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: VAT RATES :: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: TDS :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: empanelment :: ACCOUNTING STANDARDS :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT :: cpt :: articles on VAT and GST in India :: VAT Audit
« News Headlines »
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016

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 2016 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