Air travel discount to customers is not commission, so TDS under section 194H and default liability under section 201 do not arise.

An air travel agent's discount passed on to customers was treated as a reduction in the ticket sale price, not commission for services rendered. On that basis, section 194H did not apply because the customer merely received a lower price and did not perform any service for the agent. As no commission existed, the assessee could not be treated as an assessee in default under sections 201(1) and 201(1A), and the TDS demand could not survive.

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Issues: Whether the amount passed on by an air travel agent to customers as discount on ticket booking was commission liable to tax deduction at source under section 194H of the Income-tax Act, 1961, and whether the assessee could be treated as an assessee in default under section 201(1) and section 201(1A).

Analysis: The amount allowed to customers was held to be a discount reducing the sale price, not commission paid for services rendered. The Tribunal followed the binding view that section 194H does not apply where the customer merely receives a lower price and does not render any service to the agent. On that basis, the demand raised under section 201(1) and section 201(1A) could not survive.

Conclusion: The discount passed on to customers was not commission, section 194H was not attracted, and the assessee was not liable as an assessee in default.

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