Case Law Details
DCIT Vs KLM Royal Dutch Airlines (ITAT Delhi)
Brief facts of the case are that the assessee is a Foreign Company incorporated under the Laws of Netherlands and is engaged in the business of ‘Operations of Aircraft in International Traffic’. It operates in India through a branch office by virtue of approval from Reserve Bank of India. For the Assessment Year 2015-16, the assessee filed its original return of income on 26.09.2015 declaring total income of Rs.841,40,89,890/ – from the business of “Operations of Aircraft in International Traffic and after claiming the relief u/s 90 of the Income-tax Act, 1961 (for short ‘the Act’) read with Article 8 of the DTAA between India and Netherlands, there was Nil taxable payable and claimed a refund of Rs.,80,33,660/-. It was claimed that no income is chargeable to tax in India, as the entire income of the assessee is exempt from taxation in India u/s 90 of the Act read with Article 8 of the Double Taxation Avoidance Agreement (DTAA) between the India & Netherlands. Thereafter the assessee was served with a notice u/s 143(2) of the Income Tax Act, 1961. The Assessing Officer through order sheet entries directed the assessee to file details regarding the Technical Handling Income received by the assessee and show cause as why the Technical Handling Income is not taxable in India. The assessee filed detailed submissions in compliance to the above directions and further submissions giving a break-up of total revenue earned from the technical handling income and the expenses incurred thereon along with supporting agreements (including reciprocal agreements). The assessee claimed that the income from technical handling is exempt from taxation in India as the same is covered under Article 8 of the DTAA between India & Netherlands and hence not liable to tax in India. Further, it was also submitted during the assessment proceedings that the issue is squarely covered by the judgment of the Hon’ble Delhi High Court as well as by the Orders of Hon’ble ITAT, in the assessee’s own cases for the earlier assessment years. Notwithstanding the submissions by the assessee, the AO passed the assessment order dated 29.03.2018, wherein the AO has assessed the income of the assessee by treating the entire income from technical handling as taxable in India after allowing 5% adhoc allowance for expenses.
Upon careful consideration, we note that Hon’ble Delhi High Court in the case of the assessee for assessment years 2004-05 to 2008-09 by the order dated 25.01.2017 (392 ITR 218) elaborately dealt with the issue.
Upon careful consideration, we note that Hon’ble Delhi High Court in the case of the assessee for assessment years 2004-05 to 2008-09 by the order dated 25.01.2017 (392 ITR 218) elaborately dealt with the issue.
FULL TEXT OF THE ORDER OF ITAT DELHI
Please become a Premium member. If you are already a Premium member, login here to access the full content.
