Case Law Details
Brief of the Case
Delhi High Court held In the case of DIT vs. Royal Jordanian Airlines that section 44BBA is not charging provision, but only a machinery provision; it cannot preclude an Assesses from producing books of accounts to show that in any particular AY there is no taxable income. In other words, the Court concurs with a view that where there is no income, Section 44BBA cannot be applied to bring to tax the presumptive income constituting 5% of the gross receipts in terms of Section 44BBA(2). No doubt, for that purpose the Assessee has to produce books of accounts to substantiate that it has incurred losses or that its assessable income is less than its presumptive income, as the case may be.
Facts of the Case
The Royal Jordanian Airlines (RJA) came to existence by Ordinance No. 10 of 1969 issued by the Hashemite Kingdom of Jordan under Article 31 of the Constitution of Jordan. The said Ordinance was published in the Jordanian official gazette dated 10th April 1969. The features of RJA as spelt out in the Ordinance were that it was a body corporate having financial and administrative independence, it was a part of the Ministry of Transport of the Government of Jordan and it was to undertake all the scheduled air transport activities from and to the Kingdom of Jordan.
RJA has its principal office in Amman in Jordan. It appointed Jet Air Pvt. Ltd. as its general sales agent in India. RJA commenced its operations in India, carrying passengers and cargo on international flights from and to India from 1989 onwards. Since commencement of operations in India, RJA has been incurring losses. It did not file any return of income in India. In response to a notice issued to it under Section 148 in respect of the AYs 1989-90 to 1992-93, stating that RJA has not declared its income in terms of Section 44BBA and in response to another notice under Section 142(1) in respect of AY 1993-94, RJA filed its return for the aforementioned AYs 1989-90 to 1993-94. RJA disclosed its gross receipts as well as its expenses, apart from the commission paid to its agents.
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