COMMISSIONER OF INCOME TAX TDS vs. M/S FRANCE AIR PVT.LTD.

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ITA/884/2006HC DelhiDLHC01062383200613 April 2009Bench: CASES PERTAINING TO SPL.DIVISION BENCHES3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the Revenue's appeal, setting aside the Tribunal's order. The matter was remanded back to the Tribunal for fresh examination.

What were the facts?

The assessee, a General Sales Agent for Air France, failed to deduct tax at source on supplementary commission paid to its agents. The Assessing Officer and CIT(A) upheld the disallowance. The Tribunal, relying on a previous judgment, allowed the assessee's appeal.

What were the issues?

Whether the assessee was liable to deduct tax at source on supplementary commission paid to its agents, and the correctness of the Tribunal's reliance on a previous judgment.

Which sections of the Income-tax Act were involved?

Section 197,Section 260A

AI-generated summary — verify with the full judgment below

ITA 884/2006

Page 1 of 3

* THE HIGH COURT OF DELHI AT NEW DELHI %

Judgment delivered on : 13.04.2009 ITA No. 884/2006

COMMISSIONER OF INCOME TAX NEW DELHI

..... Appellant Through: Ms Prem Lata Bansal & Ms Anshul Sharma, Advocates

versus

FRANCE AIR PVT. LTD.

..... Respondent Through: Mr U.A. Rana & MrAbhishek K. Rao, Advocates

CORAM :-

HON'BLE MR JUSTICE BADAR DURREZ AHMED HON'BLE MR JUSTICE RAJIV SHAKDHER

1.

Whether the Reporters of local papers may

be allowed to see the judgment ?

2.

To be referred to Reporters or not ? 3. Whether the judgment should be reported

in the Digest ?

RAJIV SHAKDHER, J 1. In this case the Revenue has preferred an appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’) against judgment dated 16.09.2005 passed by the Income Tax Appellate Tribunal (hereinafter referred to as the ‘Tribunal’) in TDS no. 34(Del)2004 pertaining to assessment year 2002-03. 2. The assessee herein is a General Sales Agent (in short ‘GSA’) for Air France Ltd. The assessee was passing on discounted fare tickets to

ITA 884/2006

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its IATA agents. The Assessing Officer found that the assessee-GSA had failed to deduct Rs 1,32,188/- in respect of supplementary commission to the tune of Rs 48,58,566/- paid by the assessee to its agents. It is apparent from the Tribunal’s order that the Assessing Officer had noted the fact that the assessee had 55 such agents conducting its business and that the assessee had obtained a certificate under Section 197 of the Act for deduction of tax at a lower rate in respect of 25 such agents. However, even after giving effect to the said certificate issued in favour of the assessee, there was a short-deduction of tax at source by the assessee to the tune of Rs 1,32,188/-. 3. The assessee being aggrieved by the order of the Assessing Officer preferred an appeal to the Commissioner of Income Tax(Appeals) [hereinafter referred to as the ‘CIT(A)’], who sustained the order of the Assessing Officer. 4. In a further appeal to the Tribunal the assessee placed reliance on the judgment dated 19.10.2004 passed in TDS No. 58(Del)03 titled ‘CIT vs Singapore Airlines. The Tribunal passed the impugned judgment by basing it substantially on its own judgment in the case of Singapore Airlines (supra). The necessary consequence was that it allowed the appeal of the assessee.

ITA 884/2006

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5.

In view of our judgment delivered today i.e., 13.04.2009 in a batch of appeals, wherein the lead case, is entitled as CIT vs Singapore Airlines; being ITA No. 306/2005, the appeal of the Revenue has been allowed. Therefore, this appeal has to be allowed. It is ordered accordingly, with a direction that the Tribunal will re-examine the issue afresh.

RAJIV SHAKDHER, J

April 13, 2009/kk

BADAR DURREZ AHMED, J

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