Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: empanelment :: cpt :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: VAT Audit :: due date for vat payment :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: VAT RATES :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: ACCOUNTING STANDARD
 
 
News Headlines »
 Did you know? The tax exemption on your HRA
 Income Tax Department expands list of deposits, transactions under scrutiny
  Income-tax Act, 1961 read with Rule 114E of Income-tax Rules, 1962
 Master Directions on Access Criteria for Payment Systems
 RBI-Scheduled Bank's Statement of Position in India as on Friday, January 06, 2017 (Revised)
 3 Big Mistakes To Avoid This Tax Season
 The Top 5 Tax Stories Of 2017
 Are multiple service tax rates in the offing?
 All you need to know about claiming tax break on HRA
 How much income tax you should pay on investments in gold?
  Best ways to save tax in 2017

KLM Airlines gets tax relief on rent paid to AAI
November, 08th 2008

KLM Airlines got a reprieve from the income tax department on the rent paid for cargo space hired by it from Airport Authority of India, thanks to a Delhi High Court order last week.

KLM, which offers air cargo as well as passenger services, has a licence from AAI for using the cargo space in Mumbai. The airline has outsourced the cargo booking and handling services to an Indian company, CSI, on a commission basis.

Being a Dutch company, KLM is liable to pay tax in the Netherlands for the income it generated in India from its airline operations, including air cargo transportation.

However, the income tax authorities disputed a certain part of its revenue generated from India as income from other sources, a category of income taxable in India. The department argued that the rent payable to AAI by KLM was adjusted while making payment to CSI. The department held that this part of payment is income from other sources. The adjusted amount was treated by the department as income liable to be taxed in India under Article 6 of the DTAA between India and the Netherlands.

The departments contention was upheld by the commissioner (appeal), the first appellate authority on tax matters. However, the Income Tax Appellate Tribunal (ITAT) held that such rent adjustments were invariably linked to its cargo handling business for which licence was issued, and therefore, such rent adjustments could not be treated as income from other sources.

The ITAT also accepted the contention of KLM that even if the recovery of rent was to be treated as income from other sources, since an identical amount was paid to the AAI, the same would be offset against each other because there was a direct nexus between the receipt and the payment.

The Delhi High Court upheld the decision of the tribunal and dismissed the appeal filed by the income tax department against the tribunal order.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions