May 2011
TDS: Commission or brokerage: Section 194H of Income-tax Act, 1961: A.Ys. 2004-05 to 2007- 08: Agent of airline companies permitted to sell tickets at any rate between fixed minimum commercial price and published price: Difference between commercial price and published price not commission or brokerage: Not liable to TDS.
By K. B. Bhujle Advocate
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[CIT v. Qatar Airways, 332 ITR 253 (Bom.)]
In an appeal preferred by the Revenue, the following question was raised:
“Whether on the facts and in the circumstances of the case and in law, the difference in amount between commercial price and published price is special commission in the nature of commission or brokerage within the meaning of Explanation (i) to section 194H of the Income-tax Act, 1961?”
The Bombay High Court held as under:
“(i) The agents of the assessee-airlines were granted permission to sell the tickets at any rate between the fixed minimum commercial price and the published price. The assessee would have no information about the exact rate at which the tickets were ultimately sold by its agents. It would be impracticable and unreasonable to expect the assessee to get a feedback from its numerous agents in respect of each ticket sold.
(ii) The permission granted to the agents to sell the tickets at a lower price could neither amount to commission, nor brokerage in the hands of the agents.
(iii) Thus the tax at source was not deductible on the difference between the commercial price and the published price.”
