2021 (7) TMI 221

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.... year 2012-13. 2. The assessee before us is an international airline which operates its services to and from, amongst other places, Indian aiprorts. The assessee has entered into an arrangement with Oberoi Airport Services to enable its business and first class passangers to use the airport lounge, run by the Oberoi Airport Services, at Mumbai airport. The assessee has duly deducted tax at source, @ 2% under section 194C, from these payments. These payments were treated as contractual payments for the services rendered by the Oberoi Airport Services. The Assessing Officer was, however, of the view that the payments were in the nature of rental payments for the use of space and, such, are required to be treated as rent. The tax as deducti....

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.... being allowed to consume food and drinks etc. Viewed thus, the tax required to be withheld from these payments, for rendition of services under a contract, is 2% as per the requirements of section 194C. The authorities below are, however, not content by this tax withholding. Their view is that the assessee ought to have treated these payments as rental payments and, accordingly, deducted the tax at source @ 10% under section 194 I. However, the payment of lounge facilities cannot, by any stretch of logic, be characterized as payment "under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of (either separately or together) any,-(a) land; or (b) building (including factory building); or (c) land appurtenant to ....

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....preme Court in the case of Assistant Collector of Central Excise v. Dunlop India Ltd. [(1985) 154 ITR 172 (SC)], where the Hon'ble Court has itself quoted from the decision of House of Lords as under: "We desire to add and as was said in Cassell & Co. Ltd. v. Broome [1972] AC 1027 (HL), we hope it will never be necessary for us to say so again that "in the hierarchical system of courts" which exists in our country, "it is necessary for each lower tier", including the High Court, "to accept loyally the decision of the higher tiers". "It is inevitable in a hierarchical system of courts that there are decisions of the Supreme appellate Tribunal which do not attract the unanimous approval of all members of the judiciary... But the judi....