DCIT TDS 1(1), MUMBAI V. GO AIRLINES (I) LTD, MUMBAI

ITA 1500/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84518 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-12-2014
• Appeal Filed By: Department
• Bench Allotted: G
• Next Hearing Date: 13-10-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 22-02-2013
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ITA NO.1500/MUM/2013 ASSESSMENT YEAR: -2008-09 ITA NO.1501/MUM/2013 ASSESSMENT YEAR: -2010-11 ITA NO.1502/MUM/2013 ASSESSMENT YEAR: -2009-10 DCIT (TDS)-1(1), ROOM NO. 804, K.G. MITTAL HOSPITAL BLDG, CHARNI ROAD, MUMBAI. VS.` M/S GO AIRLINES (INDIA) LTD. PAPER BOOK HOUSE, OFF MAHAKALI CAVES ROAD, ANDHERI - 400093 PAN:- AAACG1936A APPELLANT RESPONDENT ORDER PER VIJAY PAL RAO, JM THESE THREE APPEALS BY THE REVENUE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF CIT(A) ALL DATED 19.11.2012 ARISING FROM ORDER P ASSED U/S 201(1)/201(1A) OF THE INCOME TAX ACT FOR THE A.Y. 2008-09 TO 2010-11. THE ASSESSEE HAS RAISED COMMON IN GROUNDS IN THESE APPEAL. GROUND RAISED FOR A.Y. 2008 -09 ARE AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE AMOUNT PAID BY GO AIRLINES (INDIA) LIMITED TO THE AIRPORT OPERA TOR AS PAYMENT OF PASSENGER SERVICE FEE (PSF) IS NOT IN THE NATURE OF RENT AS DEFINED U/S. 1941 OF THE ACT. 2. LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLD ING THAT GO AIRLINES (INDIA) LTD. WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S. 1941 OF THE I. T. ACT, 1961. REVENUE BY SHRI KISHAN VYAS ASSESSEE PERCY PARDIWALA DATE OF HEARING 15.12.2014 DATE OF PRONOUNCEMENT 15.12.2014 M/S GO AIRLINES (INDIA) LTD 2 | P A G E 3.0N THE FACTS AND CIRCUMSTANCES OF THE CASE AND AL SO IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT MAJOR PORTION OF THE PASSENGER SERV ICE FEES( PSF) PAYMENT MADE BY THE ASSESSEE IS FOR MEETING THE SECURITY RELATED EXPENSES. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND A LSO IN LAW, THE L'D CLT(A) ERRED IN HOLDING THAT THE ACTION OF THE AO OF TREATING TH E ASSESSEE AS ASSESSEE IN DEFAULT U/S 201/201(LA) WAS UNWARRANTED AND NOT JUSTIFIED. 2. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND C ONSIDERED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, WE NOTE THAT AN IDENTICAL ISSUE WAS CONSIDERED AND DECIDED BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL I N THE CASE OF JET AIRWAYS VIDE ORDER DATED 23 RD OCTOBER 2013 IN ITA NO. 5264/MUM/2012 IN PARA 12 T O 15 AS UNDER:- 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE RELEVANT MATERIAL EVIDENCE BROUGHT ON RECORD. LET US FIRST SEE THE CAUSE OF PSF, CAUSE LIES IN RU LE 88 OF THE INDIAN AIRCRAFT RULES, 1937, WHICH PROVIDES AS UNDER :- THE LICENSEE IS ENTITLED TO COLLECT FEES TO BE CAL LED AS PASSENGERS SERVICES FEES(PSF) FROM THE EMBARKING PASSENGERS AT SUCH RAT E AS THE CENTRAL GOVERNMENT MAY SPECIFY AND IS ALSO LIABLE TO PAY FO R SECURITY COMPONENT TO ANY SECURITYAGENCY DESIGNATED BY THE CENTRAL GOV ERNMENT FOR PROVIDING THE SECURITY SERVICES A PERUSAL OF THE AFOREMENTIONED RULE CLEARLY SHOWS THAT IT IS A STATUTORY LIABILITY FOR EVERY LICENSEE TO COLLECT PSF. SINCE IT IS A ST ATUTORY LIABILITY AND THE MEANING GIVEN BY THE STATUTE HAS TO BE CONSIDERED AND IN TH IS CASE THE INDIAN AIRCRAFT RULES, 1937 HAS USED THE TERM FEES, THEREFORE, SA ME MEANING HAS TO BE GIVEN WHILE CONSIDERING THE PSF. IT IS NOT IN DISPUTE THA T THE ASSESSEE IS ONLY ACTING AS A CONDUIT BETWEEN THE EMBARKING PASSENGERS AND THE CE NTRAL GOVERNMENT AGENCY. THIS VIEW IS ALSO FORTIFIED BY THE FACT THAT OUT OF RS.200/-, RS.130/- IS THE SECURITY COMPONENT, WHICH IS DEPOSITED IN A SEPARATE ESCROW ACCOUNT, WHICH IS OPERATED AND CAN BE UTILIZED BY AIRPORT CONCERNED ONLY TO ME ET THE SECURITY RELATED EXPENSES OF THAT AIRPORT. 