TaxTMI 
TaxTMI 
2010 (9) TMI 536
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....ss of booking domestic and international airline tickets. The assessee is a member of IATA under an agreement. The assessee earned the commission on booking the tickets for the passenger from various airlines. The airlines deduct the TDS on these earnings of the assessee. The assessee has been booking tickets from direct customers who purchase the tickets directly from the assessee in their own name also through the intermediaries who approaches the assessee to book tickets in the name of the passengers intended to travel. The issue in this appeal is regarding the income of these intermediaries earned from the assessee in the process of booking tickets for third parties. The AO disallowed the deduction claimed by the assessee on accou....
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....kers. He has referred the invoices raised by the assessee to the direct customers as well as the intermediaries at pages 10 to 67 of the paper book. Thus, the learned AR of the assessee has submitted that when the handling charges are in the nature of discount and not in the nature of any commission paid or credit given by the assessee to the intermediaries then no TDS is required to be deducted under section 194-H. He has submitted that it is only sale of tickets and not contract of agency between the assessee and the intermediaries. He has pointed out that the assessee is debiting the account of the intermediaries with the net amount as per the invoices raised and no credit is given on account of any commission or brokerage. Therefore, wh....
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....e not the customers of the assessee but linked with customer. Thus, the payment to intermediaries is nothing but commission even though assessee may have not signed any agreement. In any case it is not essential for commission agent to sign any agreement. Conduct of the assessee in deducting tax at source also indicates that the assessee itself considers the payment to be in nature of commission" 8. From the above findings of the AO it is clear that the intermediaries are booking the tickets from the assessee. Therefore, the intermediaries are not working as agent of the assessee for doing assessee's business rather the intermediaries are bringing the business to the assessee as recorded by the AO and the assessee is passing out some han....
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....basis and there is no contract of agency at any point of time. It is also not possible to accept the contention of Mr. Naik for the Revenue that the definition of "commission or brokerage" as contained in the explanation to section 194H is so wide that it would include any payment receivable, directly or indirectly, for services in the course of buying or selling of goods and that, therefore, the discount availed of by the stamp vendors constitutes commission or brokerage within the meaning of section 194H. If this contention were to be accepted, all transactions of sale from a manufacturer to a wholesaler or from a wholesaler to a semi wholesaler or from a semi-wholesaler to a retailer would be covered by section 194H. To fall within th....