Asstt. CIT v. Jet Airways (India) Ltd.

INCOME TAX ACT, 1961

--Tax deduction at source--Under section 194-I andShort deduction or non-deduction of TDS--AO was of view that (i) assessee had not deducted tax at source under section 194H on account of commission from the retained amount of commission by the credit card companeis/banks. (2) AO noticed that the assessee had paid passenger service fees (PSF) to the Airport Authority of India without deducted TDS. The assessee submitted that : provisions of section 194H could not be applied as banks made payment after deducting certain fees as per the terms and conditions in credit card and it was not a commission bu a fee deducted by the banks. (2) The assessee explained that PSF was a statutory levy collected by the airport operators in its fiduciary capacity to be eventually turned over to the government. it was further explained that the PSF consisted of 2 components-the security component to the designated security agency for providing security services to the passenger and facilitation to private passengers facilitation services by the airport operators. There was no liability of TDS as the assessee had not claimed such payment as expenses in is books of accounts. Held: (1) Payments made to banks/credit card companies on account of tilization of credit card facilities would be in one nature of bank charges and not in the nature of commission under section 194H and hence no TDS was required to be deducted. (2) Licensee of the airport was required to collect the PSF initially collected by the concerned airlines from the passengers and ten handedover to the respective airport authority. It was cleared that assessee only collected the PSF from passengers for and on behalf of the airport authority and passed the same to the airport authority, so, no deduction of TDS.