13. FURTHER IT IS PERTINENT TO NOTE THAT THE CBDT I N ITS OFFICE MEMORANDUM DATED 30-06-2008 HAS CLEARLY STATED THE FACT THAT THE LIC ENSEE OF THE AIRPORT I.E. THE AIRPORT OPERATOR, IS REQUIRED TO COLLECT THE PSF IS INITIALLY COLLECTED BY THE CONCERNING AIRLINES FROM THE PASSENGERS AND THEN HA NDED OVER TO THE RESPECTIVE AIRPORT OPERATOR/AUTHORITY. THUS, IT IS ABSOLUTELY CLEAR THAT THE ASSESSEE ONLY COLLECTS THE PSF FROM THE PASSENGERS FOR AND ON BEH ALF OF THE AIRPORT AUTHORITY/OPERATOR AND PASSES THE SAME TO THE AIRPO RT AUTHORITY/OPERATOR. THIS M/S GO AIRLINES (INDIA) LTD 3 | P A G E VIEW WOULD ALSO BE MADE VERY CLEAR BY THE ANSWER TO QUESTION NO.24 GIVEN BY THE CBDT IT IS CIRCULAR NO.715, DATED 8TH AUGUST, 1995, WHICH RELATES TO CLARIFICATION OF VARIOUS PROVISIONS RELATING TO TAX DEDUCTION AT SOURCE. QUESTION NO.24 READS AS UNDER :- QUESTION 24 : WHETHER IN A CASE OF COMPOSITE ARRAN GEMENT FOR USER OF PREMISES AND PROVISION OF MANPOWER FOR WHICH CONSID ERATION IS PAID AS A SPECIFIED PERCENTAGE OF TURNOVER, SECTION 194-I OF THE ACT WOULD BE ATTRACTED ? ANSWER : IF THE COMPOSITE ARRANGEMENT IS IN ESSENCE THE AGREEMENT FOR TAKING PREMISES ON RENT, THE TAX WILL BE DEDUCTED U NDER SECTION 194-I FROM PAYMENTS THEREOF. THE FACTS UNDER CONSIDERATION SHOW THAT THE PSF IS A STATUTORY LIABILITY WITHOUT DEMARCATING/EARMARKING THE AREA TAKEN ON RENT , NOR IT IS A CASE OF SYSTEMATIC USE OF LAND SPECIFIED FOR CONSIDERATION UNDER AN ARRANGEMENT, WHICH CARRIES THE CHARACTERISTICS OF LEASE OR TENANCY. A MERE USE OF THE LAND AND PAYMENT CHARGED, WHICH IS NOT FOR THE USE OF THE LAND BUT FOR MAINTE NANCE OF THE VARIOUS SERVICES INCLUDING TECHNICAL SERVICES WOULD NOT TECHNICALLY BRING THE TRANSACTION AND THE CHARGES WITHIN THE MEANING OF EITHER LEASE OR SUB-L EASE OR TENANCY OR ANY OTHER AGREEMENT OR ARRANGEMENT OR ANY NATURE OF LEASE OR TENANCY AND RENT. FOR THESE OBSERVATIONS, WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SINGAPORE AIRLINES LTD ., REPORTED IN ( 2012) 252 CTR (MAD) 429. 14. IT WOULD NOT BE OUT OF PLACE TO CONSIDER THE CB DT CIRCULAR NO.1/2008, DATED 10TH JANUARY, 2008 RELATING TO THE CLARIFICATION RE GARDING THE APPLICABILITY OF PROVISIONS OF SECTION 194-I OF THE ACT TO PAYMENTS MADE BY THE CUSTOMERS ON ACCOUNT OF COOLING CHARGES TO THE COLD STORAGE OWNE RS, WHEREIN THE CBDT HAD THE OCCASION TO CONSIDER THE REPRESENTATIONS IN RESPECT OF THE ISSUE, WHETHER THE CUSTOMER HIRES THE BUILDING, PLANT AND MACHINERIES ETC., WITHOUT PACKAGES FOR RESERVATION FOR A REQUIRED PERIOD ARE KEPT IN COLD STORAGE AFTER PAYING COOLING CHARGES. THE CBDT, THUS, CLARIFIED THAT THE CUSTOME R IS ALSO NOT GIVEN ANY RIGHT TO USE ANY DEMARCATED SPACE/PLACE OR THE MACHINERY OF THE COLD STORAGE AND THUS DOES NOT BECOME A TENANT. THEREFORE, THE PROVISIONS OF 194-I IS NOT APPLICABLE TO THE COOLING CHARGES PAID BY THE CUSTOMERS OF THE CO LD STORAGE. APPLYING THE SAME ANALOGY, THE PSF CHARGES PAID BY THE ASSESSEE ON BE HALF OF ITS CUSTOMERS, DO NOT ATTRACT THE PROVISIONS OF SECTION 194-I OF THE ACT. 15. CONSIDERING ALL THESE JUDICIAL DECISIONS IN THE LIGHT OF THE FACTS OF THE CASE, WE DO NOT FIND ANY ERROR/OMISSION IN THE FINDINGS O F THE CIT(A). HENCE, THE ASSESSEE SUCCEEDS AND THE REVENUE FAILS AND THE FIN DINGS OF THE CIT(A) ARE CONFIRMED. ACCORDINGLY, GROUNDS NO.1 & 2 ARE HEREBY DISMISSED. M/S GO AIRLINES (INDIA) LTD 4 | P A G E 3. NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOT ICE. ACCORDINGLY FOLLOWING THE EARLIER ORDER OF THIS TRIBUNAL, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF CIT(A) QUA THIS ISSUE. 4. IN THE RESULT APPEALS OF THE REVENUE ARE DISMISS ED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF DECEMBER 2014. ( D. KARUNAKARA RAO ) (VIJAY PAL RAO) (ACCOUNTANT MEMBER/ YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; ) (JUDICIAL MEMBER/ U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; ) MUMBAI DATED 15-12-2014 SKS SR. P.S, COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, G BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI