COMMISSIONER OF INCOME TAX Vs. SINGAPORE AIRLINES LTD.

JUDGEMENT

(1.) The Revenue has filed the above Tax Case (Appeals) as against the order of the Income Tax Appellate Tribunal relating to the assessment years 1997-98, 1998-99 and 1999-2000. This Court, by order dated 06.02.2006 admitted the above Tax Case (Appeals) on the following substantial question of law:

(2.) The assessee is an international airlines. In the course of the assessment proceedings, for the assessment years 1997-98 to 1999-2000, the assessee claimed that the charges paid to International Airport Authority towards landing and parking charges would not come within the definition of 'rent' as defined under Section 194 I Explanation of the Income Tax Act and hence, the liability to deduct tax at source under Section 194 I or under Section 194 J of the Income Tax Act in respect of payment of navigation charges did not arise at all.

(3.) The Assessing Authority pointed out that the charges paid by the assessee on landing and parking to International Airport Authority of India for the use of runway for landing and take off and also the space in the tarmac of the airport for parking of the aircraft represented 'rent'. Since the assessee had failed to deduct TDS at 20%, the assessee was liable to be treated as one in default; consequently, an order under Section 201(1) and 201(1A) was made. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals), who confirmed the order of the Assessing Officer. Aggrieved by this, the assessee went on appeal before the Income Tax Appellate Tribunal.