User Development Fee collection charges paid by AAI to airlines is not income from operation of aircraft

Lufthansa German Airlines Vs DCIT (ITAT Delhi) The question is whether the User Development Fee (UDF)  collection charges paid by AAI to the Lufthansa German Airlines (Assessee) is income derived from operation of aircraft not liable to tax in India as per Article 8 of DTAA between India and Germany. As the effective management of the assessee company is situated in Germany the profits from operation of aircraft in international traffic is taxable only in Germany. The UDF is levied at the Indian airports as a measure to increase revenues of the airport operator. The UDF is levied to bridge an...