ASST CIT (TDS) 3(1), MUMBAI V. JET LITE (I) LTD, MUMBAI

ITA 6960/MUM/2013

• Counselvise Citation: 696019914 RSA 2013
• Duration Of Justice: 1 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2015
• Appeal Filed By: Department
• Bench Allotted: J
• Assessment Year: 2009-2010
• Appeal Filed On: 29-11-2013
• Court: TRIBUNAL
• Department Lawyers: VANDANA SAGAR
• Section: 194C; 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH MUMBAI . , . . , BEFORE SHRI D. MANMOHAN, VP & SHRI R.C.SHARMA , A M ./ ITA NO. 6960 / MUM/20 1 3 ( / ASSESSMENT YEAR : 20 0 9 - 10 ) ACIT (TDS) - 3(2), MUMBAI VS. M/S JET LITE (INDIA) LTD., S.M.CENTRE, ANDHERI KURLA ROAD, MUMBAI ./ ./ PAN/GIR NO. : A A DCS 4480 L ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : MS. VANDANA SAGAR /ASSESSEE BY : SHRI NIRAV PODDAR / DATE OF HEARING : 2 8 TH A PRIL , 201 5 / DATE OF PRONOUNCEMENT 08 - 07 - 2015 / O R D E R PER R.C.SHARMA (A.M) : TH IS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 14, MUMBAI , DATED 26 - 9 - 2013 FOR THE ASSESSMENT YEAR 200 9 - 2010 , IN THE MATTER OF IMPOSITION OF PENALTY U/S.271C OF THE I.T.ACT. 2. AT THE OUTSET, LD. AR PLACE D ON RECORD ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, DATED 9 - 7 - 2014 , WHEREIN DISALLOWANCE MADE FOR NON - DEDUCTION OF TAX WAS DELETED BY THE TRIBUNAL. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. THE AO HAS LEVIED PENALTY U/S.271C BY DISALLO WING PASSENGERS FEES ON THE PLEA THAT TDS WAS REQUIRED TO BE DEDUCTED AT SOURCE. SIMILARLY THE AO ALSO LEVIED PENALTY BY DISALLOWING CARGO HANDLING CHARGES PAID WITHOUT ITA NO. 6960 / 1 3 2 DEDUCTION OF TAX AT SOURCE. WE FOUND THAT THE TRIBUNAL HAS DELETED THE DISALLOWANCE IN ASSESSEES OWN CASE VIDE ORDER DATED 9 - 7 - 2014 BY OBSERVING AS UNDER : - 8. FROM THE ABOVE, WE FIND THAT WHILE DECIDING THE ISSUE OF WHETHER THE CARGO HANDLING CHARGES PAID BY THE ASSESSSEE ATTRACTS THE PROVISIONS OF SECTION 194C OR 194J, THE CIT (A) HAS RI GHTLY ADJUDICATED THE ISSUE BY FOLLOWING THE EARLIER YEARS ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE ORDER OF THE ITAT, DELHI IN THE CASE OF GLAXO SMITHKLINE CONSUMER HEALTHCARE LTD (SUPRA). CONSIDERING THE SETTLED POSITION OF THE ISSUE AND RESPECT FULLY FOLLOWING THE ORDER OF THE ITAT, DELHI BENCH, WE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) IN DELETING THE DEMAND OF TAX U/S 201(1) OF THE ACT IN RESPECT OF CARGO HANDLING CHARGES IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERF ERENCE. ACCORDINGLY, GROUNDS NO.(I) TO (IV) RAISED BY THE REVENUE ARE DISMISSED . 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED ORDER OF THE TRIBUNAL IN THE CASE OF JET AIRWAYS (INDIA) LTD (SUP RA), DATED 23.10.2013. ON PERUSAL OF THE SAID ORDER OF THE TRIBUNAL, WE FIND THE PARAS 12 TO 14 ARE RELEVANT IN THIS REGARD AND THE SAME ARE REPRODUCED HERE UNDER: 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTH ORITIES BELOW AND THE RELEVANT MATERIAL EVIDENCE BROUGHT ON RECORD. LET US FIRST SEE THE CAUSE OF PSF, CAUSE LIES IN RULE 88 OF THE INDIAN AIRCRAFT RULES, 1937, WHICH PROVIDES AS UNDER : 'THE LICENSEE IS ENTITLED TO COLLECT FEES TO BE CALLED AS PASSENGE RS SERVICES FEES(PSF) FROM THE EMBARKING PASSENGERS AT SUCH RATE AS THE CENTRAL GOVERNMENT MAY SPECIFY AND IS ALSO LIABLE TO PAY FOR SECURITY COMPONENT TO ANY SECURITY AGENCY DESIGNATED BY THE CENTRAL GOVERNMENT FOR PROVIDING THE SECURITY SERVICES' A PER USAL OF THE AFOREMENTIONED RULE CLEARLY SHOWS THAT IT IS A STATUTORY LIABILITY FOR EVERY LICENSEE TO COLLECT PSF. SINCE IT IS A STATUTORY LIABILITY AND THE MEANING GIVEN BY THE STATUTE HAS TO BE CONSIDERED AND IN THIS CASE THE INDIAN AIRCRAFT RULES, 1937 H AS USED THE TERM 'FEES', THEREFORE, SAME MEANING HAS TO BE GIVEN WHILE CONSIDERING THE PSF. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS ONLY ACTING AS A CONDUIT BETWEEN THE EMBARKING PASSENGERS AND THE CENTRAL GOVERNMENT AGENCY. THIS VIEW IS ALSO FORTIFIED B Y THE FACT THAT OUT OF RS.200/ - , RS.130/ - IS THE SECURITY COMPONENT, WHICH IS DEPOSITED IN A SEPARATE ESCROW ACCOUNT, ITA NO. 6960 / 1 3 3 WHICH IS OPERATED AND CAN BE UTILIZED BY AIRPORT CONCERNED ONLY TO MEET THE SECURITY RELATED EXPENSES OF THAT AIRPORT. 