TRAVEL HUB PRIVATE LIMITED,KOLKATA vs. I.T.O WD - 12(3),KOLKATA., KOLKATA

The brief facts of this issue are that the asssessee is a member of International Air Transport Association (IATA) and acts as an agent of various airlines to sell their air tickets against receipt of commission. The said commission is paid by the airlines periodically after duly subjecting the same to deduction of tax at source. The assessee has been consistently crediting the commission portion as its income in its profit and loss account. The assessee classified itself as a kacha arahtiya broker wherein only the commission income needs to be accounted as its income. The ld. AO however classified the assessee as pucca arahtiya broker and construed the assessee as a trader

Aggrieved by the order of CIT(A) the assessee is in appeal before us. The ld. AR argued that for the very same year under appeal the assessment was later reopened u/s 147 of the Act and the reassessment was completed u/s 144 r.w.s. 147 of the Act on 12.03.2013 wherein the AO had accepted the assessee as kucha arahtiya commission agent and assessed only the commission portion as its income. It is not in dispute that the total commission income derived by the assessee was Rs.29,33,708/-. He argued that based on the subsequent order for the very same year under appeal wherein the assessee has been accepted to be kucha arahtiya broker and based on subsequent orders of the ld. CIT(A) (i.e. order for A.Y.2008-09, wherein the assessee has been classified as kucha arahtiya broker) there would be no levy of penalty u/s 271B of the Act in the facts and circumstances of the case. In response to this, the ld. DR relied on the orders of the lower authorities.

We have heard the rival submissions and perused the material available on record. We find that the ld. AR had placed copy of the re-assessment order for A.Y.2007-08; copy of the assessment order for A.Y.2008-09 and copy of the Ld.CIT(A) order for A.Y.2008-09 before us. We find from these orders that the authorities had accepted the claim of the assessee to be a kucha arahtiya broker and not a pucca arahtiya broker. In any case the assessee is only acting as an air ticketing agent engaged in buying the air tickets on behalf of its customers for commission. Hence going by the classification of the assessee as kucha arahtiya broker, only the commission income would be classified as income of the assessee which is admittedly below the limit of Rs.40 lakhs. Hence we hold that the assessee is not liable for Travel Hub Private Limited A.Yr.2007-08 compliance with the provision of section 44AB of the Act. Consequently there cannot be any levy of penalty u/s 271B of the Act for non compliance thereon. Accordingly the grounds raised by the assessee are allowed.

In the result the appeal of the assessee is allowed.