Delhi High Court
Commissioner Of Income Tax, Delhi ... vs M/S. Japan Airlines Co. Ltd. on 23 October, 2008
Author: Badar Durrez Ahmed
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 23.10.2008
+ ITA 652/2006
COMMISSIONER OF INCOME TAX ,
DELHI - XVII ... Appellant
- versus -
M/S. JAPAN AIRLINES CO. LTD. ... Respondent
Advocates who appeared in this case:
For the Appellant : Mr R.D. Jolly
For the Respondent : Mr Y.K. Kapoor with Ms Rajni Mahajan
CORAM:-
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE RAJIV SHAKDHER
1. Whether Reporters of local papers may be allowed to
see the judgment ?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be reported in Digest ?
BADAR DURREZ AHMED, J (ORAL)
Admit.
2. The following substantial questions of law arise for our
consideration:-
1) Whether the Income-tax Appellate Tribunal was
correct in law in holding that the landing / parking
charges paid by the assessee to the Airports
Authority of India were payments for a contract of
work under Section 194-C of the Income-tax Act,
1961 and not in the nature of rent as per Section
194-I of the said Act ?
2) Whether the Income-tax Appellate Tribunal was
correct in law in holding that the respondent was not
an assessee in default in respect of payments of
landing / parking charges to the Airports Authority of
India under Section 194-I of the said Act ?
3. The filing of the paper books is dispensed with. The appeal is
taken up for hearing straightaway because this court already has the
benefit of the decision in the case of United Airlines v. Commissioner
of Income-tax and Others: 287 ITR 281 where this very issue arose
for consideration. In the said decision, the question that arose was
whether the landing and parking charges could be deemed to be rent
under Section 194-I of the said Act. A division Bench of this court
concluded that such landing and parking charges would be rent under
Section 194-I of the said Act. The court observed that the word "rent"
as defined in the said provision had a wider meaning than "rent" in the
common parlance. It included any agreement or arrangement for use of
land. The court further observed that when the wheels of an aircraft
coming into an airport touch the surface of the airfield, use of the land
of the airport immediately begins. Similarly, for parking the aircraft in
that airport, again, there is use of the land. Consequently, the Division
Bench was of the opinion that landing and parking fee were definitely
"rent" within the meaning of the provisions of Section 194-I as they
were payments made for the use of the land of the airport.
4. In view of the definitive conclusion arrived at in United Airlines
(supra), the questions have to be answered in favour of the revenue and
against the assessee.
5. We may also note that the learned counsel for the assessee sought
to argue that they had been instructed by the Airports Authority of
India itself to deduct tax under Section 194-C. In this context, the
learned counsel drew our attention to a letter dated 02.08.1996 which is
quoted in paragraph 13 of the impugned order. In that letter, it is
clearly indicated that landing and parking charges would be subject to
tax deduction at source under Section 194-C of the said Act. While this
may be a valid argument in the course of the penalty proceedings, if
any, inasmuch as the letter reflects the bona fides of the assessee, this
would not be an argument available to the assessee for the purposes of
considering the questions at hand.
In view of the answers to the questions given above, the appeal is
allowed. The impugned order is set aside.
BADAR DURREZ AHMED, J
RAJIV SHAKDHER, J
October 23, 2008
dutt