13. FURTHER IT IS PERTINENT TO NOTE THAT THE CBDT IN ITS OFFICE MEMORANDUM DATED 30 - 06 - 2008 HAS CLEARLY STATED THE FACT THAT THE LICENSEE OF THE AIRPORT I.E. THE AIRPORT OPERATOR, IS REQUIRED TO COLLECT THE PSF IS INITIALLY COLLECTED BY THE CONCERNING AIRLINES FROM THE PA SSENGERS AND THEN HANDED 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 BEHALF OF THE AIRPORT AUTHORITY/OPERATOR AND PASSES THE SAME TO THE AIRPORT AUTH ORITY/OPERATOR. THIS 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.2 4 READS AS UNDER : 'QUESTION 24 : WHETHER IN A CASE OF COMPOSITE ARRANGEMENT FOR USER OF PREMISES AND PROVISION OF MANPOWER FOR WHICH CONSIDERATION IS PAID AS A SPECIFIED PERCENTAGE OF TURNOVER, SECTION 194 - I OF THE ACT WOULD BE ATTRACTED ? ANSWER : I F THE COMPOSITE ARRANGEMENT IS IN ESSENCE THE AGREEMENT FOR TAKING PREMISES ON RENT, THE TAX WILL BE DEDUCTED UNDER SECTION 194 - I FROM PAYMENTS THEREOF.' THE FACTS UNDER CONSIDERATION SHOW THAT THE PSF IS A STATUTORY LIABILITY WITHOUT DEMARCATING/EARMARK ING 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 LAN D BUT FOR MAINTENANCE OF THE VARIOUS SERVICES INCLUDING TECHNICAL SERVICES WOULD NOT TECHNICALLY BRING THE TRANSACTION AND THE CHARGES WITHIN THE MEANING OF EITHER LEASE OR SUB - LEASE OR TENANCY OR ANY OTHER AGREEMENT OR ARRANGEMENT OR ANY NATURE OF LEASE O R TENANCY AND RENT. FOR THESE OBSERVATIONS, WE DRAW SUPPORT FROM THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V. SINGAPORE AIRLINES LTD. [2012] 209 TAXMAN 581/24 TAXMANN.COM 200. 14. IT WOULD NOT BE OUT OF PLACE TO CONSIDER THE CBDT C IRCULAR NO.1/2008, DATED 10TH JANUARY, 2008 RELATING TO THE CLARIFICATION REGARDING 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 OWNERS, 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 CB DT, THUS, CLARIFIED THAT THE CUSTOMER IS ALSO NOT GIVEN ANY RIGHT TO USE ANY DEMARCATED SPACE/PLACE OR THE MACHINERY OF THE COLD ITA NO. 6960 / 1 3 4 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 COLD STORAGE. APPLYING THE SAME ANALOGY, THE PSF CHARGES PAID BY THE ASSESSEE ON BEHALF OF ITS CUSTOMERS, DO NOT ATTRACT THE PROVISIONS OF SECTION 194 - I OF THE ACT. 17. FURTHER, WE HAVE ALSO PERUSED THE ORDER OF THE CIT (A) IN GENER AL AND PARA 4.3 IN PARTICULAR. ON PERUSAL OF THE SAID PARA 4.3, WE FIND THE SAME IS RELEVANT HERE AND THE SAME READS AS UNDER: 4.3. SINCE, THE FACTS IN THE CURRENT YEAR ARE SAME, I ACCORDINGLY HOLD THA T THE PAYMENTS IN REGARD TO THE PASSENGER SERVICE FEE (PSF) ARE NOT IN THE NATURE OF RENT AND ALSO THAT THE APPELLANT WAS NOT LIABLE TO DEDUCT TDS ON THE PSF PAYMENTS TO AIRPORT OPERATORS WHICH ARE COLLECTED BY THE APPELLANT FROM THE PASSENGERS ON BEHALF OF AIRPORT OPERATORS. ACCORDINGLY, THE DEMAND OF TAX U NDER SECTION 201(1) AND INTEREST U/S 201(1A) OF THE ACT AGGREGATING TO RS. 2,29,02,139/ - IN RESPECT OF PSF PAYMENTS IS HEREBY DIRECTED TO BE DELETED. 18. FROM THE ABOVE IT IS CLEAR THAT THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE ORDER OF T HE TRIBUNAL IN THE CASE OF JET AIRWAYS (INDIA) LTD (SUPRA). THEREFORE, CONSIDERING THE SAME AND RESPECTFULLY FOLLOWING THE SAID ORDER OF THE TRIBUNAL (SUPRA), WE ARE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES N OT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS NO.(I) & (II) RAISED BY THE REVENUE ARE DISMISSED. 5. AS THE TRIBUNAL HAS ALREADY DELETED THE DISALLOWANCE MADE ON ACCOUNT OF PAYMENT MADE FOR CARGO HANDLING CHARGES, PASSENGERS SERVICE FEES MADE BY THE AO ON ACCOUNT OF NON - DEDUCTION OF TAX AT SOURCE, THE PENALTY IMPOSED U/S.271C HAS NO LEGS TO STAND. 6 . I N THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 08/07 / 201 5 . SD / - SD / - ( . ) ( D.MANMOHAN ) ( . . ) ( R.C.SHARMA ) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED 08/07 / 201 5 . . /PKM , . / PS ITA NO. 6960 / 1 3 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6 . / GUARD FILE. //TRUE COPY//