by the assessee (KLM) was an income chargeable to tax in India. This question arose in the backdrop of Articles 6 and 8 of the Double Taxation Avoidance Agreement between India and the Netherlands. There is no dispute that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received'. 5. The exact nature of the transaction was that the assessee was required to pay licence fee / rent to Airport Authority of India for use of the space for cargo handling. The assessee had entered into an agreement with CSC for handling its cargo at Bombay. The payment made by the assessee to CSC was after adjustment of the licence fee / rent paid by KLM to Airport Authority of India. This adjustment was treated by the department as income of the assessee chargeable to tax in India under Article 6 of the said Double Taxation Avoidance Agreement. 6. The Commissioner of Income Tax (Appeals) also confirmed the view taken by the Assessing Officer. 7. However, the Income Tax Appellate Tribunal, after examining the entire m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Agreement were not applicable. The Tribunal ultimately held that the assessee did not derive any income other than the profits from the operation of aircrafts in international traffic and, hence, in terms of Article 8, the same was not subject to tax in India but was subject to tax in the Netherlands as, admittedly, the effective management of the assessee was situated outside India and in the Netherlands. The additions made by the Assessing Officer and the Commissioner of Income Tax (Appeals) were consequently deleted. 9. The Tribunal also accepted the alternative contention raised on behalf of the assessee that even if the recovery of rent was to be treated as an income from other sources at the hands of the assessee, since an id ..... X X X X Extracts X X X X X X X X Extracts X X X X
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