2026 (1) TMI 1327

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....oner of Income Tax v. Singapore Airlines Ltd. reported in 2009 SCC OnLine Del 823 as affirmed by Hon'ble the Supreme Court in the case of Singapore Airlines Ltd. v. Commissioner of Income Tax, reported in (2023) 1 Supreme Court 497. 2. Learned counsel submitted that in light of the adjudication made by this Court and affirmed by Hon'ble the Supreme Court, the appeal deserves to be allowed. 3. Learned counsel for the respondent, on the other hand, submitted that since the tax effect in the instant case is about Rs. 26,00,000/-, the appeal deserves to be dismissed in light of Circular No. 5/2024 read with Circular No. 9/2024 issued by Central Board of Direct Taxes (CBDT). 4. At this juncture, Mr. Agrawal submitted that as the case fa....

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....ja has made, we dispose of the present appeal in light of para No. 68 to 71 of judgment of Hon'ble the Supreme Court, which are reproduced herein below:- "68. Our conclusion in terms of the application of Section 194-H of the IT Act to the supplementary commission amounts earned by the travel agent is unequivocally in favour of the Revenue. Section 194-H is to be read with Section 182 of the Contract Act. If a relationship between two parties as culled out from their intentions as manifested in the terms of the contract between them indicate the existence of a principal-agent relationship as defined under d Section 182 of the Contract Act, then the definition of "commission" under Section 194-H of the IT Act stands attracted and th....

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....aid taxes on the supplementary commission, the Revenue will be at liberty to proceed in accordance with law under the IT Act for recovery of shortfall in TDS from the airlines. However, we limit the ability to levy penalties against the assessees in light of Section 273-B of the IT Act. 71. Having concluded so, we hope that closure has been brought to a legal controversy that has persisted for two decades. While we reject the arguments of the assessees on merits in terms of their liability under Section 194-H of the IT Act, we hold in their favour on the count of the matter having been rendered revenue neutral due to the apparent payment of income taxes on the amounts in question by the travel agents. The assessing officer is direc....