TaxTMI 
TaxTMI 
2013 (11) TMI 1743
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.... Income Tax Act, 1961 ('the Act' hereinafter) for the relevant years. 2.1 The short and the common question involved in this set of appeals, is as to whether the payment made by the assessee, an international airlines, to M/s. Oberoi Flight Services ('OFS' for short) for lounging and catering services is 'rent' within the meaning of the term u/s.194I of the Act. 2.2 The background facts of the case are that the assessee-company has entered into an Agreement with OFS for providing lounging services, which includes an assortment of vegetarian, non-vegetarian, hot and cold snacks and alcoholic drinks, to its first class and club class passengers. Treating the same as catering services, the assessee-payer deducted tax at source u/s.194C o....
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.... and (b) ten per cent for the use of any land or building (including factory building) or land appurtenant to a building (including factory building) or furniture or fittings: Provided that no deduction shall be made under this section where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the aforesaid person to the account of, or to, the payee, does not exceed [one hundred and eighty thousand rupees: Provided further that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under c....
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....rties, and perused the material on record. 3.1 Clearly, the nature of the services for which the impugned payments stand made is of prime relevance. The Agreement between the two, i.e., the payer and the payee, pursuant to which the impugned payments have been made, is not on record. Surprisingly, there is also no reference thereto in the orders of the authorities below. The nature of the services for which the payments stand made is therefore gathered from and taken as stated in the orders of the authorities below, including the assessee's submissions before them, as well as per the grounds of appeal and statement of facts. 3.2 Coming to the respective cases of the two parties, while in the view of the assessee the said services are ....
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....of the amenities could be considered as toward proper enjoyment of the housing, and thus a part of or toward user of land and building, so as to be covered under the broader definition of the 'rent', which w.e.f. 01.06.2007 also covers the use of, apart from furniture and fixture, plant or machinery or equipment (albeit at a different rate of TDS), the provision of meals, an integral part of the arrangement, can by no stretch of imagination or by any means be considered as toward the use of land and building. The consideration for other than the meals, would, on the other hand, qualify as 'rent' u/s.194I. 3.4 Coming to the facts of the present case, without doubt the payment other than for food and refreshments, i.e., for lounging servic....
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.... hon'ble Delhi high court in United Airlines vs. CIT [2006] 287 ITR 281 (Del), followed by it in CIT vs. Japan Airlines Co. Ltd. [2010] 325 ITR 298 (Del), confirmed the said payment as 'rent' u/s.194I, the hon'ble Madras high court has in CIT vs. Singapore Airlines Ltd. [2012] 252 CTR 429 (Mad.), taken a different/contrary view. While the view of the hon'ble Delhi high court is based on the fact that the same is nothing but an arrangement for the use of the airport land, coupled with the legal position that the tax statues are to be strictly construed, the view expressed by the hon'ble Madras high court rests on the basis that it is essentially for the use of navigational facilities involved in landing and takeoff, so that it cannot be cons....